source: Caselaw Access Project

author: Campbell, J. Bosworth, J. Duer, J.

license: Public Domain

text:
    Catlin v. Hansen.
    The answer of the defendant, who was sued as the maker of a promissory note, set up as a defence, that the note in suit had been delivered to B for a renewal of a former note of the defendant, for the same amount, of which B was then the holder and owner. And that B, after such delivery, instead of returning the first note, kept them both, and therefore averred that no consideration had been given for the note in suit.

      Held, that these facts constituted no defence to the present suit, since they were evidence, that the first note, which, for aught that was alleged, was still in B’s hands, had been satisfied, and could not therefore be enforced against the defendant. The answer therefore, in effect, proved that the note in suit was founded on a valid consideration.

      Held, also, that the motion of the plaintiff, on the trial, to exclude the defence, as irrelevant, ought to have been granted.
    The evidence which the defendant was permitted to give on the trial tended to prove that B, before the note in suit was delivered to him, had parted with the first note to a holder for value, and that his transfer to the plaintiff of the note in suit was, therefore, a fraudulent misapplication.

      Held, that as this defence was different in its entire scope and meaning from that set up in the answer, the evidence ought not to have been received.

      Held, also, for the same reason, that the answer, under the provisions of the Code, could not be so amended as to let in the defence.
    When a defendant, sued as the maker or endorser of a negotiable note or bill, proves upon the trial that it was obtained from him. by fraud, or was fraudulently put in circulation, the plaintiff is bound to prove that he gave value for it when he received it.
    When a valuable consideration, however, is proven, the burden of proof is again shifted, and that of showing that the plaintiff had notice of the fraud is cast upon the defendant.
    A witness who, for a valid consideration, has agreed to indemnify the defendant by whom he is called, is incompetent under the Code “ as a person for whose immediate benefit the action is defended.” (Per Boswobth and Dues, J.J.)

