author: May 29. By the Court. Sandford, J.

text:
    Samuel Wescott v. Alfred E. Tilton.
    (Before Sandford, Duer, and Bosworth, J.J.)
    April 14,
    May 29, 1852.
    When ale is sold in barrels, with an understanding that the barrels shall be returned, and,if not returned,be charged to the purchaser at a stipulated price, the contract in relation to the barrels is a bailment, not a sale.
    The purchaser under such a contract, having sold the ale to the defendant with a similar understanding as to the barrels—Held, that the owner, the first vendor, upon proof of demand and refusal, was entitled to recover their value.
    This was au action to recover the value of seventy-four iron-bound ale-barrels, as unjustly obtained by the defendant, and was tried before the Chief Justice and a Jury in October term, 1851.
    The facts proved on the trial were that the plaintiff, who is a brewer in Hew York, in March, 1850, sold a large quantity of ale in iron-bound barrels to Sherburne & Son, of Boston, who shortly thereafter sold one hundred barrels of the ale so purchased to the defendants under a similar understanding as to the return of the barrels. In the same month of March, the plaintiff, through an agent, demanded from Sherburne & Son, who had then become insolvent, a return of the empty barrels, and received from them the following order on the defendant : —■
    “ Hoston, March 18, 1850.
    “ 74 Ale Barrels. Mr. Alfred E. Tilton.—Please deliver Samuel Wescott, or order, Seventy-four empty Ale Barrels, said barrels being the property of said Wescott.
    (Signed) “ Sherburne & Son.”

    The defendant, when some time thereafter the order was presented to him by the plaintiff’s agent, refused to deliver the barrels, alleging that Sherburne & Son were indebted to him, and that he meant to retain the barrels, and apply their value or price in part satisfaction of his claim.
    Upon this evidence, the counsel for the defendants, upon the trial, moved for nonsuit, upon the ground that the sale to Sherburne & Son was an entire contract, and in its legal construction embraced the barrels as well as the ale, but with a privilege to th,e purchasers of returning the barrels within a reasonable time. That the action, therefore, in its present form, could not have been maintained even against Sherburne & Son. A fortiori, could it not be maintained against the defendant, between whom and the plaintiff there was no privity whatever. The Chief Justice denied the motion, and the counsel excepted to the decision.
    It was then proved, on the part of the defendant, by the assignee in bankruptcy of Sherburne & Son, who was appointed in May or June, 1850, that-late in the December following he made a settlement for the barrels with the defendant, by the latter allowing the price, as a part payment on a protested note which he then held against Sherburne & Son.
    . The value of the barrels, at $2 per barrel, with interest to the 15th October, 1851, was estimated to be SlGl^g, and the Chief Justice directed the jury to find a verdict for the plaintiff for that amount, subject to the opinion of the court at a General Term, upon a case to be made by the plaintiff, with liberty to either party to turn the same into a bill of exceptions.
    April 14.—The cause was now argued upon the case so made, by G. Bowman, for the plaintiff; and J. R. Jessup, for the defendant.
   May 29. By the Court. Sandford, J.

There was no sale of the barrels by the plaintiff to Sherburne & Son.

The evidence shows that when the plaintiff sold ale to that firm, he loaned to them the barrels in which the ale was contained, to be returned to him as soon as the ale was drawn out; with an agreement that if, for apy cause, it became impossible for Sherburne & Son to return any of the barrels, they should pay for such barrels at a rate stipulated.

This agreement was for the benefit pf those purchasers, so that instead of being subjected to a suit for a tort in the event of their default to return all the beer casks at the proper time, they should be liable only for their value as upon a contract of sale at a fixed price.

When the beer casks in question were delivered to Sherburne & Son, they were the property of the plaintiffs. If they had been lost on the voyage to Boston, or burnt after their arrival there, the loss would have been his, and they continued to be his property up to the period that Sherburne & Son delivered them to the' defendant.

The cases of Smith v. Clark, 21 Wend. 83, and Norton v. Woodruff, 2 Comst. 153, to which we were referred, are not analogous—those were instances of the exchange of wheat for flour— the flour to be received was not to be the product of the wheat delivered. There was no stipulation or expectation that the flour to be returned was to be manufactured from the wheat so delivered.

The courts therefore held that there was no bailment of the wheat; that it was a sale payable in flour, and that the title to the wheat passed on its delivery. Here, by the contract between the plaintiff and Sherburne & Son, the casks in which the ale was delivered, branded with the plaintiff’s name—the specific thing were to be returned, and not a substitute. It is, therefore, moré like the case of Mallory v. Willis, 4 Comst. 76, where flour to be made out of the wheat delivered was to be furnished to the owner of the wheat, and the Court of Appeals decided that it was a bailment of the wheat and not a sale. And see 2nd Kent’s Com., 755, note 1, 7th ed.; Sargent v. Gile, 8 New Hampshire R. 325, and King v. Humphrey, 10 Penn. R. (by Barr) 217.

We were also referred to a case in the Supreme Court in this district (Westcott v. Thompson) involving in part the question presented here. That court, reversing the finding of a referee, appears to have held on the evidence that there was a sale of the casks and not a bailment. The facts presented were somewhat different from those in the case before us. The plaintiff seems to have relied mainly upon proof of a usage in the trade, and it was shown that he received in return the barrels of other brewers in lieu of his own. These circumstances probably influenced the judgment of the Supreme Court in giving their decision upon the contract, and they make the case to differ so far from the one before us, that it does not possess the weight of an authority on the point. After fully regarding the views of that learned court, so far as the two cases are analogous, and carefully considering the point as it is presented to us, we were entirely convinced, as we have already stated, that the contract was one of bailment, and that there was no sale of the casks to Sherburne & Son.

The right set up by the defendant remains to be considered. He claims to be a purchaser of the casks in good faith, and to have the superior equity to retain them.

But first he takes the ground that Sherburne & Son had the election, if the delivery to them were a bailment, to keep the casks, if they thought proper, and to pay for them at the stipulated price.

"We do not so understand the contract. If the casks were in the store of Sherburne & Son empty, we have no doubt the plaintiff could compel their delivery to him, and maintain an action of replevin, if such delivery were refused. The privilege to account for the casks at the price agreed, was applicable only to the case of an inability to return the casks, not to a voluntary retention of them.

They might be unable from various circumstances, and an instance of a sale of the ale in casks to a remote town or a distant port, might be one of those circumstances. Without speculating, however, upon the precise nature or degree of the inability which would have entitled Sherburne & Son to pay for the casks instead of returning them, it is clear that such inability was the sole ground and extent of the privilege.

¡Next, the defendant’s right as a purchaser. While we hold the contract to have been a bailment only, at the same time we are prepared to say, that as against the plaintiff the agreement for receiving the value of the casks which Sherburne & Son were unable to return, would in favor of a iond fide purchaser of the casks from them, without notice of the bailment, be evidence of an authority to them to sell the casks. It would be so on the ground, that the plaintiff in favor of such a purchaser ought to be estopped by that agreement, and the apparent ownership of Sherburne & Son, from denying that they had such an authority.

