author: Jones, J.

text:
    MARY M. De CAMP, Plaintiff and Respondent, v. THE NEW JERSEY MUTUAL LIFE INSURANCE COMPANY, Defendants and Appellants.

      [Decided June 30, 1870.]
    An appeal lies to the General Term from a Special Term order denying a defendant’s application under the twelfth section of the act to establish United States courts, passed by Congress, to remove the cause into the United States Circuit Court.
    If, where there is no contest about the facts, the order of removal is denied, the defendant may answer in abatement to the jurisdiction of the State court, setting out the facts which, under the United States statutes, authorize a removal, the application for an order of removal, and its denial.
    Upon such answer the decision of the court to which the application was made for an order of removal, that, as matters of law, the defendant was not entitled on the conceded facts to an order of removal, will be reviewed, and if found to be erroneous,, the plea to the jurisdiction will be sustained (Stevens v. Phoenix Insurance Company;. Court of Appeals).
    The office of a petition for removal to United States Court is to set on foot the proceedings to obtain a removal, and is like unto a declaration of law or a bill in equity, and like them must contain such averments as will, on being either conceded or established, entitle the petitioner to the relief asked for.
    If the application for a removal is made on notice, those averments which are not denied by the opposing party will be taken by the court as true, and as to those which are denied the petitioners will be at liberty to produce proof.
    Before Monell, Jones, and Spencer, JJ.
    Appeal from an order.
    The order appealed from was made upon an application of the defendant to have this cause removed to the United States Circuit Court, pursuant to the 12th section of the act to establish the judicial courts of the United States passed by Congress (U. S. Statutes at Large, vol. i., pp. 73-79).
    The order denied the application.
    The application was founded on the complaint in the action, a petition, and notice of appearance, of which the following are copies:

      Superior Court of the City of New York.
    Mary M. De Camp, plaintiff, v. The New Jersey Mutual Life Insurance Company, defendants.
    To the Superior Court of the city of New York:
    The petition of the New Jersey Mutual Life Insurance Company, the above-named defendants, respectfully showeth—
    That an action has been commenced in this court against your petitioners, by Mary M. De Camp, a citizen of this State, to recover the sum of ten thousand dollars, under a policy of insurance in her favor, on the life of her husband, John H. De Camp, alleged to have been made and delivered by the defendants.
    That the matter in dispute in such action exceeds as aforesaid the sum or value of five hundred dollars, exclusive of costs.
    That your petitioners, at the time of filing this their petition, have entered their appearance in this court, in the said action.
    That your petitioners are not citizens of the State in which the above-entitled action is brought, but are citizens' of another State; to wit, of the State of New Jersey.
    That they, your petitioners, have procured and herewith offer good and sufficient surety for their entering in the United States Circuit Court, on the first day of its session, copies of the process against them in said cause, and also for their then appearing and entering special bail in the said cause, if special bail was originally requisite therein, pursuant to the statutes of the United States in such case made and provided.
    Your petitioners therefore pray that the said cause may be removed for trial into the next Circuit Court, to be held in the district where the same is pending, to wit, into the next Circuit Court for the Southern District of the State of New York, pursuant to the provisions of the said statutes of the United States in such case made and provided, and that this court do accept the surety offered by your petitioners as aforesaid, and do proceed no further in the said cause.
    And that this court would give all proper directions, and grant to your petitioners such further or other order or relief in the premises as may be just.
    The New Jersey Mutual Life Ins. Co.
    By Chas. C. Lathrop,

      Vice-Preset.

      City and County of New Yorh, ss.:
    Charles C. Lathrop, being duly sworn, doth depose and say that he is the Vice-President of the New Jersey Mutual Life Insurance Company, the petitioners above named; that he has read the foregoing petition, and knows the contents thereof, and that the same is true to Ms knowledge, except as to the matters therein stated on information and belief, and that as to those matters he believes it to be true.
    Charles C. Lathrop.
    Sworn to before me this 17th 1 day of November, 1869. )
    Stur&es M. Morehouse,

      Notary PubUe,

      County of New Yorh.

    Superior Court.
    Mary M. De Camp v. The New Jersey Mutual Life Insurance Company, defendants.
    Notice of appearance.
    Sir—Please to take notice that the defendants appear in this action, and that we are retained as attorneys for them therein. New York, November 19,1869.
    Yours, &c.,
    Sanford & Woodruff,

      Defendants' Attorneys,
    102 Broadway.
    To'A. S. Diossy, Esq.,
    Plaintiff’s Attorney.
    And on bond executed by two sureties in proper form, as required by said 12th section.
    It was opposed in an affidavit of the plaintiff’s attorney, of wMch the following is a copy:

      Superior Court of the City of Yew York.
    Mary M. De Camp v. The Yew Jersey Mutual Life Insurance Company.

      City and County of Few 7orle, ss.:
    A. S. Diossy, plaintiff’s attorney, of said city, being duly sworn, says that the defendants are a foreign insurance company, created by the laws of the State- of Yew Jersey, but doing business in this State, in compliance with the laws thereof. That the policy of insurance upon which this action is brought, and the risk thereby taken, was a portion of the business of defendants, so transacted within this State. That the assured, John H. De Camp, resided in this State. The application for said assurance was made and said policy delivered to him here. That the defendants at that time had a place of business at 130 Broadway, in the city of Yew York, and have now at 180 Broadway, in said city, and upon the outside of said building is placed a large and conspicuous sign, with the words thereon, “The Yew Jersey Mutual Life Insurance Company, Branch Office.”
    That in accordance with the provisions of the statute of this State, the said defendants have filed with the clerk of the city and county of Yew York the certificate of authority to carry on the business of life insurance in the State of Yew York.
    A. S. Diossy.
    Sworn before me this 4th day ) of December, 1869. [
    Johu Towusehd,

      Fotarry Public,

      City and Co. 1Y. 7.

      Mr. Charles F. Sanford for appellants.
    The question was fully argued at Special. Term, upon its merits, but the motion was denied, solely on the authority of Stevens v. Phœnix Ins. Co. (24 How. 517), and N. Y. Piano Co. v. The New Haven Steamboat Co. (2 Abb. P. R., N. S., 357). Both of those eases were reviewed and commented on in the later case of Fisk v. The Chicago & Rock Island R. R. Co. (3 Abb., N.S., 453), which was cited, with other cases, in support of the motion. Both of them have been reversed on appeal—the former by the Court of Appeals, the latter by this Court at General Term. Both now stand as authoritative decisions for the appellants, in support of their motion (Kranshaar v. N. H. Steamboat Co., 7 Robertson, 356; Stevens v. Phœnix Ins. Co., N. Y. Court of Appeals, Sept., 1869; MS. opinion).

      Mr. John Townshend for respondent.
    The order is not appealable. Appeals can be had only in the cases prescribed by section 349 of the Code, and the order appealed from is not within any of the clauses there mentioned. It does not affect a substantial right (Illius v. New Haven R.B., 3 Kernan, 597).
    To warrant a removal it must be made to appear to the satisfaction of the court “ that the action is by a citizen of the State in which the suit is brought, against a citizen of another State, and that the amount in dispute exceeds five hundred dollars.” To satisfy the court of these facts, there should be legal proof of them. The words “ satisfaction of the court ” are used in section 135 of the Code, and these have been held to require legal proof, and that information and belief is not sufficient (Warren v. Tiffany, 9 Abb., 66; Evertson v. Thomas, 5 How., 46).
    The ordinary form of verification of a pleading, which is the mode of verifying the petition adopted in this case, amounts only to this, that parts of the petition are by the deponent believed to be true, without saying which parts. For anything which appears to the contrary, all the material facts may be on information and belief. It would be different if the verification read “ except as to the matters therein stated to be on information,” etc. (Bostwick v. Elton, 25 How., 362; Truscott v. Dole, 7 How., 225; Roome v. Webb, 3 How., 327).
    It should ' appear affirmatively not only that the petition has been filed in this court, but also that the filing was contempora.neons with the entry of the appearance. Neither of these facts appears in this case (Carpenter v. N. Haven R. R. Co., 11 How., 481; Redmond v. Russell, 12 Johns., 153; Roberts v. Carrington, 2 Hall, 649).
   By the Court:

Jones, J.

The first question raised on this appeal is that the order is not appealable.

The case of Illius v. New Haven R. R. (3 Kernan, 597) is cited in support of this proposition.

In that case the court below granted the application for a removal, and the appeal was to the Court of Appeals. The point decided was that an appeal would not lie to the Cov/rt of Appeals from suoh an order.

I do not stop to inquire whether the principle of the decisions or the reasoning of the learned judge supports the proposition contended for in this case, for there is a subsequent decision of the Court of Appeals which, in my view, controls the question of the appealability of this order.

It is the ease of Philo Stevens et al. v. The Phœnix Insurance Co. of Hartford. In this case the defendant had made an application for the removal of the cause under the said 12th section, which application was denied. The defendant then answered, setting up among other defenses the existence of the matters and the doing of the acts which called for a removal under this 12th section, the making of an application to the court for an order óf removal, the papers on which that application was founded, the proceedings thereon, and the denial thereof, and insisted that by reason of the said several matters the court had no jurisdiction over the cause. On the trial of the action the plaintiff had a verdict and judgment thereon. The j udgment was affirmed at General Term. From this judgment an appeal was taken to the Court of Appeals, where it was reversed on the ground that, the defendant having complied strictly with said 12th section, the State court had no further jurisdiction to proceed in the case.

