text:
    ARTHUR B. LONG, et al., Plaintiffs and Respondents, v. EDWARD BUSSELL, Impleaded, &c., Defendant and Appellant.
    Monet had and received—action for the same.
    “As a general rule, the question is, to which party ex mquo et lono does the money belong ” (Buel v. Boughton, 2 Den. 91).
    This action “is denominated an equitable action, and is less restricted by technical rules than most others. It aims at the mere justice of the case, and looks entirely to the question whether the defendants hold money, which in equity and good conscience belongs .to the plaintiff (Colville v. Besley, 2 Den. 139, 142).

      Held, in this case, that the defendant received money which in equity and good conscience belonged to the plaintiffs. They came into its possession by a misappropriation of it by plaintiff’s factors and agents. The latter, as between themselves and their principals, had no right to, nor interest in, such moneys, except as the trustees of the plaintiffs. The defendants did not part with any consideration, nor incur any liability; nor did they release any right or property, for or on account of its payment to them.
    Before Curtis, Ch. J., and Freedman, J.

      Decided December 1, 1879.
    The case of Butterworth v. Gould (41 N. Y. 450) reviewed, and not considered analogous to this case.
    Appeal, by defendant from a judgment in favor of the plaintiffs, entered upon the report of referee.
    The facts sufficiently appear in the opinion.

      S. R. Johnson, for appellant.

      Ed. W. Chamberlain and Nelson Smith, for respondents.
   By the Court.—Curtis, Ch. J.

The referee found, that on or about March 19, 1877, the plaintiff, by Valentine Meyers & Co., their factors, at the city of New York, sold and delivered to the copartnership firm of Southard & Co., doing business in the city of New York, a quantity of pine lumber belonging to the plaintiffs, consisting of one hundred and five thousand seven hundred and forty-three feet, at the price of $16 per thousand feet, amounting to $1,624.43, over and above the freight thereon, which freight was also to be and was paid by Southard & Co., to the party entitled thereto, and which sum of $1,624.43 became due and payable from Southard & Co. to the plaintiffs, for the price of the lumber, on or about March 22, 1877.

That also, on or about March 22,1877, the firm of Southard & Co. paid over to the defendant the price of the lumber so due to the plaintiffs, being the sum of $1,624.43, and the same was received by the defendants to the use of the plaintiffs.

The referee also found that plaintiffs, on or about January 28, 1878, demanded the sum from the defendants, which they neglected and refused to pay, and that the same, with interest from January 28, 1878, was justly due and owing from the defendants to the plaintiffs.

The referee also found, as conclusions of law upon the facts of this case, that the plaintiffs were entitled to recover from the defendants in this action the sum of $1,745.34, together with the plaintiffs’ costs of the action, for which judgment should be entered against both of the defendants, so far only as that it may be enforced against the joint property of both defendants, and the separate property of Edward Bussell.

The proofs sustain the findings of fact of the referee. The conclusions of law that he arrives at are well and carefully considered in his opinion, which is as follows :

The plaintiffs reside at Grand Rapids, Michigan, and manufacture lumber.

Valentine, Myers & Co., at the time of the transactions in question, were engaged in selling lumber on commission, and in the purchase and sale of it on their own account, and had their lumber depot at Hastings, in this State, and an office in the city of New York.

Some time in 1876 there was an agreement made between them and the plaintiffs, by which the latter were to forward to the former, at Hastings, in this State, lumber to be sold by Valentine, Myers & Co., as the factors and agents of the plaintiffs. Valentine, Myers & Co. were to advance all the money required to pay the freight on the lumber thus forwarded to them, and after the latter had sold the lumber they were to make returns on the sale to the plaintiffs. Valentine, Myers & Co. were to deduct from the gross proceeds of the sales five per cent, on the amount thereof for their commissions, the amounts advanced by them for freight, and the amount of charges that would accrue, the nature of which charges was understood between them.

Under this arrangement, Valentine, Myers & Co. from time to time received lumber from the plaintiffs, and out of the lumber thus received they sold and delivered to Southard & Co., of this city, on or about March 19, 1877, a lot of lumber, amounting to $1,691.88, or thereabouts. At the time of this sale Valentine, Myers & Co. were indebted to the plaintiffs on account of sales made by them prior thereto of the plaintiffs’ lumber, over and above the amount of all sums which they had paid for freight on all the lumber forwarded to them by the plaintiffs, and over and above all charges they could possibly make in regard thereto, in an amount exceeding the sum of $6,000, and which yet remains unpaid. On March 20, 1877, Valentine, Myers & Co. assigned to the defendants their claim and demand against Southard & Co. for the price of the lot of lumber they sold to the latter, which assignment is in writing, and concludes thus, viz. :

“The consideration for this assignment being so much of the indebtedness due by us to said Bussell & Co. as shall be equivalent to the amount of the claim assigned.”

On this assignment Southard & Co., soon after its date, paid to Bussell & Co. $1,500 in money, and paid by direction of Valentine, Myers & Co. to the captain of the boat on which this lumber was brought from Hastings to this city, $67.41, the amount due him for freight, and adjusted the balance, being $124.43, by crediting the same to the defendants on account, whereby they have received the same in a way equivalent to the receipt of the same in cash. At the time Valentine, Myers & Co. assigned this claim to the defendants they knew that Mr. Havens, one of the firm of Valentine, Myers & Co., was about to commence a suit against his copartners to wind up the business of the firm and obtain the appointment of a receiver of its property and effects. Such a suit was soon brought, and a receiver therein was appointed, and Mr. Bussell was one of the sureties of the receiver in that suit, or was a surety for Havens to enable him to obtain an injunction therein. , Southard & Co. had no notice, when they bought this lumber and paid for it, as above stated, that the plaintiffs were in any way interested in such lumber ; nor did the defendants have any such notice when they received the said assignment, nor at the time they received from Southard & Co. the $1,500 in cash, or at the time they took payment of the $124.43 by receiving a credit for it on account.