But the defendant does not stand in the position of a purchaser in good faith, who has paid value upon the strength of Sherburne & Son’s right to sell the casks. He bought the ale of them, with the understanding that the barrels were to be returned, or to be paid for. They were not paid for. The ale was sold to him when it was delivered. The barrels were not. If he had the pure option of electing to keep the casks and pay for them, he did not exercise the right. There is no evidence that he ever thought of keeping them until after Sherburne & Son failed. After that event, and some months after the casks had been demanded of him in behalf of the plaintiff, he attempted to pay for the casks to the assignee in bankruptcy of Sherburne & Son by offsetting their value against a protested note of that firm held by him. It does not appear that he had this note when the firm failed or when the casks were first demanded. And after that, it was too late for him to influence the plaintiff’s right as the real owner, to have the casks returned to him.

Besides all this, the evidence would warrant a jury in finding that the defendant received the casks from Sherburne & Son on the same terms and conditions that they received them from the plaintiff, and that he never had a right to elect to become the purchaser of the casks.

On both grounds we are clear that he had no just claim to withhold the casks from the plaintiff, and there must he a judgment for the latter for the amount of the verdict. Judgment for plaintiff.


source: Caselaw Access Project

author: By the Court. Duer J.

license: Public Domain

text:
    Bell v. Holford et al.

    The firm of S. D. & Co. being insolvent, executed an assignment of their partnership effects to the defendants in trust for the payment of their debts. Subsequent to the execution of the assignment, they executed to S., one of the firm, an agreement in the words and figures following:
    “ Whereas several suits are now pending in one or more courts of law and equity, in the State of Hew York, and in other States in the United States of America, for the purpose of recovering certain claims or demands belonging
    , to, or in which the Trustees of the estate of the late firm of Stainer, Dutilh & Co. are now interested, and in which several suits so depending, Edward Stainer, one of the members of the said firm, is made a party plaintiff or defendant, and such suits being for the benefit of the Trustees of said estate:
    “How for_and in consideration of the premises and other good and sufficient considerations, we, Holford, Brancker & Co., and Peter C. Pfeffel, the Trustees of the said estate, do hereby agree to pay and discharge all costs, damages, and charges out of the proceeds of said estate, which may arise in consequence of any or either of said suits; and agree and promise to save harmless the said Edward Stainer from any liability or claim by reason thereof.”
    In an action 'by the assignee of S. to enforce payment of damage and costs incurred by him in actions concerning property held by him individually, ‘

      Held, 1. That the agreement was single and entire, and the indemnity which it promised, was an exclusive charge upon the property assigned.
    2. That the agreement embraced only those suits in which the Trustees were interested ; that it did not therefore embrace such as concerned property, which did not pass to them by the trust deed; that if it had been intended to embrace
    . such suits, it would have been invalid, and would not be enforced by a Court of Equity.
    3. That by the assignment of the defendants for the benefit of their creditors the rights of the partnership creditors were fixed, and could not be varied by any subsequent act of the partner or trustees. That, by the terms of the assignment, the property was to be devoted to the payment of partnership debts. Hence no subsequent agreement to apply a portion of it for any other purpose, could be upheld.
    Parol evidence is admissible in many cases to determine and define the subject matter of a contract, when such evidence is explanatory; never when contradictory.
    It was competent therefore in an action on the agreement in question, to prove what suits were pending, and how the trustees were interested, but not to prove that the agreement meant to embrace suits in which they were not interested.
    It is not competent for an appellate court to alter a judgment given in the court below, when the party by his omission to appeal has precluded himself from denying its justice or propriety. An appellate court may in some cases modify or reverse in part a judgment or decree, but only when such modification or reversal is necessary to render the decree as finally pronounced entirely consistent.
    (Sandford, Duer, and Bosworth.)
    April 16, 1852;
    June 12, 1852.
    This was an action, brought by the plaintiff, under an assignment from Edward Stainer, of an alleged cause of action, upon the following instrument executed by the defendants:
    “Whereas several suits are now pending in one or more Courts of Law and Equity in the State of Eew York and in other States in the United States of America, for the purpose of recovering certain claims or demands, or resisting certain claims or demands belonging to, or in which the Trustees of the estate of the late firm of Stainer, Dutilh and Company are now interested, and in which said several suits so depending, Edward Stainer, one of the members of the said firm, is made a party plaintiff or defendant, and such suits being for the benefit of the Trustees of said estate. Eow for and in consideration of the premises and other good and sufficient considerations: We, Holford, Brancker & Co., and Peter C. Pfeffel, the trustees of the said estate, do hereby agree to pay and discharge all costs, damages, and charges, out of the proceeds of said estate, which may arise in consequence of any or either of said suits, and agree and promise to save harmless the said Edward Stainer, from any claim or liability by reason thereof.”
    The complaint set forth that in the. year 1840 the firm of Stainer, Dutilh & Co1., of which firm Edward Stainer was a member, failed in business, and executed an assignment of their property to the defendants and one Pfeffel, in trust to pay partnership debts, and that said assignment conveyed the individual property of Stainer as well as the partnership effects. That the property of Edward Stainer so conveyed, embraced certain real estate, situated in Sandusky City, Ohio, formerly purchased of one James H. Bell in January, 1837. That on this purchase .Stainer had executed a bond and mortgage to Bell to secure $4000 of the purchase money, which bond and mortgage were subsequently assigned to the plaintiff. That in the month of October, 1838, Stainer filed his bill in chancery against Isaac and James, to be relieved from this bond and mortgage, and for an injunction to restrain Isaac Bell from suing on the bond. ■ This injunction was dissolved, and on the 12th of February, 1840, Isaac Bell commenced a suit on the bond, in the Supreme Court, in the name of James H. Bell against Stainer, and on 81st May, 1845, recovered judgment against him for $8,000 debt, and $2,081 damages and costs, of which $181 were taxed as. costs. That the' bill in chancery was, on argument, dismissed by the Court of Appeals, in the year 1848, and the costs taxed at $376,370.
    The complaint further stated, that the defendant in this action and Pfeffel were the principal creditors of the firm of Dutilh, Stainer & Co., and that' at the time of -the execution of the assignment before mentioned the defendant executed and delivered to Stainer the agreement of indemnity upon which the present action was brought,' and that the consideration of the agreement was the execution of the assignment, which Embraced Stainer’s individual property, , as well as that of the firm. That at the time said agreement was given, there was no debt or claim, or suit pending against Stainer individually, except the suits referred to connected with the Bell transaction. The complaint averred that Stainer being -indebted to the plaintiff by reason of the judgments recovered in the action before mentioned, assigned the agreement of indemnity to him as collateral security.
    The answer averred that the purchase of the Sandusky property from Bell was made by Stainer in behalf of the, firm, and the conveyance was taken to him, because the others were aliens. The suits set up in the complaint were admitted, but it was averred' that the suits were commenced long subsequent to the time stated in the complaint—the answer averred that the assignment of Stainer, Dutilh & Co., was made March 26, 1838, and set it forth as follows:
    “ For and in consideration of one dollar, and for other good and sufficient consideration, we, Edward Stainer - and Eugene Dutilh, members of the firm of Stainer, Dutilh & Co., do by these presents assign, transfer, and set over unto Peter C. Pfeffel and Holford, Brancker & Co., all the property, bills-receivable, and choses in action, of which'the firm of Stainer, Dutilh & Co., are possessed, or have any claim to, and which are contained and set forth in page íwe of the book in which this assignment is written, and which, property, hills receivable, and choses in action, are therein estimated at the value of two hundred and eighty-two thousand four hundred and fifty-six dollars, he the same more or less. To have and to hold the said property, bills receivable, and choses in action for the special trust, however, namely: to divide the proceeds of said property, bills receivable, and choses in action, equally among the respective claims mentioned and set forth in page Fowr of this said book, paying such claims pro rata according to the amount due thereon respectively from the aforesaid firm of Stainer, Dutilh & Oo.
    “ And for the purpose of carrying the trust herein mentioned into effect, powers of attorney have this day been made and delivered to the said Peter C. Pfeffel and Holford, Branker & Co., to do all things requisite and necessary in the premises.
    “ In witness whereof we have hereunto set our hands and seals this twenty-eighth day of March, one thousand eight hundred and thirty-eight.
    “ED. STAINEE, (Seal) “EUGENE DUTILH. (Seal)