This decision establishes that upon a strict compliance with this 12th section the State court loses jurisdiction and the United States court gains it without any formal order to that effect; and consequently, if it is attempted to proceed in the State court after such compliance, the fact of such compliance will constitute a defense to be interposed by way of a plea to the jurisdiction, and this although a formal order of removal has been refused.

Thus the right to the transfer of jurisdiction and the refusal to accord it may be pleaded in defense to the action. It may be laid down as a general maxim that whatever may be pleaded in defense relates to the merits of the controversy, for that constitutes a part of the controversy itself.

An order denying a removal affects this right of transfer, which may thus be pleaded in defense and thereby form one of the controverted issues to be tried, and therefore it affects a substantial right; and that is all that is necessary to invest it with an appealable character.

It is true we might dismiss this appeal and leave the defendant to obtain his right by an answer to the jurisdiction; and if the judge below had declined to make any order this would have been the only course that could have been pursued. But the judge below made an order; that order, as shown above, affects the substantial right and is therefore appealable, and if it is erroneous we should not permit it to stand.

Upon examining the said 12th section it appears that, so far as the present question is concerned, four matters must exist in fact before the State court is called on to act at all.

1. That the suit should be against an alien by a citizen, or by a citizen of one State against a citizen of another.

2. That the matter in dispute exceeds the value of $500.

3. That the defendant shall at the time of entering his appearance in the State court file a petition for the removal of the cause for trial into the next Circuit Court to be held in the district where the suit is pending.

4. Offer good and sufficient surety to the effect prescribed.

If all these matters exist then the State court is called on simply to accept the surety, and thereupon .to proceed no further, and to discharge any bail that may have been originally taken.

It is evident that if any one of these prerequisites does not exist the State court is not called on to accept the surety.

Whatever may be the effect of the judge’s determination as to the existence of these prerequisites upon a conflict of proof and after hearing both parties, the Court of Appeals have held that his determination that as a matter of law upon the conceded facts they do not exist, is not such a determination as will conclude the parties until it is reversed on appeal; but that on a plea to the jurisdiction it may be urged that he was in error and was forced to accept the surety. What may be the effect of his decision on a conflict of evidence as to the prerequisites existing in fact, and how such a decision may be relieved against, are questions that do not arise in this case; for here there is no such conflict.

In this case it is contended that the prerequisites were not established by proper proof, because the proof of them consists solely in the statements in the petition, the only verification to which is that the petitioner knows the contents thereof and that the same is true of his own knowledge, except as to the matters therein stated on information and belief, and as.to those matters he believes it to be true; which is simply swearing that the petitioner is informed that the matters contained in the petition are true, and believes such information to be true, and that this does not constitute legal proof: It is insisted that the judge properly refused to accept the surety for want of legal proof of the existence of its prerequisites.

The petition, however, is but the initiatory step for setting on foot the proceedings to obtain a removal. Its office is like that of filing a declaration at law, or a bill in equity, and like them must contain such averments as will, "on being either conceded or established, entitle the petitioners to the relief asked for ; but it is no part of its office to furnish proof of its averment, although if properly verified it may incidentally do so in some instances.

If the petitioner applied ex parte, undoubtedly the court would, while accepting the petition as evidence of those averments which were positively sworn to, yet require legal proof of those sworn to on information and belief.

But when the application is made on notice to the adverse party, the court will leave the party to take care of his own interests and require him to controvert those averments of the truth whereof he is not satisfied, and will consider those averments not controverted as conceded to he true. The controversion may he by either an answer or affidavit; but whatever form it comes in, those matters which are controverted and those only are the ones which are in dispute, and as to those the petitioner will be at liberty to furnish proof.

In the present case none of the averments in the petition are controverted, except so far as the facts stated in the affidavit of the attorney for the plaintiff tend to controvert the averment that the petitioners were not citizens of this State but citizens of the State of New Jersey. The question thus presented to the court, and the only question, was whether on the facts stated in that affidavit the defendants were to be regarded as citizens of this State or not.

The judge below, as appears from his opinion, regarded this as being the only point presented for his determination, and denied the motion on the sole ground that under the decisions of the Supreme Court in Stevens v. Phœnix Ins. Co. (24 How., 517), and of this court in N. Y. Piano Co. v. New Haven Steamboat (2 Abb. Pr., N. S., 357), the defendant was estopped from setting up that it was not a citizen of this State. He so held apparently, not because he was satisfied of the correctness of the doctrine, but because he felt himself bound by those authorities.

Since the decision of the motion in the court below the Court of Appeals has reversed the decision of the Supreme Court in Stevens v. Phœnix Ins. Co., and with that reversal the case in this court also falls.

It is now established by the decision of the Court of Appeals that the defendant being incorporated under the laws of the State of New Jersey is a citizen of that State alone, and is not estopped by the other matters set forth in the affidavit of plaintiff’s attorney from claiming that it is not a citizen of this State.

The order below must be reversed; but as the plaintiff may, by reason, of her reliance on the General Term decision of this court, have omitted to controvert some of the other averments in the petition, an order of removal should not be made here, but the defendants should be remitted to the Special Term to renew their motion there. ¡No costs of appeal to either party.

Ordered accordingly.


source: Caselaw Access Project

author: Monell, J. McCunn, J.

license: Public Domain

text:
    ALBERT B. CORY, Plaintiff and Respondent, v. WALTER P. LONG, Defendant and Appellant.

      [Decided June 30, 1870.]
    A naked transfer from one partner to another of his interest in the partnership property vests the title absolutely in the latter, discharged of all lien or equity of the former.
    It is only where the outgoing partner has reserved to himself the right to have the partnership property applied to the payment of the partnership debts that a court of equity will compel such application.
    An outgoing partner may secure such equity by sufficient covenants on the part of the regaining partner. Such covenants must require the remaining partner.to apply the partnership property to the payment of the debts. Upon such a covenant, a lien arises in favor of the outgoing partner, which a court of equity will enforce.
    But a mere covenant by the remaining partner to pay the partnership debts, and to indemnify the outgoing partner against them, raises no equity in his favor. Upon such a covenant the outgoing partner can look only to the personal indemnity, and cannot require the application of the partnership property to the payment of the debts.
    Before Monell, McCunn, and Freedman, JJ.
    Appeals from two orders.
    The plaintiff was a member of the firm of W. P. Long & Co., which was composed of the plaintiff and defendant.
    In 1869, by an instrument in writing, signed by and under the seals of the respective parties, the copartnership was dissolved, the right, title, and interest of the plaintiff in the copartnership property and effects sold, conveyed, and delivered by him to the defendant, who in consideration thereof agreed, in and by said instrument, “ that he would pay all and every debt, claim, and demand against the firm, and would hold the plaintiff free and clea/r of and from all claim and demand whatever thereon.”
    The plaintiff alleged, as a violation of the agreement by the defendant, that the defendant was appropriating such partnership property to his own individual use; that he refused to pay any of the partnership debts, which amounted to about $10,000; that the partnership assets remaining in the defendant’s possession were about equal to that sum; that the defendant was insolvent and unable to indemnify the plaintiff, or to make contribution towards payment of such debts.
    A preliminary injunction was granted restraining the defend- ■ ant from disposing of or interfering with the partnership property, and a receiver was appointed.
    Motions to dissolve the injunction and to vacate the appointment of the receiver were denied at Special Term.
    The defendant appealed from both orders to the General" Term.

      Mr. James K. Hill for appellant.
    The right in equity of a partner to have partnership property applied for the payment of partnership debts, is lost when the property by a bona fide transfer ceases to be partnership property, whether the transfer is made to a stranger or to a partner.
    This point is specifically decided in the case of Dimond v. Hazard (32 N. Y., 65), where the court, in treating of' a transfer from one partner to his copartner, says,: “ When one of two part ■ ners retires from business, relinquishing to the other all his interest in the partnership property, the reniaining partner has the same dominion over it as if it had always been his own separate estate.”
    This position is fully supported by the authorities (Sage v. Chollar, 21 Barb., 596; Parish v. Lewis, 1 Freeman’s Chan., 299; Bullett v. Meth. Ep. Ch., 26 Penn., 110; Howe v. Laurence, 9 Cush., 555; Robb v. Mudge, 14 Gray, 534; Story on Part., sections 358, 359; Ex parte Ruffin, 6 Vesey, 119; 11 Vesey, 3; 10 Vesey, 347; Collyer on Part., sections 174, 894, 903).
    The covenant on the part of the defendant to pay the partnership debts, and hold the plaintiff harmless, cannot operate in such a way as to make the former partnership property a trust fund for the.payment of the partnership debts (Sage v. Chollar, 21 Barb., 598; Story on Part., section 359; Ketchum v. Durkee, 1 Barb. Ch., 480; Kirby v. Schoonmaker, 3 Barb. Ch., 46).

      The insolvency of the defendant occurring subsequently to the transfer, even if established by the plaintiff, cannot revive the lien of the retiring partner so as to render the partnership property still remaining in specie, primarily liable for the payment of partnership debts (Ex parte Ruffin, 6 Ves., 119; Ex parte Freeman, Buch., 471; Ex parte Williams, 11 Ves., 3; Ex parte Fell., 10 Ves., 347; Ex parte Fry., 1 Glyn and Jam., 96).
    The case of Deveau v. Fowler (2 Paige, 400) is very meagrely reported, and appears to have been decided on the authority of Smith v. Haviland, an unreported case. It must be distinguished from this case as disclosing some element of fraud in the transfer, or else it is contrary to principle and the current of authorities,' and has been overruled by Sage v. Chollar (21 Barb., 596) and Dimond v. Hazard (32 N. Y., 65).

