source: Caselaw Access Project

author: Robertson, Ch. J. McCunn, J. (dissenting.)

license: Public Domain

text:
    Frances Tolano, plaintiff and respondent, vs. The National Steam Navigation Company, defendants and appellants.
    1. It is doubtful whether, when the cause of action set out in the complaint is a conversion merely of a. trunk, “ containing plate and other valuable articles,” the value of such contents can be recovered, unless evidence of their value be admitted on the trial without objection, and the case be tried upon the assumption that the action is brought for their conversion also.
    2. The principle that even a common carrier is only rendered liable in an action for the actual conversion of goods entrusted to them, by proof of an actual appropriation of them to his own use, does not affect the mere form of the action, but its substance also. The abolition of forms of action by the Code does not affect it.
    3. To make a common carrier liable for non-delivery of property, entrusted to him, the action must be brought specifically upon his breach of a public duty, or bis undertaking to carry safely and deliver, and he cannot be made liable for such neglect in an action wherein the complaint charges merely a conversion of the property to his own use, wherewith his position as common carrier has nothing to do.
    4. It is error to treat an action brought for the conversion of chattels as one for dereliction of duty or breach of contract by the defendant as a common carrier, and, without any evidence of a conversion, submit to a jury merely the questions, whether certain articles were “ ordinary and necessary ” to a traveler and a sum of money was a reasonable amount for traveling expenses.
    5. Where the counsel for the plaintiff disclaims any taking charge by the defendants as common carriers of articles lost, and during her whole travel she kept them in her possession, under her charge no question of liability as common carriers can arise.
    6. Proof that a plaintiff was not allowed to put a trunk containing valuables, on board of one of two tug boats, that were employed by the defendants, under the dierction of quarantine commissioners of the port of New York, to tow a quarantined vessel and her occupants with their baggage to the shore, wherein she herself emiar/ced to be landed, but was directed by the agent of the defendants to put it on board of the other tow boat, which she did, and it was lost with its contents, is no absolute evidence of conversion thereof by the defendants, as matter of law.
    7. Ordinary diligence is used where articles are “ so sedulously kept by the vigilance of its custodian that it could not be stolen or abstracted.” Evidence of that fact alone is not evidence of a conversion, but should be submitted to the jury with any other evidence of it.
    (Before Robertson, Ch. X, Garvin and McCunn, JX)
    Heard October 21, 1867;
    decided January —, 1868
    . Appeal by the defendant from a judgment entered upon the verdict of a jury, and from an order denying a motion for a new trial.
    The defendants are owners of the streamship Helvetia, employed in the carriage of passengers and freight between Liverpool and New York, and the plaintiff was a steerage passenger on said vessel, from the former to the latter place, in September and October, 1866. The complaint alleged that the defendants were a foreign corporation; that on or about the 29th day of October, in the year 1866, either within the waters of the bay adjacent to the county of New York, or at the city and county of New York, said defendants wrongfully converted to their own use, a certain trunk or package containing plate, jewelry, wearing apparel and gold coin, then and there being the property of the plaintiff" and of the value of $2892.50.
    It alleged a demand and refusal to return the property, and demanded judgment against the defendants, for the sum of $4000, besides costs.
    The defendants, by their amended answer, admitted that they were a foreign corporation, and that the plaintiff had demanded from them a trunk or package which she alleged was lost, and which she likewise alleged contained plate, jewelry, wearing apparel and gold coin; and the defendants denied generally and specifically each and every other allegation in the complaint contained. The defendants, for a further, separate, several and distinct defense, alleged that they were carriers of passengers between the ports of Liverpool, Queenstown and New York; that if the package or trunk in .the plaintiff’s complaint described ever came into the possession of the defendants, the plaintiff was a passenger on board a steamship of the defendants, and put such package, or trunk on board said steamship as luggage or baggage of the plaintiff; that the plaintiff was taken as such passenger under an express contract between her and the defendants at a low rate of fare, and in consideration that the defendants should not be responsible for loss, damage or detention of the plaintiff’s luggage or baggage.
    The defendants, for a third defense, alleged that they were common carriers of - passengers between Liverpool, Queenstown and' New York, that if the package or trunk described in the complaint ever came into their possession, the same was .brought on board one of their steamships as the baggage of the plaintiff, and was so received by them; that said trunk or package contained various articles of merchandize, and gold and. silver to a large amount, and not the ordinary wearing apparel of the plaintiff, and was not in any sense the baggage of the plaintiff; that the plaintiff fraudulently represented it to be such baggage, concealed the fact that said trunk or package contained merchandize, gold and silver as aforesaid, and paid no freight upon the same, and that the defendants exercised due care and diligence in the carrying of the said package or trunk.
    The defendants, for a fourth defense, alleged that they were common carriers by steamship of passengers between Liverpool, Queenstown and New York; that if the trunk or package of the plaintiff ever came into their possession, she came a passenger from Liverpool to the city of New York in the steamship Helvetia, belonging to them, and brought with her the trunk or package described in the complaint as her baggage; that they safely carried said plaintiff and her baggage to the port of New York; that during and throughout the voyage, and up to within less than ten days of the arrival of the Helvetia at the port of New York, the cholera existed on board the said steamship ; that in consequence of such disease, the said vessel, on her arrival at the port of New York, on or about the eighth day of October, 1866, was quarantined under and by virtue of an act of the legislature of the state of New York, passed April 29, 1863, and acts amendatory thereof; under and by virtue whereof the quarantine commissioners and health officer of the port of New York took absolute possession and control of such vessel and her passengers, and their baggage, and also of the trunk or package of the plaintiff, so as aforesaid brought to the port of New York by the defendants, and carried the same away.
    The action was tried before a justice of this court and a jury. The jury found a verdict in favor of the plaintiff, and assessed her damages at $2800.

      J. M. Van Gott, for the appellants.
    I. The defendants are sued, not for breach of their agreement or duty as common carriers, but for the voluntary and “injurious conversion” of the plaintiff’s property, and no such conversion was proved. At most the property was lost or stolen.
    1. Trover will lie where the goods have been lost to the owner by the act of the carrier, though there may have been no intentional wrong. But it will not lie for the mere omission of the carrier, as where the property has been stolen or lost through his negligence, and so cannot be delivered to the owner. The remedy in such cases is assumpsit, or a special action on the case. (Anon. 2 Salk. 655. Ross v. Johnson, 5 Burr. 2825. And see Dewell v. Moxon, 1 Taunt. 391; 2 Saund. 47, f.; McCombie v. Davies, 6 East, 538.)
    2. Mere non-feasance does not work a conversion of the property, and although the owner may have some other action, he cannot maintain trover. Here the trunk was lost, and the plaintiff can only recover, if at all, upon the counts which charge the defendants as carriers. (Hawkins v. Hoffman, 6 Hill, 586. Ross v. Johnson, 5 Burr. 2286, 2288.)
    II. It may be regarded as settled law, that a carrier is liable for a reasonable sum of money for traveling expenses, carried as baggage in a passenger’s trunk. But this liability is strictly limited to “ traveling expenses.” It does not include “ funds carried for the purpose of transportation, remittance, or investment in another locality.” (Merrill v. Grinnell, 30 N. Y. Rep. 594, 610. Taylor v. Monnot, 4 Duer, 116. Birdsall v. Russell, 29 N. Y. Rep. 220.)
    HI. The money in question was either carried for the purpose of transportation or remittance, or for investment in another locality. The plaintiff was changing her residence to New York, to engage in business there, and for that purpose carried her furniture,, wearing apparel, plate and capital. Her traveling expenses to New York were paid before she embarked at Liverpool, and all she brought with her was for use in her new abode and business after her arrival. The bulk of her property was distributed in seventeen packages, and the trunk in question contained newly purchased bonnets and dresses not worn before the voyage, (except for two hours to evade the revenue charges) nor on the voyage, a table cover and silver plate, (excluded by the court,) as well as the bulk of her money or capital with which to commence business in New York. The money was not made baggage, any more than the table cover and silver plate, merely by mingling it with ordinary baggage. It is a perversión of language and truth, and a fraudulent evasion of the law, to describe it as baggage. The natural presumption that this money was a mere fund transported to New York, was not negatived by any evidence, that any portion of it was being carried for traveling expenses.
    ■IV. If any part of the money was for use for traveling expenses, it was only so much as .was reasonable therefor.
    1. It is undisputed, (1,) that the traveling expenses to New York had been paid; (2,) that the trunk in question was delivered at quarantine, on the defendant’s tug, to be transported, and that the plaintiff was transported on another tug, free of additional charge. The transit was from the ship to the shore, where the journey ended, and the trunk was delivered to the carrier at the ship so to be carried gratuitously to the shore. There1 were no traveling expenses, or they were merely nominal.
    2. Upon this undisputed state of facts, it is a conclusion of law, that the money was not carried in the trunk from the ship to the shore for traveling expenses. $1330 was not a reasonable sum for traveling expenses from the ship to the shore or for a few days thereafter, with reference to the circumstances of the plaintiff. What is a reasonable sum for traveling expenses is a question of law, where, as here, the facts are entirely undisputed. (Roth v. Buffalo and State Line Railroad Company, 34 N. Y. Rep. 548, 553.) At least it must, in such a case, be for the court to say that money beyond some limit is not reasonable for traveling expenses; and $1330 is far beyond that limit.
    3. The limitation of the passenger-carriers’ liability for money carried as baggage, is reasonable and founded on sound policy, and ought -to be enforced. It can only be enforced by making the limit a question of law on undisputed facts, or by setting aside verdicts as palpably contrary to evidence, when rendered, as here, for a sum largely in excess of a reasonable limit.
    V. The whole claim is loaded with suspicion; and if the action is sustained to any extent, the rules of law should be applied rigorously to limit the amount of the recovery.
    1, The verdict is contrary to the evidence, and in violation of the charge restricting the liability for the money to a reasonable sum for traveling expenses.
    2. If jewelry and ornaments may be regarded as baggage to any extent, it can only be to the extent to which it is carried for actual use on the journey. Here, it was not carried to be worn in the steerage of an emigrant ship; and it was not for use on the journéy. It was, therefore, in fact, not carried as a traveller’s baggage for nse; but was being transferred by the plaintiff as a part of the bulk of her capital and effects, from one country to another. '

      S. Morrison, for the respondent.
    I. Under municipal authority the defendants discharged the plaintiff from their vessel, as passenger, at some place oiit of the city of New York, by reason of the epidemic which prevailed on board the ship, from which, as a passenger, the plaintiff was discharged by the defendants pursuant to" law. (2 R. S. p. 6, § 12, 5th ed.) The relation of carrier and passenger ceased on such discharge.