    “ Sealed and delivered in presence of
    “Jno. Steel.”
    The answer also admitted the making of the agreement of indemnity at the time the assignment was executed, but denied that it was executed in consideration of the assignment. It also denied that the suits against Stainer, mentioned in the complaint, were pending at that time, or that they were comm enced until many months thereafter, or that the agreement embraced such suits, or the causes of action connected therewith. The answer also denied the amounts claimed in the complaint to have been recovered in the judgments against Stainer.
    The reply of the plaintiff put in issue the averments of the answer inconsistent with the allegations of the complaint.
    The cause came on to be heard at a special term of the Superior Court, before Mr. Justice Campbell, on the 19th November, 1851. Upon the hearing of the case, it was admitted that Stainer made the purchase of the Sandusky property, and executed the bond and mortgage as averred in the complaint; also, that the suit of Bell in the Supreme Court was commenced on the 12th February, 1840; that judgment was entered up for the amount stated in the complaint, on the 31st day of Hay, 1845. That the costs of Isaac Bell in the chancery suit, before the Vice-Chancellor, were taxed on the 1st September, 1848, at $224 85; that the costs on the appeal to the Chancellor were taxed at the sum of $61 88, and on the appeal to the Court of Errors, at the sum of $89 64; that the costs in-the Supreme Court suit were* taxed on the 31st Hay, 1845, at $2,061 12, of which sum $1,880 were taxed for interest upon the bond. The assignment by Stainer to the plaintiff, of the agreement of indemnity, was also admitted. The taxed bills referred to, were produced upon the trial, also the assignment of Dutilh, Stainer & Co., and the agreement of indemnity, and were all admitted in evidence. It further appeared in evidence on the part of the plaintiff, by the testimony of H. Dane Ellingwood, Esq., that he was the counsel of Dutilh, Stainer & Co., and of Edward Stainer, in the matters referred to; that he drew up the assignment of Dutilh, Stainer & Co., made for the benefit of their creditors, and also the agreement of indemnity upon which this suit was brought, which was executed subsequent to the assignment.
    Hr. Ellingwood further testified as to his consultations with Stainer as to the Bell suits, and as to the circumstances connected with the agreement of indemnity, as follows: “The costs were likely to be heavy on that suit, and there was chance of his being liable on the bond. From these considerations it is now my belief, and I speak from recollection of all the facts, I recommended the bond of indemnity to be, executed, and it was so. I cannot recollect any reason for giving the instrument of indemnity except those which I have given. I am pretty certain that there was no suit against Stainer except one small one for a few hundred dollars which was brought by one - Hatien, quite certain. I never knew the firm to be sued, nor Stainer either, with that exception, and the case of Bell. The Hatien claims had no connection with this indemnity. It was settled before the failure. I never had any suits in which Stainer was plaintiff, except some creditors’ bills; none of these were pending when the house failed. There might have been creditors’ bills on the part of the house and Stainer. I remember one against Beach & Hamnelcer. That was settled before the failure. This was the only one in which Stainer was plaintiff in equity; it was of but little importance. There was no chancery suit after the firm failed, except this one in the complaint, and I think I may safely say there was none. I received the money to carry on these suits, the suits mentioned in the complaint, from Holford, or his clerk Kingsford, and Mr. Holford himself has paid me some counsel fees in these suits. I went to the house of Holford, Brancker & Co., for my fees. I never received any that I recollect from any one else. I recollect one time Holford-objecting to my fees. His objection was, that the estate had nothing in it, or very little in it, that was the reason he gave me. He said he had paid the estate all out in counsel fees. This was my counsel fee for the appeal. I recollect one time Holford giving me as a reason that he was in advance, and I knew better, and I wrote to Stainer, and then he paid me counsel fees to the Court of Appeals. I have not the slightest doubt that the instrument of indemnity was executed after the suit; I can say everything except that I know it for a fact. I had my charges objected to once or twice on the ground that the estate would not warrant" it, and then I complained to Mr. Stainer, and Mr. Stainer then complained to Mr. Holford on the ground of this instrument.”
    This evidence was objected to by the defendants’ counsel, but admitted by the judge. The defendants, after reading in evidence the assignment of Dutilh, Stainer & Co., also read in evidence the letters of Edward Stainer, one dated March 30th, 1850, and the other April 7th, 1843, addressed to the defendants, in which he recites the fact of the execution of the agreement of indemnity, and refers to the fact that it was given in consequence of his signature being affixed to the bond and mortgage covering the Sandusky property, he being a naturalized citizen, and the others of the firm were not. In these letters his claim to indemnity from the suits of Bell is affirmed. It also appeared in evidence that the schedule annexed to the assignment of Dutilh, Stainer & Co., embraced the property at Sandusky.
    The presiding justice rendered his decision in writing, by which he found that “ the Agreement or Instrument of Indemnity, executed by Peter C. Pfeffel and the said defendants, under their hands and seals; and referred to or set forth in the pleadings in this action, was executed by them after the commencement of the suit in chancery brought by Edward Stainer against the above named Isaac Bell and James H. Bell in the complaint in this action referred to, and after the commencement of the' suit in the Supreme Court brought by the said Isaac Bell in the name of James H. Bell, against the said Edward Stainer and in said complaint referred to, on the bond therein also referred to, and that the said Agreement or Instrument of Indemnity was intended to indemnify the said Edward Stainer against this liability on the said bond to the said Isaac Bell on the said bond and on the judgment recovered thereon, and against Ms liability to the said Isaac Bell for the costs in said smt in chancery, and on the appeals therein, to the extent of the proceeds' of the property assigned by the firm of Stainer, DutÜh & Co. to the said defendants and P. C. Pfeffel by deed bearing date the 26th day of March, 1838, and that the said Agreement or Instrument of Indemnity was a personal covenant or obligation binding on the said defendants, to save the said Edward Stainer harmless against the aforesaid liability to the said Isaac Bell to the extent of the proceeds of the said estate assigned, and to pay to the said plaintiff the amount of his said claims against the said Edward Stainer, under and by virtue of the assignment by the said Edward Stainer to the said Isaac Bell, bearing date the 24th day of April, 1850, to the extent of the property so assigned to them as aforesaid; subject to the deduction, as the case may be, of the costs and counsel fees hereinafter referred- to, and that the said Isaac Bell is entitled to judgment against the said defendants for the sum of mne .thousand, two hundred and forty-two dollars, and thirteen-cents, with interest thereon from the 20th day of November, 1851, with costs of this action. And if the proceeds , of the said assigned property, arising from the sales of real estate, and of debts and dues collected or otherwise under the aforesaid assignment, and the value of the residue of said assigned property unsold and uncollected, should be sufficient to pay the. whole of the said sum of $9,242 /¿¡,, and interest thereon as aforesaid, after deducting from such proceeds such sums of money as have been paid by the said defendant to K Dane EHingwood for reasonable costs and counsel fees in prosecuting and defending the suits herein above referred to, then and in such case the said plaintiff is entitled to enforce payment by execution of the whole of the said sum of $9,242 ¿ , and interest thereon as aforesaid; but if the said proceeds, and the value of the real estate assigned remaining unsold, and of the debts and dues uncollected, should not be sufficient, after such deduction, to pay the whole of the said sum of $9,242 and thirteen cents, and interest thereon as aforesaid, then and in such case the said Isaac Bell is and shall be entitled to enforce payment by execution against the said defendants of so much only of the said sum of $9,242 and thirteen cents, and of the interest thereon as aforesaid, as the said proceeds and the value of the estate assigned, unsold and uncollected, shall amount to after such deduction as aforesaid, but shall be entitled to enforce payment by execution against the said defendants of the costs of this action absolutely and without reference to the said assigned property.”