      Mr. Roger A. Pryor for respondent.
    That the plaintiff has a natural equity to the interference of the court, is obvious enough on the facts disclosed by the plaintiff’s papers.
    The agreement to indemnify the plaintiff against the copartnership debts—the assignment of all the plaintiff’s interest in the copartnership in consideration of such indemnity—the refusal of the defendant to pay the copartnership debts, and consequent actions against the plaintiff—the instigation of these actions by the defendant—the dissipation of -the copartnership assets, and the insolvency of the defendant—these circumstances not only raise a natural equity, but give a technical equity to the relief prayed in the complaint. This equity is based on the right of the partners, as between themselves, to have the partnership property first applied to the discharge of the partnership debts (Story, 1 Equity Juris., secs. 676, 675; Wilson v. Robertson, 21 N. Y., 592; Havens v. Hussey, 5 Paige, Ch. R., 30; Greenwood v. Broadhead, 8 Barb., 593; Lindley on Partnership, passim).

    On the right of the plaintiff to marshal the partnership property (securities) so as to protect him, a surety (Hayes v. Worth, 4 Johns. Ch. R., 132; Willard, Equity Juris., 333, 337; 1 American Leading Cases, 369; 1 Story Eq. Juris., secs. 633, 645).
    On the right of the plaintiff, as surety, to be subrogated to all the remedies of the creditors against the defendant (Willard Eq. Juris., 110, 340).
    On the right of the plaintiff, as surety, to compel a resort,'in the first instance, to the defendant as principal (Willard Equi. Juris., 346).
    On the principle of quia timet, to protect the partnership property, as clothed with a trust to pay the partnership debts (Willard Eq. Juris., 332; Story on Partnership, sec. 360). This principle is applicable in favor of sureties (Ranelaugh v. Hayes, 1 Vernon, 190; Hoyes v. Ward, 4 Johns. Ch. R., 132; King v. Baldwin, 2 Johns. Ch., 562; Champion v. Brown, 6 Johns. Ch., 406).
    On the right of the surety, in equity, to compel payment by the principal, when the surety has been brought under liability by the debt falling due, although he may not have actually been sued (Willard’s Eq. Juris., 109; Antrobus v. Davidson, 1 Merivall, 569, 588; 1 American Leading Cases, 363).
    On the right of a party, in the precise situation of this plaintiff to compel specific performance of a general' covenant of indemnity, though it sounds only in damages (Champion v. Brown, 6 Johns. Ch. R. 405, and cases cited; 1 Story’s Eq. Juris., secs. 130, 350).
    And on the fundamental ground of equity jurisdiction, that equity will interpose to redress fraud, and prevent irreparable damage.
    In Deveau v. Fowler (2 Paige Ch. R., 400), the. precise point in contention here was ruled by Chancellor Walworth, who, under circumstances essentially the same as the present, refused to vacate an order of injunction and of receivership. He declared it to be “ the settled law of the court ” to grant the relief prayed in this complaint, and under the circumstances here exhibited. (Ketchum v. Durkee, 1 Hoffman Ch. R., 537).
   By the Court:

Monell, J.

The right of the plaintiff to retain the injunction and receiver in this case depends upon the effect which is to be given to the sale and transfer to the defendant of the partnership property, and his agreement to pay the partnership debts, and hold the plaintiff free therefrom.

A naked transfer from one partner to another of his interest in partnership property vests the title absolutely in the latter, discharged of all lien or equity of the former; and it is only where the outgoing partner has reserved to himself the right to have the partnership property applied to the payment of the partnership debts that a court of equity will compel such application. An outgoing partner who transfers the whole partnership property to the remaining partner has a right thus to protect himself; and upon sufficient covenants on the part of the remaining partner, to devote the partnership property to the payment of the partnership debts, a lien may arise, which a court of equity may possibly enforce on behalf of the outgoing partner. The reason in such a case would be that, notwithstanding the dissolution of the partnership and the transfer of the partnership property, the outgoing partner remains liable for the partnership debts, and, therefore, would have a right to require their payment by the remaining partner out of the partnership property, the consideration for which being the transfer of the partnership property, and which right he could secure by suitable and sufficient stipulations on the part of the remaining partner.

But I am not aware that it has anywhere, except in two eases, been held that a mere agreement on the part of the continuing partner to pay th!e partnership debts and to indemnify the retvring partner, was sufficient to enable such partner to invoke the aid of a court of equity to enforce such agreement, by compelling the application of the property to the payment of such debts.

In Deveau v. Fowler (2 Paige, 400), upon a dissolution of a copartnership, it was agreed that one partner should take all the stock and effects and pay the partnership debts, and indemnify the retiring partner against them. Upon allegations that the defendant was insolvent, and that he threatened to dispose of the property and appropriate it to his own use, leaving the debts unpaid, an injunction was granted and sustained. That case is referred to and sanctioned by the vice-chancellor (Whittlesey) in Rebb v. Stevens (Clark 191, 195), where creditors sought to enforce the equity of the retiring partner.

These are the only cases which go to the extent of upholding the injunction in this case, and the former loses much if not all its force as an authority by the doubt subsequently expressed by the chancellor in Ketchum v. Durkee (1 Barb. Ch. R., 480), that he was not quite certain that the court gave the proper construction to the agreement of the parties in that case, in supposing that the intention was that the copartnership debts should be first paid out of the proceeds of the property, before the purchaser should be permitted to apply any part of that property to other purposes. And the latter case, in which the vice-chancellor followed Deveau v. Fowler, must be considered as correspondingly weakened.

The general principle, as stated by elementary writers, is, that it is competent for partners, in cases of a voluntary dissolution, to agree that the joint property shall belong to one of them; and if such agreement be bona fide, and for a valuable consideration, it will transfer the whole property to such partner, wholly free from the claims of the joint creditors (Story on Part., sec. 358; Collyer on Part., sec. 174; Gow on Part., 3d ed., 237 to 241).

And this is so, although the whole or a part of the consideration of the transfer is, that the partners taking the property shall pay the debts of the partnership. The reason is, that in such a case the retiring partner, who so transfers his share, has no lien on the property for the discharge of the debts; for, by his voluntary transfer, he has parted with it and trusted to the personal security and personal contract of the other partners. Story on Part., sec. 359, and Collyer on Part., sec. 894, where the leading English case of Ex parte Ruffin (6 Ves., 119), and the case of Ex parte Freeman (Buck, 471), and Ex parte Fry (1 Glyn and Jam., 96), are referred to as authorities in support of the text.

In Ex parte Williams (11 Ves., 3) Lord Chancellor Eldon declared there was no equity in favor of a retiring partner where the consideration for the transfer was wholly or in part a covenant to pay the debts and indemnify the retiring partner, “ so conceived as not to leme any Men v/pon theproperty.”

The English cases are, I think, entirely uniform, and sustain the proposition that unless a lien on the property is expressly preserved in favor of the retiring partner, the remaining partner takes an absolute title discharged of all equity.

In Sage v. Chollar (21 Barb., 596) this precise question was involved and decided. There a sale had been made and a covenant of indemnity given. Judge Harris says (p. 598): “ If the partner taking the transfer has agreed to pay the partnership debts, the partner making the transfer, though he still remains liable for those debts, can only look to the personal security of his copartner for indemnity.”

Judge Hasten (of the Buffalo Superior Court), in a carefully considered opinion in Smith v. Howard (20 How. Pr. R., 121), entertains the same view. He says, when the partner sold, he did not reserve any lien upon the property, but took merely the personal undertaking of his vendees to pay the debts. Had he reserved a lien upon the property for the payment of the debts, the creditors of the firm might have availed themselves of that lien.

But the more recent case in the Court of Appeals, Dimon v. Hazard (32 N. Y. R., 65), must, I think, be considered as controlling. In that case, the continuing partner received all the assets of the firm and “ assumed ” all the debts, and the court held that, as the transfer had been honestly made, and for a valuable consideration, the property had thereby become his separate estate, wholly free from any claims of joint creditors.

The clear weight of authority, therefore, seems to be, that unless the retiring partner reserves a lien upon the partnership property, so as to require its application to the payment of the partnership debts, the vendee will take an absolute title; and that a mere personal covenant to pay, or of indemnity, will not give such a lien.

These questions have usually arisen in actions instituted by the joint creditors to enforce the equity of the retiring partner. In those cases it has been held that such creditors might be substituted in equity to the rights of the' partners, as being the ultimate cestui que trusts of the fund to the extent of the joint debts. But no such equity can be worked out by creditors except through some equity of the partners, and if the partners have none the creditors can have none.

I confess that my first impressions were strongly in favor of sustaining the injunction in this case; but the examination of the cases to which I have referred has satisfied me that such impressions were erroneous.

It was made a point by the plaintiff that under the agreement of indemnity he, as between himself and his partner, became a surety merely, and therefore had a right to compel payment of the partnership debts by the principal debtor. But I do not perceive how that helps this case, which is not to compel a performance of the defendant’s covenants, but to compel the application of property to which the defendant has an absolute title to the payment of the firm’s debts. It may be that the plaintiff, without either paying or waiting to be prosecuted for the partnership debts, might have a judgment against the indemnitor, requiring him, as the principal debtor, to satisfy such debts. But in such an action he could not reach the partnership property, nor would he be entitled to an injunction restraining its •disposition.

The order appealed from should be reversed, with costs.

McCunn, J.