It is clear that the lumber sold by Valentine, Myers & Co. to Southard & Co. belonged to the plaintiffs at the time of the sale and delivery thereof. That as between the plaintiffs and Valentine, Myers & Co., the latter bad no right, legal or equitable, to any part of the ¡nice to be paid for it. The money paid for it by Southard & Co. to the defendants, when thus paid, in equity belonged to the plaintiffs. Their lumber, by the sale made of it, and the payment made therefor, became converted into this money, which they thus identify and follow into the defendant’s possession. In judgment of law, as I think, they received it to the plaintiffs’ use, unless the facts proved establish a right in them, to take and retain it as against the plaintiffs. The defendants now seek to retain it on the ground, in substance, that on March 16, 1877, they loaned Valentine, Myers & Co. $1,500 in money, on the promise that the proceeds or price of the lumber which Southard & Co. bought should be applied to repay this loan of $1.500. There are three items of evidence bearing directly on this question, viz. :

1. The terms of the assignment of the claim.

2. The testimony of Bussell, and

3. The testimony of Mr. Havens, who got the loan from Bussell.

First. The terms of the written assignment do not import that it was made to secure specially this loan. The loan was $1,500, and the demand, as proved, was $1,624.43, as Southard & Co. paid to the captain of the canal boat $67.45, which left due on the lumber $1,624.43. The assignment states that the claim assigned was “ supposed to amount to about $1,600, more or less.” It directs “ Southard & Co. to pay the said claim to said E. Bussell & Co., or to settle with them for the same,” and declares the consideration thereof to be “ so much of the indebtedness due by us ” (Valentine, Myers & Co.) “ to the said Bussell & Co., as shall be equivalent to the amount of the claim assigned.” This imports the precise consideration and cause of the assignment of the claim to be pre-existing indebtedness of Valentine, Myers & Co. to E. Bussell & Co., of the same amount as that of the claim assigned, and that such pre-existing indebtedness exceeded in amount the amount of the claim assigned. There is nothing in it pointing to or indicating any loan of $1,500, and certainly nothing suggesting the idea of such a loan having been made on a promise that it should be repaid by means of payment of this claim, but, on the contrary, its terms are repugnant to any such idea, or the existence of any such fact.

Second. E. Bussell was examined, before trial, on March 21, 1878. Previously thereto, and about January 28, 1878, he had received written notice from the plaintiffs of the claim which they seek to enforce in this action. On that examination he testified thus, viz. :

“ The last loan I made them (viz., Valentine, Myers & Co.) was on March 16, 1877, $.1,500 ; I fix the date by the fact that I gave a check, and have recently looked up the check” . . . “and this said last loan was only for a day; I took no note or other security ” . . . “This last loan of $1,500 was agreed to be repaid the next day, the 17th ; I did not see them on the 17th, to the best of my recollection, but did see them within a few days after ; think it was at their office, and called their attention to the fact that they did not return said loan ; they then said that they had been disappointed in getting money from some bank; think it was some notes they offered 'for discount; they had some lumber here which was about sold, or that they calculated to place, they said ; they gave me a writing on Southard & Co.” (meaning thereby the assignment before mentioned). . . “I got $1,500 within a'day or two; I do not remember when I got the rest. . . They gave me $1,500 in money, and credit for the balance.”
“ Q. On what account did you take that paper from Havens?” (meaning the assignment).
“A. It was on account of the indebtedness I had against Valentine, Myers & Co., and I gave no receipt for it.”

On the trial of this action Bussell was again examined, and, after hearing his previous deposition read, and after hearing Jonathan 1ST. Havens testify in relation to the loan of the $1,500, testified thus, viz. :

“Q. You remember this check of March 16, 1877, which has been referred to ?”
“A. Yes.”
“ Q. What took place between you and Mr. Havens, if anything, in regard to this lumber which was sold to Southard & Co. at the time of giving this check ? ”
“A. He came to me and wanted to borrow $1,500 for a day or two ; he said that he had money coming in from some bank, and also a boat load of lumber at Watrous & Wilson’s yard, which he had sold, and which he would probably have the money for next day, and would reimburse that money if I would lend him the $1,500 ; I did so, and did not hear anything of him in a day or two ; I went to see them, and they explained that Watrous & Wilson had only taken part of the load, or that they were about selling it somewhere else ; that their money had not come from the bank, and that as soon as it was sold they would give me my money ; in the course of a day or so they sold this lumber to Southard & Co., and gave me an order, as I supposed it was, to go and collect the money.”

On cross-examination he testified thus :

“ Q. This balance here, over and above the $1,500 with which you were credited by Southard & Co., I suppose, has been paid to you ; that is, you had dealings with Southard & Co., hadn’t you?
“A. Yes.
‘ ‘ Q. And that balance was allowed to you as against claims that they held against you ?
“A. Yes, sir.
“ Q. So that it is the same as cash in your hands ?
“A. Yes.”

