author: By the Court.—Van Vorst, J.

text:
    JOHN C. RUST, Appellant, v. CHARLES HAUSELT, Impleaded with HENRY RANCKE, Respondent.

    I. Refebence, otheb than of issues.
    1. Report of referee.

      (a) Confirmation of.
    1. Rule 30. By force of the rule itself the report becomes absolute and confirmed, unless exceptions thereto are filed and served within eight days after service of notice of filing the report. No order of confirmation, either upon motion or ex parte, is necessary.

    1. So held as to a reference to take and state an account.

      (b) Unnecessary motion to confirm.
    1. If, notwithstanding no exceptions are filed, a motion is made to confirm, which after opposition is granted, an appeal from the order of confirmation entered thereon brings up nothing for review.

    (c) Exceptions, filing nunc pro tunc.
    1. Effect of.

    Although, after a motion to confirm has been heard and granted, exceptions are filed nunc pro tunc, yet no benefit can result therefrom, on appeal from the order of confirmation.

    1. To obtain any benefit therefrom, there must be a rehearing of the motion upon the exceptions.
    1. If such rehearing is had after an appeal from the original order, it would involve an abandonment of the appeal.
    2. Power to order. The court has power to permit the filing of exceptions nunc pro tunc, and to that end may malee such disposition of an appeal from an order confirming a report to which no exceptions were filed, as may be necessary to prevent a failure of justice.
    H. Reversal of judgment and new trial.
    1. ACTION FOR AN ACCOUNTING, EFFECT OF REVERSAL IN. ' '

      (a) Where an action is brought for an accounting, and judgment is rendered dismissing the complaint on the ground that there has been an accounting by the defendant, which is binding and conclusive on the plaintiff, and adjudges that defendant recover for the amount found due him on such accounting, the effect of a reversal of such judgment is that upon these facts appearing upon the trial, the plaintiff was entitled

      to an accounting, and to the payment of such mm as on such accounting he might be found entitled to.

    III. Bona fide holder for value.

    1. Value parting, what is.
    (<$) Partnership. Surrender of chattel mortgage on individual PROPERTY, BROUGHT BY THE MORTGAGOR INTO THE FIRM, SUBJECT TO THE INCUMBRANCE.
    1. Constitutes a valuable consideration for the firm’s.indorsement-s of notes given, on the surrender of the mortgage, by the mortgagor, for his individual debt secured thereby.
    IV. Chattel mortgage—not filed.

    1. Validity of, as between partners.
    (os) An unfiled chattel mortgage on property subsequently brought by the mortgagor into a firm of which he becomes a member, as his proportion of the capital, is not invalid as to the other partners by reason of its non-filing.
    The property comes into the concern impressed with the lien of the mortgage.
    V. Ratification.

    1. By one partner of the acts of his copartner.
    (as) Where one partner, without the assent or knowledge of his copartner, gives to H. his own notes with the firm name in
      dorsed thereon by him, in payment for his individual debt, ■which is secured by a chattel mortgage made by him on his individual property, which property, subject to the mortgage, he had brought into the copartnership as his proportion of the capital, H. at the same time surrendering his chattel mortgage, and. thereafter there is a transaction between the firm and H. as to some wire gauze, and thereafter the firm makes an assignment to II. for the benefit of creditors, and in the schedule of liabilities annexed thereto states its indebtedness, to H. to be $3,000; and upon the evidence it appeared that there could not be so large a claim in favor of H., except upon the basis that the firm acknowledged its liability on the said indorsements; and it also appeared that upon that basis the claim in favor of H. would be-much larger, unless the firm had received a credit in respect of the wire gauze; and H. testifies as follows:— “Q. In Ex. 1,” being the schedule of indebtedness, “the-firm indebtedness to you is stated at $3,000; state how that amount was arrived at? A. They owed me $6,000, and after deducting the wire gauze, they agreed that the balance should be $3,000. I accepted the assignment upon the schedule of liabilities handed me by Rancke & Rust, which included my debt at $3,000.”
    Held,
    A ratification of the act of the partner who gave the firm indorsement for his individual debt-, and an adoption by the firm of the original claim against the individual partner as a firm obligation.
    VI. ASSIGNEE IN TRUST FOR BENEFIT OF THE CREDITORS OF A FIRM.
    1. Accounting.

      (a) Action for, by one of the partners, against his copartner and the assignee.
    1. Result op above holding as to ratification.
    1. As between the parties to the action the assignee is entitled to charge against the assets of the firm said sum of $3,000, and is under no obligation, to account for the proceeds or value of the. gauze as part of the assigned estate.

    Before Curtis, Ch. J., and Van Vorst and Speir, JJ.

      Decided February 2, 1880.

      This action was brought to compel the defendant Hauselt to account, as assignee of the firm of Rancke & Rust, of which firm the plaintiff was a member. Upon a trial at special term the plaintiff’s complaint was dismissed, and an affirmative judgment was rendered against him. This judgment was reversed at general term, and a new trial ordered. Upon appeal to the court of appeals, the decision of the general term was affirmed, and judgment absolute was rendered against the defendant. Upon the remittitur of the court of appeals being filed in this court, and judgment thereon being entered, an order of reference was made to William F. Shepard, Esq., counselor at law, to state the account, and to ascertain and determine the amount due the plaintiff.
    The referee stated the account, and reported nothing due to the plaintiff, and the defendant moved at special term to confirm the report. No exceptions had been filed by the plaintiff to the report. The court confirmed the report. The order made states that the report was “ confirmed in 'all things, it appearing that no exceptions had been filed to such report.”
    • Whereupon the plaintiff appealed from the report of the referee and from the order confirming same. The plaintiff then moved at special term for leave to file exceptions, nuno pro tuno, which motion was denied, and the plaintiff thereupon appealed from such order.
    Both appeals are now considered.
    Dixon, Whitlock & Anderson, attorneys, and John H. Bergen, of counsel, for appellants, urged:
    I Rule 30 does not apply to the report of the referee in this case at all, and the judge at special term should have heard the motion on the merits, a. This reference was like one to take testimony and report with opinion, and on the coming in of the report, it was the .duty of the court to hear argument on the merits and render judgment. It was-made under the provisions of section 194, Code Civ. Pro. b. No exceptions were necessary to such a report, but it was the duty of the court to decide upon the facts reported and the evidence. c. If exceptions were necessary, then the coui’t should have allowed them in furtherance of justice. d. The court had power to allow the; exceptions to be filed nuno pro tuno, and it should have done so (Douglass v. Douglass, 7 Hun, 272).
    II. The court of appeals, in affirming the general term of this court, held that the plaintiff was entitled to judgment against the defendant; and the decision of the referee being made upon the same facts upon which this court at general term and the courf of appeals had passed, is directly in the teeth of both of those decisions, and in effect overrules both this court at general term and the court of appeals. The court of appeals, by its judgment, determined that no error had been committed by the general term in granting a new trial, and thereupon rendered judgment absolute upon the right of the appellant (Code Civ. Pro. § 194). The opinion of the former general term showed that they passed upon all the questions of fact sought to be again raised before the referee, to wit: The indebtedness of the firm to Hauselt. The binding effect of the accounting and settlement between Bust and Bancke. The ownership of the wire gauze. All these were by that opinion decided in favor of plaintiff. The matters having thus been decided in favor of plaintiff, and defendant having chosen to appeal and give the usual stipulation, the decision of the court of appeals affirming that of the general term, in the absence of an opinion, must, be deemed to be an affirmance in every respect, and their judgment must be in these respects a judgment absolute in favor of plaintiff, and upon the right of the defendant as appellant. These questions should therefore have been treated by the referee as. res adjudieata.

    III. Upon the merits : It was proved and not contradicted that the defendant Hauselt was the assigneeof the firm of Ranche & Rust. Under that assignment-he received $13,000 in notes, which he collected in full. He also had in his possession, when the assignment-was made to him, certain goods belonging to Rancke- & Rust (wire gauze), which had been transferred to him by Rancke, without the knowledge or consent of • Rust, in payment of an individual past due debt from Rancke to Hauselt, from which goods he subsequently realized net $1,986.86. Hauselt, as assignee, paid out in liquidation of all claims against the firm of Rancke- & Rust, $11,235.32, thus leaving in his hands in cash:
    Balance of amount realized from notes which he received under assignment, over and above amount of debts of firm, - - $1,764.68
    Also the net proceeds of the wire gauze, which was firm property, and for which he must account,....... 1,986.86
    $3,751.54
    From which he is entitled to deduct the
    amount the firm owed him, - - - 1,000.00
    Leaving balance,......$2,751.54
    To be accounted for by him as assignee, less his commission.
    These facts are not disputed on this accounting, and yet in the face of this evidence and of these facts, the referee decided there is nothing due the plaintiff.
    IV. The law is perfectly settled, that Hauselt is not entitled to hold the goods of the firm of Rancke & Rust, to pay the individual debt of one of the firm to-him (St. Nicholas Nat. Bk. v. Savery, Gen. Term, Super. Ct., Weekly Dig. April, 1879, p. 67; also decision in this case at general term, which was affirmed in court of appeals).
    V. The pretense of a chattel mortgage amounts to nothing, as it never had any validity ; it was not filed, and Rust never knew there was such a thing in existence.
    VI. Rancke’s acts in transferring the wire gauze to Hauselt (which was firm property) in payment of his •individual debt, and in giving him the indorsement of the firm for the same purpose, being without the "knowledge of Rust, were void, and Hauselt must account for the gauze, and for the balance of the money in his hands, precisely the same as if no such transaction had ever taken place, a. Hauselt never got title to the wire gauze until he accepted the assignment. Until the execution and delivery of that instrument, the wire gauze was the property of the firm of Rancke & Rust, and they could have maintained replevin or trover for it. When the assignment was delivered, then the title to this gauze passed to Hauselt as assignee, and he must account for it in this action.
    VII. The plaintiff is clearly entitled to a judgment in this action upon the undisputed facts, for $2,751.54, with interest, at least, from February 24,1875, the date when the assignee turned over the claims to firm and settled his account, less the commissions of the .assignee.