(dissenting). About the facts of this case there is no controversy. It is either admitted, or else is established by a clear preponderance of proof, that the plaintiff sold his interest in the copartnership, of which the plaintiff and defendant were the component members, to the defendant, and took back from the defendant an agreement that he would pay all the copartnership debts, and would indemnify this plaintiff against all liability in respect of them; that, in pursuance of such sale, the plaintiff delivered to the defendant the custody and control of all the copartnership effects; that various suits have been instituted against the plaintiff to recover of Mm the very debts which the defendant assumed and agreed to pay, in consideration of the transfer to him of the plaintiff’s interest in the copartnership; that, except the court interfere by an exertion of its equity powers, the entire copartnership property will be diverted to the defendant’s individual use, and the plaintiff be compelled to pay all the copartnersMp debts, without the possibility of relief or indenmity from the defendant, who is utterly insolvent.

On this state of facts, Chief-Justice Barbour appointed a receiver of the copartnership property, with the usual injunction, and the appeal is from those orders of injunction and receivership.

If tMs court have no power to grant the relief required by the exigency of the case, then is there a defect in our system which I had not supposed to exist. To say that the plaintiff has no resource but upon his contract of indemnity, and that he must permit all the copartnership property to be dissipated, and then seek redress of an insolvent individual, is not only a mockery of administrative justice, but a plain violation of the spirit of our law, which abhors multiplicity and circuity of action, and pretends to accord complete relief in every instance of appeal to its protection. I find no difficulty in establishing the plaintiff’s right to relief, and that, too, upon familiar principles of equity jurisprudence. Confessedly, as between the plaintiff and defendant, and in respect to the copartnersMp debts, the defendant, by virtue of his contract of indemnity, is'the primary debtor, and the plaintiff a mere surety. The plaintiff’s equity to relief is founded then on the following elementary principles:

1. On the right of the partners, as between themselves, to have the partnership property first applied to the discharge of the partnership debts (Story, 1 Equi. Juris., secs. 675-676; Wilson v. Robertson, 21 N. Y., 592; Havens v. Hussey, 5 Paige Ch. R., 30; Greenwood v. Broadhead, 8 Barb., 593; Lindley on Partnership, passim).

2. On the right of the plaintiff to marshal the partnership property (securities) so as to protect him, a surety (Hayes v. Worth, 4 Johns. Ch. R., 132; Willard Equity Juris., 333-337; 1 American Leading Cases, 369; 1 Story Eq. Juris., secs. 633-645.)

3. On the right of the plaintiff, as surety, to be subrogated to all the remedies of the creditors against the defendant (Willard Eq. Juris., 110-340).

4. On the right of the plaintiff, as surety, to compel a resort in the first instance to the defendant as principal (Willard Equi. Juris., 346).

5. On the principle of quia timet, to protect the partnership property, as clothed with a trust to pay the partnership debts ; (Willard Equi. Juris., 332; Story on Partnership, sec. 360). This principle is applicable in favor of sureties (Ranelaugh v. Hayes, 1 Vernon, 190; Hoyes v. Ward, 4 Johns. Ch. R., 132; King v. Baldwin, 2 Johns. Ch., 562; Champion v. Brown, 6 Johns. Ch., 406).

6. On the right of the surety in equity to compel payment by the principal when the surety has been brought under liability by the debt falling due, although he may not have actually been sued (Willard’s Equi. Juris., 109; Autrobus v. Davidson, 1 Merivall, 569-578; 1 American Leading Cases, 363.)

7. On the right of a party, in the precise situation of this plaintiff, to compel specific performance of a general covenant of indemnity, though it exceeds only in damages (Champion v. Brown, 6 Johns. Ch. R., 405, and cases cited; 1 Story Equi. Juris., secs. 130-358). And

8. On the fundamental ground of equity jurisdiction, that equity will interpose to redress fraud and prevent irreparable damage.

In Cranston v. Plunet et al. (54 Barbour, 59), a husband had made a settlement on Ms wife and had taken back a covenant of indemnity against liability for her support. It was urged that the husband had no redress but in the trustees’ responsibility, but the General Term of the Supreme Court held that the contract of indenmity gave him a right to require that the property settled should be specifically appropriated to the purposes of the trust. Mills v. Watson, decided at General Term of this court in May, 1869, and reported in Transcript of 12th April, 1870, was an action in equity in the nature of a bill, quia timet, to compel the defendant specifically to perform a covenant of payment and indemnity. Mr. Justice FitMan, delivering the unanimous judgment of the court, propounded the following principles, and adduced in their support the authorities cited:

By the covenant in the deed from the plaintiff to the defendant, the latter for a good consideration undertook to pay plaintiff’s debt to a third person. The defendant thereby, as between Mm and the plaintiff, became the principal debtor, and the plaintiff his surety. It is a well settled rule in equity that a suit in equity may be instituted and maintained by a surety to compel payment by the principal upon a covenant of indemnity; and, unless there be some good reason shown to the contrary, the court will decree specific performance, upon the same principle that they entertain a bill of quia twnet (2 Story Equi., sec. 880, p. 194; Marsh v. Pike, 2 Sand. Ch., 210; 10 Paige, 395).”

In principle it is impossible to distinguish the plaintiff’s right from the equity to relief established and illustrated in Mills v. Watson.

But the very point in contention has been adjudicated, and the relief here sought accorded, by the weightiest judges in the State. In Deveau v. Fowler (2 Paige Ch. R., 400), Chancellor Walworth refused to vacate the appointment of a receiver made upon precisely the facts here developed, and, in doing so, de-. dared it to be the settled rule of the court, under these circumstances, to appoint a receiver. And in the case of Davis v. Morris (36 N. Y., 574), Deveau v. Fowler was quoted against the opimon of the court. Grover, J., adverting to the case (Deveau v. Fowler), does not question its authority, but, on the contrary, recognizes it, and distinguishes it from the case then sub judice.

In Smith v. Haviland (2 Paige, 401), Chancellor Jones made a similar decision upon identical facts. In the course of my reading I have been unable to find any adjudication.in hostility to* the judgment of these eminent lawyers. Upon principle, then, as well as authority, the orders should be affirmed.


author: Freedman, J. Spencer, J.

text:
    MARTIN L. TOWNSEND, Plaintiff and Respondent, v. MORTIMER HENDRICKS et al., Defendants and Appellants.

      [Decided June 30, 1870.]
    Where the complaint states a cause of action which, if true, would entitle the plaintiff to recover back moneys paid by him to the defendants (upon their representations that certain steps had been taken by them toward the completion of a contract), upon the ground that the defendants never entered upon a performance of the contract, and the defendants, by answer, interpose a counter-claim, the trial of which requires the examination of a long account, the action is referable, notwithstanding the complaint, by further averments, charges that said representations were false and fraudulent, and such reference is not in violation of the provisions of the constitution guaranteeing trial by jury.
    Before Barbour, C.J., Freedman and Spencer, JJ.
    Appeal by defendants from an order made at Special Term, referring the action, and all the issues therein, to a referee to hear and determine the same.

      Mr. Charles M. Da Costa for apppellants.
    This is. an appealable order (section 349 of the Code).
    It “ affects a substantial right,” in that the order appealed from deprives the defendants of their constitutional right of trial by jury, in a case in which it is conceived the law of the land does not authorize a compulsory reference.
    The rule is well settled that an appeal from an order of reference will lie, where a reference is not authorized by law (Cram v. Bradford, 4 Abb. Pr. R., 193; Batchelor v. Albany City Ins. Co., 6 Abb., N. S., 240; Turner v. Taylor, 2 Daly, 278).
    The cause of action alleged in the complaint is not one which the court can compulsorily refer. Its gravamen is fraud, the plaintiff seeking to recover, as damages, the several amounts of money which he alleges he was induced to part with and pay to the defendants, by reason of their alleged false and fraudulent statements and representations. The answer, while admitting the receipt by the defendants of the respective amounts of moneys alleged by the plaintiff to have been paid, denies each and every of the allegations of the complaint charging, or purporting to charge, the defendants with any fraud, or attempt at fraud; and then, as a further defense, sets up the true and exact statement of the transactions had between the parties. It is clear, therefore, that such an issue is not one which it is in the power of the court compulsorily to refer.
    It is true that the defendants’ answer also sets up a counterclaim, and which is put at issue by the reply; and the learned justice held that such an issue required the examination of a long account; and it was, therefore, within the power of the court to compulsorily refer all the issues in the action.
    It is respectfully submitted that in this the learned court below erred, for the reasons stated in the following .points, viz.:
    Ho issue involving any accounting is framed by the answer and reply, for the plaintiff, in his complaint, avers that during the pendency of the transactions the defendants delivered to the plaintiff several statements of account, which are alleged to be untrue, false, and fraudulent, and made with intent to deceive the plaintiff, and to induce him to pay the moneys he did to the defendants. The answer avers that the several statements of account rendered were just and true, and accepted by the plaintiff. The reply avers that the statements of account referred to and mentioned in the answer are the identical statements of account mentioned in the complaint, and that they are made up of false, fictitious, and usurious charges.
    The accounts thus rendered are either:
    Accounts stated, and therefore conclusive (Lockwood v. Thorn, 1 Kernan, 170; ibid., 18 N. Y., 285; Smith v. Marvin, 27 N. Y., 137).