I think it perfectly clear on this testimony that the loan of $1,500 was not made in reliance on any promise by Havens that the proceeds of this cargo of lumber should be applied to repay it. That Bussell had no such idea when he made the loan, and, according to his deposition before trial, there could be no pretense that anything was said about this cargo of lumber at the time the loan was made. As Bussell details the transaction in that deposition, the cargo of lumber was spoken of when he went and inquired why the loan had not been repaid. There is no pretense in that deposition that any allusion was made to it, or to any explanation of Havens getting money from a bank at the time the loan was made. The testimony of Bussell harmonizes with the terms of the assignment, in respect to what the transaction in regard to this loan was.

The testimony of Havens does not convince me that the terms of the assignment fail to describe that transaction truly in its whole substance, or that Bussell has failed to, describe it accurately. A part of his testimony tends to show that when he borrowed tile $1,500, he assured Bussell that, he would give him a claim on the lumber, and as soon as the money was got for it he should have it. But, he says, he don’t think he said to Bussell, at the time of the loan, that he was expecting to get money from a bank, or that he had offered some notes for discount, and expected to get the money in that way.

Is positive he told Mr. Bussell when he got this check that he would pay when he sold that lumber that was on the boat T. O. Davis.

“ Q. Did Mr. Bussell, at the time, you gave him this assignment, on 20th March, know that your firm had suspended or were about to suspend? . .

“A. . . It was well understood that we gave him this assignment, because wTe would have to suspend ; it was given to him, and, I think, he understood it was for that purpose ; we wanted to secure him.

“ I told him it would be better to secure this $1,500 by making an assignment of the claim for this boat load of lumber ; the boat load of lumber was sold.” This was after the sale to Southard & Co., as that was not made until the 19th.

There are some undisputed facts that support the theory that when Bussell made the loan of $1,500 nothing more was said by Havens then that he would repay it the next day, or in a day or two. At that time Bussell did not suspect that the firm of Valentine, Myers & Co. were in difficulty. That firm and Bussell & Co., prior thereto, from time to time, exchanged notes, and at that time there were outstanding notes of this character, amounting to several thousand dollars (about §6,000), and Bussell did not consider that Valentine, Myers & Co. then owed Bussell & Co. anything, because the latter then supposed the notes oí the former perfectly good. There was not, therefore, any apparent necessity or occasion for Havens to promise, or even suggest, in order to obtain this loan for a day or two, that he would devote any designated property to repay the loan.

On such a state of facts it was natural, and according to the usual course of business under the circumstances, that the transaction should have been such as Bussell in his deposition testifies it was.

Bub before the assignment was made the affairs of the firm of Valentine, Myers & Co. had reached such a crisis that Havens, as a member of that firm, had determined to bring a suit against his partners and obtain the appointment of a receiver, and did do so. That Bussell then knew. That made it certain that Bussell & Co. would be obliged to pay their outstanding notes which they had given for notes of Bussell & Co. to a like amount, and that the notes of the latter would be protested, and that Bussell & Co. would, at most, only receive a dividend on the notes they had given, and would be compelled to pay. The testimony indicates that indebtedness of Valentine, Myers & Co. to Bussell & Co. to thus accrue,' or to thus become absolute, was, in the contemplation of the parties to the assignment^ part of the indebtedness therein mentioned.

These considerations naturally aid. in coming to the conclusion that Bussell, in his deposition, stated the transaction truly, and the whole of it, and that Havens is mistaken in supposing that what w-as first told by him to Bussell, about the lumber finally sold to Southard & Co., was said before the check was delivered, and that it was in fact said a day or two after that, when Bus-sell called to inquire why the loan had not been repaid. It was more important to Bussell and his firm what the fact was in this regard than it -was to Havens, and he, of the two, would naturally remember the transaction according to its substance, if either would. His memory, in regard to that point, would be expected to be more fresh and reliable when first examined than it would be some months later.

I cannot resist the conclusion that the $1,500 was loaned entirely without security, and without any promise to repay it out of the proceeds of a sale of the lumber sold to Southard & Co.

On such facts the defendants received from Southard & Co. money belonging to the plaintiffs, without paying any consideration therefor.

In an action for money had and received, “As a general rule, the question is, to which party, ex cequo et dono, does the money belong?” (Buel v. Boughton, 2 Den. 91).

The action for money had and received is “ denominated an equitable action, and is less restricted by technical rules than most others. It aims at the mere justice of the case, and looks entirely to the question whether the defendants hold money which in equity and good conscience belongs to the plaintiff” (Colville v. Besley, 2 Den. 139, 142).

The defendants have received, and applied to their own use, money which, in equity and good conscience, belonged to the plaintiffs. They came to the possession of it by a misappropriation of it by plaintiffs’ factors and agents. The latter, as between themselves and their principals, had no right to, or interest in, such moneys, except as trustees of the plaintiffs. The defendants did not part with any consideration, or incur any liability, or release any right or property for or on account of this money.

There is no analogy between this case and cases like Butterworth v. Gould (41 N. Y. 450). The latter case, and others like it, hold that where A. is indebted to B. or G., and B. and C. severally claim the debt is due to him, and A. pays the debt to B., that C. cannot recover the money of B. as money had and received to the use of 0., even though it may be made to appear that the debt was in fact owing to C. It cannot be regarded as money paid to the use of 0., for the payment thus made does not in any respect affect his right still to call on his debtor for payment. The relations, as between himself and A., are not affected thereby. In the present case, the money, which was delivered by Southard & Co. to the defendants,.at the time it was so delivered, belonged in equity to the plaintiffs. The payment made by Southard & Co. satisfied their liability for the price agreed to be paid for the lumber. After such payment was made, all claims which the plaintiffs might otherwise have made against Southard & Co. were extinguished. The only title which the defendants can make to the money is through Valentine, Myers & Co., by whose violation of their duty to the plaintiffs the defendants obtained possession of it without paying any consideration therefor.