    H. The relation of carrier and passenger having ceased to exist from the time of the discharge, the defense qua carrier is not maintainable as regards the plaintiff’s claim.
    I. The "discharge of the passenger, as such, discharged the defendants’ relation to her as carriers, and the plaintiff could hot sue the defendants for her short-coming to the place of destination. (2 R. S. supra)

    2. The property of the plaintiff, as an incident to the relation, "was, simultaneously with her discharge, discharged as "baggage, for which the defendants, up to . the .time of their discharge as carriers had been liable.
    3: If this were not so, at what particular juncture did the defendants’ relation as carriers cease ? Can it be maintained this question turns upon the incidents of the convalescence" of a fever or cholera patient, his ability or disposition to be landed, the municipal sanction to allow the landing and the like ?
    " HI. The plaintiff’s property having been, by compulsion, taken from her by the defendants, they are liable. (Reynolds v. Schuler, 5 Cowen, 323. Connah v. Hale, 23 Wend. 462. Wintringham v. Lafoy, 7 Cowen, 735. Bristol v. Burt, 7 John. 254. Murray v. Burling, 10 id. 172.)
    IV. The defendants at no time as cairiers, or in any other relation, by contract with or privity or consent of the plaintiff, had charge of the property.

      1. During the passage on the Helvetia the plaintiff kept the same under her control, in her immediate possession, and in her actual custody; whilst on the Illinois she did the same. It was only taken on the tug boat against her will.
    2. It was not baggage committed to the care of the carriers, any more than-the watch, wallet or jewels of the passenger in his own custody.
    3. Had this property been lost or purloined from the plaintiff, and the defendants sued therefor, the answer that the defendants had it not, would have been a perfect defense under the proof.. °
    V. The exception to the ruling on the motion to dismiss the. complaint, at the close of the plaintiff’s evidence, and again at the close of the evidence of the defendants, upon the ground that trover cannot be maintained against a carrier because of the mere omission to deliver, is not well taken. .
    1. Because, as contended in points I, H, and HI, the action is not predicated upon the relation of carrier.
    2. The action in that form is not maintainable where a mere omission to deliver is not the only gravamen of the case. The authorities, which maintain the proposition, , that a mere omission to deliver, is not sufficient, involve the logical conclusion that in such case, the property having been lost or stolen, cannot be wrongfully converted by the defendants. Inability to restore the same on demand does not disprove wrongful conversion.
    3. In this case the property is proved to have been taken by the defendants against the will of the plaintiff; and the defendants, by affirmative evidence, show, that since the same was taken, it was under the charge of their custodians, so sedulously kept by their vigilance, that it could not be stolen or' abstracted. Thus the defendants have proved too much to maintain the proposition that a nonsuit should follow. The property not having been stolen or abstracted, the action in form is maintainble. (Hawkins v. Hoffman, 6 Hill, 588.)
   Robertson, Ch. J.

The cause of action set out in the complaint in this case is a wrongful conversion by the defendants of, and a refusal by them to deliver to the plaintiff, on a demand by her, a trunk, (her property,) “ containing plate, and other valuable articles, and money.” Were it not that evidence seems to have been admitted, without objection, of the value of such contents, and the ease to have been tried upon the assumption that the action was brought for their conversion also, it might be doubtful whether they could be recovered for, under a complaint so worded.

. Under the allegation in the complaint of the “ conversion ” of the property in question by the defendants, to their own use, whether as bailees for hire, or only gratuitous custodians of it, the plaintiff could not recover without proof of an absolute appropriation of it by the defendants to their own use, or, what is equivalent, parting with it to others without the authority of the owners. Only in such cases would an action,, in the form of trover, have formerly lain, even against common carriers. (Devereux v. Barclay, 2 Barn, & Ald. 702. Stephenson v. Hart, 4 Bing. 476. Youl v. Harbottle, Peake’s Cas. 49. Sublock v. Inglis, 1 Stark. 154.)

Where a common carrier was sought to be made liable, on non-delivery, a special action on the case for a breach of the public duty of carrying safely, or of assumpsit for a breach of the undertaking so to carry, would have been the only forms of remedy for a mere negligent loss. (Ross v. Johnson, 5 Burr. 2825. Anon. 2 Salk. 665.) This con-' stitutes a substantial difference in the cause of action, which the plaintiff was bound to observe in the statement of facts constituting the complaint, (Code of Procedure, § 142, subd. 2,) if she seek to recover for mere non-delivery or loss. This, in fact, the plaintiff conceded, claiming on the argument, however, that such appropriation, in fact, by the defendants, was established by the evidence.

. No question is made as to the termination by the compulsory transfer of the plaintiff to the receiving or hospital ship, Illinois, under the health laws of this state, of the original contract oif the defendants, as common carriers, to transport the plaintiff, and her baggage to the port of New York, and safely land it and her there; the plaintiff’s counsel not only conceding that it was so terminated, but even claiming that the defendants never had, even during the voyage, the missing property under their charge as carriers, and that they took it from her by compulsion, and against her will, into their custody, and kept it in such a manner that it could not have been lost or stolen, and must, therefore, have been appropriated by them to their own use. A mere compulsory taking of the property from the plaintiff’s possession by the defendants, and a refusal to restore it, would have been sufficient, without any proof of its subsequent fate, or of a demand, to enable her to recover in this action; proof of want of ordinary care in keeping it, or of actual subsequent appropriation of it to the use of the defendants, would only be necessary in case they had been voluntary bailees without hire.

On the trial the counsel for the defendants requested the court to charge the jury, that they “ must find a verdict for the defendants, if they found that they did not convert the property in question to their own use,” which the learned judge presiding on the trial refused to do, except as he had already charged, to which refusal such counsel excepted.

The learned judge had charged that" “the principles applicable to all cases of property lost by carriers, are equally applicable to this case, and must be applied, with the same rigor, as in all others. There is nothing that calls for any relaxation of the rules- in this- case.” And he added: “In my view of the case, under the evidence, these defendants are liable for the loss of this trunk. As to the liability for the contents, that is another thing. There is no question at all but that there was such a trunk, and it may be fairly assumed that the trunk was lost.” He then submitted to the jury substantially three questions of fact. (1.) What were the contents of such trunk. (2.) Whether the articles of wearing apparel and jewelry, claimed by the plaintiff to have been in said trunk when lost, were her ordinary and necessary wearing apparel for the voyage; and (3.) Whether the sum of $1200, claimed by her to have been in such trunk when lost, was a reasonable amount of money “ for traveling expenses, and for staying a few days at a hotel, until she could get into business;” and instructed them that, if they decided the last two questions in favor of the defendants, they should “ give her a verdict ” for such articles as were in the trunk, except certain ones which he had directed them to disregard, as not being necessary either as wearing apparel or for traveling expenses.

The court thus not only evidently put the liability of the defendants upon the ground of their being common carriers, liable, at all events, for the loss of the property in question upon its non-delivery, and not exempt from liability by proof of any ordinary legally recognized excuse for not delivering at the end of the route, but also refused to charge that the defendants were not liable unless for a conversion of the property to their own use. This is directly contrary to the principle settled by the authorities already referred to, (vide supra,) and was sufficient error to authorize the granting of a new trial. The plaintiff’s counsel seems, however, to have conceded this, and devoted himself to the task of proving that there was sufficient evidence in the case to establish such conversion, either by the compulsory taking of such property out of the plaintiff’s possession; or, if such taking were peaceable and lawful, by the impossibility or violent improbability of its disappearance in any other way, under all the circumstances of the case. And as it may be necessary, in case of another trial of this case, to determine what rules of law are applicable under that view, it may be yell to look at the evideuce. It was not only conceded on the argument, but claimed by the plaintiff’s counsel, “ that the defendants at no time, as carriers or in any other way, by contract with, or privity or consent of the plaintiff) had charge of the property.” This maybe assumed to be true up to the time of her leaving the Illinois to go on shore, for both the plaintiff and another witness (Mrs. Young) testify to that effect. The former states that she had had charge of that box during the passage, in her “berth,” because there were valuable things in it, and “ she never allowed it to go out of ‘her’ possession on board the Helvetia or the Illinois until it was put on the,tug boatand, again, that this was the only package in her charge ; she had no other but that in her charge. She further testified that she had it three weeks in her room in the Illinois. The other witness corroborated her statement as to having it in her charge in her berth, during the whole voyage, on board of the Helvetia. And the assumption of that care by the plaintiff would have prevented any recovery by her for any loss of such box during the voyage. (Cohen v. Frost, 2 Duer, 335.)