      Or are fraudulent, and part and parcel of the alleged scheme of fraud, which, if the plaintiff succeeds in establishing his alleged cause of action, will fall by themselves.
    Should.it be suggested that the counter-claim of the defendants, put at issue by the reply, involves an accounting as to the balance claimed, it will be sufficient to answer:
    That it does not involve a long accounting.
    That the court has no power to determine, or to presume, as the court below did, whether or not, if the plaintiff is defeated in his alleged cause of action, the defendants will then proceed with, or abandon their counter-claim. It is an affirmative cause of action on their part, and its prosecution or abandonment is entirely within their own control and option.
    But even if the issue raised by the defendants’ counter-claim involves the examination of a long account, no accounting can by any possibility be necessary until the plaintiff has either abandoned or been defeated in his alleged cause of action; and, until then, the court has no power to order a compulsory reference (Draper v. Day, 11 How. Pr. R., 439; McCulloch v. Brodie, 13 How. Pr. R., 347; Sharp v. The Mayor, 14 How. Pr. R., 213; affirmed on appeal, 31 Barb., 578; Cameron v. Freeman, 18 How. Pr. R., 353; Ross v. The Mayor, 2 Abb., N. S., 266; Goodyear v. Brooks, 4 Rob., 682; ibid., 2 Abb., N. S., 296; Bushnell v. Eastman, 2 Abb. N. S., 411).
    If the 271st section of the Code be construed to authorize the compulsory reference of all the issues in all cases in which any one of the issues does, or by possibility may, involve the examination of a long account, then it is submitted that such section is, quoad hoe, unconstitutional and void.
    Section 2 of article 1 of the Constitution of this State provides : 5‘ That the trial by jury, in all cases in which it has been heretofore used, shall remain inviolate forever.”
    At the time of the adoption of such Constitution, the Revised Statutes (2 R. S., 383), as amended by chapter 163 of the Laws of 1845, were in force; and they authorized a compulsory reference in “a ccmse founded wpon contract” when it should appear that “ the trial of the same ” would involve the examination of a long account; and i/n no other ease in which an issue was joined did the statute authorize a compulsory reference. In other words, at the time of the adoption of the Constitution of 1846, actions ex eontraetu, involving the examination of a long aceowit, could alone be compulsorily referred; all other actions, whether ex contractu or ex delicto, could not be so referred; and the trial by jury of the latter was, therefore, by the terms of the above cited section of the Constitution, preserved “ inviolate forever,” unless waived by both parties to the action, in the manner herein provided.
    The cause of action in the complaint alleged, being clearly one ex delicto, the defendants have a right to insist upon their constitutional right of a trial by jury of the same, even though the court might, after they had succeeded on such trial, have the right to order a compulsory reference of the affirmative cause of action pleaded by them in their counter-claim.
    The right of trial by jury is a constitutional right, and cannot be too faithfully preserved; and any legislative tampering with it should at least be strictly construed (Sharp v. The Mayor, 18 How. Pr. R., 213; Bushnell v. Eastman, 2 Abb., N. S., 411).
    Mor are the views above suggested at all in conflict with the case of Batchelor v. The Albany City Ins. Co. (6 Abb., N. S., 240). The action there was one ex contractu—viz.: on a policy of insurance. The policy provided for the furnishing of the usual preliminary proofs before any right of action under the policy could accrue. The plaintiff furnished the required preliminary proofs, which consisted of one hundred and forty-five items of the aggregate value exceeding eleven thousand dollars. The answer not merely contained a denial, but attempted to raise an issue of fraud. The court held:
    That the answer was insufficient to raise an issue of fraud.
    That by the terms of the policy the account (viz., the preliminary proofs rendered), was a pre-essential to the cause of action, and formed part of the basis of the action, and that by it the recovery was to be controlled and limited; and that hence the plaintiff’s cause of action, arising ex contractu, and involving the examination of a long account, could be compulsorily referred.
    That it being a case in which a compulsory reference could be ordered, the Appellate Court could not disturb such order.
    But if all the foregoing views be erroneous, it is apparent from the pleadings (and so sworn to by one of the defendants, under and by advice of his counsel) that the decision of difficult questions of law will be required on the trial of the issues. The exception contained in the 271st section of the Code therefore applies ; and hence the court cannot order a compulsory reference (Goodyear v. Brooks, 4 Rob., 682; 2 Abb., N. S., 296-301, and cases there cited).

      Mr. John L. Hill for respondent.
    The contract made between the parties is the gist or gravamen of this complaint.
    The complaint now, as a declaration before the Code, consists of three distinct parts: (1) The gist or substance; (2) matter of inducement, and (3) matter of aggravation (Gould’s Pleadings, chap. 3, sec. 7).
    The gist is the essential ground, without which there can be no legal cause of complaint. The inducement is ■ introductory, without which this essential ground cannot well or forcibly appear. Matter of aggravation consists of the various circumstances of enormity under which the principal act was committed. Aggravation and inducement sometimes perform the same office.
    The Code has introduced a change which has an important bearing upon these distinctions. While it has not abolished this framework in pleading, it permits, more than formerly, a simple inartificial narration of the facts and circumstances.
    It was not the object, but it has been the result of this change to make the discovery of this old-fashioned framework extremely difficult in many cases.

      This complaint certainly sets forth a contract, and assigns breaches upon it. It presents an agreement in several different parts:
    It alleges a simple reguest to parchase copper for the plaintiff, and an undertaking to perform.
    It next alleges that plaintiff paid the defendants $2,000 (two bonds taken as cash), in consideration of which they agree “ to take up, pay for, deposit and heep the same (the copper), and would adnance ” the money necessary for that purpose.
    It then alleges a series of such payments and agreements in the order with the circumstances, and at the time when each was made.
    It then assigns the breaches of these several agreements: “They did not tahe up, they did not pay for, * * they did not put and heep in store, they did not incur the expenses, etc.,” i. e., they did not advance the money as they had agreed to.
    This contract and the breaches so assigned comprise the gist of this complaint.
    It is obvious that if the defendants shall show that they have hept and performed this contract, no matter how corrupt thei/r purposes may have been, the plaintiff cannot succeed. It is equally clear that if the plaintiff shall show nonperformance, he will be entitled to recover something. In other words, this contract and its regui/rements is the thing “ without which the pla/intiffwould have no legal cause of complaint” This exactly defines the gist or gravamen of the pleading, as we have seen.
    It matters not what the defendants said, what they represented, or what plaintiff may have believed. The sole question is this: Has this contract beenperformed ?

    The defendants were the plaintiff’s agents to purchase the copper. He hnew nothing about the purchase, except what they represented to him. It is not pretended that he was present at the purchase, or that he ever saw the property or the evidence of its ownership.
    The allegations of the falsity of these representations does not affect the main issue. It was proper to state them. They were

      a part of the story, strictly matter of inducement to the contract. If proper to state them it was proper, also, upon two grounds, to state their falsity:
    It was simply matter of aggravation under the old system.
    It was a part of the story which we are required, at least permitted, to spread upon the record, under the new one.
    But it is said the representations were made with intent to deceive! True, but-what of that? There are two answers to this suggestion:
    The same as to the allegation of falsity.
    It was impossible truthfully to tell this story, as we understand it, and conceal or avoid showing the court that wé had been cheated. '■ The character of the representations, and the circumstances under which they were made, were such that an allegation of their falsity necessarily implied an intent to cheat. We might have omitted these words, but the fact would, nevertheless, have appeared.
    We submit that a fraudulent act with a fraudulent intent may be used simply as matter of aggravation without changing the nature of the action.
    It is said that the prayer discloses the character of the action. We submit that the prayer of a complaint has no such office to perform.
    It is apparent from the foregoing analysis that the contract is the gist of this complaint. Strike out the contract, and the backbone of the pleading is gone. Concede its performance, and the plaintiff has no legal cause of complaint
    All the allegations which are said to be distinctive of fraud might be stricken out, and leave a perfectly valid cause of action.
    Try a similar experiment with the allegations about contract, and the complaint is destroyed. Ho cause of action could be imagined based upon the remaining facts.
    We therefore submit that the gravamen of this complaint is contract.

    In this view of the complaint the reference of the cause did not violate any principle of the Constitution.

      The only constitutional restriction applicable to the case is found in section 2, article 1:
    “ The trial by jury, in all cases in which it has been heretofore used, shall remain inviolate forever.”
    The restriction is not to such as were referable by law at the time of the adoption of the Constitution of 1846. It does not say “ in all cases in which it is now used.” It is “ in all cases in which it has leen heretofore used” Hence, if actions of tort even had ever leen referable, although the laws under vbhich the power was exercised might have leen abrogated or expressly repealed, the restriction of this article would not prevent the reenactment of simila/r provisions.

    We submit that even actions of tort were allowed to be referred prior to 1846 (1 Dunlap’s Practice, ed. of 1821, 533, citing 1 Revised Laws, 516).
    Various cases are referred to, showing what the practice was at this time.
    It is worthy of note that it was common practice under the Constitution of 1820, to refer actions of assumpsit, and there was no provision against referring actions ex delicto.

    “ The statute, so far from restricting the power of referees to matters of account alone, does not even confine it to actions arising ex contractu“ It is a satisfactory answer, however, that references as broad as that now contended for by the plaintiff were sanctioned by statute and practised by the courts long before the adoption of the Constitution” (Lee v. Tillotson, 24 Wend., 338).
    From these authorities it will appear that prior to the Constitution of 1846, it was common practice to refer an action of assumpsit or any action arising on contract which involved a long account; and at the same time there was no constitutional provision against referring any cause, in the discretion of the court, in which a long account was prolally involved (see act April 5, 1813, § 2, and 1 Rev. Laws, 516).
    The long account was not, as seems to have been supposed by some, the old action of account where there were mutual charges with items on each side. The act of 1813 gave a reference at discretion where the account was composed of items all on one side.