The defendants further claim that they can defend against this action under that provision of the Factor’s Act which declares that the factor’s agent, intrusted with the possession of any merchandise for the purpose of sale, shall be deemed to be the true owner thereof, so as to give validity to his contract with any other persons for the sale or other disposition of the whole or any part of such merchandise, for any money advanced, or negotiable instrument, or other obligation in writing given by such other person on the faith thereof.

It seems to me, with all due respect for the confidence with which this position was taken, and the ability with which it has been supported, that the short and full answer to it is, that Valentine, Myers & Co., the factors and agents intrusted with the possession of the plaintiffs’ lumber for the purpose of sale, have not made any contract with the defendants for the sale of any part of such lumber, or for the disposition of any such lumber to the defendants for money advanced by them, or securities given on the faith thereof. The lumber in question was sold and delivered to Southard & Co. • The only contract between Valentine, Myers & Co. and the defendants, in relation to this lumber, was made several days after the sale and delivery of the lumber to Southard & Go., and consisted wholly of the transfer by Valentine, Myers & Co, to the defendants, without consideration, of the indebtedness of Southard & Co., for the lumber thus purchased. , The money which Southard & Co. paid and the defendants received, at the time it was so paid and received, was the property into which said lumber had been converted, and in equity belonged to the plaintiffs (Duguid v. Edwards, 50 Barb. 297; Wallace v. Castle, 14 Hun, 106).

The plaintiffs should have judgment for $1,624.42, with interest thereon from the time the demand was made upon the defendants therefor. There were no commissions due to Valentine, Myers & Co. for the sale of this lumber.

I have no doubt, upon the evidence, that at the time of this sale they owed the plaintiffs over $6,000, after crediting themselves with five per cent, commissions on all prior sales.

The above opinion of the referee fully and clearly maintains the conclusions arrived at by the referee, and they are concurred in.

The judgment appealed from should be affirmed, with costs to the respondents.

Freedman, J., concurred.


source: Caselaw Access Project

author: By the Court.—Curtis, Ch. J.

license: Public Domain

text:
    GEORGE H. TOWNSEND, Plaintiff and Respondent, v. MILES ROSS, as Survivor, &c., Defendant and Appellant.
    Before Curtis, Ch. J., and Freedman, J.

      Decided December 1, 1879.
    ■Costs.—Sheriff’s fees.
    Upon taxation by the judge, the sheriff’s bill was allowed §33.13 for keeper’s fees (in charge of a schooner levied upon).

      Held, that this allowance to the sheriff was erroneous. The statutory fees and poundage allowed to a sheriff are in full compensation for his services and expenses in executing the writ. He is not entitled to charge for the services of a keeper, in charge of the property levied upon (Crofut v. Brandt, 58 N. Y. 106).
    Appeal by defendant from an order, in which the sheriff’s fees on an execution were taxed at $48.92.

      Leon Abbett, for appellant.

      Almon Goodwin, for respondents.
   By the Court.—Curtis, Ch. J.

The order at special term, opening the defendant’s default, required, .among other conditions, that the defendant should pay to the plaintiff “the legal fees and disbursements of the sheriff,” on the execution issued under the judgment, from which the defendant sought to be relieved.

The bill presented by the sheriff was as follows:

To poundage, . . . $8.74
To levy and return fee, . . 2.69
To notices of sale, . . . 4.00
To expenses incurred, . . . 15.00
To towing schooner from Tottenville to Gowanus, . . . 40.00
To keeper’s fees, 16 days, at $3 per day, 16 nights, at $3, . $96.00
To compensation to deputy, 20.00
$186.43

Upon taxation by the judge at special term, the bill was taxed at.$48.92, of which amount $32.13 was allow,ed for keeper’s fees.

The defendant appealed from this order, and claims that the allowance to the sheriff of $32.13 for keeper’s fees was erroneous.

This question, in regard to keeper’s fees, appears to have been passed upon adversely to the claims of the sheriff to charge for them (Crofut v. Brandt, 58 N. Y. 106). It was held, in this case, that the statutory fees and poundage allowed by statute to a sheriff are in full compensation for his services and expenses in executing the writ.

The sheriff incurred expenses in holding possession of the vessel levied upon under the execution, for which the allowance appealed from, of $32.13, for keeper’s fees, seems not unreasonable, but no provision by statute is made for their allowance. There are, perhaps, other services rendered by sheriffs, where the compensation received is more than commensurate with the service rendered. This may have been considered by the learned judge delivering the opinion in Crofut v. Brandt (58 N. Y. 112), who observes that “in the long run the result, in the contemplation of law, is that the fees ’which the law prescribes are adequate compensation for the risk and expense incurred.”

The claim made, that the order opening the default, in requiring the payment of the sheriff’s disbursements, gives a latitude to the court in ordering the expenses for keeper’s fees to be paid, and that it rests in its discretion, is not tenable, because the order itself limits the payment required to be made by the defendant to “ the legal fees and disbursements” of the sheriff on the execution. If the court at special term had intended, as a condition of opening the default, that fees or disbursements, other than those specified in the statutes, should be paid, it would nob' have used a term of limitation, debarring the sheriff from requiring payment of charges other than such as the statute (which is the only law under -which he can enforce charges without consent of the party) gives him the right to demand.