The first question, therefore, on the evidence, is as to the compulsory taking of such property by the defendants out of the possession of the plaintiff. In applying the evidence to that point, it is to be assumed that all previous relations between the parties had ceased, and that they stood precisely as if, for the first, time, the plaintiff, being a lodger on board of the Hlinois, had parted.with the possession of her trunk at the moment .of her leaving that vessel to go on shore, by letting it go on board of a separate tug boat from that in which she went to the shore. The testimony of the plaintiff was, that when the tug boat came alongside, and she was directed to go on board of it to go ashore, her son and herself took such trunk’ and its contents “ to the gangway to bring with them.” Mr. Finlay, (the alleged agent of the company,) said, they could not bring their baggage on that boat— it must go on the other tug boat. “They then carried it across the side to the other tug boat, and it was put on board.” They then went ashore on the first boat. This was all done under Mr. Finlay’s direction. On cross-examination, she stated that he “ said he would not allow any package to be on board where the passengers were.” This was corroborated by Mrs. Young and the son of the plaintiff (James Tolano.) The latter also testifies that Mr. Finlay, who was acting then as agent of the defendants, receiving and delivering letters, bringing down provisions and the like, came down, with two tugs to bring -the passengers and baggage on shore. The fact of Finlay’s acting as such agent was also testified to by another witness, (Gamble,) who further states that Finlay brought all the baggage on one tug, and carried the passengers to land on another. After towing the Illinois to her winter quarters by such boats, he removed the passengers on one boat and the baggage on another. He ordered that no baggage or package should to be taken by the passengers. This was when all were leaving.the Illinois to and. He would not permit any of the passengers to have or keep their baggage under their own charge when landing from the Helvetia. “He prevented them from taking their baggage with them.” It was admitted on the trial “thatthe defendants employed the tug boats to land the passengers and their baggage.” This evidence was not essentially varied by any other testimony, except that Mr. Finlay testified, that he told the passengers that they had to go on the passenger tug boat, and the baggage must- go by the other tug, but that any small parcels or valuables he would allow them to take with them; and in this he was corroborated by two other witnesses (Rourke and Peterson.) This testimony is apparently not contradicted by any other. The box itself was three feet long and one foot six inches broad. Mr. Finlay also testified that he had the superintendence of the landing of the passengers and baggage from the Helvetia. He took down two - boats — one for the passengers and the other, baggage. He had orders from the quarantine commissioners to have the Illinois brought to Gravesend bay, and there disembark the passengers and the baggage. He wanted to get the passengers to Castle Garden before it was closed, that they might be taken care of during the night. He superintended the transfer of the passengérs; another person, (Peterson,) had charge of the men that moved the baggage, which he landed on the wharf at Castle Garden, and put in an inclosed space.

I am unable to discover in the evidence any forcible dispossession of the plaintiff of such trunk, or any compulsion of her to place it on board of the baggage boat. She was undoubtedly prevented from taking it with her in the passenger boat, but that alone would not have compelled her to put it into the custody of the agents of the defendants, on board of the other boat. She might, for aught that appears to the contrary, have left it on board of the Illinois, and taken another opportunity to land with it in her possession ; unless the removal of herself and her baggage as well as the other passengers, was by authority of the quarantine commissioners, and therefore peremptory; under which indeed, rather than that of the defendants, Finlay seems to have been acting, as the agent of such public officers. His separation of the passengers from the baggage may-have been discreet to prevent any delay in waiting for the latter, which might interfere with such passengers being landed and'housed in Castle Garden that night. Passengers were notified they might take small packages of valuables, and it does not appear that the plaintiff claimed the trunk to be such. It appears to have, been a box of dubious size for holding valuables, (unless they were very numerous;) at all events the plaintiff, without the least remonstrance, although it contained a great deal of money and valuables, as she stated, and she had had it in her berth under her eye the whole voyage, carried it herself to the side of the other tug boat and saw it put on board. No part of this evidence seems to me to be such an assumption of exclusive dominion or control over such box by Finlay, as agent of the defendants, as to make the act of receiving it on board of the baggage boat a conversion by them. If it contained any evidence of it, it should have been submitted to the jury.

But, if such delivery was a voluntary bailment without hire, the question of want of ordinary diligence in taking care of the box should have been submitted to the jury, if there was any evidence of it. It seems by the testimony that, after being placed on board of the tug boat, (the Meteher,) all the baggage was landed as before mentioned, and left in charge of a watchman, (Hartman,) all night in an inclosure. All of it brought from the Illinois was there next morning, and was again - in charge of a watchman, (Peterson,) all that day, until he was relieved by the previous watchman, (Hartman,) who remained until the second morning on guard, when the landing agent, (Hall,) came, who commenced delivering it, after an examination by custom house officers, the plaintiff being present. Buch watchman denied the removal of any of the baggage until that time, and the plaintiff’s counsel admitted on the argument that such trunk was “so sedulously kept by the vigilance of its custodian ■ that it could not be stolen or abstracted;” nor do I find any evidence of the want of the ordinary precautions taken by prudent men to take care of their property. If there was, it should have been submitted to the jury, unless downright negligence was proved.

I am not prepared to admit that, upon strong proof of great care of a bailee without hire, in guarding chattels delivered to him, so as almost to exclude the possibility of their disappearance without his connivance, a conversion to his use is to be presumed, or that it is by itself, alone, sufficient to go to a jury upon this point. At most it can only be a circumstance to be submitted to the jury, .either alone or with others. 1

Upon either view of the case, therefore, either that of the court considering the defendants as common carriers, and liable as such without an appropriation of the property to their use, or that of the plaintiff’s counsel considering the defendants either as tort feasors, in taking or afterwards appropriating the goods, or guilty of negligence in taking care of them, there should be a new trial.

The judgment and order denying a. new trial must, therefore, be reversed, and such new trial had, with costs to abide the event.

McCunn, J. (dissenting.)

I regret that I must dissent from some of the views set forth in the leading opinion of the court.

The action is to recover $2892.50, being the value of a small trunk and contents, which the plaintiff alleges the defendants wrongfully took and converted to their own use. The facts are substantially as follows': The plaintiff was a passenger in one of the defendants’ steamships, (the Helvetia,) from'Liverpool to this port. On the arrival of the •vessel here, it was found necessary to quarantine her, under our laws; consequently, the passengers were sent, with all their- luggage, to the steamship Illinois, then moored in the lower bay. At the expiration of some eighteen or twenty days; and after quarantine was perfected, the defendants sent their steam tugs and brought the passengers and their baggage to the city. The plaintiff had the- small trunk (the one out of which this controversy arose) in her pos-" session, and was guarding it herself, as she had done all the voyage. The defendants took the trunk from her against her will, and placed her in one tug, and her property, together with this trunk, on another, to send them to this city. This was the last she saw of her trunk, or the articles it contained. She demanded her property; the demand was refused. Hence this action. / The complaint does not declare against the defendants as carriers, but simply against them for unlawfully taking and converting the property; and I hold that, under the circumstances, this is the proper form of pleading.

The defendants answer that they are carriers for hire, but urge, against a recovery, that an action of trover will not lie for the mere omission of the carrier to deliver, as Where the property has been stolen or lost through negligence, and so cannot be delivered to the owner. The remedy, their counsel says, in such cases, is assumpsit, or a special action on the case, and not trover, as he alleges this action is. The 69th section of the Code has abolished" all distinctions between the mere forms of actions, and every action is now a special action on the case, (Goulet v. Asseler, 22 N. Y. Rep. 228.) The Code (§ 142,) requires only a plain and concise statement of the facts, constituting a cause of action, without repetition, and a demand for the requisite relief. Eow, this complaint states concisely and clearly enough that her property was taken from her possession without her-consent, that, although she demanded a return of the same, it has.not been returned, and asks that the court award her its value. You may designate the action as an action in trover, or in assumpsit, or one on the case, or whatever else you may please to call it. I hold that nothing more is requisite in the complaint, and although some may cling to old and obsolete forms of pleading, yet to the plain mind (I mean those who seek speedy and substantial justice,) and according to the law of the day, this is all that is required.

The learned counsel for the defense, in his effort to establish that the form of action in this case should have been assumpsit and not trover, cites a synopsis of the case of Ross v. Johnson, (5 Abbott’s Digest, 243,) forgetting this fact, that the authority is a century old, and that we have changed much in the forms of law pleading since then, as well as in all things else. But even in the case of Ross v. Johnson, which I find reported at length in the second volume of Lord Mansfield’s decisions by Evans, that most learned judge declares his disapprobation of nonsuits founded upon objections that have no relation to the merits of the action.

Moreover, Lord Mansfield said, in that very litigation, that the form of the suit should have been an action on the case, which form of action the suit at bar is. I hold that the authority in Ross v. Johnson is an authority for the plaintiff. The action herein is not brought especially against the defendants, as carriers. The complaint is simply for the taking and conversion of the plaintiff’s property, facts which, without reference to form, in themselves constitute a substantial cause of action; and I hold that the court, under such a complaint, taking it in connection with the. answer and the proofs in the case, would be justified, without alleging they were carriers, in holding them responsible.

Let us examine, briefly, what one of the best elementary writers says as to the form of pleading adopted in the complaint. Hilliard, (on remedies for torts,) writing in 1867, says: “ In trover against carriers the declaration need not set forth the duty of the defendants as carriers, if it sets forth his negligence and loss.” This rule was held in the case of Wright v. McKee, (37 Verm. R. 161,) and was also applied in the case of Crouch v. The London, &c. Railway Co. (14 Eng. Law and Eq. 498.) These authorities are gleaned from the reports of states where a much stricter line of pleading is applied than in our state since our Code took effect; and I certainly can find no authority wherein this liberal rule is condemned.