    We have seen that this action is on contract, and referable within common practice prior to 1820.
    But again, if the action is for fraud, it is still referable at discretion. The act of 1813 would hapermitted it.
    A statute just prior to 1846 (Act of May 1,1845, ch. 163, sec. 2, amending Bevised Statutes) gave references in actions founded on contract. The act of 1813 was not then inoperative. The Code contains no restriction of this kind. It is as broad as the act of 1813. The omission of the limitation to actions on contract is significant, showing that the prolixity of the account was the only test.
    The issue requires the examination of a long account.
    The plaintiff cannot develop his case without an examination of long accounts. The plaintiff swears expressly that various books will have to be examined, and the defendant does not deny it. Ho difficult question of law is involved
    The court can see, from the bill of particulars, that a long account is involved. We dispute every item of this bill.
    The issue formed by the answer and reply is solely one on contract, and involves the examination of an account. Both issues are to be tried at once; hence the trial requires the examination of this account.
    The granting of this motion was matter of discretion.
    The Code intended to revive the practice under the .act of 1813. It was then discretionary by express provision.
    Common experience shows that it must be discretionary.
    Take the case of a trial at circuit, where the judge, discovering the character t of the action, refers it on his own motion. Is it appealable % We say not.
    It is upon these substantial principles that the recent case of Batchelor v. The Albany City Insurance Company (6 Abb., 240) has been decided by this court.
    Although the gist of this complaint should be held to be fraud, the order should be affirmed.

      We have seen that the power of the court was not limited to actions arising ex contractu.

    We have also seen that actions sounding in fraud were referable at discretion, although practice had confined them to actions on contract.
    This case, so far as the propriety of reviewing this order is concerned, is precisely within the rule of this court, holding that it should be affirmed.
    There was uncontradicted evidence that the trial would require the examination of a long account. The court below took that view of the facts. The court can now discover not only sufficient but abundant evidence to show that this view was correct.
    In such case the ruling of the Special Term must be affirmed (Batchelor v. Albany City Ins. Co., 6 Abb., 240).

       Reversed by Court of Appeals, October, 1870.

   By the Court :

Freedman, J.

The complaint sets forth two contracts between the parties for the purchase of 400,000 pounds of ingot copper and several supplemental agreements, whereby the defendants undertook to advance the purchase-money, to store the copper and carry the same, as it is usually called, at the option and for account of plaintiff and subject to his order, charging him therefor the usual and customary expenses for storage, insurance, and interest on the money advanced; that from time to time defendants reported to plaintiff progress in the performance of the various agreements on their part, and that upon the faith of each successive report plaintiff paid to defendants certain moneys, amounting in the aggregate to $25,000, towards the performance of said agreements on his part; that all the representations made by the defendants from time to time as to performance on their part were untrue and made with intent to deceive and defraud plaintiff; that defendants did not perform the contracts or any of the agreements on their part; that before the commencement of the action, upon discovering the false and fraudulent acts and representations of the defendants, the plaintiff duly demanded of them the repayment of the several sums of money paid by him on account, but that they refused. Plaintiff prays judgment for the return of the $25,000 paid by him.

The defendants, by their answer, deny the fraud and misrepresentations charged, and set up full performance on their part (an agreement by plaintiff to maintain in their hands a margin of four cents per pound), non-performance on the part of the plaintiff, a sale of the copper for plaintiff’s account upon due notice to him, and, as a counter-claim, a balance of $1,031.07 due from plaintiff to defendants on account of moneys advanced, expenses incurred, commissions, insurance, and interest, for which they demand an affirmative judgment against the plaintiff.

The plaintiff, by his reply, puts in issue all the material facts relied upon as constituting the said counter-claim.

Upon the hearing of the motion for a reference, founded upon affidavits, the pleadings, and the defendants’ bill of particulars, the learned judge at Special Term found, as matter of fact, that the trial of the issues necessarily raised by the pleadings involved the examination of a long account within the meaning of section 271 of the Code, and thereupon granted plaintiff’s motion for a reference of all the issues to hear and determine the same. According to the decision of the case of Batchelor v. The Albany City Insurance Company (6 Abb., N. S., 241; 37 How., 399), this determination of the Special Term will be held final and conclusive, especially as it has been the law of this court almost since the adoption of the Code that a reference may be ordered in an action sounding in tort, where the trial of the issues of fact will require the examination of a long account (Sheldon v. Wood, 3 Sandf., 739). The case last cited was decided with the concurrence of the entire court.

The appellants have argued, however, that even if section 271 of the Code can be construed to authorize the compulsory reference of all the issues in an action sounding in tort, in which any one of the issues does involve the examination of a long account, such construction would render the said section unconstitutional and void, as contravening article 1, section 2 of the Constitution of 1846, which provides : “ The trial by jury, in all cases in which, it has been heretofore used, shall remain inviolate forever. But a jury trial may be waived by the parties in all civil cases, in the manner to be prescribed by law.” This point was not raised in the cases above named. It is now advanced, as I believe, for the first time in this court, but in my judgment does not necessarily enter into the decision of this case. The complaint is not a complaint for a mere naked tort in an action in which damages for the wrong are sought to be recovered, but it contains a statement of facts which show that plaintiff’s payments were not voluntary ones with knowledge of the facts, and that, for this reason, he is entitled to recover back the amount paid. This state of facts, according to the decision of the Court of Appeals in Byxbie v.Wood (24 N. Y., 610), does not necessarily require an action to be brought for the tort, even if it allows one to be so brought. Such facts always raise in law the implied promise which was the contract cause of action in indebitatus assumpsit for money had and received. Under the Code this implied, promise is treated as a fiction, and the facts (out of which the prior law raised the promise) are to be stated without any designation of a form of action, and the law gives such judgment as, being asked for, is appropriate to the facts. If the plaintiff in the case at bar shall show, as he may do under his complaint, that the defendants never entered upon a performance, and that in consequence he demanded back his money, which was refused, the allegations of fraud, pleaded as matter of aggravation, do not affect the main issue.

It will also be seen that the issue, the trial of which requires the examination of a long account, has been raised and''forced into the case by the appellants.

The case, therefore, is not one which calls upon this court to adjudge an act of the legislature void in which the bench and bar have acquiesced for over twenty years.

The order should be affirmed, with costs.

Spencer, J.

(dissenting). My associates at this General Term .have'.decided to sustain this order of reference appealed from.

I agree with them as to the convenience and policy of compelling parties to take a reference in cases where the examination of a long account is necessary. I believe it to be greatly for the interest of the courts and of suitors that a reference should be ordered in all such cases. I differ with my associates in regard to the power of the court to make a compulsory reference in cases sounding in tort or (according to old divisions) in an action “ ex delicto,” and upon due consideration of this case I conclude that it is an action of that class.

In a like case before me at Special Term, I held that I had no power to order a reference without consent of parties: that a party objecting had the constitutional right to a trial by jury, and that it must be preserved to him; and upon further consideration of the same constitutional point in this case, I hold that a compulsory order of reference should not have been made, and the order of the Special Term should be reversed.


author: Spencer, J.

text:
    FREDERICK SPEYER and Another, Plaintiffs and Respondents, v. JOSEPH STERN, Defendant and Appellant.

      [Decided June 30, 1870.]
    The contents of every writing are tobe proved T>y the paper itself and by that alone9 if the paper he in existence.
    Therefore, in cross-examining a witness, a party will not be allowed to represent in a question the supposed contents of a written deposition, or examination, and then ask the witness if he had testified thus.
    A party may exhibit the writing to the witness and by pertinent questions call his attention specifically to the same or any part thereof, and inquire as to Ms signature or the execution of the same by him, etc.
    If the execution is admitted, the party may at a proper time read the same in eví- | dence, or if its execution is denied, it may be proved and read in evidence at the proper time for the purpose of contradicting the testimony of the witness given at the trial. Theproper time9 as a general rule, is when the party offering the same in evidence is conducting the case, and not upon the cross-examination.
    At no time, however, can a party compel a witness to answer a question, nor upon • objection be permitted to have one answered, wMch contains or sets forth substantially any portion of the subject-matter of the writing. The writing itself is Mgher evidence of its contents than the statements of the witness in relation thereto.
    After a party has rested Ms case, whether for the prosecution or the defense, he cannot de jure ” introduce any testimony afterwards except what is clearly in answer or rebuttal of evidence introduced by the opposite party, before the party offering the testimony had resumed the case.
    A defendant, to avail himself of an exception to the refusal of the court to allow Mm to introduce certain testimony offered, must have offered the same before he rested the ! defense, or it must clearly appear that the testimony offered was in answer or rebuttal j to the evidence of the plaintiff introduced after he (plaintiff) had resumed the case. \

    Before Barbour, C.J., Freedman and Spencer, JJ.
    The complaint in this action claims to recover $644.48 for goods, wares, and merchandise sold and delivered by plaintiffs to defendant in October, 1867. The answer is a simple denial of the allegations of the complaint, and issue was joined in the action September 24,1868.
    On motion of defendant, 'Abraham Speyer, one of the plaintiffs, was examined before the trial as a witness, and his deposition filed pursuant to sections 390, 391, 392, of the Code.
    The cause came on for trial before Mr. Justice Jones and a j™7-
    It appears from the case that the goods in question were selected or ordered by one Israel Stern, a brother of the defendant, and who was trading in Vermont; that the trade between the parties commenced in the fall of I860, and continued to the fall of 1867, the bills for the goods in question being the latest and dated in October, 1867. Plaintiffs claim that the defendant bought these goods and promised to pay for them, and they were delivered to him; that the trade was opened and continued by him; that they never knew Israel Stern in the premises except as the agent of the defendant.
    The defendant claims that he never bought any goods of plaintiffs through Israel Stern or otherwise; that he never opened or continued any trade with plaintiffs; that the goods in question were sold and delivered to Israel Stern by the plaintiffs without authority or interference on his part, etc.
    On the trial the plaintiffs called as their first witness, to maintain the issues on their part, Abraham Speyer, one of the plaintiffs, who was sworn and testified in chief. The important portion of the testimony of this witness is contained in the following questions and answers:

      Q. Did you ever have a conversation with Joseph Stern, this defendant, in respect to Israel Stern selecting goods, and Joseph Stern buying them, and they being charged to Joseph Stern ?