      A. G. Rogers, for the plaintiff,
    argued the following points:
    I. The plaintiff was entitled to recover under this instrument of indemnity, the amount claimed by him, absolutely and without reference to what was received by the defendants out of the proceeds of the estate assigned, because that instrument is a valid and binding agreement, founded on good and sufficient considerations, referred to and embraced these two suits and Stainer’s liability therein, and bound the defendants personally to save Stainer harmless out of their own moneys, against any claim or liability by reason of those suits. 1. It is a valid and binding agreement. Because, being under seal, it of itself imports a consideration. (13 Wend. 537; 16 Do. 502; 21 Do. 522.) Because, besides being under seal, a consideration is expressed in the instrument itself. (16 Wend. 403.) If there were no seal, and no specific consideration were expressed, or if that expressed was not in itself a sufficient consideration, yet the defendants, having expressly declared by the instrument itself that they executed it “ for other good and sufficient con- ' siderations,” are precluded from denying wliat they have thus solemnly asserted under hand and seal. 2. lire instrument of indemnity referred to and embraced these two suits mentioned in the complaint, viz. the suit in the Supreme Court on the bond, and the suit in Chancery. This is the legal presumption until the contrary be shown, because the suits referred to in the instrument and in the complaint correspond; more especially as not only are no other suits shown to have- then existed, but it is affirmatively proved by if. D. Ellingwood, that there were at that time no other suits answering the description of these, and none of any kind whatsoever against Stainer, at or after the failure of Stainer, Dutilh & Co. Independent of the intrinsic evidence which the instrument itself affords, the fact that the instrument of indemnity referred to and embraced the suit on the bond in the Supreme Court and the Chancery suit, and Stainer’s liability therein, is set at rest by the testimony of 1ST. .D. Ellingwood, who not only testifies as to this fact, but also states the reasons which induced him to propose the drawing up of the instrument, viz. to protect Stainer against his liability on the bond and the costs of the litigation. He proves that the instrument was executed after the assignment and after the suits were brought. He proves that Holford, Brancker & Co. ratified the instrument, and acknowledged their liability to save Stainer harmless in these suits by paying the counsel fees therein; and that,at one time, when Holford objected to paying further fees, witness complained to Stainer, and then Holford paid witness his counsel fees up to the Court of Appeals. Stainer’s letter of April, 7, 1843, and that of March 30, 1850,' produced by defendants. In the letter of April 7, Stainer refers to Ellingwood’s having written to him in consequence of the trustees declining to advance funds to carry on the defence to the suit on the bond, and then refers them to this instrument as the reason why they should advance the funds to defend; and alludes to their responsibility under the instrument. So in his letter to Holford, he alludes to this instrument, as given to him individually, to save him harmless from liability—refers to a sketch inclosed in the letter, and to this bond, and to the judgment on the bond, as forming the prominent item in that sketch; an d he refera to this instrument of indemnity as the means of taking his redress against the defendants, but that not possessing the means to meet the judgment and take his redress thereafter against them on the indemnity, he transferred the indemnity to the plaintiff for direct action against the assets of the estate 'to pay the judgment. Independent of the intrinsic evidence derived from the instrument itself, and the testimony of Ellingwood, that the suits mentioned in the complaint, viz. the suit on the bond in the Supreme Court, and the Chancery suit, are those referred to in the instrument, the letters above referred to produced by the defendants themselves, and consequently their own testimony, are conclusive on the point, for they take broadly and expressly, the ground that the defendants are liable for this very claim. The defendants have repeatedly and for years acknowledged that the suits mentioned in the complaint and those referred to in the instrument, are the same, and have also acknowledged their liability and ratified the instrument of indemnity, by paying to the attorney, solicitor, and counsel of Stainer, his charges throughout, from the beginning to the end; and once or twice, when Holford objected to paying further fees, and EUingwood complained to Stainer, and Stainer to the defendants, on the ground of this instrument of indemnity, then the defendants re-aeknowledged their liability, by paying them up to the close of the litigation, viz. in the Court of Appeals. The defendants have also admitted the identity of the suits mentioned in the complaint and in the instrument, and their liability to 'Stainer, and the fact of their ratification of that instrument, by not denying in their answer the averment set forth in the complaint. (1 Comst. Rep. 96, French, v. Carhart.) 3. The instrument bound the defendants personally to save Stainer harmless out of their own moneys, absolutely, without reference to the amount of funds received by them. The instrument consists of two separate promises or agreements: The first agreement or promise is, “ to pay and discharge all costs, damages, and charges, out of the proceeds of the estate, which may arise in consequence of any or either of said suits; that is, by reason of any or either of said suits.” The second agreement or promise is : “ agree and promise to save harmless the said Edward Stainer from any claim or liability by reason thereof,” that is, by reason of any or either of said suits. The first promise restricts itself to the amount of the proceeds of the estate (assigned). The second promise is more comprehensive—it is unrestricted: it is to “ save harmless, and from any claim or liability. How, the words “ save harmless,” in themselves, express an unqualified, absolute indemnity, and can, from their very nature, mean nothing else. A contingent, restricted, or limited indemnity, might give no effect whatever to the agreement; for if no funds were received, there would in such case be no liability—no effect given to the instrument: whereas the instrument says, “we agree to save harmless from any claim or liability by reason of any or either of said suits.”
    II. The court, which by the written consent of the parties was substituted in the place of a jury, having found as a fact that the instrument of indemnity was executed after the commencement of the suits in the Supreme Court and Court of Chancery mentioned in the complaint, and that the instrument was intended to indemnify said Stainer against his liability on the said bond and on the judgment recovered thereon by Bell against Stainer, and the costs of the suit in chancery and on the appeals therein, the finding is conclusive, being a question of fact; and the only question can be, whether the plaintiff shall be confined in his remedy to the extent of the assets.
    IH. This instrument being an agreement to indemnify Stainer against any claim against him, or liability on his part, he would have a perfect right to recover of the defendants the amount due on the judgment recovered by Bell against him, and the costs of the suit in chancery, without first paying the same; and the plaintiff, under the assignment to him, has all the rights which Stainer had. (19 Wend. 423, Webb v. Pond and others; 1 Comstock, 550, Gilbert v. Wynans; 8 Wend. 451; 8 Cow. 623, Rockfellow v. Donnelly.)