The only exception that can be taken to the proceedings had before the judge below, is, that in his charge he discussed, at some length, the law of carriers. Now, while such a discussion could perhaps have been dispensed with, has the course pursued by that learned judge in this respect, injured the defendants’ case? It certainly has not, and the best evidence of his not injuring the defendants’ position before the jury in his charge, is the fact that not a single exception to that charge was taken. Indeed the answer, and the whole theory of the defense was, that the defendants were carriers, and were not answerable, as such, for this special property, and it was only at the request of the defendants’ counsel that the court applied the law of carriers at all; so that it would he unjust to have this court apply that rule to the plaintiff in the argument here, when it is clearly seen that the plaintiff’s counsel protested against its application, throughout, at the trial below. Nor can the defendants request the court, at the trial of the issues of fact, to apply a rule of law in their favor against the will of the plaintiff, and then in the appellate court, if that rule is improperly applied, take ■ advantage of its improper application here. But this the defendants’ counsel does not seek. He intimates that the complaint is broad enough to hold the defendants as carriers, and in his answer he relies upon his clients’ rights as such carriers; and on the trial at circuit he requested, that the rule of law relating to carriers should be strictly applied by the court, and argued that the defendants should not be held liable for money or valuables which they did not, in their agreement with the plaintiff, as carriers, undertake to protect or forward. And the learned judge did apply the rule as requested,'and that in the strictest sense of the word, for he charged the jury that the plaintiff could only recover for necessary wearing apparel, and that if she had more money in the trunk than enough for traveling expenses, she could not recover the money over. If the complaint had been specially drawn, so as to enable the plaintiff to recover against the defendants, as carriers, the case could not have been more fully developed on the trial below than it has been. The plaintiff simply declared for taking and converting property. The defendants answer: “ "We are carriers for hire between this port and Liverpool; we did agree to carry you and a certain quantity of baggage to New York, but you had property and money in that trunk, of which you concealed from us a knowledge, and for which, under the laws of this state, we, as carriers, are not responsible, and, therefore^ you cannot recover.” Now, as I have stated before, the learned judge allowed this theory of the defense to go to the jury, and charged the law of carriers correctly, and that in favor of the defendants; and he submitted the question of necessary wearing apparel, and the proper amount of money for traveling expenses, to the jury. It will be said, however, that, under the complaint, (the complaint being for taking and converting,) final judgment cannot be granted. There are two answers to this proposition. First, the complaint is broad enough to hold the defendants as carriers, because it was optional with the plaintiff to treat the defendants as common carriers, and sue in case for breach of duty, or to ignore their character as carriers, and to sue for conversion. He has chosen the latter, and the action lies. Second, if not broad enough, the 173d section of the Code allows the appellate court, of its own motion, when it serves the ends of substantial justice, to make the pleadings conform to the facts proved on the trial.

The Court of Appeals applied this rule in the case of Pratt v. Hudson River Railroad Co. (21 N. Y. Rep. 305;) and the general term of the Supreme Court allowed a similar amendment in the case of Clark v. Dales, (20 Barb. 42.) Not only was this sound rule adopted in the above cases, but it was strictly applied in all of the following cases: Coleman v. Playsted, (36 Barb. 26;) Bowdoin v. Coleman, (3 Abb. 431;) Harrower v. Heath, (19 Barb. 331;) Cady v. Allen, (22 Barb. 388;) Bate v. Graham, (1 Kern. 237.) This doctrine was also established in this court in the case of Foot v. Roberts, decided at general term. In that case Mr. Justice Monell, in a very clear opinion, establishes, beyond a doubt, that the court has a right, in all cases where it serves the ends of substantial justice, to make the pleadings conform to the proofs.

It was “ in furtherance of justice,” as the statute declares, that such a section was added to the Code. I mean the section enabling the appellate court to make such amendments ; and surely a case never arose, and never can arise, wherein the statute can be applied and the ends of justice better subserved, than in this case. Let me ask, “ What is the amendment, if any, required here ?” Why, it simply requires the words “as carriers,” to he added, after the word “ defendants,” on line three of folio four of the complaint. It is conceded that in whatever light we may view this case, all the facts were fully developed on the trial, so as to enable the court to say whether the defendants shall be held liable as carriers, or for taking and converting, and there end the litigation. The learned judge below allowed the defendants and the plaintiff to place all the facts in the case in the fullest light before the jury, and allowed the jury to pass upon those facts; and if there were a thousand trials had hereafter, matters touching the property in controversy could not be made plainer. If this be so, why should the parties be subjected to a new trial, perhaps to a long and exceedingly expensive litigation, when this court sitting here in bank, can apply a remedy ?

Section 173 of the Code, relating to such amendments, was designed, among other things, to shorten litigation, to put an end to suits; and the courts in all cases, where the rule can be applied, should apply it strictly. I think, however, that the views set forth in the first branch of this opinion, are the correct views, and' that the complaint as it stands, is broad enough, and justifies the verdict of the jury. It is of little consequence whether the defendants took the property as carriers or as individuals: it is enough to sustain the action, that they took the property.

The object of plain pleading is to prevent, among other things, several actions from being brought for the same cause; and when the cause of action is so plainly stated that the facts can be developed at the trial and passed upon in such a form as to end the litigation, and prevent new suits for the same cause, this is all that is required, and no one will contend for a moment, after having examined the pleadings in this case and after so full a developement of the facts and circumstances on the trial below, that another action of any kind, especially an action against the defendants as carriers could be maintained. I have had no opportunity of consulting with my associate justices, who heard the case (the papers having been submitted to me.) Perhaps a discussion of the law and facts by them in my presence, or a knowledge of their views, might have induced me to concur with them about the application of the .rules of law, but in the absence of such knowledge, and entertaining the views of the law applicable to such cases I now entertain, I am for affirming the judgment, with costs.


author:
By the Court, Monell, J.
      Robertson, J.

text:
    William Fettretch, receiver, &c. plaintiff and appellant, vs. Andrew Armstrong, defendant and respondent.
    1. A compromise by one partner of a firm of a debt due to it after withdrawing from it, having either relinquished his interest in the claim to his partners on such withdrawal, or being so much indebted to them that he would not be entitled to any share of the residue of the assets of the firm, will render such compromise void for bad faith to the remaining partners, if the debtor has either received actual notice of such want of interest in the partner making the settlement, or the mode of conducting the negotiation and closing the settlement is such as should raise a suspicion in the mind of a person of ordinary prudence and intelligence that such partner was acting in bad faith towards his co-partners. Per Robertson, Ch. J.
    2. A written notice, signed by two members of a firm, to a debtor of the firm, merely not to pay any more money to any other members thereof, otherwise he will be responsible for it over again, without furnishing any reason for such prohibition, or giving any other information, does not require the debtor to make any inquiry as to the grounds of such prohibition; as it does not communicate the fact of any relinquishment, by the partners named in the notice, of any right.
    3. Notice to a debtor of a partnership that one of the partners “has nothing more to do with the firm;” that he “is out and working on day’s salary,” is nothing more than notice of his withdrawal from the firm, which is wholly immaterial. For the mere withdrawal of a partner from the firm, even with knowledge of it by a debtor to the firm, will not deprive such partner of the right to demand payment from the debtor of the partnership claim against him.
    4. Where there is no proof of any notice to the debtor of a firm, prior to the settlement of his claim by one of the partners, of the occurrence of any thing which would have deprived such partner of his right to settle .the debt; or of any circumstance of suspicion coming to the knowledge of the debtor or his agent, which should have raised in their minds as men of ordinary intelligence or prudence a doubt as to the right of such partner to settle the partnership • claim, such settlement must stand. Fer Robertson, Ch. J.
    (Before Robertson, Ch. J., and Monell and Garvin, JJ.)
    Heard November 9, 1867;
    decided January 6, 1868.
    .This was an action brought by the plaintiff,' as receiver of the assets of the firm of Irwin & Co., (composed of James and John Eettretch, Arthur Irwin, and Peter Algie,) to recover a balance claimed to be due, amounting to $1498.62, upon a contract made between said firm and the defendant, for furnishing and putting up the brown stone fronts of five houses in the city of New York.
    The complaint alleged that in January, 1866, shortly after making the contract, Peter Algie ceased to be a member of the firm of Irwin & Co.; that a pretended settlement made between the, defendant and Algie was subsequent to the latter’s withdrawal from the firm, and after the defendant had received notice thereof, that Algie had no authority to settle such claim, and that the settlement was collusive. All this was denied by the defendant, who alleged in his answer, that in March, 1866, he paid to the firm of Irwin & Co. the sum of $700, which sum was accepted and received by said firm in full satisfaction of all claims.of said.firm against the defendant, and which constituted :an" ^accord' and satisfaction of all claims alleged in the plairitifi'’kcq:mpláint. \ As a foundation for the accord, the defendant alleged that the firm of Irwin & Co. failed to perform, their contract; .-that the material was of inferior quality, and the fronts put up in an unskillful and an unwórkmánliké manner,, by mean8 of which the defendant sustained loss. ,.-
    The action .was. tried before Justice Jones and a jury. By the1 articles' of copartnership of Irwin & Co. dated November 12,1864, the partnership was to continue for one year, On the, expiration, of the year, the firm continued, (without any new agreement in writing,) carrying on the same business, by the same persons until the 27th of January, 1866, when Algie withdrew. The plaintiff testified that notice of the withdrawal' was given to the defendant’s agent. Other evidence tended to show notice to the defendant that Algie was out of the firm. The defendant and his agent denied that at the time of the settlement with Algie, they had received any notice that Algie had gone out of the firm, and testified that they had no knowledge that he had. There was some evidence of defective workmanship and materials, depreciating the value of each house $500. The defendant then proved, that on the 27th of March, 1866, he settled with Algie all matters arising under the contract, and as a compromise paid him $700 (the whole of the claim being $1320, deducting the difference for insufficient and bad work,) and took from Algie, in the name of Irwin & Co. a receipt in “ full settlement and satisfaction of all claims,” &c.
    Two questions were submitted to the jury: 1st. As to the performance of the contract'; and 2d. As to the good faith of the settlement. If they found there were defects in workmanship or material affecting the value of the buildings, they were to find for the defendant. If they found they did not exist, or were not substantial defects, they were instructed that then the plaintiff was entitled to recover, unless the settlement with Algie was good. On that subject the justice charged, that there was nothing for the jury to consider, except as to whether the compromise made with Algie was a fair, honest compromise. To which an exception was taken. He further charged, that he saw nothing in the case showing that the defendant or his agent were informed that Algie was indebted to his firm, to which the plaintiff excepted. Other exceptions taken to other parts of the charge as well as to a refusal to charge, as requested, as they relate to the subject of the compromise, are not necessary to be stated, the court having charged that “assuming that Algie had retired from the firm, and assuming that the other partners gave notice to the defendant not to pay because he had so retired, that did not take from Algie his right to demand payment of the defendant; To which there was no exception.
    The jury gave the plaintiff a verdict for $125. Judgment having been entered, the plaintiff appealed.