      S. Kauffman, attorney, and Lewis Sanders, of couasel, for respondent, urged:
    I. The order of July 24, 1879, is not appealable, being granted in default of exceptions. An order on default is not appealable,; but if the order is appealable, Rule 30 of the supreme court, in terms, says, that “the report shall become absolute, and in all things confirmed ” notwithstanding error appear upon the face of the referee’s report. (Opinion by Daniels, J. Catlin v. Catlin, 4 N. Y. Supr. Ct. [T. & C] 667). There is no error in the' order appealed from, and it must be affirmed. The order is granted in default of exceptions, and is not appealable (Innes v. Purcell, 58 N. Y. 390).
    II. a. The order of October 7, 1879, denying the' motion for leave to serve exceptions to a report confirmed three months before, and from which confirmation an appeal was then pending, was discretionary with the court below, and involved no substantial right, and hence is* not appealable, b. If appealable, there are no merits, unless a bald ignorance of law in the face of a direct motion to confirm the report, be meritorious. But if this court should grant the application, how will it affect the order confirming the report ? As has been shown, that order is absolutely unassailable, and no attempt has been made to set it aside ; this court will not make a useless order; it does not sit as a moot court.
    III. Plaintiff has no case. The findings of fact are fully borne out by the testimony, and the opinion of the referee is of itself a conclusive argument in support of his conclusions of law.
    IV. The only points at issue were what Ranke & Rust owed Hauselt at the date of their assignment to him. In their schedule of creditors they placed amount due Hauselt at $3,000. The evidence given by plaintiff to impeach" his own account was improbable, and involved a fraud upon the other creditors. Mr. Hauselt’s evidence supported the schedule of creditors, as made out by plaintiff’s book-keeper, and in the absence of the books of Rancke & Rust, and of all explanation for their absence, the referee rightly concluded that the schedule was correct, that Mr. Hauselt was not party to a fraud, and that the debt was $3,000, and that the balance due by Rancke & Rust to defendant was $1,764.68, and that upon an accounting, nothing is due from defendant to plaintiff.
    V. The wire gauze claim is discussed by the referee, and the referee clearly shows : 1st. That the wire gauze was no part of the property assigned; and, 2d. That it is no part of the complaint, and consequently not referred to him to compute, because it is not in this action. This is so clear a proposition that a single test will dispose of it. Assume that Rancke wrongfully disposed of the wire gauze to Hauselt in payment of an antecedent private debt of Rancke, a demand by plaintiff for the wire gauze would be in trover, while the present action is for an account. If this had been stated in the complaint, it would have been a clear misjoinder of actions. Hot being put in the complaint, there can be no recovery therefor, and plaintiff may still bring his action for the wire gauze, as the present judgment does not conclude him.
    VI. The chattel mortgage. The recording of the chattel' mortgage is to prevent fraud, and applies only to subsequent purchasers and mortgagees in good faith for value. It is not pretended that Rust became a purchaser from Rancke ; and if it were, the evidence does not support it. The 'firm of Rancke & Rust had the benefit .of the goods belonging to Hauselt under the chattel mortgage, and it is immaterial whether Rust consented or not, so long as this firm got the goods by means of the firm indorsement. The firm got the consideration for their indorsement.
    VII. The referee was warranted in finding a ratification. Rancke told Hauselt that Rust consented to the indorsement. Hauselt says: “At the time the'assignment was made, I received a schedule from Rancke & Rust of their ¡liabilities. This is that schedule,” marked Defendant’s Exhibit Ho. 1. “I believe Mr. Rust was present when the assignment and Exhibit Ho. 1 were delivered to me. ... In my assignment account of Rancke & Rust no reference is made to the wire gauze or the $6,000.” Q. In Exhibit No. 1 the firm indebtedness to you is stated at $8,000—state how that was arrived at % A. They owed me $6,000,—and after deducting the wire gauze, they agreed that the balance should be $3,000. “I accepted the assignment upon the schedule of liabilities handed hie by Rancke & Rust, which included my debt at $3,000. I never agreed to, and never was requested to hold the wire gauze, or the proceeds thereof, as assignee.” The referee, under this evidence —the larger portion entirely new evidence—could not have found otherwise than he did, when to find otherwise would be to make defendant a party to a fraud and a perjury. The referee chose to believe Hauselt, plaintiff’s witness, and Rancke & Rust’s schedule of liabilities, and the statement Rancke made when he gave the firm indorsement, and the firm got the goods. His decision accords with good morals and common sense. The orders should be affirmed.

       Previous to the decision here reported, this case has been before the courts in various phases. See 41 Super. Ct. 467; 42 Id. 573; 43 Id. 571; 69 N. Y. 485; 76 Id. 614.

       This rule would probably not apply if, on the hearing of the motion, exceptions were, either by express or tacit consent, made orally, argued and passed on by the court, and these exceptions were subsequently reduced to writing and ordered to be filed nunc pro tunc, eo that they might appear in the record.

       The language used by the court, considered by itself, would seem to justify the conclusion that such reversal would have no greater effect than that stated in the head-note. It undoubtedly would necessarily have such effect, but it does not seem to follow that such would be its only effect.
      In view of the fact that there was, before this general term, evidence (not before the previous one), which, had it been before that general term (viz.: the oral evidence of H. set forth in the head-notes) might have led it to the same conclusion, as to the rights and liabilities of the assignee, to which this general term afrived, it is submitted that the above decision does not go to the extent of holding that where the reversal is on the ground that the accounting is not binding and conclusive because it charges against the plaintiff items with which he is not chargeable, and that the elimination of such items would result in a balance in plaintiff’s favor, such reversal is not a decision to the effect that such items are improperly included, and must be eliminated, which is binding on the trial court on a new trial, the evidence being the same as that upon which the general term based its decision, whatever may be the power of a subsequent general term, to disapprove of, and overrule the decision of the former one.

       See Rust n. Hauselt (41 Super. Ct. 467).

   By the Court.—Van Vorst, J.

Rule 30 of the general rules of practice provides, that in references, other than for the trial of issues in an action, the referee’s “report shall become absolute, and stand in all things confirmed, unless exceptions thereto are filed and served within eight days after service of the notice of filing same.”

The reference in this case, which was not of the issues, but to state the accounts of the defendant, Hauselt, as assignee, and of his indebtedness to the plaintiff, is within the rule requiring exceptions to be filed, and none having been filed, the defendant was entitled to an order confirming the report. In fact, the report had become absolute by force of the rule itself.

The record shows no error in the order made at special term, confirming the report. The merits of the report do not appear to have been at all considered.

The order confirming the report of the referee was made on July 24, arid on July 31, the plaintiff appealed from the order. Thereafter he applied to the special term for leave to file his exceptions nunc pro tunc. Had the order been granted at that time, an appeal from the order of confirmation being then pending, it is not apparent how the appeal could be aided by exceptions thereafter filed, and which had not been in substance even considered on the motion to confirm. In order to have obtained the benefit of exceptions, filed in fact after the report had been confirmed, it would have been necessary to have obtained a rehearing of the original motion, which would have involved an abandonment of the appeal.

The grounds upon which the motion for leave to file exceptions nunc pro tunc was denied do not appear. Thfe court had doubtless power, at a proper stage of the proceeding, to order the exceptions, which, through a misapprehension of the practice in such cases, had not been filed, to be filed nunc pro tunc (Douglass v. Douglass, 7 Hun, 272), and if the exigencies of the case even now require it, such disposition of these appeals might be made as to allow that to be done which would be necessary to prevent a failure of justice.

And this involves a consideration of the merits.

The referee by his report has stated the account, and has reported that the balance of moneys in the hands of the assignee, which he has fixed at $1,764.68, is not sufficient to pay the indebtedness due him from the assignors, irrespective of his commission. He has also reported that there is no sum or amount due from the defendant Hauselt to the plaintiff.

The report of the referee covers the matters which were committed to him for examination and determination. It is claimed on the behalf of the appellant that the referee erred in both of the conclusions at which he arrived, and which are above indicated.

It is urged that the referee has decided in opposition to the decision of this court (41 Super. Ct. 467) at general term, and to that of the court of appeals (76 N. Y. 614) in affirming the judgment of the general term.

We do not regard this point as well taken. By the original judgment rendered at the special term, it was decided that an accounting had been had by the defendant of his trust, for which reason the complaint was ordered to be dismissed. The judgment further awarded to the defendant Hauselt the sum of §1,881.08 against. the plaintiff. This judgment was reversed. The effect of the reversal is that upon the facts appearing upon the trial, the assignors were entitled to an accounting from the assignee, and to the payment over of any of the assigned estate or property in his hands to which the plaintiff was- entitled. That is what the plaintiff asked in his complaint, and the relief he in substance demanded.

That accounting the referee, appointed by the court, was ordered to take. Whether anything was due to the assignors or either of them, could only be ascertained by such accounting.

The principal objections urged by the appellant to the referee’s report are his conclusion that the assignors were indebted to the assignee, at the time of the assignment, in the sum of $3,000, and to his refusal to hold that the defendant Hauselt should account in this action for certain merchandise, consisting of wire gauze, which had been delivered to him by one of the assignors previous to the dissolution of the firm, and before the assignment was made.

In disposing of these objections on the merits, certain facts are to be considered.

Before the copartnership between the plaintiff and the defendant Bancke was formed, Bancke was indebted to the defendant Hauselt in the sum of $5,000. To secure this claim Bancke executed and delivered to Hauselt a chattel mortgage, covering merchandise owned by him individually.

Afterwards Bancke entered into partnership with the plaintiff, and brought into the concern, as his pro'portion of the capital stock, his merchandise, encumbered by this mortgage.