      (Before Duer, Campbell, and Bosworth, J.J.)
    Oct. 18
    Nov. 20, 1852.
    A consistent' interpretation must be given to the two sections in the Code (§§ 348, 349), that which declares that “no witness shall be excluded by reason of his interest in the event of the suit,” and that which excepts from the' application of the rule those who are “ parties to the action, or for whose immediate benefit it is prosecuted or defended.” (Dueb, J.)
    Semble—that these provisions can only be reconciled by confining the exceptions from the general rule to those who, in judgment of law, are parties to the suit; that is, as parties on the record, or parties in interest. (Dueb, J.)
    Those only, as parties in interest, are parties to the suit, who, in all respects and for all purposes, will be concluded by the judgment to be-rendered. (Dueb, J.)
    Hew trial granted, costs to abide event.
    This was an action against the defendant as the maker and endorser of a promissory note, and was tried before the chief justice in March, 1852. A motion to set aside the verdict and •for a new trial was afterwards made upon a- case at a special term, and was denied, and the causé was now heard upon an appeal from this decision.
    In order that the questions raised upon the trial, and upon the argument, may be properly understood, it will be necessary to state vn extenso, both the pleadings and the evidence.
    The pleadings, omitting the reply, which merely took issue upon the allegations of new matter in the answer, are as follows:—
    The complaint of the above named plaintiff respectfully shows to this court, that the defendant heretofore at said city of Hew York, made his promissory note in writing, bearing date the fourth day of June, one thousand eight hundred and fifty-one, whereby he promised to pay, three months after the said date of said note, to the order of himself the said defendant, for value received, the sum of three hundred and twenty-six dollars, and the said defendant did thereupon duly endorse the said note, and transfer the same so endorsed, so that the same, before the maturity thereof, came to the possession of, and was owned by the plaintiff. And although the said note became due and payable before the commencement of this action, yet the defendant has not paid the same. And the plaintiff further says, that he is now the lawful owner and holder of the said note, and that the defendant is justly indebted to him thereupon in the sum of three hundred and twenty-six dollars principal, together with interest thereon from the sixth day of September, A.D. 1851.
    Wherefore the plaintiff demands judgment against the defendant for the said principal sum and interest, besides the costs.
    Tire defendant answering, admits that at the time mentioned in said complaint, he made his promissory note bearing date on the day, for the amount and payable at the time as stated in said complaint, that he endorsed the same and delivered it to one A. Boscher, a merchant of the city of New York, for the purpose of taking up another note, drawn by this defendant for the same amount, which would become due and payable on or about the 6th of June, 1851, which said last mentioned note had been discounted by one William Beecher, a money broker in the city of New York.
    And deponent further says upon information and belief, that said A. Boscher delivered said note in said complaint mentioned to said Beecher, for the aforesaid purpose, that said Beecher at the time said he was and claimed to be the owner of said first mentioned note, and agreed to accept of said note, and deliver up the said note which became due on or about the 6th of June, 1851, to defendant; that after delivery of said note in said complaint mentioned to said Beecher, he refused to deliver up said note due on or about the 6th of June, 1851, to this defendant, but kept both; that said Beecher never paid to this defendant any consideration for the said note in said complaint mentioned, and this defendant claims that the same is void for want of consideration.
    And defendant further answering on information and belief, denies that said note in said complaint mentioned, came into the possession of the said plaintiff before the maturity thereof, or that it is owned by the plaintiff.
    And defendant further answering upon information and belief, says that said note was passed "over to said plaintiff long after the same became due and payable, and with a full knowledge of the facts as above set forth, and with a full knowledge that the same was void for want of consideration, and defendant denies that the plaintiff is the lawful owner and holder of the said note, or that defendant is justly indebted to him in the sum mentioned in said complaint.
    Upon the trial the plaintiff gave in evidence the note mentioned in the complaint, and proved the interest thereon and rested. The defendant’s counsel then opened the cause to the jury, stating in substance the matters set up in the answer. The plaintiff’s counsel then moved to exclude the defence as thus opened and as stated in the answer, on the ground that the matter’s thus stated did not constitute a defence to this suit, though they might form a defence to an action on the note falling due 6th June. The court denied the motion, and plaintiff’s counsel excepted.
    The defendant called as a witness,' Alexander Boscher, who testified that the note in suit was given to renew a note of the same amount given by the defendant, and due on the 6th of June, 1851; the note was made for that purpose; that he took it to William A. Beecher’s office and asked for the other note. Beecher was not in; I left this note with his book-keeper and asked him for the other note; I did not get the other note; I left this note and never got the other.
    On cross-examination, he testified that he employed the attorney to defend this suit, that he is bound to pay the money to the defendant if a recovery is had in this suit, and that it is defended for his benefit.
    The plaintiff’s counsel objected, that the witness, according to his own showing, was not competent under the Code; the court overruled the objection, and the plaintiff’s counsel excepted.
    The defendant then read from the deposition of L. J. Bar-beau, taken de bene esse (having first proved said Barbeau’s absence from the state). The said Barbeau’s deposition in substance was, that he first saw the note in question on Boscher’s desk, in June, 1851; that it was given to take up another note of the same amount, due about 1st June, 1851; that the second time he saw the note it was in W. A. Beecher’s pocket-book in Bulkley & Claflin’s store, in the last week of June, 1851.
    The following question and the answer thereto, were then read by the defendant’s counsel from said deposition of said Barbeau:—
    When yon saw the note in Mr. Beecher’s possession at Bulkley & Claflin’s, will you state what took place between you and Mr. Beecher at that time in relation to this note? (Objected to by plaintiff.)
    A. I was trying to compromise a difficulty between Bulkley & Claflin, and Boscher and Beecher. Mr. Beecher, in searching his pocket-book to see what notes he had in it, that he had received from Boscher, pulled out that one note which I stated to him had been given in payment of the first one, and that he ought to have delivered this last one to BulHey & Claflin. He answered that was his business; he knew what to do with this note. There was nothing else occurred in relation to this note at that time.
    The said question and answer were duly objected to by plaintiff’s counsel; the objection was overruled, and they were admitted in evidence, and the plaintiff’s counsel excepted.
    The defendant then rested.
    The plaintiff’s counsel then insisted that no defence had been established, and that nothing appeared to affect the plaintiff’s right to recover, and that on the evidence as it stood, no notice to the plaintiff or knowledge by him of the matters given in evidence by the defendant being shown or pretended, the plaintiff was entitled to a verdict, and was not required to give any rebutting evidence. The judge ruled that the defendant had established a prima facie defence, and that the burden of. proof was now on the plaintiff. To this ruling, the plaintiff’s counsel excepted.
    The plaintiff then called as a witness, William A. Beecher, who testified as follows: The note in suit was at one time in my possession; I found it lying on my desk, one morning about the time of its date; I parted with the possession of it early in July last to the plaintiff; sold it to him at seven per cent.; he advanced me the whole amount of it, deducting seven per cent, interest; the plaintiff married my sister; I presume an entry of the transaction was made at the time in my books. The plaintiff’s counsel requested the witness to look at his book, which was then before him, and state the entry made in it as to this matter. The defendant’s counsel objected, and the judge sustained the objection, and the plaintiff’s counsel excepted. I delivered the note to the plaintiff; my business was that of a broker.
    ■ Being cross-examined, the witness testified: The plaintiff is a physician, and resides in Brooklyn; he paid me the amount of the note in cash ; no agreement whatever was made with him about it; he did not require my endorsement; I told him the note was perfectly good"; I had a note of the defendant’s before this; it passed through my hands; it was a note I received from Boscher, and for the same amount with this; I found this note on my desk; no message was left with it; my book-keeper told me that Boscher had left it; I gave nothing for it at the time ; I had procured money for Boscher many times; I gave Boscher the benefit of the; avails of this note by paying the amount to Bulkley & Claflin, or Mrs. Hill, who had loaned him money on Madame Tariffs notes; Bulkley & Claflin held defendant’s note falling due in June. I had no message whatever from Boscher; I was not aware when I first saw this note that it was left to renew the other, except by inference ; in the course of our business I was so informed, but whether before or after the transfer to plaintiff, I cannot tell; I think I was not so informed within two days after I received the note; I think Barbeau informed me at Bulkley & Claflin’s store, and before the transfer to plaintiff; Barbeau was endeavoring to settle with Bulkley & Claflin, who held Boscher’s paper; it was after this that. I transferred the note and informed plaintiff that this was a good note. I recollect that Barbeau told me I ought to hand this note to Bulkley & Claflin, and I said I would if Boscher would pay over the money he had collected; I* told Barbeau that Bulkley & Claflin said they would sue the note they held ; I think I informed Boscher and Barbeau that I had parted with this note. I told Barbeau if Boscher would .not pay over the money he had received to be paid on the notes of Madame Tarín, we must get the money the best way we could; I recollect a paper being shown me by Boscher; I did not say it was correct, nor that it was correct as a statement of the notes he had turned out; I have no doubt that the paper now shown to me is the one presented to me by Boscher; I cannot tell whether this paper contains a statement of all the moneys Boscher had. 1 was present when Barbean testified that I had admitted this paper to be correct, and I told the lawyer that it’ was not true ; since Barbeau’s examination I have endeavored to find out what Boscher owes to those from whom I procured money for him; I struck the balance and find about $1000 due from him; he agreed to pay me 15 cents a day on every hundred dollars I raised for him on notes he left with me to sell; I think I had several of Barbeau’s notes from Boscher ; I frequently received from Boscher checks; one for $1700 and odd, for which I gave him the whole amount; I gave the check to those who advanced the money; the check was the memorandum of the amount advanced. I did not understand it was a check to be presented to the bank for payment.
    On re-examination, the witness testified: Barbean called and I went with him to Bulkley & Olaflin, and I there said that Boscher having withheld money given to him by Madame Tarin to take up notes of hers, on which he had got money, I would not give this note to Bulkley & Olaflin; Boscher had received of Madame Tarin about $500; Bulkley & Olaflin held other notes on which the,y had advanced money to Boscher and which he represented to be good, and they were not; Barbean assented to what I said as to Boscher having kept Madame Tarin’s money, and said Boscher had done very wrong, and had rained Madame Tarin; Boscher admitted to me that he had used Madame Tarin’s money. I after this negotiated this note, and applied the avails to Boscher’s debts. At the other conversation I had with Barbeau, I told him that if Boscher would keep money he had received to pay over, we had a right to get it in the best way we could; my reason for negotiating this note as I did, was that Boscher had received and kept the money of Madame Tarin as before stated. There is a balance still due from Boscher to sundry persons, from whom I obtained money for him, of upwards of $1000.
    On further cross-examination, the witness testified: This balance includes no extra interest; Boscher admitted getting the money of Madame Tarin as I have stated; I have received many notes of Boscher as collateral; the money had been received by Boscher of Madame Tarin. to -pay her notes, on which I had raised money for him. Mrs. Hill resides in Hew Haven, is not a relative, of mine; I had not the notes of Madame Tarin in my hands.
    The plaintiff rested. • '
    The defendant’s counsel then offered to read in evidence from said Barbeau’s aforesaid deposition the following question and answer:
    Q. Did you ever have any other conversation with Mr. Beecher on the subject of this note, and if so, what was it?
    A. I believe in the first days of July, 1851, Mr. Beecher met me in Wall street, and told me he had just discounted Hansen’s second note, which is the one here presented, and had discounted it at a fair rate, as it was first rate paper. I asked him what kind of a trade he called that. He answered it was getting money the best way we can, and that Hansen would have to pay that note, when it became due. That was all that was said at that time.
    The plaintiff’s counsel objected to reading the same, but the judge overruled the objection, and the same was read in evidence, and the plaintiff’s counsel excepted.
    The testimony here closed.
    The cause was then summed up by the counsel for the respective parties, and the judge charged the jury, among other things, that the decision of the cause must depend on the credit to be given to the witness Beecher. If they believed his testimony, they must find for the plaintiff; otherwise for the defendant. They found, as before stated, a verdict for the defendant.