      0. E. Bright, for the appellant.

      Lockwood Qroshy, for the respondent.
   By the Court, Monell, J.

As I understand the charge in this case, it was to the effect, that if Algie had retired from the firm, and the defendant had notice of such retirement, a subsequent payment to him by a debtor of the firm, of a less sum than the whole amount of the debt due, if made upon a compromise of a claim disputed in good faith, would extinguish the indebtedness ; and it was left to the jury to say whether the compromise was fairly and honestly made. They were instructed, that if they should find there was a fair subject of dispute for the parties to settle, and that they settled it faii’ly according to their understanding of what was right, taking into consideration the claim of other parties, they must give the defendant a verdict; but if they should find the compromise was riot a fair and honest one, then their verdict should be for the difference between $700 and the sum which, with the sum paid to Algie, would be a just compensation to the plaintiff for work, &c. under the contract. The jury by finding that $125 was due to the plaintiff, have necessarily found that the compromise was not fairly and honestly made, and therefore not an accord and satisfaction of the whole debt. As such finding is in the plaintiff ’s favor, he cannot complain; and it is therefore unnecessary to examine any of the exceptions which relate to the question of the compromise and settlement made with Algie.

The question then is narrowed to this, whether under the facts of this case, the payment of $700 to Algie was a payment pro tanto, and proper to be deducted from the plaintiff’s claim. The appellant’s counsel concedes the rule to be that after dissolution, either of the former solvent and competent partners, in the absence of an agreement to the contrary, can collect a debt due to the firm, and give a discharge. Such undoubtedly is the rule. (Parsons on Part. 388, 9. Robbins v. Puller, 24 N. Y. Rep. 570.) But upon the withdrawal of one member of a firm, and a transfer of all his interest to- the remaining members, such power to discharge an indebtedness ceases, and a payment made by a debtor having notice of such withdrawal and transfer, would be invalid. I do not find, however, any sufficient evidence in this case to bring it within the principle I have last stated. I do not find any sufficient proof, such as would have sustained a verdict, that Algie had either in fact or in law, transferred his interest to the remaining partners. There was some evidence that the firm was in debt, about $5000; but even if such fact had been brought to the defendant’s knowledge, it would not have invalidated the payment to Algie. (Parsons on Part. 396.) The extent of the notice was that Algie was out of the firm, or had withdrawn from the firm, and had no interest in it. Such a notice did not prevent the defendant from effectually paying to Algie the debt due the firm. (King v. Smith, 4 Car. & P. 108. Duff v. East India Co., 15 Ves. 198. Combs v. Bornell, 1 Dana, 473.)

The ground of the objection to the question put to Kilpatrick does not appear. It was a proper mode of inquiry to ascertain the extent of defective workmanship or materials, and their effect upon the value of the houses; and although perhaps not the best or most satisfactory way of getting at the injury in money of the defective work, it was necessarily some, and therefore competent evidence.

I see no reason for disturbing the judgment, and think it should be affirmed, with the costs of the appeal.

Robertson, J.

The learned justice, before whom the issues in this action were tried, charged the jury that “ there was nothing for them to consider on the subject of the settlement between the agent of the defendant (Kilpatrick) and Algie, except as to whether it “ was a fair and honest one." To which instruction an exception was taken. He also refused to charge otherwise than he had charged, either that it was void “ if they believed the payment was made to Algie to defraud the remaining copartners,” or that “ the defendant was not discharged by payment to Algie” either “if the latter had withdrawn from the firm before such payment and at the time of such withdrawal, “ was indebted to the firm or his co-partners for over drafts, advances and losses * * and the defendant had notice of these facts,” or “if Algie withdrew from the firm and relinquished to the remaining co-partners his interest in the assets of the partnership before such settlement.” To the refusal to chárge either of those propositions the counsel for the plaintiff, excepted. The judge, however, instructed the jury that if they found the compromise was not a fair and honest one, they should “ give a verdict for the difference between the $700 (paid for it) and the sum which” they thought “would be a fair and proper compromise to be made.” To which an exception was taken by the counsel for the plaintiff.

The jury, under these instructions, found a verdict for the plaintiff for $125; having plainly found under the charge that the settlement with Algie was not “ a fair' and honest or proper one." Of course, unless there was something in the evidence to raise a question as to the good faith of the settlement, the plaintiff cannot complain of the verdict, and the question of law would not be presented, whether such settlement, if fraudulent, was void, entirely or only as to the difference between what was paid and what ought to have been paid.

Bad faith towards his co-partners by Algie in making such settlement, might be established by proof of his want of authority to make it, either by having actually relinquished his interest in the claim to his partners on his withdrawal from the firm, or by being deprived of such interest, by being so much indebted to them that he would not be entitled to any share of the residue of the assets of the firm. The bad faith of the defendant in such settlement, (which is also necessary to invalidate it,) might be proved either by evidence of actual notice of such want of interest in Algie, or by such a mode of conducting the negotiation and closing the settlement, as would raise suspicions in the mind of a person of ordinary prudence and intelligence, that Algie was acting in bad faith towards his partners.

And first, in regard to the question of actual notice to the defendant of any loss by Algie of his right to settle a claim due to Ms firm. • A written notice signed by two of them, (John and James Fettretch,) was delivered to an agent of the defendant, (Kilpatrick,) about ten days, (March 14th,) before such settlement, (March 24th,) merely notifying the defendant not to pay any more money to Irwin or Algie, otherwise he would be responsible for it over again, but furnishing no reason for such prohibition, and giving no other information. This, by itself, contained nothing to -require the defendant to make any inquiry, as to the grounds'of such prohibition, and certainly did not disclose any relinquishment by Algie of any right. The conversation had in the latter part of February or beginning of March, -previous to such settlement between Kilpatrick and the Fettreteh.es, (John and James,) gave the former no information that Algie had lost all control over the claim. James Fettretch simply told him, that Algie had “nothing at all to do with the firm,;” he was “out and working on day’s salary.” The words he used were, “Algie has nothing more to do with the firm.” This amounted to nothing more than notice of his withdrawal from the firm, which was wholly immaterial. No exception was taken to the instruction of the presiding justice that the mere withdrawal of Algie from the firm of Irwin & Co. even with knowledge of it, by the defendant, did not deprive Algie of his right to demand payment from the latter of his firm’s claim against him, which undoubtedly was the true rule of law. The foregoing is substantially all the evidence as to any actual notice to the defendant that Algie had ceased to have any right to collect or discharge the claim in question. On the other hand Kilpatrick, by whom the settlement was conducted, testified that he had “ no reason to suppose ” that Algie “ was not a member of the firm, when he settled with him, and that he “ had no notice whatever of Algie having no right to receive the money ; as a partner of the firm,” which is entirely uncontradicted. The defendant himself testified that he had no “ reason at any time to suppose (even) that Algie was not a member of the firm,” and that he “ had no intention of defrauding any one,” although he received the written notice before mentioned. There was, therefore, certainly no proof of any notice to the defendant prior to the settlement, of the occurrence of any thing which would have deprived Algie of his right to settle the debt.

It will be found, also, there was no evidence of any such suspicious circumstances in the mode of settlement, conducted by (Kilpatrick as) the defendants’ agent, with Algie, as to raise a question of had faith on the part of the defendant towards the other members of the firm of Irwin & Co. so as to have justified its submission to the jury. Algie made the estimate for the work and the contract itself with Kilpatrick. During the work, the latter only went to other members of the firm, when he could not get Algie to do what he wanted. A lien having been filed, about the 9th of March, 1866, in the county clerk’s office for the claim in question, indorsed with the names of Irwin and Algie as composing the firm, Kilpatrick on the same day ascertained from the clerk, what steps were necessary to discharge it. ■ About the same day, Kilpatrick offered John Fettretch $>1200 to settle the claim, and proposed to refer it to arbitrators, and talked about it again next day. Within a week after that, Algie stopped Kilpatrick in the street as he was driving a Wagon, and they “ had a conversation in relation to the "whole matter.” Algie then knew all about the lien and said, “If you want to settle the matter fairly, I am willing to do what is right; settle it fair and square between man and man.” Kilpatrick then informed him he would see the defendants’ counsel, (Orosby,) and talk with the defendant, and come to a conclusion. “ That was done, the matter talked over,” and the defendant left it with his lawyer. There were two or three interviews during, those days respecting it, and the final “ result of such negotiations, was.that after figuring over what would he fairly a deduction for insufficient and had work,” $700 was fixed as a fair price,for a settlement, which was paid and a receipt in full given by Algie on the 24th of March, 1866. Algie testified that he went to Kilpatrick first, and wanted him to settle -with him, (Algie,) and claimed that the latter knew him to be a.partner; that, there was a discussion about the matter; he demanding at first $1000, but making after-wards a deduction; he thought he had told John Eettretch he was going to settle that claim; although the latter denied any knowledge of such intention. Algie also, denied that in making suc'h settlement he ever “thought of such a thing in the world as defrauding or injuring any one.” I am unable to perceive in all this evidence any circumstance of suspicion, coming to the knowledge of the defendant or his agent, which should have raised in their minds as men of ordinary intelligence or prudence a doubt as to the right of Algie to settle such claim.

I do not regard the nature of Algie’s interest in the partnership profits, or his want of capital, or the branch of business to be conducted by him, or his receipt of separate wages for his services, or the refusal of Kilpatrick to-look to any one but John Fettretch, or the private conversation between Algie and the Fettretches in reference to his retiring from the firm and receiving more wages, not communicated to the defendant, or his indebtedness to the firm equally unknown, or the conversation between the defendant and James Eettretch after the settlement, as having any bearing on the question of the defendant’s good faith in making it.