Afterwards, and before the assignment was made by the firm for the benefit of its creditors, the defendant Hauselt demanded from Bancke the payment of his claim, or the delivery of the goods covered by his mortgage. Bancke, to satisfy Hauselt, delivered to him his notes, indorsed in the name of his firm, for the amount of the debt, and Hauselt delivered up the chattel mortgage. *

Hauselt claims that the firm’s indorsement was at the time assented to, or has been since ratified by the plaintiff. He testifies that when the firm’s indorsement was asked, Bancke replied that he would see Bust about it, and when he gave the notes said, ‘‘ Mr. Bust said it was all right.” The evidence of Hauselt is corroborated in this regard by that of his bookkeeper, the witness Wiegand. The defendant Bancke, upon the hearing before the referee, denied that he was authorized by his partner to indorse the note, and the plaintiff testified that he never knew of or assented to the indorsement by his,firm. t Afterwards, and before the assignment was made, a quantity of wire gauze, belonging to the firm of Bancke & Bust, was delivered by Bancke to the defendant Hauselt, with bills of sale therefor, executed in the firm name, on account of this indebtedness.

With the assignment, executed by the firm to the defendant Hauselt, for the benefit of their creditors, was delivered a schedule of their creditors, stating the amounts due to each. In this schedule the debt due to the defendant Hauselt is stated to be $3,000.

The evidence does not justify so large a claim in favor of the defendant Hauselt, unless upon the basis that the firm acknowledged its liability on the indorsement made for Rancke’s individual debt.

It is quite clear, that for such indorsement the firm received, through the surrender of the defendant’s chattel mortgage, which was a lien upon the property covered thereby, a valuable consideration.

That mortgage, although void as to creditors, and subsequent purchasers in good faith, for the reason that it had not been filed, was nevertheless valid as to the mortgagor, and the merchandise of Rancke went into the concern impressed with its lien.

Although by the copartnership agreement these chattels became joint property, Rancke could not, by simply placing the goods in such new relation, he still remaining an owner and being in possession, deprive the mortgagee of his legal and equitable rights under his mortgage.

In finally adjusting the claim of the defendant Hauselt against the firm at the sum of $3,000, at which amount it is stated in the schedule, delivered with the assignment, there must have been some recognition of the transaction with respect to the wire gauze, the value of which must have been taken into account, in reducing the claim of the defendant, which had been increased to $6,000, to $3,000.

The defendant Hauselt testifies that at the time the assignment was made he received a schedule from the assignors, of their liabilities.

“Q. In Exhibit No. 1, the firm indebtedness to you is stated at $3,000; state how that amount was arrived at.
“A. They owed me $6,000, and after deducting the wire gauze, they agreed that the balance should be $3,000. I accepted the assignment upon the schedule of liabilities handed me by Rancke & Rust, which included my debt at $3,000.”

This amounts to a ratification of what had been theretofore done, and is an adoption of the original claim against Rancke, for which the firm indorsement had been given as a firm obligation.

It is to be observed that this particular transaction is not sought to be impeached by the complaint in this action, nor are the creditors of the firm concerned in this proceeding.

The complaint urges neither fraud nor mistake as a ground for relief against the assignment, or the statement of the claim in favor of Hauselt. The usual accounting from an assignee is asked for, upon the closing up of the trust.

As between these parties the amount of the debt, in favor of the defehdant Hauselt, against Rancke & Rust, must be considered as the sum of $3,000. The assignors are estopped by their own action. With respect to it the parties must be left where they placed themselves. And that disposes of the question of the wire gauze sold to Hauselt before the assignment, and which was taken into account in adjusting the balance.

Amid the conflict in the evidence, it was for the referee to determine which of the witnesses he would believe, and we fail to see, in the result reached by him, any error in law, or any real injustice.

The orders appealed from are affirmed, with costs to respondent of one appeal.

Curtis, Ch. J., and Speir, J., concurred.

Subsequent to the above decision various proceedings of interest were had at special term. On one of these Judge Russell wrote an opinion in which a general review of the proceedings in the action is given.

In .view of the interesting questions’disposed of by Judge Russell, and the fact that they grew out of the above disposition made of the case by the general term, the reporters have thought proper, contrary to their usual practice, to report that special term decision in this connection.


source: Caselaw Access Project

author: Horace Russell, J.

license: Public Domain

text:
    At Special Teem.
    JOHN C. RUST v. CHARLES HAUSELT, Impleaded with HENRY RANCKE.
    Judgment absolute, with costs, ordered by court of appeals.
    Effect of.
    1. Action for am Accounting. In such an action judgment was rendered at special term, adjudging that the complaint be dismissed on the ground that an accounting had already been had which was binding and conclusive on the plaintiff, and adjudging that defendant recover the balance found due him on said accounting. Plaintiff appealed to general term. The general term reversed the judgment and ordered a new trial. Defendant stipulated and appealed to the court of appeals. That court affirmed the decision of the general term and ordered judgment absolute for the plaintiff on the stipulation, with costs.
    1. Determination as to plaintiff. Such order is a final determination that plaintiff is entitled to an accounting, and to the costs of the action.
    3. Determination as affecting defendant’s right to
    COSTS, AND TO AN AFFIRMATIVE JUDGMENT FOR ANY BALANCE THAT MIGHT BE FOUND DUE HIM ON THE ACCOUNTING.
    1. Costs of action: he is not entitled to tax them.
    3. Disbursements. Beferee’s fees paid by defendant upon taking up the referee’s report, made upon a reference ordered in and by the order, ordering, pursuant to the judgment of court of appeals, judgment absolute for plaintiff against the defendant, with costs, '•anQot be taxed by defendant as a disbursement.
    3. Balance found due defendant on such reference. Defendant. cannot enter judgment therefor.
    3. Costs, meaning of, as used in the judgment of the court
    OF APPEALS.
    1. Carries to the plaintiff the general costs of the action from the beginning to the end, except such as, subsequent

      to- the decision of the court of appeals, are specially adjudged to the defendant.
    Result.
    The costs which were specially adjudged to the defendant (which were less than the general costs in the action) were offset against the general costs, and judgment ordered for the plaintiff for the excess.

      Before Russell, J., at Special Term,

      August 31, 1880.
    Motion by defendant for leave, to enter judgment upon- a referee’s report, and motion to offset costs, submitted by both parties ; both motions being heard without notice, upon stipulation of counsel.

      Edgar Whitlock,; counsel for plaintiff.

      Lewis Sanders, counsel for defendant.
   Horace Russell, J.

The history of this case has been somewhat remarkable and complicated, and is, to that extent, at least, interesting. A. statement of its history is necessary to an intelligent discussion of the questions involved- in these motions.

The action was begun in April, 1875. The plaintiff, in his complaint, alleged that he and his copartner one Henry Rancke (who was made a defendant because he declined to unite with him as a plaintiff), on October 23, 1873, made an assignment to the defendant for the benefit of their creditors ; that the defendant, with' the assets of the firm, had discharged their debts and liabilities, and had remaining in his hands a considerable surplus; that Rancke had transferred his interest in such surplus to the plaintiff ; demanded an accounting, and asked judgment upon such accounting that the defendant pay over to him the sum remaining in his hands.

The answer of the defendant admitted the assignment and the payment of the indebtedness of the firm of Rancke & Rust, except that due himself, but alleged that the defendant had already rendered an account of his assignment, on which it appeared that the surplus remaining in his hands was not sufficient to discharge the indebtedness of the firm to himself. For a second defense he alleged that he had, before the beginning of the suit, stated to the plaintiff his account as such assignee, and that on such accounting the balance due him from the firm was $1,881, for which he.asked .judgment against the plaintiff, and against his co-defendant Rancke. The reply of the plaintiff denied the counter-claim.

The case was tried in November, 1875, before a judge without a jury, who dismissed the complaint and ordered judgment for the defendant Háuselt against the plaintiff Rust, and against his co-defendant- Rancke, for the sum of $1,881.

On appeal to the general term, on May 8, 1876, the judgment of the special term was reversed. The judgment first entered upon such reversal did not direct a new trial (41 Super. Ct. 467).

The defendant Hauselt thereupon appealed to the court of appeals from the judgment of reversal, without giving the stipulation required by section 191 of the Code upon an appeal from a judgment ordering a new trial.

The court of appeals declined to hear the appeal unless the notice of appeal was amended by inserting-such stipulation upon the argument. That being done, the court of appeals heard the argument, but dismissed the appeal on the ground that it was from a simple order of reversal from which no appeal would lie to that court (69 N. Y. 485). Thereupon, by stipulation of counsel, the order of this court, dated May 8, 1876, was so amended as to reverse the judgment of the special term and to order a new trial; and judgment to that effect was entered.

From this judgment the defendant Hauselt again appealed to the court of appeals, giving in his notice of appeal the stipulation required by section 191 of the Code—that if the order for a new trial should be affirmed, judgment absolute should be rendered against him. At the March term of the court of appeals, in 1879, the order of the general term of the superior' court was affirmed, and judgment absolute for the plaintiff on the stipulation, with costs, was ordered (76 N. Y. 614).

The judgment of the court of appeals was in due form made the judgment of the superior court. It was then, at a special term of this court, on March 29, 1879, ordered that the plaintiff John C. Rust have judgment absolute against the said defendant Charles Hauselt, with costs. It was further ordered that it be referred to a “ referee to state the account and to ascertain and determine the sum or amount which was due from the defendant Charles Hauselt to the plaintiff John C. Rust, under the judgment of the court of appeals and the judgment of this court - entered thereon.”

The parties attended before the referee, who reported, July 8, 1879: “That the defendant Hauselt received under the assignment the sum of $13,000; that he paid to creditors of the firm $11,235.32, leaving abalance of $1,764.68; that the indebtedness of Charles Hauselt was recognized and stated in the statement of liabilities of said firm, furnished to him by said firm at the time of said assignment, to be the sum of $3,000; that all of said balance is not sufficient to pay the indebtedness due the said Hauselt from the „ said firm, irrespective of his commissions as assignee ; that he has ascertained and reports that there is no sum or amount whatever due from the said defendant Charles Hauselt to the plaintiff John C. Rust.”