      T. W. Tucker, for the defendants,
    argued—
    I. That the defendants were not liable, because the suits described in the complaint out of which the plaintiff’s claim arose were not pending at the execution of the agreement of indemnity or of the assignment, and were not intended or referred to by said agreement.

      EE. The debt and costs which the plaintiff claims to recover do not arise out of any suits described in or contemplated by the agreement to indemnify. That agreement proposes to provide against costs and damages arising out of suits relating to the co-partnership estate, or in which the trustees have an interest. The suits described in the complaint, and upon which the plaintiff’s right of action depend, relate exclusively to a bond and mortgage of Edward Stainer, given for the purchase money of real estate, which the complaint avers he purchased, and for which a deed was given to him individually and not on co-partnership account. It does not appear that he has ever conveyed the said property to any one else. The property did not pass by the assignment to the trustees. The assignment proposes to convey co-partnership property only. The suits brought on the bond of Stainer, and to set aside the mortgage, had no reference to the co-partnership estate, nor to property in which the trustees had an interest.
    III. The admissions of Stainer, upon whose right of indemnity the plaintiff claims to recover, are conclusive as to the fact that the suits out of which the plaintiff’s right arises were not pending at the execution of the agreement. Such admissions would have been conclusive upon Stainer himself. They were made before the assignment of his right of action to the plaintiff. The complaint seeks for no relief beyond such as Stainer could have claimed. The assignment to the plaintiff was without any consideration present, and to secure an already existing debt.
    IV. The testimony of Ellingwood was inadmissible, and should have been rejected, because, (1.) It was introduced to explain and vary the terms of a written agreement. (2.) It contradicts the admissions and statement of the complaint and replication. (3.) It is at variance with the admissions of Stainer.
    V. The agreement of indemnity contains no provision beyond taxable costs, and expenses incidental to the prosecution or defence of certain suits then pending. It could not have intended, nor does it promise to pay a debt due (if at all) before the commencement of such suits, and not arising therefrom. The agreement, if valid at all, was a promise on the part of the assignees to pay the legal charges of a suit to set aside a fraudulent sale, not to'pay for real estate for which Stainer was already liable.
    VI. The construction which Stainer’s assignee seeks to place upon the agreement of indemnity is fraudulent as to the creditors, and would vitiate and nullify that instrument. (1.) The assignment to pay specific debts, conferred rights and priorities on the creditors which are entitled to protection. (3 Hill, 228; 11 Wend. 240.) (2.) A subsequent agreement, without the knowledge of creditors, to appropriate the assigned property for the benefit of one of the assigning partners, is fraudulent, and confers no right of action. Such an agreement would have been an attempt by one of the partners to change the order of preference ordered by the assignment, and was fraudulent and void on its face. (Strong v. Skinner, 4 Barb. 559.) It was a reservation on condition for the benefit of one of the parties. (Grover v. Wakeman, 11 Wend. 187; Mackie v. Cairns, 5 Cowen, 547.)
    VH. There was no consideration to support a promise on the part of the defendant to indemnify Stainer, for Stainer transferred none of his individual property to the defendants. The property specified in the assignment was transferred as co-partnership property, and its disposition unalterably fixed by the terms of the assignment. The defendants received nothing as security for their personal liability.
    VHL Heither Stainer nor his assignee can acquire a right of action from his own personal wrong. He cannot compel the application of the co-partnership estate to the payment of his individual debts, after, by his own action, rendering such a disposition legally impracticable.
    IX. Even if the agreement as construed by the plaintiff were valid, the present action must fail.. The assignment has established an order of preference, to which the plaintiff’s right is subj ect. The plaintiff, before claiming a personal responsibility from the defendant, was bound to prove the receipt of assets and the payment of other creditors, or that the estate had been exhausted.

      X. The defendant was a creditor of the firm of which Stainer was a member, and would have a right to set off such debt against any personal claim of Stainer or his assignee.
   By the Court. Duer J.

It was insisted, by the counsel for the plaintiff, that the agreement of the defendants, upon which this action is founded, contains two distinct independent stipulations—the first, binding them to satisfy the costs, damages, and charges arising from the pending suits, to which the agreement refers, out of the proceeds of the estate assigned to them; the second, an absolute unconditional promise of indemnity, rendering them liable as individuals, and not merely as trustees. This construction, however, has been rejected by the judge at Special Term, who has decided that the agreement is single and entire, and the indemnity which it promises, an exclusive charge upon the property assigned, and we are satisfied that his decision expresses truly the intention, and is entirely consistent with the language of the parties.

The supposition that the defendants meant to assume the debts of Stainer to any extent, beyond the funds they might be able to realize from the trust estate, is most improbable; there could be no motive or consideration for such an undertaking, nor could we be justified in saying that such was their intention, unless the terms of the agreement were so explicit as to exclude the possibility of a different construction. We add, that had our opinion upon this question coincided with the argument for file plaintiff, it would not be competent to us, as an appellate court, to alter, in conformity to that opinion, the judgment that has been given, since the plaintiff, by his omission to appeal, has precluded himself from denying its justice or propriety. He has virtually assented to the judgment as it stands. He has no right to say that it has not given to hini all the relief to which he can be entitled, and hence the objections which the defendants, as appellants, have raised, are those alone which we have the right to consider. It is true that an appellate court may, in some cases, modify, or even reverse, a part of a judgment or decree which is not embraced in the appeal, but we apprehend that this nroceeding can only be justified where the modification or reversal is necessary to render -the decree, as finally pronounced, entirely consistent.