      C. P. Kirkland, for plaintiff,
    argued elaborately the following points, and examined at large the authorities in support of them:
    1. The matters of defence, as set up in the answer and stated in the opening, should have been excluded. They did not constitute a defence to this note; for the allegation is that this note was delivered to Beecher, and by him received to take up a note due 6th June. This note then fulfilled its purpose, and the defendant, if sued on the note falling due 6th June, could make a perfect defence from the facts stated in this answer.
    II. The judge erred in ruling that Boscher was a competent witness. It expressly appeared that the suit “ was defended for his benefit.” He was then inadmissible under the Code, and his interest being unquestioned, he was'incompetent at common law. (Code, §§ 398, 399; 3 Code Rep. 24, per Oakley, J.)
    HI. The testimony of Barbean was improperly admitted. 1. It related to á conversation as to which no testimony had been given. 2. Ho foundation was laid for it, as an impeachment of Beecher, by any previous question put to Beecher. 3. It was evidence of the declarations of a former holder of a chose in action, and thus inadmissible. (Stark v. Boswell, 6 Hill, 405; Whitaker v. Brown, 8 Wend. 490; Bristol v. Dann, 12 Wend. 142; Paige v. Cagwin, 7 Hill, 361.)
    IY. The judge erred in ruling that the defendant had made out a primé facie defence, and that the burden of proof was on the plaintiff.
    Y. The policy of the law which favors and protects the free currency and circulation of negotiable commercial paper cannot be carried out, if such paper can be attacked in the hands of the holder, without any evidence casting suspicion on the motives or conduct of the holder himself.
    YI. In many cases, perhaps in most, it would be impossible for the holder to give proof of the facts and circumstances of the transfer to himself, whereas under the present law the defendant could always have it in his power to show these facts and circumstances by examining the plaintiff himself.
    YH. The invariable rule in every system of enlightened jurisprudence—viz. that every man is to be presumed innocent and honest till the contrary is shown—would be violated, and indeed reversed, by throwing the onus on the plaintiff in this case.
    YIH. The uniform doctrine established by the decisions, so far as I have been able to ascertain after diligent investigation, is that laid down by Bronson, O. J., in 6 Hill, 339, viz. “ that it will be presumed, till the contrary is shown, that the holder took the note in the usual course of negotiating commercial paper,—the orms probamdi is on the maker to show the fact impeaching the plaintiff’s title. (Nelson v. Corning, 6 Hill, 336; Pratt v. Adams, 7 Paige, 629; Pinkerton v. Bailey, 8 Wend. 600; Waterman v. Barret, 4 Harring. Del. 311; Jones v. Wescott, 2 Brev. 166; 3 Day, 311, per Livingston, U. S. Judge; Lewis v. —4 Adol. & Ellis, 838, 1 Meeson and Welsby, 405.)
    IX. Again, the legal nature, character, and incidents of negotiable paper after maturity, and of the same paper before maturity, are essentially different, as clearly stated and illustrated in 1 Sand. Sup. C. R. Rep. (Leavitt v. Putnam, 1 Sand. 203, 205.)
    The plaintiff, here, was prima facie entitled to all the rights of a holder before maturity, because at the time the defendant rested, he had not given a particle of evidence to show,—1st, any knowledge, notice, or information on the part of the plaintiff as to the matters testified to by defendant’s witnesses; or, 2d, anything to put the plaintiff on his guard or on inquiry in any manner; or, 3d, in any sense or degree to impeach or affect the plaintiff’s title to the note.
    X. The verdict is palpably and flagrantly against, or rather without, evidence. Nothing appears in any m'anner to affect ■the credit of Beecher. He is unimpeached and uncontradicted, and the verdict is the result of passion, prejudice, or mistake on the part of the jury. But let Beecher’s testimony all be stricken out—and this is the worst aspect that can be taken of the case for the plaintiff—and still the plaintiff is entitled to the verdict. Nothing appears to affect him.

      R. Lockwood, for the defendant,
    strenuously insisted, that a new trial ought not to be granted, upon the following-grounds :
    I. The motion of the plaintiff’s counsel, “to exclude the defence as stated in the answer,” was properly denied by the judge, as it is a full and perfect defence to the action. 1. It states a diversion or misapplication of the note by Beecher. 2-It also avers that the plaintiff took it with full knowledge of the fact of such diversion by Beecher.
    II. The objection to the competency of the witness Boscher was properly overruled by the judge, as he was clearly competent under the Code—the objection went only to his credibility. (Code, sec. 398.)
    - III. The objection to the question and answer read from the deposition of Barbeau, was wholly groundless. No ground is stated in the case, nor can any tenable one be conceived of. The evidence went to prove that Beecher had possession of the note at that time.
    IV. The judge ruled, .correctly, that the defendant had established a prima fade case, and that the burden of proof was thrown on the plaintiff. It became incumbent on him, when the defendant rested, to prove, by clear and undoubted testimony, that he had taken the note before maturity, and paid full value for it. (Chitty on Bills, 687, § 638, and cases there cited.)
    V. The judge properly ruled out the book of the witness as evidence. A witness is allowed to look at any memorandum or entry of his own, to refresh his own memory, but Such entry is of itself never made evidence unless upon the call of the other party.
    VI. The objections to the second question and answer of Bar-
    beau, were properly disposed of as the first; no ground of objection can be discovered. '
    VII. The charge of the judge was the only one that the facts of the case admitted of, and the plaintiff has not excepted to it. The question was purely one of the credibility of the witness Beecher, and is emphatically and exclusively one for the jury, and with whose finding on fhat point the courts never interfere. ,(6 Wend., 1 Stark, p. 91, 268.)
    . VII. The motion for a new trial should be denied with costs.
    The judges gave their opinions seriatim.

   Campbell, J.

The plaintiff declared upon a promissory note, made by the defendant, payable to his own order, and endorsed by himself. The defendant admitted in his answer the making and endorsing of the note, and set up, by way of defence, that it was made and endorsed by him for the purpose of being used . to renew and take up a previous note for the same amount. That the person into whose possession it came, and who claimed to be the owner of the first note, agreed to accept the note in suit and deliver up the first note. That he afterwards refused to deliver up the first note, and kept both notes, and paid no consideration for the note in question. The answer further sets up that this note was passed to the plaintiff after it became due, and with a full knowledge of all the facts set forth, and with full knowledge that it was void for want of consideration, and therefore denies that the plaintiff is the lawful holder and owner of such note, or that the defendant is indebted. The plaintiff replies and takes issue, averring that he is the holder of the note in good faith, and for a full consideration, and received the same before maturity, and that he had no knowledge as to the ¡alleged purpose for which the note was made, and denied the same.

On the trial the plaintiff moved to exclude the proposed defence, because the matters set up in the answer, if they constituted any defence, would be a defence to an action on the first note, which was paid or cancelled by the acceptance of the note in suit, and would, therefore, not avail the defendant in this action upon the second note. The court denied the motion, and the plaintiff excepted.

The making and endorsing of the note being admitted by the answer, the defendant then proceeded and proved the purpose for which the note in suit was made, as set forth in his answer, and that it came into the possession of the former owner and holder of the first note. The plaintiff also gave evidence tending to show that the former owner and holder of the first note had parted with it, and that he refused to apply the second note to take up the first; but such evidence was very slight. The defendant then rested. The plaintiff then insisted that no defence had been established, that no evidence had been given to show that the plaintiff had any notice or knowledge of the matters set up by the defendant, and that the plaintiff was not required to give any rebutting evidence.

The judge ruled that the defendant had established a yyrimA facie defence, and that the burden of proof was now on the plaintiff, to which ruling the plaintiff* excepted.

The plaintiff then called Beecher, the former owner and holder of both notes, who testified that he parted with the note in suit, before its maturity, to the plaintiff for a full consideration and its legal interest, and that he- had appropriated the proceeds to the payment of other indebtedness, due from one Boscher, who was the party who had received both notes from the defendant, and for whose benefit the first note appears to have been discounted. The jury, notwithstanding, found a verdict for the defendant.