The defendant took up and filed the referee’s report and moved for its confirmation. No exceptions to the report having been filed, it was confirmed, as of course, under Rule 30. An appeal from the order confirming the report was taken by the plaintiff. The general term affirmed the order. An appeal from this order of affirmance was dismissed by the court of appeals, June 10, 1880.

The defendant then attempted to tax the costs of the action. The clerk declined to tax his costs, on the ground that the costs had not been awarded to him. The court sustained the clerk’s ruling. The defendant then attempted to tax, as his disbursements, the §80 paid the referee upon taking up his report. This was refused by the clerk, and Judge Freedman, before whom the matter was taken, sustained the clerk, holding that disbursements followed costs, and that a party not entitled to costs was not entitled to tax disbursements.

Now the defendant seeks to enter an affirmative s judgment against the plaintiff for the amount of the indebtedness of Rancke & Rust to him, stated in the computation of the referee as remaining unpaid after the application of all the moneys which came into his hands by virtue of the assignment.

The question then is whether, under the circumstances recited, the defendant is entitled to enter such judgment, and what costs the respective parties are entitled to.

The defendant claims substantially the same rights as if the reference ordered for the purpose of carrying out the order of the court of appeals giving the plaintiff judgment absolute, were an ordinary reference to hear, try and determine all the issues in the action, on the coming in of the report as to which he would be entitled, as a matter of course, to enter judgment.

There are two objections to this theory: In the first place, it was not such a reference, but a reference to state the accounts and to report what was due the plaintiff. In the next place, the defendant’s rights must now Be considered with reference to his stipulation on appeal from the order granting a new trial to the court of appeals, and the determination of the court of appeals rendering judgment absolute against him.

What was the effect of that stipulation and judgment % Did it mean something or nothing % Could the defendant stipulate that judgment absolute should Be rendered against him, and under such a judgment still enter an affirmative judgment for all that he originally claimed ?

I. think not. Any right which he had to the affirmative relief, claimed in his answer, was lost by the judgment of the court of appeals on his stipulation, so that when the case came back to the superior court, it stood in the same position as if there had been no answer interposed—at any rate, no answer asking for affirmative relief. The court might have taken the account, and, having ascertained that there was nothing due the plaintiff, ordered judgment for the plaintiff simply for costs, in conformity with the decision of the court of appeals. It chose, instead, to have the examination made by a referee, under its direction.

The defendant acquired no new rights by reason of the matter being sent to a referee. The referee was simply to perform an act for the court, mainly ministerial, whereupon, it became the duty of the court to enter a final judgment in conformity to the decision of the court of appeals.

There cannot be such a thing as a judgment absolute for the plaintiff, and a finding for defendant of a larger balance due him (Shufelt v. Rowley, 4 Cow. 58).

In Thompson v. Lumley (7 Daly, 74), which was an action for malicious prosecution, the complaint was dismissed at the trial. The general term reversed the judgment and ordered a new trial. The court of ap. peals affirmed the order and ordered judgment absolute for the plaintiff, upon the usual stipulation. The-case coming back to the common pleas, damages were-assessed by a judge and petit jury. On the assessment of damages, Judge Yaw Brunt ruled that the plaintiff need give no evidence as to the payment of the sum of' $700 costs and counsel fees, alleged in the complaint to, be special damages, because the judgment of the-court of appeals established that claim. Motion was-made to vacate the assessment of damages, which was-denied, and on the appeal from the order denying that-motion, Chief Justice Daly said :

“ The effect of the judgment of the court of appeals was the same as if the whole of the plaintiff’s cause of. action had been admitted. It was equivalent to an admission, by a failure to put in an answer, that the defendants had, maliciously and without probable cause, caused the plaintiff to be arrested, imprisoned and. prosecuted upon a charge of perjury. But the amount paid for counsel fees and costs the plaintiff had to-prove upon the assessment, for that was in no way settled by the judgment of the court of appeals, the effect-of which was simply to establish the plaintiff’s cause-of action as averred in his complaint,but nothing more,, and the ruling of the judge upon this point was, in my opinion, erroneous (p. 76). ... As respects the assessment of damages in this case, it is to be regarded as-analogous to a default upon a failure to answer, and to-be governed by the practice which existed upon assessing damages upon an inquest at the circuit, or upon a. writ of inquiry before a sheriff’s jury” (p. 78).

What, then, is the effect of an admission by failure to answer \ Clearly, that the plaintiff in an action is entitled to the relief demanded.

It would be an extraordinary thing for a defendant who did not answer, to get an affirmative judgment in. the nature of a counter-claim.

In Wright y. Delafield (25 N. Y. 266) the plaintiff brought his action to restrain the prosecution of actions pending against him on notes given for the.purchase of land, on the ground of defective title, and prayed that the defendant might be required to make a good title and convey. There was a pure defense to the action, which prevailed. But the judge before whom the case was tried, without a jury, not only dismissed the complaint, but gave judgment for the defendant for the amount of the notes. The plaintiff appealed from this judgment, and it was reversed, because there was no claim in the defendant’s answer for judgment upon the notes. Smith, J., delivering the opinion of the court, said:

“The principle still remains that the judgment to be rendered by any court must be secundum allegata et probata, and this rule cannot be departed from without inextricable confusion, uncertainty and mis- • chief in the administration of justice. Parties go to court to try the issues made by the pleadings, and courts have no right to make new issues for them on the trial, to their surprise or prejudice, or to find judgments on grounds not put in issue and distinctly and fairly litigated” (See also Kniffen v. McConnell, 30 N. Y. 285-290 ; Stephens v. Hall, 2 Robt. 674; Doyle v. Mulrein, 1 Sweeney, 517 ; Norbury v. Seeley, A How. Pr. 73 ; Glen Manufacturing Co. v. Hall, 6 Lans. 158).

The rendering of an affirmative judgment in favor of a party who had stipulated that judgment absolute should be rendered against him would be quite as improper as to render j udgment in his favor for what his pleadings did not claim.

It is suggested that the case of People v. Denison, decided at the Albany special term in May last (N. Y. Daily Register, July 1), is an authority for the position here taken by the defendant. I think not. In that case the action was brought by the People to recover certain sums of money alleged to have been overpaid to the defendants by fraudulent collusion with certain officers of the State government. The defense was a denial and a counter-claim. The referee reported in favor of the plaintiffs for the amount claimed. The general term reversed the judgment entered thereon and ordered á new trial. An appeal was taken by the attorney-general from the judgment and order of the general term to the court of appeals, the usual stipulation being given. The action of the general term was affirmed and judgment absolute for the defendants rendered.- The judgmént of the court of appeals having been made the judgment of the supreme court, the defendants, without any further action or order, entered judgment against the State for the amount of their counter-claim. Motion was made by the attorney-general to set aside this'judgment. Judge Westbrook granted that motion—first, because a sovereign State which has never authorized the bringing of suits against itself in its own courts for the recovery of any debt or obligation supposed to be owing by it, but which has established a State board of audit for the purpose of hearing and deciding all private claims, cannot have a judgment rendered against it in the courts ; second, because, even if such a judgment could be rendered at all, inasmuch as the counter-claim was not litigated or considered upon the trial before the referees, the defendants could not have judgment for the amount claimed without an assessment of damages pursuant to section 194 of the Code. Certainly this case cannot be an authority for the entry of judgment by a party who has stipulated that judgment absolute should be rendered against him.

In the Denison case, the defendant, in whose favor judgment absolute had been ordered, sought to enter judgment without having his damages assessed, and was forbidden. In the case at bar, the defendant, against whom, judgment absolute has been ordered, seeks, nevertheless, to enter judgment for all he ever claimed. This he cannot do.

The court of appeals, in affirming the judgment of the general term, and ordering a new trial, with judgment absolute for the plaintiff, said, “with costs.”

I am of opinion that that judgment for costs carries the general costs of the action from beginning to end, except the costs of the appeals taken by plaintiff from the order confirming the report of the referee, which were specially adjudged to the defendant Hauselt.

These costs should be offset against each other, and judgment should be entered for the plaintiff for the excess.


text:
    At General Term.
    In the Matter of the Petition of JOSÉ CARLOS TRACY, Petitioner, Appellant ; Plaintiff, in action of AMSINCK and GOSSLER v. ROQUE HERNANDEZ and JOSÉ CARLOS TRACY, sued as JOSEPH C. TRACY, Respondents.
    .Jurisdiction op State Courts. ,
    1. Public ministers members of a firm, the other members of which are not such.

      (a) State courts have no jurisdiction over an action
    AGAINST THE FIRM UPON A FIRM LIABILITY.
    1. Won-service of summons on the members who are public ministers : effect of.

    1. This, although intentional, will not give jurisdiction over the action.
    3. Want of jurisdiction in such eases, how mailed of.

    By petition of the public minister for an order dismissing the complaint.
    Before Curtis, Ch. J., Van Vorst and Speir, JJ.

      Decided February 2, 1880.
    An action was brought by Gustav Amsinck and -Gustav H. Gossler against two defendants, as partners under the firm name of Hernandez & Tracy, upon an indorsement, in their firm name, of a bill of exchange. The summons was served upon the defendant Hernandez only, notwithstanding the other defendant, 'Tracy, resides in the city of New York.
    At the time of the commencement of the action, the «defendant Tracy was, and still is, the public minister
      of the Republic of Peru in the United States. Tracy-presented his petition to the court, setting forth these facts, and moved for a dismissal of the complaint, on the ground that this court has no jurisdiction. The motion was denied, and an appeal was taken by the petitioner.