The order appealed from should be modified by striking out the item “to keeper’s fees $32.13,” with costs.

Freedman, J., concurred.


text:
    WILLIAM R. McCULLOUGH, Plaintiff and Appellant, v. BENJAMIN THOMPSON, et al., Defendants and Respondents.
    Principal and factor.—Agent.—Commission merchant.
    In a sale of goods to a, factor or agent, who purchases in his own namb, and to whom the credit is given and the merchandise billed and charged, the principal is not liable to respond to the vendor for the price of the goods, where it appears that the principal has paid his factor or agent, for the goods.
    In the case at bar, the defendants (being a foreign house) employed one Murphy, a commission merchant, doing business in New York, to purchase goods for them in the latter place, on their orders given from time to time, without reference to the persons or firms from whom he should make such purchases, and they paid Murphy for the goods, and a commission for his service. Plaintiff sold to Murphy some goods that he had been thus ordered to purchase for defendants. Murphy bought in his own name, and plaintiff made out the bills in the name of Murphy, and charged the goods to him, and demanded payment from Murphy; but failing to obtain payment, and learning that the goods were purchased for, and delivered to defendants, they seek to recover their value from the latter, although defendants .had paid Murphy for the goods.
    Before Curtis, Ch. J., and Freedman, J.

      Decided December 1, 1879.
    Plaintiff had no direct personal relations with defendants, although they had information or knowledge that Murphy had orders from defendants to purchase goods for them in New York. They gave the credit to Murphy, and treated him as a principal.

      Held, that in such a case, the law does not provide for nor permit the substitution of the principal as a party liable to respond to the plaintiffs, for the merchandise purchased of them by the agent.
    Appeal by plaintiff from a judgment dismissing the complaint with costs, entered on the report of a referee.

      Isaac L. Miller, for appellant.

      Nathan Reeve, for respondents.
   By the Court.—Curtis, Ch. J.

This action was brought to recover $115.49, the value of certain merchandise, claimed to have been sold and delivered by plaintiff and one James Woodworth, to defendants. Wool worth assigned his claim to plaintiff. The referee found that defendants were a foreign house, doing business in Canada and England; that they employed one J. D. Murphy, a commission merchant, doing business in this city, as their agent, to purchase goods for them on their orders, paying him a commission therefor ; that said Murphy, as such commission merchant, purchased in his own name the goods mentioned in the 'complaint, and that the contract of sale was made with the agent as principal debtor, and not with defendants.

The question presented is purely a question of fact.

The evidence strongly tends to establish that the plaintiff contracted with the agent Murphy, and not with the defendants. The plaintiff knew, at the time of the sale, that this agent Murphy had been ordered by the defendants to purchase these goods. But did the plaintiff at the time of the sale give the credit to the foreign house, the defendants, or to the commission merchant in New York ? It is difficult to reconcile the view, that the credit was given to the defendants, when we find that at the time the plaintiff charged the goods in his books to the commission merchant in New York, with whom he negotiated the sale, and delivered the goods pursuant to his instructions, and to whom he gave the bills thereof, made out against him, and not against the defendants, as the purchaser of them from the plaintiff.

It is somewhat inconsistent with the idea that the .credit was given to the defendants at the time of the sale, that payment for these goods was, at various times, during about two months, demanded by the plaintiff from Murphy, the commission merchant, though he was in a straitened condition, and no communication was made to the defendants on the subject, until about the time this suit was commenced. The defendants had in the meantime, paid Murphy for the goods.

This evidence inclines me to think that the plaintiff had no idea, at the time of the sale, of recourse upon the defendants for payment, but that, having casually learned at that time for whom Murphy was purchasing as a commission merchant in the market, upon his omitting to pay, he presented the claim in suit against the defendants.

If the contract was an absolute one between the plaintiff and Murphy, for the sale of the goods and the giving of the credit to the latter, the law does not provide a way, in case of the latter’s neglect to pay, by which the dealer with him can be substituted involuntarily as the party to respond.

In considering the question in dispute, the referee has had the witnesses, the letters, books and proofs before him. He has had the best opportunity of determining the facts. The evidence in the case sustains the conclusions he arrived at. After considering it, I have been unable to come to any other conclusion than that the goods were sold to Murphy and credit given exclusively to him. There are some exceptions presented in the case, but none that require the granting of a new trial.

The judgment appealed from should be affirmed, with costs.

Freedman, J., concurred.


text:
    MORRIS FRANK, et al., Plaintiffs and Respondents, v. THE CHEMICAL NATIONAL BANK OF NEW YORK, Defendant and Appellant.
    Bank accounts—forged checks—pass-book, settlements and BALANCES THEREON.—EVIDENCE.
    The question as to who should bear the loss, in case of forged checks, and the cases bearing upon the same, discussed (Leavitt v. Stanton, Supplement to Hill & D. 413; Weisser v. Denison, 10 N. Y. 68).
    In the latter case, the following text, fully cited and approved, “'that the bank must be presumed to know the signatures of its dealers, and that it pays forged checks purporting to be signed by them at its peril. That a depositor owes no duty to the bank that, obliges him to examine his pass-book after the same had been -written up by the bank, and the vouchers or checks returned with it, with a view to the detection of forgeries of his name. That the depositor was bound by the acts of his clerk, only so far as he was acting in the course of his employment.”