The objection taken by the plaintiff on the trial, that the matters stated in the answer do not constitute a defence to this suit, we think, is fatal to the defendant. That part of the answer is as follows—he says that said “ Boscher delivered said note in said complaint mentioned to said Beecher, for the aforesaid purpose ; that said Beecher, at the time, said he was and claimed to be the owner of said first mentioned note, and agreed to accept of said note, and deliver up the said note, which became due on or about the 6th of June, 1851, to defendant; that after delivery of said note in said complaint mentioned to said Beecher, he refused to deliver up said pote, due on or about the 6th of June, 1851, to this defendant, but kept both; that said Beecher never paid to this defendant any consideration for the said note in said complaint mentioned, and this defendant claims that the same is void for want of consideration.” The allegation is, that Beecher was the holder of the first note, and received the note in suit, agreeing to give up the other. The effect of his receipt and agreement was to destroy in his hands the first note. Suppose, immediately after the 6th of June, when the first note fell due, it had been put in suit by Beecher, then the matters set up in this answer would, if proved, establish a complete defence. Thisobjectionmighthavebeentaken by demurrer, and was properly taken, we think, on the trial. The verdict is, too, against the weight of evidence; but it is unnecessary to consider this point.

It was claimed by the counsel for the plaintiff, on the trial, that it was not sufficient fpr the defendant simply to show a fraudulent misapplication of the note, but that it was his duty ■ to proceed and prove that the plaintiff had taken it" with notice and without consideration, and this point was pressed with much earnestness upon our attention on the argument. It is not to be denied that there has been considerable difference of opinion as to what is the true rule in cases of this kind—that is? upon whom rests the burden of proof—and we shall consider this question briefly for the purpose of explaining the views of this court. . In Holme v. Karsper, 5 Binney, 469, decided in 1813, Chief Justice Tilghman says,—“ In the first instance it is. presumed that every man acts fairly. It lies on the defendant, therefore, to show some probable ground of suspicion before the plaintiff is expected to do anything more than produce the note on which he founds his action. But this being done, it is reasonable that the holder should be called on to rebut the suspicion. All that is asked of him is to show that he has acted fairly and paid valueand the learned judge considers these the principles of the mercantile'law. In Munroe v. Cooper, 5 Pickering, 412, the court says,—“ We agree that a newtrial in this case must be granted, for the purpose of allowing the defendants to prove, if they can, that there was fraud practised in the inception of the note, or that it was fraudulently put in circulation. This fact being established will throw upon the plaintiff the burden of proof, to show that he came by the possession of the note fairly, and without any knowledge of the fraud.” In Bailey v. Bidwell, 13 Mees. & Welsb. 73, Baron Parke says,—“It j certainly has been, since the later cases, the universal under- ¡ standing, that if the note were proved to have been obtained by ‘ fraud or affected by illegality, that afforded a presumption that the person who had been guilty of the illegality would dispose ; of it, and would place it in the hands of another person to sue í upon it; and that such proof casts upon the plaintiff the burden ' of showing that he Was a bond fide endorser for value.” That has been considered in later times as settled, and in this the 1 Court of Exchequer concurred. In the more recent case óf Smith v. Braine, in the Queen’s Bench, reported in 3d English Law and Equity Eeports, 379, the case of Bailey v. Bidwell is sommented on and approved. “Since the new rules,” says Lord Campbell, Chief Justice, “judges have, with entire appro"bation, directed juries that, when the bill was illegal in its inception, or when the immediate endorser to the plaintiff ' obtained possession of it by fraud, the want of consideration, asbetween him and the plaintiff, may be presumed, and in such case the onus is cast upon the plaintiff of proving that he gave’ value. In a still more recent case, decided in the Court of Exchequer in June, 1851, reported in 4th English Law and Equity ’ Reports, 531, Harvey v. Towers the same rule is enforced, Platt, Baron, observing that “ the cases of Bailey v. Bidwell and Smith v. Braine, were the decisions of eight judges, and that the casting the burden of proving consideration on the holder of a bill, shown to be affected by fraud, was an extremely just rule, as he must best know what consideration he gave for it.” Such, also, would seem to be the rule in our own state. Thus, in Vallett v. Parker, 6 Wendell, 615, Savage, Chief Justice, “ the holder of a bill or note need not, in the first instance, show a consideration; possession proves property; but if there are any suspicious circumstances as to the honafldes of his possession, and the defendant has a good defence against the payee, then he must show that he paid value for it, For instance, if the note has been lost or stolen, or fraudulently put into circulation, &c., then the plaintiff must show that he came lawfully and fairly by it, and paid value for it,” (See also Woodhull v. Holmes, 10 John. R. 231; Conroy v. Warren, 3 John. Cases, 259.) The rule is laid down very distinctly and clearly in 2d Greenleaf on Evidence, § 172,—“Even in an. action by the endorser against an original party to a bill, if it is shown on the part of the defendant that the bill was made under duress, or that he was defrauded of it, or if a strong suspicion of fraud is raised, the plaintiff will then be required to show under what circumstances, and for what value, he became the holder. It is, however, only in such cases that this proof will be demanded of the holder; it will not be required where the defendant shows nothing more than a mere absence or want of consideration on his part.” The reason given in Bailey v. Bidwell is, that where there is fraud, the presumption is, that he who has been guilty will part with the note for the purpose of enabling some third party to recover upon it; and such presumption operates against the holder, and it devolves upon him to show that he gave value for it. Where the defence grows out of mere absence, or want of consideration, no such presumption arises. Í The dictum of the judge in Nelson v. Corning 6 Hill, 336, must be considered as made with reference to the particular facts of that case, and not laid down as a general rule. ? We are of opinion that in this case the ruling of the judge on the trial, that the defendant had made out a prima faeie defence, and that the burden of proof was on the plaintiff,- was correct. But there remains a further question for consideration. When the plaintiff shall have shown that he is a holder for value, upon whom does it rest to give the proof as to notice? We think that the burden of proof shifts back upon the defendant. It may often occur that the plaintiff, in giving proof of value paid, will furnish for the defendant evidence of notice in cases where there has been collusion. But where the plaintiff is really a lyjna fide holder, it may well be, that he may prove the payment of value without being able to give any evidence as to notice,' because none,exists. Besides, as the law now is in this state, the defendant has always the means of proof in his own power, - in all cases, where he can rely upon the oath of the plaintiff, because he can at will place him on the stand as a witness. In cases, therefore, where there is fraud, or strong suspicion of fraud, made out by the defendant, the holder of a promissory note, or bill of exchange, who sues for its recovery, must then /' show that he received it before its maturity, and for a valuable ( consideration; and if he succeeds in this proof, the defendant, to defeat a recovery, must establish, if he can, that the note was received by such holder with notice of the fraud. But for the reasons first given in this cause, there must be a new trial, costs to abide the event.

Bosworth, J.

I think Boscher was incompetent as a witness. The note in suit was made by the defendant for his accommodation, and delivered to him for the purpose of taking up another note .also made by the defendant for his accommodation, and at the time outstanding. If a recovery be had by the plaintiff and the money is collected from the defendant, the amount can be’recovered from Boscher with the costs of the suit. On the other hand, if the defendant succeeds, the verdict at once exonerates Boscher from all liability to the maker. In addition to this, he is actually defending this suit by an attorney retained by himself for the purpose. The suit is defended for his direct and immediate benefit, and is actually defended by himself. A verdict in favor of the defendant as directly, immediately, and absolutely, discharges Boscher from all liability to the maker, as it does the maker from all liability to the plaintiff. The result of a verdict for the defendant is of itself as beneficial to Boscher as to the defendant.

Such a party was Unquestionably incompetent before the-Code. That provides, in § 398, that no person offered as a witness shall be excluded by reason of his interest in the event of a suit.” The succeeding section declares that § 398 shall not apply to any person for whose immediate benefit it is defended.

Such a person stands in the same position as he did before the Code ; § 398 has no application to him; his interest in the event renders him equally incompetent as before. As to him, the Code has not changed the pre-existing law. That made him incompetent, and as to him the law is unchanged. (7 Barbour, S. C. R. 161, 162.)