      Luke A. Lockwood, attorney, and of counsel, for appellant:
    I. This court has no jurisdiction. Paragraph 8 of section 711 of the United States Revised Statutes declares that the courts of the United States have exclusive jurisdiction of all suits or proceedings against ambassadors and other public ministers, &c. Section 687 places exclusive jurisdiction of such actions in the United States supreme court. Section 4,063 declares all writs and process whereby the goods, &c., of a public minister are seized or attached, void. Section 4,064 punishes by imprisonment and fine every person, party, or attorney or officer, who obtains or prosecutes or executes such writs.
    II. Exemption from being sued in a State court cannot be renounced by a public minister, because it is not his personal privilege, but the right and privilege of the United States (Valerino v. Thompson, 7 N. Y. 576, and cases there cited. See Davis v. Packard, 7 Pet. 276).
    III. The difficulty is not obviated by not serving the partner who is a public minister. The action is nevertheless against him, and the relief prayed for is a judgment against him ; and the judgment to be entered in the action, under the State' law, is against his joint property, and the execution to be issued thereon would be a violation of sections 4,063 and 4,064. «
    IY. The petitioner had a right, under the law of this State, being a defendant upon a joint contract, to appear and defend said action, notwithstanding he was not served with a summons (Higgins v. Rockwell, 2 Duer, 650 ; Rogers v. McLean, 11 Abb. Pr. 440). But by reason of inability to waive his exemption by law, he properly applied by petition, respectfully bringing the fact of action brought, and no jurisdiction, to the knowledge of the court.

      Y. The court will dismiss such actions at any stage when the fact of no jurisdiction is brought to its knowledge (Valerino v. Thompson, 7 N. Y. 586 ; Taaks v. Schmidt, 19 How. Pr. 413 ; Griffin v. Dominques, 2 Duer, 658).
    VI. The court has no jurisdiction in an action upon joint contract when one of the defendants is a public minister, consul, &c. (Valerino v. Thompson, supra; Naylor v. Hoffman, 22 How. Pr. 516; Rock River Bank v. Hoffman, 22 Id. 257).
    VII. The order should be reversed with costs, and as the plaintiffs had due notice before suit brought, the complaint should be dismissed, with costs.

      Martin & Smith, attorneys, and Aaron Pennington Whitehead, of counsel, for respondent:
    I. The privilege which prohibits courts from exercising jurisdiction over foreign ministers duly accredited to the government of the United States, does not extend to their partners in business. The privilege is personal and is limited to the ambassador and his servants, and does not extend to others who happen to be connected by business ties; if it were otherwise, a foreign minister who happened to have - a dozen partners might shield them all from the payment of their just debts by insisting on his privilege. No authority can be found which justifies the course taken by the petitioner. The privilege has never been extended, so far as counsel for the plaintiffs have been able to ascertain, beyond the foreign minister himself (4 Blacks. Comm.
      254 ; Magdalena Co. v. Martin, 2 E. & E. 94 ; Wheat. 295 ; Wheat. [Lawrence ed.] 394). The mere fact that the petitioner is joined as, a defendant in the action gives him no right to come in by a voluntary independent petition and endeavor to have the action dismissed as against his partner. The petitioner, although joined as a defendant,- is not sued. No process has been served against him. No action can be said to be maintained against him until he is brought in by process. The petitioner is undisturbed in his person, and would not know that such an action existed unless so informed by the defendant Hernandez, and clearly he has no cause of complaint until the plaintiffs have endeavored to coerce him within the jurisdiction of the court.
    II. The petitioner has no standing in court. There is no foundation for such a proceeding as he has initiated. His position is simply this. An action having been commenced against his partner, Hernandez, in which he is joined as a defendant, he chooses to come into court with another proceeding, and demands that the action be dismissed. Such a proceeding is unau thorized by the Code or by any practice. It is an unwarranted assumption for the petitioner to volunteer to come into court and demand that certain proceedings be dismissed upon his application. If he have any remedy, it must be in the action in which Hernandez has been sued. But these proceedings are in no way connected with the action. It is an attempt on the part of the petitioner to interfere with a process of this court, and to dictate to this court who shall and who shall not be sued. It is respectfully submitted that such a proceeding cannot be tolerated, and that it is without foundation in practice or precedent.
   By the Court.—Van Vorst, J.

The courts of the United States have jurisdiction, exclusive of the courts of this State, of all suits or proceedings against ambassadors or other public ministers (U. S. Rev. Stat. §§ 687, 711, subd. 8).

Exemption from being sued in a State court cannot be renounced by a public minister, because it is not his personal privilege, but the right and privilege of the United States (Valerino v. Thompson, 7 N. Y. 576; Davis v. Packard, 7 Pet. 276 ; St. Luke’s Hospital v. Barclay, 3 Blatchf. 259). The difficulty is not overcome by an intentional omission to serve, as is the case in this instance, the partner named as a defendant, who is a public minister. The action is, nevertheless,. in substance against him ; a judgment is demanded against the defendants, and, when entered, the judgment, under the laws of this State, may be enforced against property, which the defendant, not served, owns jointly with his co-defendant (Code, § 136).

Under the execution, which- the plaintiff could issue and enforce upon such judgment, the goods and chattels of the defendant Tracy, owned by him jointly with his co-defendant, could be seized. Such, execution would be a violation of the statutes of the United States (§§ 4,063, 4,064).

By reason of his inability to waive his exemption, the defendant cannot voluntarily appear and defend this action, as he might, but for this exemption.

In this condition, unless he can otherwise intervene, he may be subject to the hardship of seeing his goods sold to answer a claim against his firm, against which he may have a good defense.

It would seem, therefore, that the only remedy open to the defendant is to call the attention of the court to the subject by petition or motion, as he has done, and it is doubtless the duty of the court to dismiss an action of which it has no jurisdiction (Taaks v. Schmidt, 19 How. Pr. 413; Griffin v. Dominguez, 2 Duer, 656).

The order appealed from is reversed, with costs and disbursements of this appeal.

Curtis, Ch. J., and Speir, J., concurred.


author: By the Court.—Speir, J.

text:
    HOWARD T. FELTON, Appellant, v. WILLIAM H. McCLAVE, Respondent.
    I. Agent’s interest m an agency for a term of years.
    1. Purchase of, provided principal’s consent, if necessary, should be obtained.

      (a) Conditions precedent to recovery of purchase-money.
    1, That there should be a valid subsisting contract, whereby the vendor is constituted agent for the term.

      (a) What not such contract. An instrument purporting to be a contract between a corporation and third parties, whereby the corporation agrees to and does employ the third parties as its agents for a specified period; but not signed by the president of the corporation, nor attested by its secretary, nor sealed with its corporate seal, and repudiated by the company; the instrument in the case at bar being signed “ J. D. Culp, for the. Consolidated Tobacco Company of California, by authority as per telegram hereto attached. This to be ratified and properly indorsed by officers of said company,” and the telegram being ‘‘To J. D. Culp: You are authorized to close contracts for sale of our goods on terms desired, but official documents can follow if needed. I. N. Stow, President Consolidated Tobacco Co., Cal.;” .does not constitute a valid, subsisting contract.
    2. Gonsent of the principal.

    What not sufficient consent. One consenting to a transfer of the agent’s interest under a claimed contract, but providing that the consent was not to assume any recognition by the company of the existence of any such contract, or a similar provision, is not sufficient.

      II. COKPOBATION.
    1. Contract by. ,

      (a) What not valid and binding.

      Supra.

    Before Curtis, Ch. J., and Speir, J.

      Decided February 2, 1880.
    The action is brought upon a contract made between the plaintiff and the defendant to recover $4,500 and interest, which the plaintiff claims to be due from defendant on a sale to him of one-half interest in a contract averred to have been made between the Consolidated Tobacco Company of California and the firm of William A. Park & Co., of which the plaintiff was a member, constituting that firm sole agent of the California Company.
    The plaintiff alleges that said agreement between plaintiff and defendant was executed on September 11, 1874, and, in pursuance of the terms and conditions of said agreement, the plaintiff procured from the said Consolidated Tobacco Company and from William A. Park full written consent that defendant succeed to plaintiff’s interest in said contract with said company, and the said William H. McClave, in part performance of said agreement to purchase, paid plaintiff on account of said purchase-money the sum of $100; that the plaintiff tendered an assignment of all of plaintiff’s interest with the “Consolidated Tobacco Company,” and defendant declined and refused to receive said assignment and declined to perform his agreement with the plaintiff.
    The defendant answered that the plaintiff failed to obtain the company’s consent, and so notified him, and that the agreement came to an end; that long after-wards the plaintiff professed to have obtained from the company the necessary consent, but that, though requested, he failed to exhibit it, and the answer put the plaintiff’s allegation at issue.
    The complaint was, on motion of defendant’s counsel, dismissed, and the plaintiff appeals.

      G. S. Van Pelt, attorney, Henry Daily, Jr., of counsel, for appellant.

      Man & Parsons, attorneys, and John E. Parsons, of counsel, for respondent.
   By the Court.—Speir, J.

By the terms of the agreement between the plaintiff and defendant, it was a condition precedent to the performance of the contract by the defendant-that the plaintiff should obtain the written consent of the Consolidated Tobacco Company and William A. Park, that defendant should succeed to the plaintiff’s interest in the contract with said company. This is admitted by the plaintiff’s counsel, and he asserts such written consent was obtained. ' •

It is important to look at the contract between- the Consolidated Company and William. A. Park & Go., for the purpose of ascertaining what interest was involved in this consent. The contract was executed May 9,1874, before the contract between the plaintiff and defendant was made, and it constituted William A. Park and the plaintiff Felton exclusive agents for five years for the sale throughout that portion of the United States lying east of the Bocky Mountains of nine-tenths of all the cigars and tobacco manufactured by the company. The first point presented is, did the California company execute the agreement alleged in the complaint to have been made between them and , William A. Park and the plaintiff, appointing them such agents ? It is set- out in the complaint and purports in the attesting clause to have been signed by the president of the company, and its corporate seal to be affixed thereto and attested by its secretary. The signature to it and its execution was in fact only as follows :

“J. D. CULP,
“ For the Consolidated Tobacco Company of California, by authority as per telegram hereto attached, this to be ratified and properly indorsed by officers of said company.
“ WILLIAM A. PARK.,
H. T. FELTON.”
“ Signed and sealed in presence of “Henry C. Stow.”'