It is very possible, that if a collusive settlement by a debtor made with one joint contractor to defraud his fellow contractors is void, all considerations paid by the debtor for it are to be disregarded. Rut in this case, the charge was more favorable to the plaintiff than he was entitled to, by having the question of the fairness of the settlement, without any evidence legally assailing it submitted to the jury, whereby he- has gained a verdict of $125. I do not think he can complain for not getting $700 more, to which he would not be entitled without bad faith on the part of the defendant, (of which there was no evidence,) none of the exceptions to the admission or exclusion of evidence being tenable. I therefore concur in affirming the judgment, with costs of the appeal to the defendant.


author: By the Court, Robertson, Ch. J.

text:
    Moses Pardo et al. plaintiffs and appellants, vs. George A. Osgood et al. receivers, &c. defendants and respondents.
    1. The assured, by a time policy upon a vessel which provides, that the loss, (if any,) shall be payable at a certain time after proof of loss and interest and that the premium shall be deducted from the loss, are entitled, in case of a general average loss, insolvency of the insurers, and an' appointment of a receiver of their assets, to have such loss set off against the claim of such receivers, on a premium note given by the assured for the premium on such policy.
    2. A loss incurred by a solvent assured under a policy issued by insolvent underwriters, before the insolvency of the latter occurs, is a mutual debt or credit,” within the meaning of the statutes relative to trustees of insolvent debtors, capable of being set off against the premium upon -such policy; although, by the terms of the policy the loss be not payable until a certain time after proof of it and interest, and no such proof was presented to the receivers before such insolvency.

      3. In such a case the loss is to be deemed to have occurred at the time of tho injury to the vessel by the peril insured against. The making of the repairs, out of which the claim arises, and the adjustment of such claim, only fix the amount of damages. The right to indemnity is fixed at the time of the injury.
    (Before Robertson, Oh. J., and Monell and Garvin, JJ.)
    Heard November 19, 1867;
    decided January 6, 1868.
    This was an appeal from a judgment overruling a demurrer to an answer. The action was brought to procure an offset of a premium note, (given by the plaintiffs upon a policy of insurance,) against a claim for a loss under the policy, and the cancellation and surrender of the note. The complaint alleged that the plaintiffs were co-partners, under th.e name of “ Pardo, Seixas & Co.” That on the 26th day of April, 1865, at the city of New York, the said “ The Columbian Insurance Company,” in consideration of the premium note of the plaintiffs for $1401.25, (bearing date on that day, and payable in one year thereafter,) to them delivered by the plaintiffs, duly made, executed and delivered to the plaintiffs, their agreement in writing, (known as a valued policy of insurance for $10,000,) bearing date, also, on that day, whereby said corporation, for the consideration aforesaid, and other considerations in said policy expressed, caused to be insured, (and thereby undertook to save, harmless,) the plaintiffs from and against any loss or damage, by perils of the sea, (and other perils therein insured against and specified,) to their Dutch barkantine, Judah Oappe, for the period of one year from the date aforesaid, to an amount not exceeding $10,000, and then and there, by the terms of said policy, said corporation also agreed that, in case of any loss under the said policy, the same should be paid to the plaintiffs in thirty days after due proof of such loss and proof of interest; and it was, also, further expressly provided, by the terms of said policy of insurance, that the amount of said premium note, if unpaid, should also be first deducted from the amount of such loss, as by reference thereto, as part of the complaint, would more fully appear; that after the execution and delivery of said policy of insurance, the said bárkantine, Judah Oappe, on the 20th day of December, 1865, sailed from the port of New York, on a voyage within the provisions of said policy, and before the 20th of January, 1866, by stress of weather, storms and tempest, and perils ' of the sea, so insured against, sustained great injury and damage in respect to her hull and sails; that afterwards, on the 22d of January, 1866, the master of said vessel made protest of the matters last aforesaid, and of said loss and damage, at St. Thomas, W. I. (which was the first port touched at by the vessel after said damage,) before the consul of the Hetherlands, of-all which matters the said insurance company had notice"; that afterwards repairs were then and there made upon said ship, so damaged as aforesaid, to a large amount, all of which were necessary to make said vessel sea-worthy and in as good condition as she was before said disaster and damage occurred; that there was, by reason of the matters aforesaid, a general average loss upon the said ship, so insured against, amounting to the sum of $2252.51, with interest from March 15, 1866; that thereafter, to wit, about March 18, 1866, the amount of such general average loss, so chargeable upon such vessel, and the said corporation as insurers thereof, was duly and properly adjusted, ascertained and liquidated, and the same amounted to said sum of $2252.51; that on or about the said 15th day of March, 1866, the plaintiffs duly presented to the then receivers and representatives of the said “ The Columbian Insurance Company,” due proof of the said loss and their interests therein, and of the adjustment of the amount óf such loss at the said sum; that the said Columbian Insurance Company was a corporation duly organized under the laws of the state of New York, in or about August, 1857; that on the 23d day of January, 1866, Benajah • Lóffingwell and Joseph Morrison were duly appointed receivers of all the property and effects of the said Columbian Insurance Company, by the Supreme Court, at ' a special term thereof, held in the'city and county of New York, upon proceedings duly taken therefor, in an action therein pending between William H. Harbeck, as plaintiff, and the said company as defendants; that afterwards, on the 24th day of January, 1866, the said Leffingwell and Morrison duly qualified as such receivers, and filed all the security required of them by the said- court with the clerk of the city and county of New York, and were duly invested with all the property and effects of said corporation; that the defendants had since been duly appointed receivers in' the place of the persons originally appointed, and were now duly vested with the title to all the property and effects of the said corporation; that the appointment of the defendants as receivers of the said “ The Columbian Insurance Company ” was made upon, and in consequence of, the insolvency of the said company, and upon proceedings founded upon such insolvency, for the better disposition of the assets of said company, and the liquidation of its affairs, in pursuance of the statute in such case made and provided, and that at the time of such insolvency, and of the appointment of the receivers of said company, the said premium note of the plaintiffs passed into the hands of said receivers, and is now held by the defendants, as such receivers ; that the plaintiffs have kept and performed all the stipulations in said agreement, or policy of insurance, on their part to be performed; that the said premium note fell due on the 29th day of April, 1866, and is now in the hands of the defendants, and is still unpaid; that no part of said loss or damage has been paid to the plaintiffs, or actually applied in extinguishment of said note; that the plaintiffs have often requested the defendants, as such receivers, to make an adjustment and offset of their said demand to the extent of the said note, and also to make payment to them of what maybe due above the same, but they have at all times hitherto declined so to do; that afterwards the plaintiffs applied to said Supreme Court by petition, in due form of law, for that purpose, and such proceedings were thereupon had that on the 30th day of October, 1866, at a special term of said court, an order was duly made, authorizing the plaintiff to prosecute the said defendants in any court of record in this state, for any legal or equitable relief they might deem themselves entitled to have by reason of the matters aforesaid.
    Wherefore the plaintiffs demanded judgment, that it might be declared by this court that said receivers took and now hold said note, subject to the legal and equitable rights and offsets of these plaintiffs, under the statute in such case made and provided, and under and by virtue of the conditions and terms of said policy, to have an adjustment (between the plaintiffs and the defendants, as such receivers, as representaves of said company) of the mutual credits and claims of the plaintiffs and said company, which are above mentioned and referred to, and a set-off or deduction of the amount .owing to them for the said general average loss, against, and from said premium note of the plaintiffs, and that thereupon the said premium note might be deducted' from the amount of said loss as adjusted, and the said note delivered up to the plaintiffs to be canceled, and the' defendants directed to pay to the plaintiffs the remainder of such loss, in due. course of administration of the assets of said corporation, and that' the plaintiffs might have such other and further relief, &c. with costs.
    The defendants, in their answer, alleged:
    1st. That the Columbian Insurance Company was, at the time of the appointment of receivers thereof, as set forth in the complaint, insolvent, and entirely unable to pay their creditors in full, and still remain so.
    2d. That immediately upon the appointment of Benajah Leffingwell and Joseph Morrison, as receivers of the said Columbian Insurance Company, they published a notice thereof, for three successive weeks, in the state paper, and in a newspaper printed in the county where the principal •place of conducting the business of the said company was situated, to wit, in the New York Evening Post, of which notice the following is a copy:

      “ Notice is hereby given that the undersigned have been-appointed by the Supreme Court of the state of New York, receivers of all the property and effects of the Columbian Insurance Company (Marine) of the city of New York, and that they hereby require,

      First. All persons indebted to the said company to render, on or before the 20th day of March, 1866, at the office of the receivers, No. 2 Nassau street, in the city of New York, an account of all debts and sums of money owing by them respectively to the said receivers, and to pay the same.

      Second. All persons having in their possession any property or effects of the said company, to deliver the same to the said receivers, on or before the day, and at the place above mentioned.

      Third. All the creditors of the said -company to deliver their respective accounts and demands to either of the said receivers, on or before the 20th day of March, 1866, and at the place aforesaid.

      Fourth. All persons holding any open. or subsisting contract of the said company, to present the same in writing and in detail, to the said receivers, on or before the 20th day of March, 1866, and at the place aforesaid.
    New York, February 3, 1866.
    Joseph Morrison,
    B. Leeeingwell,
    Receivers.”
    3d. That no notice of protest, or of the loss mentioned in the complaint, was ever received by the said company; but the same was received by the defendants after their appointment as receivers aforesaid and after the first publication of the notice aforesaid, and not before.
    4th. That if the plaintiffs are allowed to set off their premium note against the amount due to them upon the loss'set forth in the complaint, they will thereby secure a preference over other creditors of the said company to the extent of the said note and diminish the fund in the hands of the defendants, which ought to be applied to the payment of creditors in equal proportions.
    Wherefore, the defendants demanded judgment; that the plaintiffs pay to the defendants the amount of the said note, to wit: $1401.25, with interest from April 29, 1866, and that the claim of the plaintiffs be paid out of the funds in the hands of the defendants as receivers, ratably, in just proportion with other debts of the said company.
    The plaintiffs demurred to the amended answer for the, reason that it appeared upon its face not to state facts sufcient to constitute defense to the cause of action allegéd in the complaint, or any counter-claim thereto, and stated only conclusions of law.
    The court, at special term, overruled the demurrer, with liberty to the plaintiffs to amend on payment of costs. The plaintiffs appealed to the general term.