This court decided at a late general term, in Howland v. Willetts, that in an action against the defendant for levying as sheriff,' on personal property claimed by the plaintiff to be his, on an execution against a third person, the plaintiff in the execution, who had indemnified the sheriff for .making such levy, was an incompetent witness for the defendant. That decision would seem to cover the precise question presented here, and be conclusive in this court against the competency of the witness. •

With respect to the main question in the cause, I understand thS^ rule to be well settled both in this country and in England, that where the maker of a note in a suit by an endorsee, proves that the note was lost by or stolen from him, or has been fraudulently put in circulation, the onus is then thrown on the plaintiff to prove that he bought it before maturity, bond, fide, and for value. (3 J. C. 260, 3 Conroy v. Warren, 6 Wend. 622; Vallett v. Parker, 1 Hall, 562; Fulton Bank v. Phœnix Bank.)

In January, 1851, it was decided by the Queen’s Bench in Smith v. Braine (3 L. & E. R. 379), and later in the same year by the Court of Exchequer in Harvey v. Towers (4 L. & Eq. R. 531), that on general principles, irrespective of any questions arising upon the pleadings, when the maker proves that the bill is founded on illegality or fraud, or has been the subject of illegality or fraud, the plaintiff, though an endorsee, is compelled to show himself a bond fide holder for value. Such proof in behalf of the maker raises the presumption that the endorsement to the plaintiff was without consideration. The plea in each of those cases, alleged’ among other things, that the bill was endorsed to the plaintiff without consideration. Both courts held that this allegation, or some equivalent one, was essential to a perfect plea, but did not require the defendant to prove that the plaintiff paid no consideration.

The rule being settled, it is useless to discuss its wisdom. But it may be briefly and I think justly said, that such a rule presents no obstacles to* a free circulation of negotiable paper, in the honest transaction of ordinary business. Presumptively, there is no practical difficulty in a man of business being able to show when and of whom he received a bill or note, and what he paid for it. There may be exceptions to this, but they must be comparatively few. So there is presumptively no difficulty in the way of a bank proving when and for whom a note was discounted.

On the other hand, when a note has been fraudulently put in circulation, and more especially if it has been lost or stolen, the maker has no means of ascertaining through what hands it has passed, or how or when the plaintiff became the owner.

I think it was correctly ruled at the trial that the evidence established aprima faoie defence. It showed that the note had been left at Beecher’s office in his absence, to take up the note for which it was to be substituted. That the latter was at the time in the hands of third persons. That Beecher, instead of taking it up, negotiated the note in question, after being notified by his clerk of the purposes for which it was left, and thus fraudulently misapplied it. This was sufficient to cast the burden on the plaintiff of showing himself a holder for value before maturity, and of course established aprimd facie defence.

Whether the evidence given was competent under the pleadings, and whether the facts set up in the answer constituted a defence, even if true, are entirely different questions.

The answer states that the note in suit was delivered to Beecher for the purpose of taking up the other note ^ that he agreed to accept of it and deliver up the other noíe; that after the delivery he refused to deliver up the other note, but kept both. If these facts are true,. I think the note in suit was a satisfaction in Beecher’s hands of the first note, and his acceptance of it, under the circumstances stated, would be a perfect defence to a suit by him on the old note. If so, the note in suit was a valid note in his hands. There is no allegation that he did not in fact hold the first note at the time the second was accepted, and that was agreed to be given up, or that he has not at all times since continued to hold the latter in his own right. According to the answer, the only ground of complaint is, that Beecher has not given up the first note after having received the second in lieu of it. The case made by the proof is, that the second note was left at his office in his absence, for the purpose of being substituted for the first. And though he was informed by his clerk of the purpose for which it was left, he suffered the first note to mature and continue in the hands of a third person, to whom he had -previously negotiated it, and fraudulently negotiated the note in suit for his own benefit.

The allegation of the defence was unproved in its entire scope and meaning, and the case is one on which there was an entire failure of proof. (Code, § 171.)

The court at the trial cannot direct the pleading amended, or the fact to be found according to the evidence, in such a case. (§ 169, 170, 171.) It can only do this where the variance between the pleading and proof is not calculated to mislead the plaintiff in maintaining his action, and not where the defence proved differs, in its entire scope and meaning, from that set up in the answer.

I think a new trial should be granted with costs to abide the event, on the grounds that Boscher was improperly admitted as a witness, and that the objection was well taken that the defendant should not have been allowed to prove the new matter stated in his answer, as it constituted no defence. Even as the Code was,when these pleadings were framed, only such allegations of new matter in answer as are material, are to be taken as true on a failure to put thém in issue by the reply. (Code, § 168.)

If the plaintiff had not put them in issue in his reply, he could not have been prejudiced by it, if they do not constitute a defence. For if they do not, they are not material",’ and might have been stricken out on motion, as irrelevant or redundant.

Duer, J.

I cannot assent to the opinion that Boscher was an incompetent witness, merely from the fact, that he was personally liable to the defendant in case a judgment should be obtained against him. It may be -true, that Boscher had rendered himself thus liable by delivering the note in suit without obtaining a return of that it was meant to renew, and that this liability gave him a direct and certain interest in the event of the suit, which, as the law stood before the adoption of the Code, would have been sufficient to exclude him; and it is also true, that in all cases where a witness is thus interested in favor of the party by whom he is called, it may be justly said, that the suit is prosecuted or defended, as the case may be, for his benefit. But if every person is to be excluded as a witness, who will incur a certain loss, or derive a certain gain, from the determination of the suit in favor of the party by whom he is called, that provision of the Code, which declares that “ no person offered as a witness shall be excluded by reason of his interest in the event of the action” (Code, § 398), will be, in effect, repealed, since, when the Code was adopted, the rule, I apprehend, had been settled by the modern decisions, that it was only a direct and certain interest, in the event of the suit, that could operate^ as a ground of exclusion. It is evident, however, that the two provisions in the Code, that which excludes as witnesses those “for whose immediate benefit the suit is prosecuted or defended” (§ 399), and that which admits those, who are interested in the event of the suit, must receive, if possible, a consistent interpretation; and assuredly a construction cannot be given to the former by which the very extensive, and, I think, beneficial change, in .the law of eyidence, which the latter was meant to effect, shall be stripped of its meaning and vitality, and rendered wholly inoperative and void. There are no other means, however, as it seems to me, by which these two provisions can be reconciled, and the consequence that I have stated, be prevented, than by giving to the words “ for whose immediate benefit the suit is prosecuted or defended,” a far more restricted interpretation than that, which judges, in some cases, seem disposed to adopt. The provisions can only Be reconciled by construing-section 399, as it was plainly meant to be construed, not as superseding the general rule, which the section immediately preceding declares, but merely as excepting certain cases from its future application; and the proper inquiry, therefore, is how shall the cases thus meant to be excepted be limited and defined, so as to leave an ample scope for the operation of the general rule, that the interest of a witness, in the event of the suit, shall not be permitted to exclude him.