      A. Yes, sir.

      Q. When was that.?

      A. In the fall of 1865, Mr. Joseph Stern brought in his brother and introduced him to me, saying to me that he might select all the goods he wants, and he is going to pay for them; from that day we sold goods right on.

      Q. From 1865 down to 1867 did you, from time to time, sell and deliver goods to Joseph Stern ?

      A. Right along; I had no other name but Joseph Stem.

      Q. Did Israel Stern, from time to time, down to and during this period, come in and buy goods in the name of Joseph Stem ?

      A. Yes, sir.

      Q. Were they shipped in the name of Joseph Stern ?

      A. They were shipped in the name of Joseph Stem.

      Q. And invariably charged to him ?

      A. Yes, sir.°

      Q. You received your pay in the name of Joseph Stern ?

      A. Yes, sir.
    At the close of the examination in chief, which terminated as above, the defendant’s counsel cross-examined the witness at some length, which cross-examination terminated as follows :

      Q. You don’t know whether he said Israel Stern wanted to buy goods of you ?

      A. I don’t remember.

      Q. That was before you had any dealings with him ?

      A. I don’t remember.

      Q. You have been examined in this case ?

      A. Yes, sir.
    [Defendant’s counsel hereupon showed the witness his examination in this action, taken before trial, on the 20th day of October and 12th day of November, 1868, and duly sworn to before Chief-Justice Barbour on the 12th day of November,' 1868; and defendant’s counsel asked the witness the following questions:]

      Q. In speaking of this interview in 1865, when you say his brother told you to sell goods; on your own examination of this case, did you testify as follows:
    “ Q. Did the defendant ever request or authorize you to sell and- deliver any goods to his brother, on the defendant’s account?”

      “A. He did.”
    “ Q. State the particulars.”
    “ A. The defendant came with his brother to my store, and requested me to sell his brother goods, and he would see me paid for it.” .

      Q. Did you testify to that in this case %

    [This question was objected to by plaintiffs’ counsel. The court sustained the objection, and refused to allow the question to be answered; to which decision counsel for defendant then and there duly excepted.
    The counsel for defendant thereupon stated that he pressed the question for the purpose of contradicting the testimony of this witness given on the trial. The court refused to allow the question to be answered, upon the ground that where a witness had been examined before trial, the testimony so taken could not be used on the trial to contradict his oral evidence. To this decision counsel for defendant then and there duly excepted.]

      Q. Did you state on that examination, in substance, that that was all the defendant said on that occasion ?
    [This question was objected to by plaintiffs’ counsel. The objection was sustained by the court, to which defendant’s counsel then and there duly excepted.]

      Q. How do you remember the precise amounts of the bill, on this day, in 1867 ?

      A. I can remember by my books; I can show.

      Q. Did you make the entries at the time %

      A. I did not.

      Q, Who did?

      A. Hy book-keeper.

      Q. You have no other recollection than that those things are entered on your books ?

      A. I suppose so.

      Q. That is all you know \

      A. That is all I know.

      Q. And you did not make the entries %

      A. I did not.

      Be-dweot examination by plaintiffs’ counsel:

      Q. Do you recollect, independent of the books, the fact of selling goods on this date and to that amount ?

      A. I do.

      Q. What is the amount of those goods %

      [Witness referred to a memorandum.]
    After the plaintiffs rested, Joseph Stern, the defendant, was called as a witness in his own behalf, and his testimony was in direct conflict with that of said plaintiff, Abraham Speyer.
    The defendant’s counsel, after the examination of Joseph Stern and one other witness, rested on the part of the defense, and plaintiffs resumed, and after recalling and re-examining Abraham Speyer and Lewis Adler, also rested, and the defendant’s counsel resuming the defense, the following proceedings were had.
    The plaintiffs having rested their case, Joseph Stern (the defendant), being recalled on his own behalf, testified as follows:

      Q. Did you at any time authorize your brother to buy any goods whatever of the plaintiffs, the Messrs. Speyer %

    [This question was objected to by plaintiffs’ counsel. The objection was sustained by the court; to which defendant then and there duly excepted.]
    [Counsel for defendant hereupon offered in evidence the entire examination of the plaintiff, Abraham Speyer, taken before trial, on behalf of defendant. This was objected to by plaintiffs. The objection was sustained, on the ground that the witness had been examined on the trial, and therefore his examination taken before trial was inadmissible; to which decision counsel for defendant then and there duly excepted.]
    Defendant hereupon rested.
    This case contains all the evidence taken on the trial.
    The case was summed up by the respective counsel for the plaintiffs and the defendant.
    The counsel for the defendant asked the court to charge that:
    “Upon the testimony of Abraham Speyer no more than a guarantee is proved, and therefore the plaintiffs cannot recover.”
    [The court declined to charge this proposition; to which counsel for defendant then and there duly excepted.]
    Counsel for defendant thereupon requested the court to charge the jury that:

      “ If in 1865 the defendant and Abraham Speyer had the conversation testified to by Abraham Speyer, that would only be an authorization extending to a single purchase, and therefore the plaintiffs cannot recover.”
    [The court refused to charge this proposition; to which counsel for defendant then and there duly excepted.]
    The court thereupon charged the jury, to which charge there was no exception except as above stated. Subsequently the jury rendered a verdict for $698.35, and the defendant moved before said justice to set aside the verdict and grant a new trial upon the exceptions and for insufficient evidence, and that the verdict was against the evidence, which motion was denied.
    ■ The appeal is from the judgment entered upon said verdict, and the order denying the motion of defendant for a new trial.

      Mr. Henry L. Clinton for appellant.
    The verdict is so clearly and palpably against the weight of evidence, that it should on that account be set aside.
    Plaintiff Speyer and defendant in their evidence flatly contradict each other as to the conversation on which plaintiffs sought to make defendant liable for goods sold his brother.
    The court erred in refusing to charge the jury the proposition that, “ If in 1865 the defendant and Abraham Speyer had the conversation testified to by Abraham Speyer, that would only be an authorization extending to a single purchase, and therefore the plaintiff cannot recover.”
    The court erred in refusing to allow defendant’s counsel to contradict the testimony of plaintiff, Abraham Speyer, respecting the conversation between him and the defendant (on which it was sought to make defendant liable in this action), by reading from the examination of the plaintiff, Abraham Speyer, taken by defendant before trial.
    Clearly the court erred in refusing to allow defendant to put in evidence the entire examination of plaintiff, Abraham Speyer, taken before trial on behalf of defendant. The court refused to allow this examination to be given in evidence on the ground that the witness had been examined on the trial.
    There may be good reasons for holding that the plaintiff could not read in evidence in his own behalf his own examination taken before trial, and at the same time testify orally for himself; but there can be no good reason for holding that the plaintiff by testifying orally can deprive the defendant of his right to introduce in evidence against him (plaintiff) his examination taken before trial.

      Mr. Du Bois Smith for respondent.
    The examination of a party taken at the instance of his adversary is not admissible to contradict his testimony given on the trial, and, when he is present thereon, cannot be read.
    This examination is authorized by section 391 of the Code, which provides that a party to an action may be examined at the instance of the adverse .party, subject to the same rules of examination as any other witness, to testify either at the trial, or conditionally, or upon commission.
    The examination offered to contradict the witness did not substantially vary from his evidence given on the trial.
   By the Court:

Spencer, J.

The verdict of the jury upon this conflict of testimony should not be disturbed or set aside, as against the weight of evidence, nor do I think the court erred in refusing to charge the jury as requested by defendant’s counsel.

There are two other rulings or points in this case claimed as error by the defendant.

First.—That the court erred in refusing to allow this question to be answered (after defendant’s counsel had read a portion of the examination or deposition of the witness taken before the trial on the part of the defendant): Did you testify to that in this case ?

Although I cannot agree with the learned judge who presided at the trial in the grounds of his refusal to allow this question to be answered (after objection), I hold that his ruling was correct, for the following reasons:

That the contents of every writing are (according to the ordinary and well established rules of evidence) to be proved by the yya/per itself a/nd by that alone, if the paper be in existence.

That in cross-examining a witness a party should not be allowed to represent in a question the contents of a written deposition or examination, and to ask the witness if he testified thus.

A party may exhibit the writing to the witness, and by pertinent questions call his attention specifically to the same or any part thereof, and inquire as to his signature or his execution of the same, etc. (So far as defendant’s counsel pursued this course he was not objected to or interrupted.)

If the witness admits its execution, the party, at a proper time, may read the same in evidence, or if the witness denies its execution, etc., the party may, at a proper time, prove and read the same in evidence for the purpose of contradicting the testimony of the witness given on the trial.

The proper time for reading the paper in evidence or proving the same is, as a general rule, at a time when the party offering the same is conducting the case, and not upon cross-examination, although circumstances may often justify the direction of the court for its introduction at other times.