      Albert Mathews, for the appellants.
    I. Since the decision upon the demurrer at special term in this action, the precise question involved in this issue has been very fully considered by the Court of Appeals, and the right to the offset clearly established by the decision of that court. That decision must control this case in this court. The question is now res adjudicata. (Osgood, receiver, &c. v. DeGroot, 36 N. Y. Rep. 348.)
    1. In the case of Osgood v. DeGroot, the action was brought by the same receivers upon a like premium note against the makers who had insured in the company, and had sustained a loss covered by their policy ; but the equities and legal rights of the makers of that note were less clear than the plaintiffs’ in this case. In that ease the demand of the insured was long after the premium note fell due, and was not payable by the company until long after the suit was actually commenced by the receivers to recover the amount of the note. In the case now before this court, the demand of the insured was payable lefore the note fell due, and loth were due when this action uas commenced.

      2. On the argument of that case in the Court of Appeals, the same counsel represented the receivers, and printed copies of the opinion of this court in this case were furnished to that court.
    3. Upon that argument the counsel for the plaintiffs in this action submitted an argument upon the identical questions involved in this action, to which points and authorities he refers now in this case.
    U. The only defense set up in the answer in this case is the legal effect of a notice issued by the receivers. This defense was overruled by the court in this case.
    HE. The facts of this case established a reciprocal right of set-off in both parties, within the equity of the general statute concerning “ set-offs.” If the makers of the note had been insolvent, and yet had sued the receivers for their dividend, pro rata, with other creditors,- could it he urged that the receivers could not set off their demand upon the note ? To hold this would be grossly inequitable. But if the right of set-off exist at all, it must be reciprocal. Like an estoppel, it must be mutual. (2 R. S. 354, §§ 18-25. Bize v. Dickason, 1 T. R. 285. Berry v. Brett, 6 Bosw. 627.)
    IV. The limitations to the duty of set-off in cases of “mutual credits” in suits between trustees of insolvent debtors and creditors of the insolvents, contained in the statutes (2 R. S. 47, § 36; Id. 355, § 18, subds. 10, 11,) do not impair the right or duty of set-off in this case.
    1. This is not an action by an assignee of an insolvent debtor. (2 R. S. 355, § 18, subd. 11.)
    2. The duties and obligations by law imposed on trustees of insolvent debtors belong to receivers, like the defendants, only so far as they are applicable. (2 R. S. 470, § 74.)
    3. Trustees of insolvent debtors are prohibited from a set-off, in cases of “ mutual credits,” only where the claimant would not have been entitled to a dividend. (2 R. S. 47, §§ 33, 35, 36.)
    4. Now, though there may be a doubt whether these plaintiffs’ demand (being unliquidated, and not payable until after the rights of the trustees attached in case of an insolvent debtor) would be a “debt,” entitled to a dividend, and therefore, barred by the debtor’s discharge; still, in the case of a receivership of an insolvent corporation, unquestionably the plaintiffs would take their dividend the same as any other creditor. (2 R. S. 22, §§ 30-34. Id. 471, § 79, subd. 3.)

    5. Therefore, inasmuch as the reason and ground of exclusion of the set-off in the cases-of trustees of an insolvent debtor do not apply to the case of receivers of a corporation, the exception contained in the statute referred to (2 R. S. 47, §§ 33, 36) cannot be construed to limit their duty to allow the off-set in a case like the present.
    V. The insolvency of the corporation, instead of being an objection to the set-off, furnishes an additional equity in favor of the plaintiffs, under the facts and circumstances of this "case. Here were reciprocal executory contracts. The plaintiffs agreed to pay their note, if the corporation would indemnify the makers against loss beyond $he amount of their note. The receivers should not be permitted to make a virtue of the company’s failure and inability to keep their promise, so as to compel the plaintiffs to pay a note they could not have been asked to pay, if the company had performed their obligation. The nearest approximation to justice that can be had in the case will be reached by allowing the set-off. The remainder of the plaintiffs’ loss may be irremediable. (Simson v. Hart, 14 John. 76. Columbian Ins. Co. v. Black, 18 id. 149. Miller v. Receiver of Franklin Bank, 1 Paige, 444. Lindsay v. Jackson, 2 id. 581. Wolcott v. Sullivan, 1 Edw. Ch. 399. Barber v. Spencer, 11 Paige, 517. Barbour on Set-off, 193.)
    YI. The judgment should be reversed, and judgment ordered for the plaintiffs, as demanded in the complaint, with costs.

      Dudley Field, for the respondents.
    This case differs from that of Osgood v. DeGroot in two material respects, viz 1. That the foundation of the claim in the DeGfroot case was perfect before the receivers’ appointment, except as to the proof of loss; whereas in this case the plaintiffs had no claim at all until after that appointment. 2. That this is an action brought to compel a set-off; whereas, in the DeGfroot case the note was set up only as a defense.
    I. In the DeGroot case it is expressly stated that the loss which was there set off against the premium note, was sustained on November 22, 1865, two months before the receivers were appointed; and on this fact the court makes its judgment depend. (See 36 N. Y. Rep. 350.)
    II. In the present case, the loss was not sustained until after the receivers were appointed. This does not appear, in so many words, upon the face of the complaint; but is clearly to be inferred from its statements.
    1. The loss was a “ general average loss.” This means a loss which is made- to fall upon all the interests at risk, and saved by being averaged upon all. (1 Pars. Mar. Law, 284.) The vessel, it is true, was injured on the 20th of Janary, three days before the receivers were appointed. But the claim of the plaintiffs is not founded upon this injury, for that, would be simply a partial loss, which was not insured against, and is not pleaded as the basis of their claim. The general average loss was founded upon the repairs done in port for the purpose of enabling the vessel to bring the cargo home. That this alone could. be the foundation of a claim for general average is very clearly shown by Parsons in treating on this subject. (1 Pars. Mar. Law, 293.)
    2. The cost of these repairs was not necessarily the measure of indemnity for the partial loss of January 20, even if that had been covered by,the policy; while it was necessarily the measure by which the various contributions to general average were determined. It might be less, or it might be more, according to circumstances; but it was almost impossible that the ship’s contribution to general average should be precisely the same amount as would indemnify it for the original injury. Ordinarily, it would be less; but if the cargo were very valuable, and the vessel/poor, it might be the duty of the captain, in a port where repairs were expensive, and reshipment by another vessel impossible, to spend three times the value of the ship in repairs. The general average loss in such a case might largely exceed the loss for which the insurers would otherwise be responsible. But all that is material to our purpose is to show that the losses are not the same. And this is well settled. (1 Pars. Mar. Law, 293. Padelford v. Boardman, 4 Mass. R. 548.)
    3. The general average loss could not therefore occur until the repairs, which were its foundation, were completed. These repairs were not commenced until ■ after January 22, 1866, and could not possibly have been completed in one day. On January 23, the receivers were appointed. The complaint shows that the loss dated from March 15, 1866. That is clearly the day upon which the repairs were paid for, since the adjustment was not made until three days later. The receivers’ title dates from January 23,1866, the day of their appointment, although their bonds were not filed until the next day. (Rutter v. Tallis, 5 Sandf. 610.) It thus appears that the loss sued upon occurred on March 15, 1866, while the-receivers’ title dates from January 23, 1866.
    III. This is an action for set off, and to compel satisfaction and cancellation of a note. The BeGrroot case is no authority for such a proceeding; and the action cannot be sustained, even if the facts would constitute a defense to the note.
    1. The action is not maintainable under the head of equitable jurisdiction for the cancellation of instruments. The, note was over due when the action was commenced, and could not be transferred so as to deprive the plaintiffs of any set off. In such cases this action does not lie. (1 Story’s Fq. Juris. § 700, a. Threlfall v. Lunt, 7 Sim. 627.)
    2. The action is not maintainable as one founded upon an equitable right of set off; because, if the plaintiffs have any such right, they can avail themselves of it as a defense to an action on the note, and not otherwise. Equitable defenses may be pleaded in ¿very species of action. (Blair v. Claxton, 18 N. Y. Rep. 529. New York Central Insurance Company v. National Protection Insurance Company, 14 id. 85. Crary v. Goodman, 12 id. 266.) This being the case, cross actions cannot be brought for the purpose of restraining suits, though the original claim is strictly legal, and the defense purely equitable. [Arndt v. Williams, 16 How. Pr. 244. Hunt v. Farmers' Loan Company, 8 id. 416. Dederick v. Hoysradt, 4 id. 350. Grant v. Quick, 5 Sandf. 612. See Foot v. Sprague, 12 How. Pr. 355, 358.)
    3. The equitable action for a set-off being founded only upon the inability of the courts of law to allow such a set-off, is made obsolete by the fusion of law and equity under the Code of Procedure, which makes all these cross suits useless and improper.

      Mathews, in reply.
    The alleged differences pointed out by the defendants are equivalent to a cognovit. The first is founded neither in fact nor reason. The second has no foundation in law, or support from the authorities cited.

      First. It is alleged the plaintiffs had no claim against the insurance company, when the loss' happened, January 20, 1866, nor until after the repairs had been made upon the ship, which, it is' conjectured, was after the defendants’ appointment as receivers, (January 23, 1866;) whereas, in the DeGroot case, the claim arose November 22, 1865.
    I. In the DeGroot case the sea damage occurred on the 22d day of November, 1865, and not the repairs to the ship.

      ' II. The damage to the ship, in. this case, is the only injury mentioned in the complaint, and as the loss was a “ general average loss,” to which both cargo and freight must have contributed, of course the “ general average loss ” (as adjusted) was less than the real loss sustained by the ship. The notion is, therefore, novel, as well as fanciful, that the “ foundation of the plaintiffs’ claim ” did not" arise until the .ship was repaired, and the loss averaged. The claim of the plaintiff was not created, but diminished by the average or contribution.
    III. The loss being more than five per cent, the insurers were liable for a partial loss, and the receivers’ counsel is in error in his assumption in this respect. (See similar policy, De Groot case.)