In answering this inquiry, I shall not, in order to justify my own views, now enter on a critical examination of former decisions, but shall content myself with saying that the exceptions in § 399 must, in my judgment, be confined to those who are, in reality, parties to the suit, that is, are either parties on the record, or parties in interest. The words in the section, “ parties to the action,” I construe as meaning only a party on the record, and those that immediately follow, “nor to any person for whose immediate benefit it is prosecuted or defended,” as applying exclusively to a person who is a party in interest, and who, as such, will in law be as effectually concluded by any judgment that , may be rendered, as a party to the record. The latter words, thus construed, will be found to embrace two, classes of cases. First, when the party on the record calling the witness, is a nominal party only, and the real interest in the suit itself, is in the witness,- as when the party is a trustee and the witness a cesbui que trust, who will either have an immediate right to the money that may be recovered by the party calling him, or sustain an immediate and necessary loss from an adverse judgment; and second, when the "party calling the witness, although not merely nominal, yet prosecutes or defends the suit, at the request of, and under a positive indemnity from, the witness. The conclusive, reason for this second exception is, that a person under whose indemnity the action is prosecuted or defended, is in judgment of law a real party to the suit, who, as such, has a right to control the proceedings, and is, in all respects and for all purposes, concluded by the judgment (1 Greenleaf on Evid. p. 523; 1 Smith Lead. Cases, Duchess of Kings, case; Morgan v. Thorn, 9 Dowl. 228; Rapelyea v. Bruce, 4 Hill 19; Bates v. Stanton, ante.) I add, that after much reflection, I am satisfied, that if any other exceptions than those, which have been stated, shall be admitted from the general rule that a witness is not disqualified by'his interest in the event of the suit, the rule itself, if not wholly abrogated, will be so narrowed, in its application, as to, be robbed of its chief utility and value. Courts of justice will find it difficult, if not impossible, to trace a clear line of distinction between the cases in which witnesses are to be excluded and those in which, notwithstanding their interest, they ought to be admitted; and in the result, the inconvenient and inequitable rules of the common law that were meant to be abolished—if not in terms, yet in substance—will be restored. Construing, however, the words of the Code, “ for whose immediate benefit the suit is prosecuted or defended,” in the limited sense that I have given to them, it by no means follows that Boscher was a competent witness. On the contrary, I entirely agree with Judge Bosworth, that by his own showing he was incompetent, and that the objection to his testimony taken upon the trial ought to have been allowed, He admitted upon his cross-examination, not merely that he was defending the suit at his own expense, but that he was bound to pay to the defendant the money that might be recovered—by which I understand him to mean that he had bound himself, by an express promise, to satisfy the judgment, if a judgment were recovered. His actual liability was a sufficient consideration for this promise, and his agreement to indemnify the defendant, consequently, valid. The case, therefore, falls within one of the exceptions that I have admitted to exist, and is not distinguishable from that of the witness who was excluded by the court in Howland v. Willetts.

Upon the other- questions in the cause I agree, substantially, with my brethren, and deem it unnecessary to add any remarks to the observations which they have made, f am not, however, prepared to say, that had. the defence set up on the trial been properly admitted under the pleadings, the verdict could not be set aside as against the weight of evidence. This is not a question, however, which it is necessary to discuss; and in the result, that a new trial must be granted, we all concur.


author: By the Court. Bosworth, J.

text:
    Giles v. Dugro.
    (Before Duer, Campbell, and Bosworth, J.J.)
    October 22;
    November 20.
    The defendant, in the assignment of a lease to the plaintiff, covenanted that “ the assigned premises were free and clear of and from all former and other grants, bargains, and incumbrances whatsoever.” The defendant, however, by a prior deed, had bargained, sold, and assigned to one Sloan the privilege to use a wall on the premises as a party wall of a building, to be erected during the whole unexpired term of the lease.

      Held, that the conveyance so shown was not to be construed as a mere license to use the wall, but was an absolute and irrevocable grant creating a permanent encumbrance, and was therefore a breach of defendant’s covenant with the plaintiff.
    It appearing that Sloan, in the exercise of the privilege granted him, had actually used, and still used, the wall in question as the party wall of a building he had erected—Held, that these facts were a virtual eviction of the plaintiff, entitling him to more than nominal damages. The rule of damages, when there is only a partial eviction, is, that a portion of the original consideration money can be recovered, bearing the same ratio to the whole consideration as the value of the land to which the title has failed bears to the value of the whole premises.
    It not appearing that the damages found by the jury exceeded the proportionate sum to which the plaintiff was entitled, and no such question having been raised in the court below—Held, that the verdict could not be disturbed.

      Held, that the allegation that the use by Sloan of the privilege granted to him occasioned no damage to the plaintiff’s building, was no answer to the plaintiff’s claim for damages.
    Judgment for the plaintiff affirmed with costs.
    Appeal from a judgment at special term.
    The following are the material facts in the case:—
    The defendant owned an indenture of lease, dated February 1st, 1851, for the term of twenty-one years. On the 31st of May, 1851, by deed, he sold and assigned it to the plaintiff for the sum of $4,000, subject to a mortgage executed by the defendant to secure the sum of $2,000; and subject also to the rents, covenants, conditions, and provisions contained in the assigned lease. The defendant covenanted that “ the assigned premises now are free and clear of and from all former and other gifts, grants, bargains, sales, leases and executions, back rents, taxes, agreements, and incumbrances whatsoever, except said mortgage.” This deed of assignment was recorded June - 18, 1851.
    The defendant, by an instrument in writing, signed and sealed ' by himself and Smith Sloan, dated on the 21st of May, 1851, had sold and assigned to Sloan the privilege of using as a party-wall one of the end walls of the building on the demised premises, free and undisturbed for the whole term of the lease. Sloan not to be at liberty to insert more than five tiers of beams in the wall, nor to break into the wall more than four inches in depth, four in width, and ten in length. This was recorded the 3d of June, 1851, and Sloan paid for the grant or privilege $100.
    This action was brought to recover the value of the privilege granted to Sloan, on the ground that the grant was a breach of defendant’s covenant contained in the deed of assignment from him to the plaintiff. At the time this action was commenced Sloan had entered upon the erection of a building on a lot adjoining the wall in question, and had inserted one tier of beams in this wall.
    The action was tried before Chief Justice Oakley, who “ instructed the jury to render a verdict for the plaintiff' for the value of the privilege granted to Smith Sloan, subject to the opinion of the court on the questions, whether the privilege granted by defendant to Smith Sloan was a breach of the covenant contained in defendant’s assignment to the plaintiff, and if so, whether the plaintiff can recover for the value of the privilege so granted, inasmuch as the same was not any damage to plaintiff’s building.”
    The jury rendered a verdict for the plaintiff for $150.
    On a case containing the evidence and the questions reserved at the trial, Justice Dube, at special term, adjudged that the grant of the privilege was a breach of defendant’s covenant, and gave judgment for the plaintiff. From his order and the judgment entered pursuant to it, the defendant appeals to the general term.

      J. Cochrane for the defendant, the appellant,
    contended that the judgment was erroneous, and ought to be reversed, upon the following grounds :—
    The action is for the value of the privilege—
    The defendant, by his assignment of lease dated 31st May, 1851, covenants that the assigned premises are free and clear of and from all former and other gifts, grants, bargains, sales, leases, judgments, back rents, taxes, assessments, and encumbrances whatsoever (except a certain mortgage).
    The defendant, on 21st May, 1851, bargained, sold, and assigned to Smith Sloan the privilege of using as a party-wall, a certain wall standing on the north end of a lot (the lot in question), to have the use of the wall, free and undisturbed, for and during the term for which the defendant leased it—
    In case of injury to the wall, the agreement to cease—
    It seems the use of the wall was no injury to it.
    I. The selling by defendant to Sloan of the privilege to use one of the walls of the house in question for twenty years, conveyed no interest in the realty, and consequently there was no breach of defendant’s covenants against encumbrances. A license to enjoy a beneficial privilege is not an interest in lands within the statute of frauds. (3 Kent, 472, 7th ed.)
    A license granted for a temporary purpose, as to erect a dam, teiminates with the decay of the dam.
    A license passes no estate, it merely confers a right or privilege. (1 Hilliard, 146.) -
    A license is an authority to do a particular act, or series of acts, upon another’s land, without possessing any estate therein. (3 Kent; 4 Sand. Ch. R. 91-2.)
    There is a distinction between a license and a covenant. (15 Wend. 380, 387-9, 90, 91; 6 Hill, 64; 7 Ed. 3 Kent, 452; 4 Sand. Ch. R. 73; 5 Barb. 550, 555; 2 Well. 116.)
    It was a license to use in a certain manner for a limited term.
    H. The plaintiff has not been disturbed in his possession. He could not maintain ejectment against Sloan if the defendant had not sold him the privilege. (4 Kent, 571; 4 Mass. 629; 10 John. 258.)