The telegram referred to is as follows :

“Received at Fifth Ave. Hotel, May 8.
“ To J. D. Culp, Hoff. Ho. :
“You are authorized to close contract for sale of our goods on terms desired, but official documents can follow if needed. J. W. STOW,
“President Consolidated Tobacco Co., Cal.”-

There is no evidence in the case that the instrument signed by Culp ever was executed by the president of the company or attested by its secretary, or that the corporate seal was affixed thereto. What the plaintiff agreed to transfer was his half interest with his partner Park as sole agent of the company. Although the contract in terms runs “provided that the consent of the company, if necessary, should be obtained,” it cannot be pretended it was unnecessary. Any other consent would be of no account unless it was a consent to transfer an interest in the agency. If there was no' agency, there could be no interest to be transferred. The contract, like others, is to be construed in accordance with the intent of' the parties. The defendant was justified in believing that if the company was willing to take him in the place of the plaintiff he would become one-half interested in the agency upon paying $4,500, and his becoming such agent was the condition of the payment. It does not appear that Culp had any authority to execute such an agreement. Stow, by his telegram, did not undertake to give any such authority. The company having heard that the plaintiff’s firm claimed to have a written contract with them, executed by Culp as its agent, wrote to the firm on the same day that the contract between the parties to the suit was executed, informing them that Culp had no authority to contract in behalf of the company, and that they had before notified them that the instrument referred to had been disapproved by the trustees.

It is apparent from all- the evidence that the company at all times repudiated the agreement set up by the plaintiff between it and plaintiff’s firm, and also the agency of Culp to contract for them ; and further, that they did not recognize the existence of any contract binding the company to. continue their agency. The learned judge properly dismissed the complaint upon the ground that the plaintiff had not procured any such consent as a preliminary step to his right to recover.

The consent that was given by the company, as testified to by the plaintiff and his witness Stow, did not even in terms amount to a consent. It contained in substance a provision that the giving of the consent was not to assume any recognition by the company of the existence of the contract claimed by the plaintiff to have been entered into. It was only a consent to the transfer of such right as the plaintiff might have, stafcing that he had no right at all—a strong intimation that the defendant, after the transfer, would not be recognized as agent. In Other words, the plaintiff, Felton, may make any arrangement with the defendant McClave to substitute him in his place as employee of the tobacco company. Nevertheless the company can say to him, you may transfer whatever right you have, but we will not permit you to be our agent to do our work.

The judgment should be affirmed, with costs.

Curtís, Ch. J., concurred.


text:
    ROSE McDONALD, Administratrix, &c., Respondent, v. CHARLES H. MALLORY, and others, Appellants.

      Costs.

    1. Extba allowance.

      (a) On demurrer to complaint, when not grantable on.

    Where the court of appeals reverses a judgment of the general term in favor of the defendant on his demurrer to the complaint, and orders judgment for the plaintiff on the demurrer, with leave to the defendant to answer, on payment of costs, within a certain time, an extra allowance cannot be granted, within that time, so that the same shall become a pa/i't of the costs to be paid as a condition precedent to answering.

    Before Curtis, Ch. J., and Speir, J.

      Decided February 2, 1880.
    A demurrer was interposed to the complaint, which was sustained by the special and general terms of the court, but overruled by the court of appeals, which ordered judgment for the plaintiff on the demurrer, with

      leave to the defendants to answer on payment of costs within thirty days.
    Before the expiration of the thirty days the plaintiff obtained an order at special term, which was opposed by the defendants, granting an extra allowance to the plaintiff of §150. The defendants appeal from the order.
    Butter, Stillman & Hubbard, attorneys, and of counsel, for appellants :
    I. Upon a decision and order overruling a demurrer to a complaint, where leave is granted to the unsuccessful defendants to answer over on payment of costs of the demurrer, and the decision does not work a discontinuance of the action or result in a final judgment terminating the action, but where the defendants proceed to answer under the leave granted and raise an issue for the trial term, no extra allowance should be granted. The case of Moulton v. Beecher (1 Abb. New Cas. 245), was a case where the plaintiff discontinued, and a small additional allowance was granted to the defendant as a condition of the discontinuance. The case of Lowry v. Inman (6 Abb. Pr. N. S. 394), was a case where leave was denied the plaintiff to amend and plead over, and a final judgment was entered in defendant’s favor on the demurrer. The case of Small v. Ludlam (1 Hilt. 307), was a case where the plaintiff did not avail himself of the leave given him to amend, but appealed to the general term, and the defendant had final judgment. In all of these cases it will be seen that there was either a discontinuance, or leave to plead over was denied, or the party did not avail of such leave, and a final judgment was rendered on the demurrer, terminating the action. Hone of these conditions exist in the present case; there is no discontinuance or final judgment, but the defendants have, leave to answer over on payment of the usual costs of the demurrer, and they proceed to avail themselves of that leave and to serve their answer, and thus to raise an issue of fact for trial at the regular trial term of the court.
    II. There is no practice prevailing either in this court' or in the supreme court, sanctioning such an order as the one appealed from here. The usual and settled practice is to grant leave, where a demurrer has been interposed in good faith, to plead over on payment of the usual and ordinary costs of the demurrer, which are the costs of the action up to that time, and it is respectfully submitted that in a case like this no additional allowances should be granted, but that question should be left until the trial is had at the trial term.
    III. It is quite settled that there cannot be two extra allowances granted in the same action (Brewer v. Brewer, 11 Hun, 147; Union Trust Co. v. Whiton, 17 Id. 593; Flynn y. Equitable Life Assurance Society, 18 Id. 213). And this being so, it is proper that the prevailing practice should not be disturbed and altered, but that the question of additional allowance should be left to the discretion of the justice presiding at the trial term when the case comes before him for trial upon the issues joined under the answer, and, if the plaintiff is successful, an extra allowance would, in a case like this, undoubtedly be granted. The question should, therefore, be left to the trial term, and not be entertained here now; especially where the terms of the privilege of answering over have already been stated and imposed by the court of appeals in its decision clearly and without any ambiguity. If this rule is changed, it will follow that this court will be repeatedly called upon to grant an allowance wherever a demurrer is overruled or sustained at special term, and if granted, thus preclude the party from applying for or obtaining an allowance on the trial, a change of practice which would invert the usual order of procedure, and which would be extraordinary and unnatural.
    Benedict, Taft & Benedict, attorneys, and of counsel, for respondent:
    I. The court has power to make the order. 1. The language of the Code is as follows : “ In difficult and extraordinary cases (1) where a defense has been interposed, or (2) in such cases when a trial has been had, the court may, in its discretion, make a further allowance to any party not exceeding five per cent, upon the amount of recovery, or claims or subject-matter involved.” a. Conceding the case to be difficult and extraordinary, the granting of an allowance was in the exercise of a sound discretion, b. A trial has been had. In Small v. Ludlow (1 Hilt. 307), and in Lowry v. Inman (6 Abb. Pr. N. S. 405), the argument of a demurrer was held to be a trial, and the successful party had an extra allowance. So in Moulton v. Beecher (1 Abb. New Cas. 193, 245), the argument of an unsuccessful demurrer was held to be a trial within section 309 of the Code of Procedure. 2. The court has the power to grant, and does grant, allowances in such cases where no trial has been had, viz.: on the overruling of a. demurrer for frivolousness (First National Bank of Pittsburgh v. Bush, 47 How. Pr. 78); on the discontinuance of an action (Id.; Bartlett v. Lord, Supreme Court, 1st Disk, 1879 ; and see Carter n. Clark, 2 Sweeny, 188; Coffin v. Coke, 4 Hun, 616, and cases cited; Robins v. Gould, 1 Abb. New. Cas. 133). 3. It was urged on behalf of appellants that to entitle a party to an allowance final judgment must be had. But the Code provides for allowances not only on the amount of the recovery, but on the claim involved, and nowhere makes a final judgment a prerequisite to an allowance. But a final judgment has been had, so far as the issue which has been tried is concerned. The issue of law has been tried and finally disposed of, and on that issue the plaintiff has recovered a judgment for costs. 4. The point was taken below, on behalf of the appellants, that but one allowance may be made in an action. We submit that the true statement of the proposition is, that but one allowance may be made on the trial of an issue ; but that an allowance may be made on each separate trial of an issue, though in the same action. 5. The question, however, as to whether a further allowance may be made in the event of judgment for damages being finally recovered by plaintiff, though raised, was not considered below, and does not'properly arise here, and need not be discussed.
   By the Court.—Speir, J.

The question presented by this appeal is whether the court has power to make the order appealed from.

The demurrer raised the point that a certain statute of this State has no operation on the high seas. It is not doubted that this case was difficult and extraordinary within the meaning of the Code. It received the most deliberate consideration, as appears from the able opinions which were delivered by both courts.