But after the preliminary questions are asked, as above stated (and whether the witness admits the execution or not), a party cannot compel a witness to answer a question, nor, upon objection, will he be permitted to have one answered which contains or sets forth substantially any portion of the subject-matter of the writing. The examination itself was higher and better evidence of the facts or of the statements made by the witness.

In support of the foregoing positions, see Phillips on Ev. (6 Am. ed.) vol. 2, page 437; Starkie on Ev. (old ed.) vol. 1, 102; 2 Broderip & Bingham, 113, 115, 117; Bellinger v. The People (8 Wend., 596); Newcomb v. Griswold (24 N. Y. Rep., 298.)

Second.—Did the court err in refusing to allow the entire examination of Abraham Speyer to be read in evidence when offered ?

It does not appear from the case, as to the purpose or object of defendant’s counsel in offering this examination as evidence, nor does it appear that it was proved or identified, and as no copy appears in the case we are unable to judge whether the paper was, in itself, as certified by the judge who took the same, or by the clerk who filed it in this court, entitled to be admitted and read in evidence, so far as authenticity or identity was concerned, and we cannot presume anything for or against it, or decide as to its materiality or importance to the case of defendant, if admitted. But there is another (and as I hold), a fatal objection to its reception for any reason at that stage of the trial.

It appears from the case that the plaintiff had rested and the defendant had likewise rested, and the plaintiff had resumed the case and recalled and re-examined some witnesses in rebuttal to the defendant’s case, and had finally rested. At this stage of the trial defendant’s counsel recalled defendant as a witness and asked him a question, which most clearly indicated a reopening or resumption of the defense on his part, instead of answering his the plaintiff’s rebuttal. On obj eetion, the court refused to allow the defendant to answer that question, and, as I hold, ruled very properly in the case. Then the defendant’s counsel “ offered in evidence the entire examination of the plaintiff, Abraham Speyer, taken before trial, on behalf of defendant.” On objection, the court refused to receive the same, and defendant excepted.

The defendant, to avail himself of an exception to the refusal of the court to allow this examination to be read in evidence, should have offered the same before he rested the defense.

The judgment should be affirmed, with costs of the appeal.


author: Monell, J.

text:
    CHARLES N. SHEPARD, Plaintiff and Appellant, v. GUSTAV HEINEKEN et al., Defendants and Respondents.

      [Decided December 3, 1870.]
    Where a bill of lading requires the carriers to deliver the property to a consignee therein named, or to his assigns, no action can be maintained by the shipper without a surrender of the bill of lading, or the consent of the consignee.
    Such a bill of lading is like any negotiable instrument, and good in the hands of any person to whom it may be delivered for value.
    Before Monell, McCunn, and Freedman, JJ.
    This case was tried before Judge Jones and a jury.
    The action was to recover the value of twenty firkins of butter shipped by the plaintiff with the defendants, to be transported to the city of New Orleans, by the New York and Virginia Steamship Company.
    On receipt of the butter the following bill of lading was given.
    The following is a copy of Exhibit No. 1:
    Shipped by C. N. Shepard, in good order and well conditioned, on board the United States mail steamship called the “ Yazoo,” whereof George W. Couch is master, now lying in the port of New York and bound for New Orleans (with liberty to touch at Key West and Havana, to tow and assist vessels in distress, and to sail with or without pilots), to say: D Ten F’lrins Butter, 1213,
    being marked and numbered as in the margin, and are to be delivered in the like good order and condition at the aforesaid port of New Orleans, the dangers of the seas, the restraints of governments, collisions, or fire at sea or in port, accidents from machinery, boilers, or steam, or any other accident or danger of the seas, rivers, and steam navigation of whatever nature or kind soever excepted, unto S. D. Moody & Co., or to his or their assigns, he or they paying freight for the said shipment, in the United States legal currency, at the rate of one and one-half cents per lb., with 5 per cent, primage and average accustomed. It is expressly understood that the articles named in this bill of lading shall be at the risk of the owner, shipper, or consignee thereof, as soon as delivered from the tackles of the steamer at her port of destination (the collector of the port being hereby authorized to grant a general order for discharge immediately after the entry of the ship), and they shall be received by the consignee thereof, package by package, as so delivered, and if not taken away the same day by him, they may (at the option of the steamer’s agents) be sent to store or permitted to lie where landed, at the expense and risk of the aforesaid owner, shipper, or consignee. Weights, contents, and value unknown, and not accountable for leakage, rust, or breakage, if properly stowed. Neither the ship nor owners will be responsible for gold, silver, precious stones, or metals, jewelry, nor treasure of any kind, unless bills of lading are signed therefor, and the value therein expressed.
    No bill of lading signed for less than $5 freight, to be paid immediately on the landing of the goods, without credit or discount. In the event of New Orleans being in the possession of the enemy, or of the vessel being prohibited by the orders of the commanders of the United States forces from entering the port, the master is at liberty to proceed to a near open port, or return to New York, and end the voyage.
    In witness whereof the master, purser, or agent of the said vessel hath affirmed to three bills of lading, all of this tenor and date, one of which being accomplished, the others to stand void.
    Dated in New York this 14th day of February, 1865.
    T. D. Cook, Jr.
    Freight . . . $18 19
    Primage ... 91
    Stamp, 2c.
    $19 10

      Exhibit No. 2 is like Exhibit No. 1, except in the .following particulars:
    W. W. Ten F’kins Butter. 1211 To be delivered to
    Messrs. Weed, Witters & Co.
    Freight . . . $18 16 Primage ... 90
    $19 06
    On the trial it appeared that the voyage was. abandoned before leaving this port, on account of the unseaworthiness pf the ship pf the company. The defendants gave notice to the plaintiff of such abandonment, and requested him to send for the butter. Subsequently the plaintiff made a demand for the butter, without tendering or offering to return the bills of lading, or to indemnify the defendants against such bills. The defendants declined to deliver the butter, except upon the return of their bills of lading or of an indemnity against them.
    There was conflicting evidence as to whether the defendants were the agents only or the owners of the New Y ork and Virginia Steamship Company.
    A verdict was directed for the defendants, the court refusing to submit to the jury any question of fact.
    The plaintiff excepted and appealed from the judgment.

      Mr. S. W. Judson for appellant.

      The defendants having held themselves out to the plaintiff, and dealt with the plaintiff in their own names, as principals, from the beginning of the transaction until about twenty days after the commencement of this suit, without ever disclosing or hinting at any agency, and without the knowledge of the plaintiff that they were, or pretended to be, agents, are liable im, their individual capacity as principals to the plaintiff.

    The defendants undertook the duty of carrying twenty firkins of butter from New York to New Orleans, and no other person or party .did expressly undertake that duty; and it is immaterial whether or not any other person or party, when discovered, would be hable or not.
    Even if the defendants were agents, and were known to be such, yet if they undertook the duty, or assumed any obligation, or were a contracting party, or had any interest in, or were to derive any benefit from, the transaction, they would be liable (Considerant v. Brisbane, 22 N. Y. R., 389; Nelson v. Nixon, 13 Abb. Pr. R., 104).
    The bills of lading not being signed by the master of the ship, nor by any one on board, nor at the ship, but being signed in the office of the defendants, in their presence, under their supervision, and delivered by them to the plaintiff in exchange for the receipt for the butter, were adopted by the defendants as their act; and in judgment of law the defendants made and delivered the said bills, as their bills, to the plaintiff, to all intents and purposes.
    A bill of lading as between the original parties thereto, is not to be strictly construed, but is open for explanation and construction.
    The duty of the defendants in this case did not rest entirely on contract, or the bills of- lading, but on a higher duty of common carriers (29 N. Y. R., 115, Merritt v. Earle).
    A carrier is obliged to know the possibilities of transportation before making a contract, or provide another vessel or conveyance (2 Hilton, 19, Place v. Union Express Co.).

      Mr. Morris S. Miller for respondents.
    The bills of lading showed the goods shipped to the “ consignees or their assigns,” which “ conveyed notice to the master that he could not safely deliver the goods to any person except the holder thereof” (Abbott on Shipping, 7th ed., p. 435).
    And in cases where the shipper demands the goods, "it is the master’s duty to retain, and he cannot safely deliver unless they are claimed by the holder of the bills indorsed by the shipper to whose order he had engaged to deliver ” (Abbott on Shipping, p. 435).
    Nor is he liable in trover on a demand of them, unless the bills of lading are surrendered or fully indemnified against, nor are the shipowners liable on such a state of facts (Keyser v. Harbeck, 3 Duer, p. 373, 9 C. B., 297).
    Because a bill of lading is a negotiable instrument, and in the hands of a Iona, fide holder for value transfers the title (Downs v. Greene, 24 N. Y., 638, 28 Barb., 157).
   By the Court:

Monell, J.

Without expressing an opinion upon the other questions raised in this case, I think the judgment can be sustained on the ground that no conversion of the property by the defendants, or other liability, had been shown.

The bills of lading required the property to be delivered to consignees therein named, or to their assigns, and without a surrender of the bills or the consent of the consignees the defendants were not bound to deliver; and they had a right to require such surrender or consent, or, what they did require, an indemnity, against the bills. The cases in support of this position are Downs v. Greene (24 N. Y. R., 638); Keyser v. Harbeck (3 Duer, 373); Abbott on Shipping (7th ed., 435).

There was no dispute at the trial that the bills of lading were not surrendered; nor was it disputed that the plaintiff refused to furnish any indemnity against them. There was therefore no question for the jury. The plaintiff had failed to lay the foundation for a recovery upon either cause of action, and a verdict was properly directed for the defendants.

The judgment should be affirmed.