The only questions, therefore, that we propose to examine are—first, whether the suit in chancery to .set aside the mortgage, and the suit in the Supreme Court upon Stainer’s bond, were the pending suits to which the agreement referred; and, second, whether, assuming this to be the fact, an agreement to satisfy the costs, damages, and charges that might arise from these suits out of the proceeds of the trust estate, has created any obligation which a court of law or equity'is bound ,to enforce.

The agreement is without date, nor is it possible to fix with any certainty the period of its actual execution and delivery.

The complaint alleges that it was made at the same time as the assignment, or shortly thereafter, and the answer admits, or asserts, that both instruments were executed and delivered at the same time. Yet, unless the testimony of Mr. Ellingwood is to be wholly rejected, we are compelled to say that the allegations and the admission are alike erroneous, and indeedit is.only upon the supposition that they are so, that the plaintiff, by hny possibility, can be entitled to recover. The assignment was made in March, 1838, and, according to the testimony of Mr. Ellingwood, no suit was pending at that time in which Stainer individually was plaintiff or defendant, and it is against such suits alone, as we construe the agreement, that he was meant to be indemnified. The chancery suit was commenced in October in the same year, and the suit in the Supreme Court not until February, 1840, and unless the execution of the agreement may be referred to a still later date, there is no pretext for the claims which, by sustaining this judgment, we are required to enforce. It is to suits actually pending at the time of its execution that the indemnity which the agreement promises is expressly confined, nor is it denied that such is the construction that we are bound to adopt. Let it be admitted, for the present, that both the suits in question were pending at the time of the execution and delivery of the agreement, the mere fact of their pendency is by no means sufficient to prove that they are the suits to which it refers. To justify us in adopting this construction of the meaning of the parties it must be at least consistent with the terms of the agreement, and it is manifest, that the terms may be such as wholly to exclude it. The suits against which alone Stainer was to be indemnified, are not specifically named in the agreement, but are described only in general terms, and it is therefore a first and necessary inquiry whether the suits upon the mortgage and the bond answer the description. If the description embraced only the facts that the suits to which the indemnity was to apply were then pending, and were suits in which Stainer wasplaintiff or defendant, this necessary condition would be fulfilled; but if it embraces other facts, at least as material as those that have been mentioned, and the existence of these facts cannot be affirmed in relation to the suits in question, we know no rule of construction, or principle of equity, that could justify us in saying that they were the suits contemplated by the parties. On the contrary, we may be compelled to say that they were meant to be excluded.

What, then, are the terms of the agreement ? Is the description of the suits intended limited to the facts that have been stated ? By no means. It embraces the additional facts that the suits against which the trustees agreed to indemnify Stainer were suits in which they as trustees were then interested, and which were prosecuted or defended for their benefit; and these facts, so far from being regarded as immaterial, are stated as the leading consideration of the entire agreement. In our judgment, the truth of the description is thus made a condition precedent, necessary to be proved to give any effect to the stipulations that follow. It is of no importance whether other considerations operated upon the minds of the trustees, if it sufficiently appears, that, but for their supposed interest as trustees in the pending suits, they would not have entered into the agreement at all.

Were the defendants then, as trustees, interested in the suits in question % In other 'words, for such is the meaning, were these suits prosecuted or defended for the benefit of the trust estate ? It might have been said that such was the fact in relation to the suit in chancery to set aside the mortgage, had it appeared that the title to the Sandusky lots covered by the mortgage was vested in the defendants as trustees, and that the necessary effect of a favorable decree would have been to have given them the lands discharged from the incumbrance, or to have entitled them, for the benefit of the trust estate, to the repayment of the $2,000 which Stainer had originally advanced as a part of the consideration of the purchase. Bpt we find no evidence whatever of these facts in the pleadings, documents, and testimony which form the case upon which our judgment must be given. It is true that the complaint alleges that the title to the Sandusky lots passed to ,the defendants by force of the assignment; but it also alleges that the lots were the individual property of Stainer, and that their transfer by him to the trustees formed the sole consideration of their agreement to indemnify him, and gave them an immediate interest in defeating the claims of the plaintiff upon the bond and mortgage. And, as we read and understand the complaint, it is upon the truth of these several averments that the plaintiff’s title to relief is emphatically and exclusively rested. At any rate, it is upon the proof of each and all of these averments that his title to relief in our' opinion entirely depends.

That the legal title to the Sandusky lots was vested in Stainer alone is quite certain, and is not denied, and the presumption therefore' is, that he was the sole owner; but if they were his individual property, we can perceive no ground for the assertion that any interest in them, legal or equitable, passed to the defendants by force of the assignment. If they had no interest as trustees in the lots, they could have none in the suits upon the bond and mortgage.. If not so interested, it follows that these suits were not those to which the terms of their agreement relate ; and we add, that had it been proved that it was to these suits that the indemnity promised was meant to relate, the agreement would still be inoperative and void, from an entire failure of the consideration upon which alone it was or could be founded. The assumed fact that the defendants were interested as trustees in the Sandusky lots lies at the foundation of the plaintiff’s case, and can alone sustain it. This foundation removed, the whole fabric falls to the ground.

The terms of the assignment to the defendants are explicit and unambiguous: they leave no room for argument as to the construction of the instrument. The transfer which it makes, so far from embracing the individual property of Stainer, is by express words limited to parthership property,—to property of which, the firm of Stainer, Dutiíh & Co. were then possessed, or to which they had any claim. There was no such possession or claim in relation to the Sandusky lots, if they belonged to Stainer alone. It is true that in a schedule which is annexed to the answer the Sandusky lots are mentioned as a portion of the property assigned; but this circumstance we have no right judicially to notice, since the schedule was not in evidence in the court below; and, had the evidence been given, we do not understand how it could operate to enlarge the terms of the assignment so as to include the separate property of an individual partner. If the lots were in truth the property of the firm, they passed by the assignment, and not otherwise.