    IV. There is no pretense that, in this case, the loss was adjusted until after the appointment of the receiver, (in January, 1866 ;) nor is there any evidence that the loss in the DeGfroot case was adjusted before March, 1866.
    V. It is a solecism to say the “ general average loss ” did not occur until the repairs were done, upon which the average or contribution was computed. The moment the injury happened, the loss occurred, and the claim arose. All that happened thereafter, (down to the expiration of thirty days after presentation of proofs of loss,) was the limitation of the amount of damages, and the maturing of the right to prosecute for non-payment.

      Second. It is alleged that the circumstance that, because a •plaintiff, instead of a defendant, invokes the equitable powers of the court to establish a set-off, the decision in the DeGrroot case is inapplicable.
    I. This is a distinction without a difference, inasmuch as “ set-off” is an old and favorite head of equity jurisdiction, and the insolvency of the company is good ground for invoking the equitable powers of the court. (Simson v. Hart, 14 John. 75. Lindsay v. Jackson, 2 Paige, 581.)
    U. The case cited from Simons’ Reports, and Story’s Equity Jurisprudence, was, where a judgment had been recovered upon a note, and the court refused to entertain a bill to order it delivered up, because the note was merged in the judgment.
    ITT. There is no authority for saying that an equitable defense to an apparent but inequitable claim, may not be anticipated by a suit in equity to prevent its enforcement, &c. The books are full of precedents to the contrary.
    IV. The cases cited to the proposition that cross suits cannot be brought to restrain suits, are where actions had already been commenced, and the second suit was brought to restrain the first.
    V. There is nothing in the Code to vary the jurisdiction or rights of parties similarly situated with the parties to this action.
    VI. Besides, the plaintiffs are entitled to have their rights established and liquidated, and not left in doubt and uncertainty
   By the Court, Robertson, Ch. J.

Since the decision of this case at special term, the case of the present defendants against DeGroot and another, involving nearly the same questions, has been determined by the Court of' Appeals, at their last March term, and several principles of law applicable to the present case authoritatively settled therein. The policies in both cases were on time, on vessels to which injury from perils'insured against occurred, before the appointment of receivers ; both made the loss payable a certain time after proof of loss and interest, and contained a similar clause for deducting the premium of insurance from the loss in case any occurred. The claims in both cases were for general average. It does not appear by the report of the case in the Court of Appeals whether such general average was adjusted before the-present defendants were appointed receivers, or not.

The Court of Appeals m the leading opinion in the case just referred to (Osgood and others, receivers, &c. v. DeGroot and another,) adopted several principles. The most important of which was, that both because the liability of the assured on the premium note, and of the insurers on the policy arose out of the same transaction, and the policy provided for a deduction of the premium note from any loss, the same were “mutual credits,” within the meaning of the provisions of the Revised Statutes relative to the authority of trustees of insolvent debtors to set off credits or debts of - such debtor, (2 R. S. 47, § 36;) the power to make similar set offs in the same cases being conferred upon receivers of insolvent insurance companies by other provisions of the same statutes. (Id. 469, §§ 68, 70, 71, 72, 74.) This was so held on the authority of a case decided under a section of the English bankrupt law of 19 Geo. 2, (c. 32, s. 2) which permitted an assured to prove a loss accruing after the bankruptcy, against the assignees of the bankrupt, in like manner as if it had accrued before. (Graham v. Russell, 5 Maule & Sel. 498.) In that case Lord Ellenborough held that underwriters who were solvent might, under the statute just cited, set off a claim for premiums against a loss which did not occur until after a commission in bankruptcy against the' assured; and that the entire distribution of the assets must await the result of the perils ' insured against, during the period covered by the policy. Otherwise, as that learned judge observed, “ the time of the happening, of the event and not the nature of the contract or contingency ” would “ give the rule of decision. And a contract, which would have furnished an item of mutual debt on his (the debtor’s) part or an event happening yesterday, will not even furnish an item of mutual credit upon an event happening to-day.” It would seem, therefore, that that able judge held the distinction between “mutual debts” and “ mutual credits ” to be simply that obligations for the payment of money (at least when connected with each other, by arising out of the same transaction of otherwise,) were mutual debts, if they were both due, (see Murray v. Toland, 3 John. Ch. 569; Dale v. Cooke, 4 id. 11,) and mutual credits if either remained to be paid at a future day. (See Dale v. Cooke, sup.; Duncan v. Lyon, 3 John. Ch. 357; Jones v. Robinson, 26 Barb. 310; In re Van Allen, 37 id. 229.) The learned justice (Hunt) in the case in the Court of Appeals Just cited, (Osgood, receiver, v. DeGroot,) also cited Swords v. Blake, 3 Edw. Ch. 112;) 2 Story’s Eq. Jur. (§§ 19, 34;) Reed v. Bank of Newburgh, (1 Paige, 215;) In re Globe Ins. Co., (2 Edw. Ch. 625,) and the opinion of the vice chancellor in Holbrook v. Am. Ins. Co., (6 Paige, 220,) in support of the same principle.

The learned justice, in his opinion, just referred to, seems either to have taken for granted as matter of fact, that the loss in the case before him not only occurred, but was due, at or before the time of the appointment of the defendants as receivers, notwithstanding the provision in the policy, that it should not be payable until sixty days after proof of loss and interest, since there was no evidence before the court that any such proof was furnished until after the appointment of the receivers, (March 26, 1866,) and their advertised notice, and the pleadings only admitted an assent by the receivers at that time.to the validity and amount of such claim; or else he held, with Chancellor Walworth, in the case of Holbrook v. Receivers of Am. Fire Ins. Co., (ubi sup.) that the New York statute which allowed set offs in case of insolvent debtors (ubi sup.) like the English bankruptcy acts, (5 Geo. 2 c. 30, § 38. 6 Geo. 4, c. 16,) which use the same words, “ embraced not only mutual debts but also, all credits and transactions ex contractu, where the credit or contract must ultimately terminate in a debt, although the ' debt had not been liquidated or payable at the time of the bankruptcy.” In support of that doctrine, the learned chancellor, in the case mentioned, referred to the cases of Grove v. Dubois, (1 Term Rep. 112;) Bize v. Dickinson, (Id. 285;) Koster v. Easan, (2 M. & S. 112.) To which the learned Justice (Hunt) in the case in the Court of Appeals added that of Jones v. Robinson, (26 Barb. 310;) Berry v. Brett, (6 Bosw. 627;) In re Receivers of Globe Ins. Co. (2 Edw. Ch. 625.) But it seems to have been overlooked by both those learned justices that in every one of those cases, one of the mutual debts or credits was due at the time of the bankruptcy or insolvency. For no notice was taken by them of the cases of Glennie v. Edmunds, (4 Taunt. 775;) Sampson v. Benton, (2 Brod. & B. 89,) and Ex-parte Rhodes, (15 Ves. 539,) decided under the statutes of 5 Geo. 2, (e. 30, § 28,) and 6 Geo. 4, (c. 16,) whose language is more explicit in the use of the words “ mutual debts" and “ credits” than that of 19 Geo. 2,(ubi sup.)under which Graham v. Russell, (ubi sup.) was decided. Yet in those cases, notwithstanding the claims arose on contract and must ultimately have terminated in a debt, as they did although not liquidated at the time of the bankruptcy, they were held not to be admissible as a set-off.

The provision of the Revised Statutes also, by which the right offset off by a defendant in a suit by the trustees of an insolvent debtor to recover a claim due him is limited to debts owing by such debtor before public notice of the appointment of the trustees or the commencement of proceedings against him (2 R. S. 41, § 7,) is also overlooked by both the learned justice of the Court of Appeals, and the late eminent chancellor in the two cases already commented on.

Still I am compelled to yield to the authority of such case in the Court of Appeals (Osgood, receiver, v. DeGroot) for the doctrine, that a loss incurred by a solvent assured under a- policy by an insolvent underwriter, before the insolvency of such underwriter, was a mutual debt or credit within the meaning of the statutes as to trustees of insolvent debtors, capable of being set off" against the premiums upon such policy, although such loss was by the terms of the policy not payable until some time after proof of. loss ■ or interest, and no such proof was presented before such insolvency to the receivers.

I regard the loss in this case as having occurred at the time of the injury, by the peril insured against, to the vessel insured. Whatever may be the doctrine as to a mere charge of general average on the cargo or freight, general average upon the vessel is merely the residue of compensation for the' injury, after crediting the amounts received from contributory sources. The making of the repairs and adjustment of the claim only fixes the amount of damages; the.right to indemnity accrues at the time of the injury. The BeGroot case also seems to consider the form of the action or proceeding immaterial. And as1 it disregards the section of the Revised Statutes, to which I have referred, which seems to confine the right of set off to suits against an insolvent debtor, (2 B. S. 41, § 7,) the defense must be considered complete to the premium notes in any action or proccding which either party has a right to bring, in which the court has jurisdiction to pass on the question.

As to the objection that the action is an equitable one by the debtors of the company, which is rendered unnecessary because'they have a right under the Code of Procedure to set it up as a defense in an action, it is to be remarked that the plaintiffs are entitled to a judgment for the residue after making the set-off payable in the due course of administration of assets of the company. If they should prove for the whole claim before the assignees, it might be considered as a waiver of their right of set off, and the assignees might never bring a suit on the note to test the question, or if they did, the plaintiffs could not well get any judgment for the balance. I am not prepared to say that the Code has necessarily abolished the exercise of long established affirmative equitable jurisdiction to enforce a set-off cognizable only in equity. The necessity of and right to, an injunction order, to prevent a suit in which all the rights of the parties cannot be settled, and aid a suit in which they can, is fully sufficient in this case, and the only question in it is, therefore, as to the right of set off.

For these reasons the judgment at special term should be reversed, with costs to abide the event.