Although an additional allowance, when properly granted, becomes a part of the costs of the action awarded by the Code to the successful party (Commissioners of Pilots v. Spofford, 3 Hun, 57), it becomes a grave question whether it can be inferred that the court of appeals intended that an extra allowance should be included in the costs when a provision is made in its decision, that the defendant have leave to answer on payment of costs. This is not the final costs in the action, and is so determined by the court. The question then is presented, has the court the power to award an extra allowance in any case until the termination of the action. We have decided, this present term, that neither costs nor allowances can be awarded since the adoption of the Code, unless authorized by law. The discretion to be exercised by the judges in the awarding of, and adjusting of costs and allowances must be limited and controlled by statutory authority. The cases are numerous which seem to justify an allowance when a plaintiff voluntarily submits to a nonsuit or discontinues after issue joined. A trial is not now a necessary element, when a defense has been interposed in a difficult and extraordinary case, nor is it deemed necessary that a judgment should be actually entered. The statute authorizes all these, and within the authority of the statute the courts may exercise their discretion. The test must be, that the action has terminated in such form that the successful party can lawfully claim the payment of the costs on such termination, and enforce their payment in any mode known to the practice. We know of no case, nor has any been furnished us, which does not come within this rule. If extra allowances can be made now, there can be no good reason why they should not again be allowed every time the court of last resort sends a case down for a new .trial upon similar terms, and even in the same case. There cannot be two extra allowances granted in- the same action, although the case may have been tried several times (Flynn v. Equitable Life Assurance Society, 18 Hun, 212). This furnishes a conclusive argument that extra allowances can only be made when the action is finally ended.

The order of the special term appealed from should be reversed, with costs.

Curtis, Ch. J., concurred.


text:
    JAMES SHEEHAN, Appellant, v. GUSTAVE HUERSTEL, Administrator, Etc., Respondent.

      Costs in an Equity Action.

    1. Unsuccessful administrator-defendant.

      (a) Not entitled to, when.

    1. The court, upon adjudging that a fund in the hands of an administrator-defendant which he claims belongs to his decedent, in fact belongs to the plaintiff, and that neither the administrator nor his decedent has any interest therein, cannot direct the payment of the defendant’s costs out of such fund. '
    Before Curtis, Ch. J., and Van Vorstand Spier, JJ.

      Decided February 2, 1880.

      George W. Wilson, attorney, and of counsel, for appellant.

      Abraham Kling, attorney, and of counsel, for respondent.
   By the Court.—Speir, J.

This is an appeal from an order awarding costs to the defendant upon a judgment rendered by the court in favor of the plaintiff.

The action was brought by the plaintiff to have certain moneys declared to be his. The case was referred, and the referee gave judgment that the money was the exclusive property of the plaintiff, who was successful, and that the estate which the defendant represents as administrator has no interest in the fund. The defendant failed to recover, but on his application, the court awarded him costs to be paid out of the plaintiff’s private fund. We are of the opinion that the court has no power to award costs to an unsuccessful defendant out of the private fund of a successful plaintiff. The cases in which the defendant may recover are where the defendant is not united in interest with those against whom the plaintiff recovers—when separate defenses are made by separate answers—and where costs may be awarded to the successful defendant (Allis v. Wheeler, 56 N. Y. 50 ; Park v. Spaulding, 10 Hun, 128). In the present case the fund from which the costs are to be paid, is no part of the estate, but is the exclusive property of the plaintiff. The instances above stated where costs may be allowed, are authorized by the Code, and the discretion of the court is to be exercised within the limitations of the law. This principle, we think, is applicable in cases of both law and equity. Mr. Justice Marvin has said, in Downing v. Marshall (37 N. Y. 380),- “It is equally clear that the court of chancery has no inherent jurisdiction to ordain and order costs independent of statutory authority.”

The order appealed from should be reversed, with costs.

Curtis, Ch. J., and Van Vorst, J„. concurred.


author: By the Court.—Freedman, J.

text:
    HENRY A. ROGERS, Respondent, v. THE SUN MUTUAL INSURANCE COMPANY, Appellant.
    I. Marine Insurance.
    1. SEAWORTHINESS, WARRANTY OF.
    (it) Implication of. The mere fact of effecting the insurance, independently of the particular terms used, impliedly warrants that the vessel at the commencement of the voyage is seaworthy.
    (Z>) Extent of the warranty. That the material of which the vessel is made, its construction, the qualifications of the captain, the number and description of the crew, the tackle, sails, and. rigging, stores, equipment and outfit generally, are such as to render it in every respect fit for, and able to encounter with safety the ordinary perils of the proposed voyage or service. It extends to qualities and defects of the vessel unknown, and that could not have been known, no less than those known, to the assured.

    (c) Condition precedent. This warranty is a condition precedent to the policy attaching, and the burden is on the assured to prove seaworthiness, whether the loss or injury proceeded from a want of it in any particular or not.

      (d) Waiver or modification of the warranty.
    1. Burden of proof as to.

    It rests on the assured to establish.
    2. What will not operate as.
    1. Measures taken by the assurer, such as having a survey made to satisfy himself as to the sea-worthiness of the vessel, will not of themselves so operate.
    2. Description of vessel in policy. The fact that the vessel had been built for sound and inland navigation, that the assurer knew such fact, and that by the policy she was described as “the Steamboat Novelty,” do not, as matter
    0 of law, restrict the implied warranty of general seaworthiness to a limited warranty of seaworthiness for sound and inland navigation, n. Application of above principles.
    A vessel which had been built for sound and inland navigation, which fact was known to the assurer, was insured under the description of “ the Steamboat Novelty,” at and from Newark, New Jersey, to the St. John’s River, Florida, with privilege of port or ports on the way. The assurer required that the vessel should be surveyed by an inspector in their employ, who should report on her condition to it, before it would accept the risk, and. also required that the assured should pay the inspector’s fee for making the survey. The inspector made the survey, and rated the vessel “A. 1% for sound and inland navigation,” but did not refer to a novel arrangement of the machinery, and the peculiar application of the propelling power, which, of itself, according to the opinion of some of the witnesses, rendered the vessel unseaworthy. After this report, the policy, dated November 2, 1876, was issued. The boat started from Newark, November 27, and lay at Clifton Dock, Staten Island, over night, leaving
    there to go down the bay on the morning of the 28th. When a little below and about a mile and a half from the Staten Island shore, she collided with a schooner coming up the bay. The collision broke a hole in the side of the Novelty, and she was run in towards the Staten Island shore, and beached about fifty yards out from the shore, her bow resting on the bottom and her stern swinging. On the 39th, a notice of abandonment was served on the assurer, which was not accepted.
    Held,

      A chwt'ge that, as matter of law, there was under these facts a modification of the warranty of seaworthiness, and a refusal to leame to the jury the question whether there was, in point of fact, any waiver or modification, were erroneous.
    1. Immaterial error.
    1. There being abundant evidence upon which fhe jury might have found a breach of the warranty, in case there „ was no waiver or modification, the errors cannot be regarded, as immaterial, so as that the charge could be sustained, notwithstanding their commission.
    Before Curtis, Ch. J., and Freedman, J.

      Decided February 2, 1880.
    Appeal by defendant from judgment entered upon the verdict of a jury, and from order denying motion for new trial.
    On November 21, 1876, the defendant issued its policy, dated that day, to the Newark Transportation Company, in the sum of $10,000 upon the steamboat Novelty, insuring her at and from Newark, New Jersey, to the St. Johns River, Florida, with privilege of port or ports on the way.
    On application being made for this insurance, the defendant’s officers required that before accepting the risk one Captain Stuart should survey her and make report to them of her condition. Stuart was in their employment at an annual salary, as inspector of vessels in the port of New York. His salary'did not cover the inspection of vessels out of this port, and they required the assured to pay Stuart’s fee for making the survey, which he did. Stuart examined the boat and made a written report to the defendant of her character and .condition, and- "gave oral information to the officers of the company upon every point inquired about, as did Glover, the broker, who also examined the boat.
    The boat started from Newark, November 27, and lay at Clifton docks, Staten Island, over night, leaving there to go down the bay on the morning of the 28th. When a little below there and about a mile and a half from the Staten Island shore,-about noon of the 28th, she collided with a schooner coming up the bay, the stern of the schooner striking the bow of the Novelty. The collision broke a hole in the bow of the Novelty, and she was run in toward the Staten Island shore and beached about fifty yards-out from the shore, her bow resting on the bottom and her stern swinging. On the 29 th a notice of abandonment was served on the defendant’, which was not accepted. The Novelty lay there until about February 12, 1877, when she was raised and put on the dock at Hunter’s Point. Meanwhile, nothing had been done' by her owners towards raising or saving her.
    The claim on the policy was assigned to the plaintiff, and this action was brought, claiming a total loss, which is defended upon the following grounds, among others :
    1. That the insurance was induced by false representations as to, and by concealment of facts respecting this boat, which were material to the risk, and that the policy was therefore void.
    2. That the implied warranty of seaworthiness was not satisfied by the condition and character of this boat, „ and that, therefore, the policy never attached.
    3. That by a regular survey, made under the rotten clause in the policy, she was “ declared unseaworthy, by reason of her being unsound or rotten,” and that, therefore, the insurers, by the express terms of the policy, were not liable.
    4. That the cost of repairs, after making the deduction of one-third new for old, as provided m the policy, would not exceed a moiety of her value as there stated, and that, therefore, by the terms of the policy, the loss was only a partial loss, and that the defendant, if liable at all, could be held liable for a partial loss only.
    The trial extended from February IB to February 21,1879, when the jury rendered a verdict for the plaintiff for the full amount claimed, as for a total loss. A motion was made upon the judge’s minutes that, the verdict be set aside and a new trial granted upon the exceptions and for insufficient evidence, and because the verdict was for excessive damages and otherwise contrary to the evidence and contrary to law, which was denied, and the defendant duly excepted.
    Judgment was entered for the amount of the verdict March 8, 1879, and the defendant duly appealed from the order, denying its motion, for a new trial and from the judgment.

      Evarts, Southmayd & Choate, attorneys, and Joseph H. Choate and Frederic B. Jennings, of counsel, for the appellant.

      Larned, Warren & Ethridge, attorneys, and W. Z. Larned, of counsel, for the respondent.
   By the Court.—Freedman, J.