It is, however, impossible for us to say, upon the, pleadings and evidence, that the lots were in any sense, legal or equitable, the property of the firm. It is true that the answer denying the averment in the complaint, that they belonged to Stainer alone, alleges that they were purchased with the funds of the partnership, and were therefore, although the legal title was vested in Stainer, really and equitably the property of the firm. But the reply makes a distinct issue upon these allegations, and no evidence whatever has been adduced to sustain them. Even had such evidence been given, it would have afforded no foundation for the relief which the plaintiff seeks, since the rule in equity is invariable, that a plaintiff is never entitled to a judgment unless the proofs upon which he relies correspond with the allegations in his complaint. As the case now stands, neither the plaintiff nor the court has any right to say that Stainer was not the sole and exclusive owner of the Sandusky lots. The conclusion is, therefore, not to be resisted, that, as the defendants as trustees had no interest in the lots covered by the mortgage, they had no interest in the suit instituted by Stainer to set it aside. That they had any interest whatever in the suit against Stainer upon his bond—the debt, damages, and costs on which amount nearly to the whole sum for which the judgment under review has been given—has not been and cannot be pretended. It is evident that whether he succeeded or failed in that suit was to them, as trustees, a matter of entire indifference. His success could not tend to enlarge hor his failure to diminish in any degree the trust estate. Judging, therefore, of the interest of the parties from the terns of their agreement, we are compelled to say that the indemnity promised to Stainer is not applicable to either of the suits to which the judgment that has been given alone relates, and consequently that the judgment, as founded either upon an erroneous interpretation of the agreement, or upon a mistaken view of the evidence or of the law, must be reversed.

We are told, however, that the doubts which might otherwise have existed as to the real intention of the parties have been wholly removed by the testimony of Hr. Ellingwood, who has positively sworn that the suits in question were those which were contemplated by the parties when the agreement was executed, and to which the indemnity then promised was meant to apply; and hence it has beemargued that the question whether the defendants were or were not interested in these suits as trustees must be regarded 'as wholly unimportant, and the declaration that they were so be rejected as immaterial. But our own views are widely different. The question of the interest of the defendants is regarded by us as the vital question in the cause, the declaration of, their interest as a necessary part of their agreement, and the proof, as indispensable to the relief which the plaintiff seeks to obtain ; and hence the testimony of Hr. Ellingwood, so far as it is inconsistent with these views, must be rejected. Admitting for the present that the true im- • port of his testimony is such as has been stated, it stands in plain opposition to the written agreement of the parties; and the object of its introduction was not to explain that agreement,but to overrule it. It appears from the case that this objection to his testimony was raised at the special term; and upon the fullest consideration we are satisfied that it ought to have, prevailed. It is doubtless true that in many cases parole evidence not only may .but must he admitted, to determine and define the subject-matter of a contract; but the evidence is only to be admitted when it is purely explanatory, never where it is plainly contradictory. In the present case, as the terms of the agreement were general, parole evidence was necessary to fix their application. Hence Hr. Ellingwood was a competent witness to prove what were the suits then pending to which the agreement referred, and how the defendants, as trustees, were interested in their prosecution or defence; hut he was no more competent to prove that the agreement was meant to embrace suits in which the defendants were not interested than to prove that it embraced suits already terminated, or not then commenced. The actual pending of the suits was no more a necessary condition of the liability they meant to assume than their actual interest. The agreement limits the indemnity it promises to suits in which the trustees as such were interested: the evidence of Mr. Ellingwood is relied on as proving that it extended to suits in which they had no interest whatever. The contradiction is direct and positive.

Entertaining these views, we deem it needless to inquire whether we are hound to adopt that construction of the testimony of Mr. Ellingwood, upon which the counsel for the plaintiff have insisted. We content ourselves with remarking, that were we compelled to act upon his testimony as stated in the case, we should have great difficulty in saying that he meant to swear, that the suit upon the bond was actually commenced before the execution of the agreement. The heavy expenses that were likely to he incurred in the chancery suit, we understand him as saying, suggested to his mind the propriety of procuring for his client, Stainer, the bond of indemnity which the defendants consented to execute. We have seen that the chancery suit was instituted in October, 1838, and, from the nature of the controversy, it must soon have been known that the expenses of its prosecution would he heavy; and it is therefore very improbable, that nearly eighteen months were suffered to elapse before the indemnity, to which Mr. Ellingwood thought his client was entitled, was in fact required. It is true, he says, that when the indemnity was required, there was a chance that his client would be liable on the bond, hut that chance was just as probable when the chancery suit was instituted; and if it had weighed with the parties, it would doubtless have caused an express stipulation to indemnify against the bond by name. He says nothing of the expenses of such a suit, and his language seems rather to indicate that it was anticipated, than that it was commenced.

It is not, however, alone upon the grounds, and for the reasons that have been stated, that we hold ourselves bound to reverse the judgment from which this appeal is taken. Waiving all objections to the testimony of Mr. Ellingwood, not only to its import, but. its admissibility, and, considering the fact to be established, that the suits relative to the bond and mortgage are those to which the agreement must be construed to relate, we are then constrained to say, that it is an agreement which the defendants, as trustees, had no right to make, and we, either as a court of law or equity, are not bound to enforce. If the defendants agreed to indemnify Stainer against the costs, damages, and charges, arising from these suits, out of the property assigned to them, they violated their trust, and, in decreeing the execution of such an agreement, we should violate all the principles by which courts of equity, in judging of such transactions, have hitherto been governed. „

The rights of the partnership creditors were fixed by the assignment, and without their knowledge and consent could not be varied by any subsequent act of the partners, or of the trustees. By the terms of the assignment, all the property which it embraced was irrevocably devoted to the ratable satisfaction of the partnership debts; nor without a manifest breach of good faith, and of the trust thus created, could any portion of it be applied, or be rendered applicable to any other purpose. To sustain an agreement involving such a misapplication of the trust property would be to sanction an act, which, according to the doctrine, and in the language of equity, whatever may have been the motives of the parties, must be deemed and declared a fraud.

Sensible of the force of this objection, the learned counsel for the plaintiff endeavored to meet it by requiring us to presume that the indemnity to Stainer which the agreement was meant to secure, wa&puflBsed to him at the time of the assignment, and was in reality a condition upon which the assignment was made; but it is impossible for us to act upon such a presumption'. It is something- more than gratuitous and arbitrary. It is not only not justified by any facts that have been given in evidence, but as we read and understand the testimony of Mr. Ellingwood, is positively repelled. As the counsel of Stainer, Dutilh & Co., he drew the assignment, and if a promise of indemnity had then been exacted and given, he must have known, and we doubt not would have stated the fact; so far from stating the fact, we understand him as swearing that the indemnity as given was the result not of any" previous engagement, but solely of his own recommendation and advice— advice which was certainly not given until many months after the execution of the assignment. For aught that appears in the evidence, there was no thought of an indemnity until the suit in chancery had been commenced.

We are not to be understood as saying, that had the nature of the transaction been proved to be such as the counsel for the plaintiff was forced to assume, our own views as to the justice and law of the case would have been materially altered. We are disposed to think, that a clandestine promise to indemnify Stainer from the" proceeds of the property assigned, must still have been regarded by us as fraudulent and void, even had it been shown to be, as between the mumed/iaU parties, the consideration of the assignment; that question, however, is certainly not before us, and is therefore.not necessary to be decided.