      Before Curtis, Ch. J., and Freedman, J.

      Decided December 1, 1879.
    In the case at bar, only three of the checks claimed to be forged were produced in court,'and defendant claimed that only those could be considered. Held, by the court, that if the proof that all the checks were forged, was sufficient, that the referee was in duty bound to find such a conclusion of fact. Their production on the trial was not absolutely necessary.
    There was evidence on the trial, as to the existence and nature of alterations, erasures, and tracings in the check and pass-book, and on the forged checks. An oculist testified that a certain magnifying glass was a correct one, and that it magnified four times. The plaintiffs offered the glass in evidence, and handed it to the referee, and requested him to inspect and examine with it the three checks that were produced in evidence, and that were claimed to have been forged, for the purpose of determining whether or not the signatures upon these checks were genuine. To all this, counsel for defendant objected, but the referee overruled his objection, and used the glass, and the defendant’s counsel excepted to the decision of the referee, and also to his action in using the said glass. Held, that the referee occupied the position of a jury, in determining the question as to the alterations, erasures, and tracings, and he had the same right as a jury to use a magnifying glass in the investigation of material objects. It was proper for him to use the glass, if he could see better with it. It was his duty as a referee, in a case where alterations, erasures, and forgeries were claimed to exist, to resort to the usual and proper agencies that correctly add to or increase the power and capacity of human vision, and consequently of human judgment, in respect to the issues of fact that he was called upon to consider and decide.

      Held, upon the facts and law in the case, that the judgment entered in the court below on the decision of the referee, to the effect, in substance, that defendant should pay the amount of the forged checks, should be confirmed.
    Appeal from a judgment entered against the defendant, on the report of a referee, for $15,794.20.
    The plaintiffs bring this action to recover a balance of money they had deposited with the defendant.

      The defendant answered that the money so deposited had been paid out from t-inSe to time on the checks of the plaintiffs, and that they had, at various times, rendered their accounts and vouchers for such payments to the plaintiffs, who made no objection to such accounts, and pointed out no errors.
    The plaintiffs, who composed the partnership of Frank and Hirsh, opened an account with the defendant in the fall of 1865, and the business relations of the parties were of the character usual between a depositor and a bank. The plaintiffs deposited money from time to time with the defendant, and drew it out on their checks. A bank-book, commonly called a 'bank pass-book, was kept, in which an entry was made of the moneys deposited by the plaintiffs, and this book was “written up and balanced” from time to time; the defendant entered therein the various amounts paid by it on the plaintiffs’ checks, and struck the balance therein, and thereupon returned to the plaintiffs the book with the paid checks, as the defendant’s vouchers for the payments made and thus entered.
    These business relations continued until after the commencement of this action in 1870, and no complaint was made by the plaintiffs of any irregularity in the account until in September, 1870. Then the claim, which is the subject of this litigation, was that from about- July 13, 1869, to September 26, 1870, the defendant had charged in the account as paid, divers sums of money, amounting in the aggregate to $8,181.38, which were not paid on the plaintiff’s checks, or, at any rate, on the genuine checks of the plaintiffs. During this period the bank book had been balanced five times and returned to the plaintiffs with the vouchers, and no-objection had been made by them to the correctness of the account, or the balance as struck in this book. On the trial it was claimed that entries of thirty-seven payments made, and which, it appears, ivere in fact made by the bank on thirty-seven checks, were improperly made, on the ground that no such checks had ever been drawn by the plaintiffs, and were forgeries. The plaintiffs produced 392 checks paid by the defendant, which they admitted to be genuine, and also conceded that there were five other genuine checks paid by the bank, which had been lost. Of the thirty-seven checks paid by the bank, which the plaintiffs claimed were forgeries, three were produced, amounting altogether to $600, and considerable evidence was given in respect to the genuineness of the plaintiffs’ signatures to these. The remaining thirty-four checks, amounting in all to $8,751.63, were not produced by the plaintiffs, and the signatures to these were not open to the inspection or examination of witnesses on the trial. Evidence was introduced tending to show that the forgeries were committed by the book-keeper of the defendants, who attended to their bank accounts, and who absconded about the time of the discovery of the forgeries, having destroyed or concealed the forged checks, except these three checks, which were discovered in the bank after he left.
    There have been two trials of this action before referees. It was first referred to Henry Nicoll, Esq., who reported in favor of the plaintiffs for $9,189.96. The.defendant appealed from the judgment entered on this report to the general term, and the judgment was reversed for error in the reception of evidence. The case is reported in 37 N. Y. Super. Ct. 27. It was then referred to War. Gf. Ciioate, Esq., who reported in favor of the plaintiffs, and it is from the judgment entered upon his report that the defendant now appeals.

      Charles Jones and John E. Roosevelt, for appellant.

      B. F. Watson, for respondent.
   By the Court.—Curtis, Ch. J.

The first question that conies before us for consideration, is one of fact. Were these thirty-seven checks which were paid by the bank, and alleged by the plaintiffs to be forgeries, such in reality or not ? There is a considerable conflict of testimony on this question. The officers of the bank and the expert called by them are confident in the belief that these thirty-seven checks are genuine, and consider them as such.

The plaintiff, who alone conducted the business of the firm in New York, positively denies that the checks were drawn by the firm, or authorized by it, and witnesses are introduced who point out differences between the signatures of the three checks, that were found of the number claimed to be forgeries, and those which - are conceded to be genuine. The plaintiffs claimed that the signatures on the spurious notes were traced by being placed over genuine signatures, and then slowly drawn; and that, when magnified by a lens, the indications of irregularity of outline, and of frequent stops in tracing the signatures, were distinctly visible.