      Barnard, contra,
    made and argued the following points:—
    I. The privilege to Sloan was a grant, bargain," and sale of a right in the assigned premises and building, and deprived the plaintiff of the full ownership of the lot and building. He could not take down the wall to alter the building during the term of the lease.
    H. The privilege was a valuable privilege, and the plaintiff was entitled to the benefit of that value, if he was willing to sell it.
    III. The plaintiff is entitled to recover for the value of the privilege, even though it was not any damage to the building— a grant of a right of way over that part of the lot not covered by the building would not have been of any damage to the building, and yet it would have been a breach of the covenant, and would lessen the value of the premises assigned.
   By the Court. Bosworth, J.

The defendant’s counsel insisted that the sale to Sloan of a privilege to use one of the walls in question as a party wall for. twenty years conveyed no. interest in the realty, and therefore was no breach of defendant’s covenant to the plaintiff. That it was a mere license, and passed no estate in the leasehold premises.

The terms of the covenant (among others) are, that “the assigned premises now are free and clear of and from all former and other grants, bargains, and encumbrances whatsoever.”

By the deed to Sloan, the defendant did “ bargain, sell, and assign” to him the privilege to use the wall as a party wall of a building to be erected adjoining to it, for and during the whole unexpired term of. the lease. This was an absolute and irrevocable grant of a right to use a portion of the premises assigned to the defendant, and excluded the possibility of the defendant making the same use of the wall, or selling, and granting to any one the right to so use it.

It is sufficient to say that the right granted was not revocable, and was permanent. It would endure as long as the lease of the premises affected by it. It is in the nature of an easement. It creates a paramount right to the extent of the interest granted, and we have no doubt that it is an encumbrance within the proper meaning of the term as used in the defendant’s covenant. (Prescott v. Trueman, 4 Mass. 627. Wolfe v. Frost, 4 Sand. Ch. R. 72-89.)

The more important question relates to the proper rule of damages.

The general rule is, that in an action upon a covenant against encumbrances, the plaintiff will recover only nominal damages, unless he has been evicted or has satisfied the encumbrance. He may pay off the encumbrance if he chooses to do so, and in such a case will recover the amount paid with interest, if it do not exceed the consideration paid for the land. (Delavergne v. Norris, 7 J. R. 358. Hall v. Dean, 13 J. R. 105.)

In Prescott v. Trueman, Ch. J. Parsons says that, “ where a subsisting easement is alleged as the encumbrance, the injury arising from the easement, or the fair and reasonable price paid by the grantee to extinguish it, of which the jury will judge, is the measure of the damages.”

The general rule undoubtedly is that in an action upon a covenant against encumbrances, whether it be a judgment, mortgage, right of dower, or a paramount right to the land or some part of it, if he has not paid off the mortgage or judgment, or extinguished the right of dower or paramount right, as the case may be, he shall recover only nominal damages. The reason of the rulé is, that he shall not be permitted to recover back the consideration paid for the land, and still hold it on a contingency that he may never be disturbed in his possession. He must first extinguish, the encumbrance, so that it cannot afterwards prejudice the grantor before he will be permitted to recover the amount of it, or the amount fairly and necessarily paid to extinguish it.

- In this case the easement has not been extinguished, but is still subsisting. In the nature of things it cannot well be extinguished, except by the plaintiff’s purchasing the dominant tenement. It cannot be deemed feasible to extinguish it, by a purchase or assignment of the privilege, without the payment of much more than the privilege is found by the jury to be worth.

Sloan has entered into the use and enjoyment of the privilege granted to him, has erected a building adjoining the one in question, and made a wall of the latter a party wall of the newly erected building. His occupation and possession of the wall of the building in question, so far as it is used as a party wall of the new building, is exclusive of, and excludes the use of it by any other person for the same purpose.

It is virtually an eviction of the plaintiff by force and virtue of a grant from the defendant to Sloan, co-extensive with the nature and extent of the interest granted. If instead of the grant in question, the defendant had underlet for the unexpired term a specific parcel of the assigned premises, and the lessee had entered into possession under his lease, what would be the measure of damages ?

The rule seems to be, in case the eviction be only of a part of the land purchased, that a recovery under the covenant of seizin can be had for only a ratable part of the original price, and it must bear the same ratio to the whole consideration, that the value of' the land to which the title has failed, bears to the value of the whole premises. And it is also laid down as settled law in this state, that “ the ultimate extent of the vendor’s responsibility, under all or any of the usual covenants in his deed, is the purchase money with interest.” (4 Rent Com. 476, 477 5 J. R. 49; 12 id. 126; 10 Wend. 142.)

Assuming this to be the true rule, and that the plaintiff may be deemed to have been evicted to the extent and according to the nature of the interest granted to Sloan, the technical expression of the proper measure of damages would be such sum as represents truly the relative value x of the interest granted to the value of the whole premises.

Whether such proportionate value is more or less than the actual value of the interest granted, does not expressly appear. Ho objection appears to have been made on the trial, nor was it taken on the argument, that such relative value might possibly be less than the actual value of the privilege granted.

The objection taken on the argument was, that only nominal damages could be recovered, while the easement or privilege was existing and unextinguished.

We do not, under the peculiar facts and circumstances of this case, deem it a duty to grant a new trial, on the mere conjecture, that on investigation the relative value of the interest granted to that of the whole premises, may possibly be less than the actual value of the interest granted, as no such position has been taken ‘by the defendant’s counsel.

The affirmation, that the privilege granted “ was not any damage to the plaintiff’s building,” we understand to simply mean, that the exercise and enjoyment of the privilege do not impair its stability, or the value of its use for the purposes for which it was designed and is occupied.

Such a fact is no more an answer to the plaintiff’s claim to damages for a breach of the covenant, than the fact that a failure of title to, or a prior lease of part of a farm granted, is no damage to the residue, would be an answer to an action for damages on a covenant of seizin covering the whole. The residue might be as valuable in and of itself, without as with that, the title to which had iailed. That would be no reason why the grantee should not recover a proportionate part of the consideration, to indemnify him for the loss of that, from which he had been evicted by a paramount title.

The judgment appealed fron; must be affirmed with costs.


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

text:
    Clason v. Rankin.
    It is sufficient evidence of an ouster in an actipn brought by a tenant in common to recover the -possession of his share of lands in the possession of the defendant, that the original entry of the defendant was hostile to the plaintiff’s rights, and the possession that followed exclusive and adverse.
    It is a presumption of law that the possession of the defendant retained its original character, and this presumption, in respect to the plaintiff, was held not to be repelled by the fact that the defendant had obtained p lppeg from the other tenants in common covering their respective shares. ..........