Ina marine insurance, whether it be on the ship, freight, or cargo, or the commissions or profits to accrue upon the cargo, the assured is understood impliedly to warrant, hy the mere fact of effecting the insurance, independently of the particular terms used, that the ship is at the commencement of the voyage seaworthy ; namely, that the materials of which the ship is made, its construction, the qualifications of the captain, the number and description of the crew, the tackle, sails, and rigging, stores, equipment, and outfit, generally, are such as to render it in every respect fit for the proposed voyage or service (1 Phillips on Ins. § 695, and cases cited).

This warranty extends to the qualities and defects of the vessel, unknown, and that could not have been known, no less than those known, to the assured (Ib.).

The warranty is a condition precedent to the policy attaching, and the burden is upon the plaintiff to prove seaworthiness, whether the loss or injury proceed from a want of it in any particular or not (Hazard v. New England Ins. Co., 8 Pet. 581).

The standard of seaworthiness varies at different places, and, in general, that must be taken which rules at the place where the vessel belongs. So, too, this standard varies according to the character of the vessel, her location, the voyage she is to undertake, or the service she is to perform. Thus, if she is in port, she may be seaworthy for that place, although not for sea. If on the ways for repair, she may be fit and sufficient for that condition, although she would not be fit to be waterborne. So, too, the insurance may be for a mere .temporary purpose, as the going from one harbor to another, or even across a harbor or a strait, or a brief navigation upon inland waters, or while being safely launched ; and, if the ship be sufficient for this purpose, it will not be necessary that she should be in a condition to go to sea (1 Parsons on Marine Ins. 886, 387, and cases cited).

Thus, in Cobb v. New England Mutual Marine Ins. Co. (6 Gray, 192), insurance was effected on a vessel when waterborne, at and from Perry, with permission to go to Eastport and thence to a southern place ; and it was held that it was sufficient if the vessel was in a fit condition to go to Eastport while she sailed for that place, although she was not fit for sea.

The obligation may also be lessened, enlarged, superseded, or waived, by the parties. A vessel may be offered for insurance and insured that will not admit of being put into that condition of seaworthiness for the intended voyage which is ustial and requisite in ordinary cases.

But any such change or waiver must be clearly established. A survey of the ship by surveyors acting for the underwriters, preliminary to the agreement to insure, even when done in pursuance of an express standing regulation of the insurance company, is not a waiver on their part of their right to insist on the implied warranty of seaworthiness (1 Phillips on Ins. § 753, and cases cited).

Myers v. Girard Ins. Co. (26 Penn. St. 192), was an action on a policy of insurance on the iron hull stern-wheel steamboat Governor Moorhead, for one trip from Philadelphia to Port Washington, N. C. The boat was new, built in Philadelphia, and was to be taken to North Carolina to run on the Tar river as a passenger and mailboat. She proceeded down the Delaware river, but the steam got down, the furnace- refused to draw, and she put in at Leedsburg, Morris river, and after an ineffectual attempt to make her machinery work properly, the captain took her back to Philadelphia, and, while at her berth at the wharf, during the same night, she sunk, and considerable damage was doné. The witnesses all testified that she was not built for ocean navigation, but was adapted for river navigation, but were of the opinion that she could, with care, in favorable weather, be taken from Philadelphia to Port Washington. The company knew she was a river boat. One witness testified that he had surveyed her and communicated the facts as to the character of the boat and the trade she was intended for, to the secretary of the company, before the insurance. A nonsuit having been granted on the ground t,hat she was unseaworthy, the supreme court, on appeal, held as follows, viz:

“We see no evidence from which an inference could be drawn that the insurance was to stand good without reference to the ability of the steamboat to make the trip. It may be conceded that the insurance company knew that the boat was built for the river trade, and that it had been examined by the agent of the company before the insurance, but a Avaiver of the implied covenant of seaworthiness for the particular voyage insured does not follow from either of these circumstances, or both combined. All the authorities establish that a waiver of seaworthiness, when not expressed in the contract of insurance, is only to be inferred upon clear evidence that the insurer knew that the vessel was unfit to perform the voyage insured, or that a full representation was made by the assured of the defects of the ship before the completion of the contract.
‘ ‘ The assured is not bound to make any representation as to the condition of the vessel at the inception of the risk, for this is cured by the implied warranty of seaworthiness; but if he wishes to avoid the implied warranty by a disclosure of the defects, he must take care that the disclosure is full and complete. A mere statement that a vessel is intended for a particular trade, although that trade may be less hazardous than the voyage insured, will not cast the risk of seaworthiness upon the insurer ; nor does it follow from ah examination, that defects in the machinery of a steamboat were discovered and considered in the contract of insurance.”

The rule clearly deducible from all the authorities is

1. That it is competent for the underwriter to say, in effect, to the applicant for insurance : “ You are or represent the owner of the vessel, who is bound to know all about her. For my own protection I shall look as far as I deem it expedient, but, after all, I shall rely upon the warranty of the seaworthiness of the vessel to encounter with safety the ordinary perils of the voyage upon which you propose to send her; ” and

2. That the burden of establishing a different contract rests upon the assured.

This rule may in some instances operate as a harsh one, but it is a reasonable and salutary one, and public policy is against its relaxation in favor of the owner, because upon its enforcement depends in a great degree the safety of the crew and passengers.

By the policy in question, dated November 21, 1876, and issued to the Newark Transportation Company, the defendant insured the steamboat Novelty at and from Newark, N. J., to the St. Johns River, Florida, with privilege of port or ports on the way. One of the clauses of the policy further provided that it should be lawful for the said vessel, in her voyage, to proceed and sail to, touch and stay at; any ports or places, if thereunto obliged by stress of weather, or other unavoidable accident, without prejudice to the insurance.

Upon the trial the vessel was shown to have been built in 1869, at Philadelphia, to run by way of experiment, as a fast river boat. .She had two high-pressure locomotive boilers, and engines of the locomotive type, two on each guard, which were adapted to the use of and required fresh water. The mode in which the power was applied to the wheels was novel and pecu-. liar, and in the opinion of some of the witnesses, in-itself, rendered her unseaworthy ; and when she left on her voyage, she h^d only water enough for two days. The insurance was made upon a survey of Captain Stuart, which did not refer to this novel arrangement of the machinery and the peculiar application of the propelling power, but rated the vessel as' “A, 1M, for sound and inland navigation.” In making this survey Captain Stuart was shown, and held to have acted as the agent of the assured, and not as the agent of the defendant. The survey was not made a part of the policy, nor in any way therein referred to.

Nevertheless, the learned judge who presided at the trial, ruled that, as matter of law, the warranty of seaworthiness had been modified by the facts that the vessel had been built for sound and inland navigation, that the defendant had notice of it, and that by the policy she was described as “the steamboat Novelty and, entertaining these views, he refused, though specifically requested so to do, and against defendants’ exception, to leave the question to the jury whether in point of fact there was any waiver or modification.

Under the principles and authorities already referred to, and in view of the fact that there was abundant evidence upon which the jury mi^ht have found a breach of the warranty in case there was no waiver or modification of it, this charge cannot be sustained.

The policy was for a voyage from Newark, N. J., to St. Johns River, Florida, with privilege of port or ports on the way. Under the privilege thus accorded it was not strictly necessary that the vessel, in point of construction, repairs, and equipment, should be seaworthy for the whole voyage as a continuous trip. The cases cited by the learned counsel for the defendant do not go to this extent, for Taylor v. Lowell (3 Mass. 331), and Merchants’ Ins. Co. v. Clapp (11 Pick. 56), did not involve the question ; in Fontaine v. Phoenix Ins. Co. (10 Johns. 58), there was no liberty clause ; in Moses v. Sun Mutual Ins. Co. (1 Duer, 159), the decision was placed upon the ground that there was no evidence of any loss against which the defendants, by the just construction of the policy, undertook to indemnify the assured ; and the view expressed in Kettell v. Wiggin (13 Mass. 67), that the vessel, insured from Gibraltar to the United States, with liberty to touch at the Cape de Yerd Islands, should have been sufficiently found at Gibraltar to enable her to stay and load at the Isle of May, without depending upon procuring provisions there, must be read in connection with the fact that the liberty clause in that case authorized the vessel to touch at said island for salt only.

The plaintiff was bound, however, to prove that the vessel, in point of construction, repairs and equipment, was in all respects competent, under the privilege accorded to her to use a port or ports on the way, to continue and complete the voyage so insured, and to encounter all the ordinary perils and dangers of it with safety. Upon his own showing it appeared that the proposed voyage ran along a dangerous coast, along which the gales are apt to be sudden and severe, and the sea is apt to get up high in a very short time, and the currents run ^ith the wind, and that a vessel overtaken by a storm on certain parts of that coast is likely to find it difficult and hazardous to get into a harbor or inlet. It was for the dangers of such a voyage, inclusive of the risk incident thereto that in case of a storm the vessel might not be able to reach a harbor, that the vessel, in the absence of a waiver or modification, had been warranted seaworthy.

The description of the vessel in the policy as the steamboat Novelty” is not of itself evidence of a partial waiver or modification of the warranty, nor does it become such evidence when taken in connection with the further fact that the véssel was built for sound and inland navigation, for notwithstanding the latter fact she might have been originally built so exceptionally strong as to be fit for the proposed voyage, or she might have been rendered sufficiently strong for the occasion. Nor is notice to, or knowledge in, the company'sufficient per se. All these matters constituted only circumstances to be considered by the jury in connection with the other facts of the case bearing upon the same point. Upon the whole case the question of partial waiver or modification of the warranty was one of fact, and it was error to take it from the jury, and to charge them that the obligation to prove seaworthiness was modified by the fact that she was known to have been built for sound and inland- navigation, and that, except as to the engines, the Newark Transportation Company was only bound to make her equal in seaworthiness to the average of vessels navigating the Sound and inland waters.

As the error referred to necessitates a new trial, it is unnecessary to consider the other questions presented by the appeal.

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

Curtis, Ch. J., concurred.