Upon the evidence, the referee found for the plaintiffs, evidently giving it a careful consideration. He had the witnesses before him personally ; he' had the fullest opportunity of judging, where it was conflicting, as to who was best entitled to credit; and the conclusion he arrived at is supported by proofs, to such an extent, that it would be at variance with well-settled rules for this court, on appeal, to set aside his decision on this question of fact, as against the weight of evidence, or as unsustained by the proofs in the case. The checks being forgeries, there is of course'no reason for claiming that they were paid in pursuance of any authority from the plaintiff.

The question as to which party should bear the loss, under circumstances analogous to those of the present case, has already been passed upon in the supreme court and in the court of ultimate resort. In Leavitt v. Stanton, (Supp. to Hill & D. 413), where the plaintiff was dn the habit of depositing money with the defendant and drawing on him, and the defendant paid a draft of $10,000 with plaintiff’s signature forged to it, the circumstances 'which would excuse the defendant from liability to respond to the plaintiff are considered by Nelson, Ch. J., in the opinion delivered by the court. The facts disclosed negligence and suspicion on the part of the plaintiff, when the draft was sold to the felon, but it was held that these facts fell short of gross carelessness, which should, at least, be established, if the principle on which the defendant sought to be exonerated could at all be entertained; and that they were insufficient to charge upon the plaintiff the consequences of the forgery that subsequently happened.

In the case now before us, the bank paid out its own 'money upon the forged checks, and not that of the plaintiffs, who were strangers to these acts of the bank and in no sense parties to them, or guilty of any gross negligence in respect to them. The bank, after it had thus parted with its own money, charges the sums so drawn out to the plaintiffs, in their account with the bank, who, upon notice, and without delay, refuse to ratify, or be bound by these acts of the bank.

In the case of Weisser v. Denison (10 N. Y. 68), the bank paid the checks that were forged by the depositor’s confidential clerk, charged them in the depositor’s pass-book, balanced and returned it to the clerk with the forged vouchers, who examined the account at the depositor’s request, and reported it correct. The depositor did not discover the forgeries until many months after, when he immediately notified the bank. In the. action he brought to recover the balance of his deposit, it was held, that the bank could not retain the amount of the forged checks ; that it must be presumed to know the signatures of its dealers, and pay checks purporting to be drawn by them at its peril; that a depositor owes no duty to the .bank, that obliges him to examine his pass-book, or vouchers, with a view to the detection of forgeries of his name, and that the depositor was bound by the acts of his clerk, only so far as he was acting in the course of his employment.

In the case before us, the appellant urges that its position is very different from that of the defendant in Weisser v. Denison, supra, because in that case the checks were produced, and it was proved they were forged by the depositor’s clerk, who alone examined the pass-book and returned checks, and reported the result to his principal. In that case the forged checks were found in the trunk, of the absconding clerk ; in this case only a small part of them were found and that only after the clerk had absconded, but there ivas also evidence of erasures and alterations of the pass and check-books and of false readings of them by the clerk when they were compared with the account and examine'd by him and the plaintiff Frank together. I know of no principle of. law, that because only a portion of the checks claimed to be forged was found, the referee, or a j nry, is inhibited from finding, if there is evidence to warrant it, that the checks not found were also forgeries. If this view prevailed, it would only be necessary for the criminal who had obtained possession of the checks he forged, to destroy or secrete them, and thus secure immunity to the bank paying the forged checks, from any liability to the depositor. The referee, if the proofs made it apparent to him, that the thirty-seven checks in question were all forged, though only three of them could be presented before him, was in duty bound to so find.

There was evidence afc the trial as to the existence and nature of alterations, erasures, and tracings in the check and pass books and the checks. An oculist,■ being shown a glass, testified that it was correct, and magnified four times. The plaintiffs offered the glass in evidence, and the defendant excepted to its admission.

When the testimony was closed, the counsel for the plaintiffs handed to the referee the magnifying glass thus offered in evidence, and requested him to inspect and examine with this glass the checks produced on the trial and read in evidence, for the purpose of determining whether the signatures to the three alleged forged checks were the genuine signatures of the plaintiffs, or were forged or traced signatures. The counsel for the defendant objected to this, and to the referee’s using the glass for that purpose; but the referee overruled the objection, and decided that he would use the glass for that purpose, and he did use the same for such purpose, and the defendant excepted to the decision of the referee, and to such use of the glass.

There was an opportunity to cross-examine as to the glass, and as to its capacity, if the defendant deemed it of any consequence, or had reason to suppose it incorrect. The referee occupied the position of a jury in determining the questions as to the alterations, erasures and tracings. The use of lenses that magnify, as auxiliary to the human vision, is so universally resorted to and adopted, as a necessary factor in obtaining precise mathematical results in the investigation of material objects, that the use of glasses, proved to be correct, in a judicial investigation, where the truth can very possibly only be arrived at by such use, does not seem reprehensible. The referee had the same right as a jury would have had, to look through glasses that magnify. It was proper for him to use the glass, if he could see better with it. It was his duty, in the interest of justice as a referee, in a case where alterations, erasures and forgeries were claimed to exist, to resort to the usual and proper agencies, that correctly add to, or increase, the power and capacity of human vision, and consequently of human judgment, in respect to the issues of fact he was called on to decide.