      (Before Oakley, Ch. J., Paine and Bosworth, J.J.)
    November 8;
    December 11, 1852.

      Semble, that the denial in the defendant’s answer of all right or title in the plaintiff was equal to a confession of ouster, superseding the. necessity of proof upon the trial.
    Judgment at special term, dismissing the complaint, reversed, and new trial granted.
    This was an action to recover the possession of an undivided moiety of three lots of ground in the city of Hew York. The complaint averred the seizin in fee of the plaintiff, the possession of the defendant, and the dispossession by him of the plaintiff. The answer denied all right, title, or interest, in the plaintiff, and that the defendant had at any time dispossessed him of the premises, or of any part thereof.
    The cause was tried before Mr. Justice Campbell, at a Special Term in April, 1852, and upon the trial the following stipulation in writing, signed by the counsel of the parties, was read in evidence.
    It is admitted by the counsel for the respective parties, that at the time stated in 'the complaint, the above-named plaintiff was seized in fee simple of the one undivided half part of the premises described in the complaint as the grantee of William Kain, who, by deed dated 1845, conveyed the same to him who became seized thereof as one of the heirs-at-law of Francis Kain, deceased, and that at the time of the commencement of this suit, the above-named defendant was in the possession of the said premises.
    And it is further admitted by said counsel, that on the first day of Uovember, 1838, the said Francis Kain, then in full life and seized of said premises, made a lease thereof in writing to John Stroud and William Rankin, for ten years and six ' months -from that date, at an annual rent of seven hundred dollars until May 1st, 1840, and nine hundred and fifty dollars thereafter, which lease was duly acknowledged and recorded, and contained a covenant in the words following, to wit: “And it is mutually agreed by and between the parties hereto, that after the expiration of the term hereby granted, provided the said parties of the second part shall, previously to such expiration, three months, notify the party of the first part, of such an intention on their part, the said parties of the second part may have a renewal of this lease for a further term of five years, at an annual rent to be ascertained by two disinterested persons, one to be chosen- by each of the parties hereto, and if they cannot agree, they to choose another indifferent person, and the valuation of the demised premises (without improvements) made and set down in writing by any two of such persons, shall fix such rent for such renewed term of five years, to be estimated at six per cent, per annum, on such valuation, and such renewed lease shall also contain similar clauses with this lease, except as to the renewal thereof.”
    That said Francis Kain died in 1844, intestate, leaving him surviving, Henrietta Kain, his widow, and no children or descendants, and his heirs-at-law were his brother, William Kain, and Amelia Ann, wife of Washington M. Postley, Agnes, wife of Samuel B. Postley, Francis Kain, James Kain, and Abraham B. Kain, the children of his deceased brother, James Kain.
    That said lease was duly assigned by the said John Stroud, to the said William Rankin, and afterwards and before the expiration of the said lease said William Rankin departed this life, having first made and published his last will and testament, by which he appointed John T. Fisher, the executor thereof; that said will was duly proved before the surrogate of the county of New York, and letters testamentary thereon were duly granted by said surrogate to the said JohnT, Fisher; that afterwards and about the first of May, 1850, the said John T, Fisher, as such executor, assigned said lease and all the covenants therein contained, to the said defendant, Daniel Rankin, who then entered into the possession of the said premises; that the said Henrietta Kain, the widow of Francis Kain, departed this life on or about the first day of September, 1851, and that new leases were granted of those parts of the said premises, ■whereof Amelia Ann, the wife of Washington Postley, Agnes, the wife of Samuel B. Postley, James Kain and Abraham B. Kain, were seized as heirs-at-law of Francis Kain, deceased, for the balance, to wit: two years and nine months from August 1,1851, and that said new leases were granted and made prior to the commencement of this suit. And that the said defendant hag never paid any rent to the plaintiff, and 'further, that previous to the expiration of the said lease and within the three months mentioned in said covenant in said ' lease, the said William Eanldn notified the agent of the parties seized of said premises, that he would like to have a renewal of said lease to Stroud and Eankin.
    Upon this state of facts, and after hearing the counsel, the learned judge dismissed the complaint with costs.
    The plaintiff appealed from this judgment, and the appeal was now heard.

      A. W. Clason, Jr., for plaintiff,
    insisted that the judgment ought to be reversed, and a new trial granted, and relied upon the following points and authorities,
    I. The possession of the defendant was.in its inception hostile to the possession of the plaintiff. The defendant entered under an assignment of an expired lease, and as to the plaintiff claims to hold against his right of possession.
    H. The subsequent hiring from'some of the heirs of Francis Kain did not alter the relations of the parties to this action. They let their respective shares of the premises, but as' to the undivided moiety of the plaintiff the possession was not thereby affected.
    HI. The estates of tenants in common have the sole unity of possession; that unity once destroyed, the tenancy in common is at an end.
    IY. The plaintiff and the heirs of Francis Kain are no longer tenants in common; the defendant, and those heirs of Francis Kain who let to him, are now tenants in common.

      Wallis, contra,

    claimed the affirmance of the’judgment upon the following grounds—
    I. The defendant was, at the time of the commencement of the suit, a tenant in common with the plaintiff, of the lands ■ described in the complaint, and the plaintiff was bound to prove actual ouster. (2d Rev. St. 403, sec. 28 (3 Ed.) Edwards v. Bishop, 4 Comstock, R. 61.)
    H. filie possession of the defendant is the possession of his landlord, (3 Rev. St. 333, sec. 13.) The tenant in occupation must be made the defendant in an-action of ejectment, and is entitled to the same defence his landlord would be entitled to make.
    III. The possession of the defendant was never adverse to the plaintiff, for he is rightfully entitled to the possession of one undivided half of the premises,
    IY. The judgment at special term should be affirmed with costs.
   By the Court. Oakley, Ch. J.

The only question in this case is, whether the facts admitted furnished sufficient proof of an ouster, so as to enable the plaintiff, who claims only an undivided moiety of the premises, to maintain the action.

It is admitted that the original entry of the defendant was under the assignment of a lease, which had then expired. As his entry was therefore without title, it was in its nature hostile to the rights of the true owner, and the occupation that followed, in fact, exclusive and adverse. Bor do we think that this construction is at all altered by the fact, that the expired lease (contained a covenant of renewal. The covenant gave no right of entry.

Without resorting to the evidence, we incline strongly to the-opinion, that the denial in the defendant’s answer of all right, title, and interest in the plaintiff, is an admission, that his own possession is adverse, and may therefore well be treated as equivalent to a confession of ouster, superseding the necessity of proof upon the trial; but as we do not mean to place-our decision upon this ground, it is not necessary to state the reasons that incline us to the opinion.

The ground upon which we place our decision, is, that the character of the defendant’s possession must be determined by the nature of the claim under which he originally entered, and as, in its inception, this was clearly hostile to the rights of the plaintiff, and the 'possession of the defendant under it in fact exclusive, we think there is sufficient in the case to show such an ouster by the defendant, as destroyed the tenancy in common, and entitled the' plaintiff, by bringing this suit, to treat him as a trespasser. As the possession of the defendant was in its origin hostile, the presumption of law is, that it remains so. Ror is this presumption met or weakened hy the fact, that he has obtained a lease from the other tenants in common of their respective shares. By his acceptance of this lease, his possession, in respect to them, has ceased to be adverse, but this is no evidence that it has ceased to be adverse, in respect to the undivided moiety of the plaintiff. There was no necessity for making the other tenants in common parties to this suit. Their rights are not questioned. The jiidgment is reversed, and there must be a new trial, with costs to abide the event.