The questions in this controversy have been very carefully and very clearly presented by the respective counsel; but after considering their arguments and briefs, and the evidence and the finding of fact by the referee, and the conclusions of law based upon decisions in cases/that appear to be corresponding in their character, and also' those of the defendant’s exceptions not discussed here, I am led to the conclusion that the judgment appealed from should be affirmed, with costs.

Freedman, J., concurred.


text:
    HARVEY M. MUNSELL, Plaintiff, v. EDWARD FLOOD, Defendant.
    Agreement—written and verbal.
    Conversations and verbal arrangements that have resulted in a written agreement between the parties, should not be admitted in evidence to vary or change the written agreement, which must be construed as, and assumed to be the final conclusion of the verbal negotiations or conferences between the parties.
    In the case at bar, Held, that the written agreement was complete in itself, and did not appear as a supplement or part of the verbal agreement that preceded it, or in anywise dependent upon it, and ■ the verbal agreement was properly excluded.
    Certain personal prop jrty having been parted with by the plaintiff, and delivered to the defendant, on certain conditions to be performed by the defendant, set forth in the written agreement, and defendant having failed to perform and fulfill the same, the plaintiff was held to be entitled to the return of his property.

      Before Curtis, Ch. J., and Freedman, J.

      Decided December 1, 1879.
    At the trial, the court directed a verdict for the plaintiff, to which the defendant excepted. The court directed the defendant’s exceptions to be heard, in the first instance, at the general term, and an order to that effect was entered in accordance with section 1000 of the Code of Civil Procedure.

      Edgar Whitlock, for plaintiff.

      Thomas H. Hubbard, for defendant.
   By the Court.—Curtis, Ch. J.

The action was brought to recover from the defendant the possession of a note for $2,000, made by the plaintiff, and three policies of insurance, the complaint alleging they were wrongfully detained by the defendant from the plaintiff. The answer admits the possession, but denies the wrongful detention.

The plaintiff delivered the note and policy to the defendant, in pursuance of an agreement, in writing, and under seal, executed by the defendant, November 6, 1875, and read in evidence at the trial.

By the terms of that agreement the defendant, in consideration of the note and policies delivered to him by the plaintiff, was to do four things:

I. To release all his right, title, and interest in and to a nail machine to one L. M. Merrill.

II. To surrender every contract, note, insurance policy, &c., held in connection therewith, to this L. M. Merrill.

III. To have his mother assign the patent she held of said nail machine to this L. M. Merrill.

IV. To obtain from his mother, at once, a written agreement to fulfill the above immediately.

The only thing that the defendant did under that .agreement, was to procure his mother to execute an agreement, that, at a further day, she would assign the -patent to L. M. Merrill. The assignment itself was •never executed. The total value of the property .detained was found to be $3,241.23.

The plaintiff made due proffer, in court, to surrender the agreement to assign.

At the argument but two of the exceptions were ■insisted upon by the defendant, and the discussion was limited to them. The first of these exceptions was one ¡to the ruling of the court, denying the defendant’s motion to dismiss the complaint, on the ground that -the plaintiff had not shown that, at the time of the commencement of the action, he was either the owner, or entitled to the possession of the property claimed. The remaining exception was one to the ruling of the court, excluding an offer of the defendant to show that he had fully performed, on his part, a previous agreement of January 15, 1875, which had been read in evidence, to which the plaintiff and one L. M. Merrill and himself were parties ; but that the plaintiff had failed to perform it, and had failed to put in the money he agreed to, and had carried away the patented machine, and that when he, the defendant, called on the plaintiff for a settlement, for the money and the removal of the machine, it was verbally agreed Detween them, that plaintiff would give defendant, in settlement, the note for $2,000, and the policies of insurance now in controversy ; and that in pursuance of this verbal agreement the plaintiff gave the defendant the note and policies, and that as a supplement to this verbal agreement, and .as a part of the consideration for the note and policies, the agreement of November 6 was made between the parties.

It thus appears there was some verbal agreement -between the parties previous to the agreement of -November 6, 1875. It would be in contravention of well settled rules to admit evidence of some former verbal understanding or agreement touching the matter in question, to vary, or affect the terms of a subsequent written agreement, duly executed between the parties, and which the law deems to be the best and final expression of the minds of the parties meeting in unison, .after preliminary parol discussion and agreement. The conversations and the verbal arrangements, after they have resulted in a written agreement between the parties, are to be interpreted by what the parties have signed, and not by what may have passed between them, verbally, previously to the act of signing.

The agreement in question covers the entire ground, .and is complete, as such, in itself. There is no occasion to resort to external matters to explain it. It does not appear to be a supplement to the verbal agreement, or dependent Upon it to be sustained. It was properly excluded.

With regard to the first exception, referred to, which was to the refusal-of the court to dismiss the ■complaint, on the ground that the plaintiff was not the owner, or entitled to the possession of the property ■claimed, the case shows that, being the owner of the policies, and the maker of the note, he parted with them on certain conditions to be performed by the defendant, The defendant failed to fulfill or comply with certain of the conditions that were pre-requisite to these obligations, vesting in him, as his absolute property. The delivery of the securities to the defendant being conditional, upon the defendant’s failure to comply with the conditions, the plaintiff was entitled to be reinstated in his original position.

The case shows, that the plaintiff should have the relief he seeks.

The exceptions should be overruled and judgment rendered for the plaintiff with costs.

Freedman, J., concurred.