Upon the case as it actually is, we are clear in the opinion that the plaintiff is not entitled to the relief which he seeks, even if we adopt that interpretation pf the agreement which is most favorable to his claim. We cannot give to the plaintiff, as the assignee of Stainer, any portion of the funds, which, by the joint and irrevocable act of Stainer and his partner, had become the exclusive property of their creditors. The judgment at Special Term is, therefore, reversed, and the complaint dismissed with costs, except the costs of this appeal.


author: By the Court. Duer, J.

text:
    Bates v. Stanton and others.
    As a general rule, a bailee cannot set up a right of property in a third person to defeat a recovery by his bailor.
    To this general rule, however, there are many exceptions.
    Semble—That the right of the true owner may be set up in all cases where, upon his demand, the property has been in fact delivered to him before the commencement of the suit.

      Feb. 17;
    June 12.
    The law may be considered as settled, that such a delivery is an absolute bar to the claim of the bailor, when it is shown that he had obtained possession of the property by felony, force, or fraud.

      Held, that the evidence given by the defendants upon the trial in support of their defence, that the goods in controversy had been obtained from an agent of the owners by collusion and fraud, was properly admitted.

      Held also, that the record of a judgment in favor of the owners against the plaintiif for the recovery of the goods, was conclusive evidence of such collusion and fraud, the questions litigated and the parties being substantially the same. (Before Duer, Pathe, and Bosworth, J. J.)
    The complaint alleged that the defendants were the owners and master of the ship Hero, one of a line of packet ships sailing at stated periods between Hew York and Hew Orleans, called “ Stanton’s Line,” for the transportation of freight and merchandise for hire, and that the defendant, Stanton, was the agent of the line, and engaged in receiving and sending freight and merchandise for hire from Hew York to Hew Orleans, and forwarding it to St. Lords and other places above and beyond that place.
    That on the 3d day of April, 1848, the plaintiff, being the owner of 125 cases of boots and shoes, which he was desirous of sending to St. Louis, with a view of there commencing the boot and shoe business, shipped the, same on board said ship for Hew Orleans, to be forwarded to St. Louis, and took from the master a bill of lading of that date, by which the defendants acknowledged the receipt of said cases of merchandise from the plaintiff on board said ship, and agreed to carry them to Hew Orleans, and forward them to St. Louis.
    That the ship sailed, and arrived at Hew Orleans on the 23d of April, with the goods on board; that after she sailed, the defendant, Stanton, wrote to the consignee and agent of the ship at Hew Orleans, in combination with one Jesse Y. Hiles, and caused said goods to be returned in said ship on her return voyage to Hew York, and said property, of the value of $5,747 29, was by the defendants converted to their own use. The plaintiff demands the amonnt of the goods and consequential damages, amounting in the whole to $10,000.
    The defendant, Stanton, and the other defendants, in separate answers, made substantially the same defence.

      They- admit the receipt of the goods on board of the ship, the sailing of the ship, and their refusal to deliver them, and in excuse, say:
    That the goods did not belong to the plaintiff, but to Grant & Ensign, of Hartford, Connecticut, who had intrusted them to one Cook, to sell for them in his store in Korwich, Connecticut. That the plaintiff obtained them by a fraudulent combination with Cooke. That being so informed by Kiles and Grant & Ensign, the defendants, at their request, caused 121 cases of said property to be returned in the ship to Kew York, and there delivered to Grant & Ensign, and took their bond of indemnity against the plaintiff’s claim, and Grant & Ensign defended this action.
    The plaintiff, in reply, controverts the averments in the defendants’ answers.
    On the trial before Oakley, Oh, J., and a jury, the plaintiff, having produced the bill of lading, the execution of which was admitted, and proved a demand of the goods of the defendants, and a refusal to deliver them before the commencement of the suit, rested his cause.
    The defendants then offered in evidence, in defence of the plaintiff’s action, a record of the proceedings in a case in the Court of Common Pleas in the State of Massachuetts, where, in an action of trover for one hundred and twenty-five cases of boots and shoes, claimed to be those in question, by Grant & Ensign, against Bates, they recovered a verdict for'$3,534 22 damages, and a judgment thereon, and in which, on exceptions taken to the ruling of the judge, the case was removed to the Supreme Court, and was then pending.
    The plaintiff objected to the admission of this testimony on the ground that the defendants could not dispute the plaintiff’s title to the property in' the bill of lading, that the proceedings were between other parties, and assuming them to be a final judgment, did not conclude the parties to this suit; that the proceedings on their part showed that the judgment was not final, and were not sufficient to estop the plaintiff in this action.
    The court decided that the proceedings in the court in Massachusetts were admissible in evidence, and that the defendants might dispute the plaintiff’s title by showing the title of the goods to be in Grant & Ensign.
    The court thereupon decided that' said proceedings were conclusive as to the rights of the parties to this action, and precluded the plaintiff from any right to recover for the 125 cases of boots and shoes in the complaint mentioned, or any part of them, and ordered the complaint to be dismissed and judgment to be entered for the defendants.
    From this judgment the plaintiff appealed, and the case was now before the court upon a bill of exceptions.

      F. B. Cutting and Asa Child, for the plaintiff,
    made and argued the following points—
    I. The ship-owners having refused to deliver the goods in pursuance of the bills of lading, were guilty of a conversion.
    n. The ship-owners were not compelled by any legal proceedings, or other compulsory means, to surrender the goods to Grant & Ensign; the property was brought from Hew Orleans by them in violation of their contract as carriers, and was voluntarily delivered to Grant & Ensign. They cannot now set up an adverse title against the shipper who intrusted them with the property. Having obtained possession from the plaintiff, by reason of an express undertaking to deliver them to him or to hi@ assigns, they are estopped from setting up title in strangers (Gosling v. Birney, 6 Bing. 339; Kiernan v. Sanders, 6 Ad. and Ellis, 516; Hall v. Griffin, 10 Bing. 246; Miles v. Cattle, 6 Bing. 734; 1 Bacon Abg. 369, Title Bailment (A). Story on Agency, sec. 217; Angel on Carriers, sec. 335, 217; Story on Bailments, sec. 450, 582; Discon v. Hammond, 2 B. and Ald. 313).
    The defendants would not have been permitted to file a bill of interpleader (Crawshay v. Thornton, 2 M. and C. 1; S. C., 7 Sim. R. 391; Nicholson v. Knowles, 5 Madd. 47; Lowe v. Richardson, 3 Madd. 277; Cooper v. De Pastet, 1 Tam. R. 177; 2 Sto. Eq. Juris., § 816, 817, 812).
    HI. The proceedings in the Court of Common Pleas for Hampden County were not admissible evidence against the plaintiff; because,

      1. As between the parties to this action, the proceedings would not have been evidence against the defendants (1 Greenl. Ev. § 524).
    2. The papers showed that there had been no final judgment (1 Greenleaf, 529).
    IV. But if admissible, the alleged proceedings were not conclusive against the plaintiff.

      Dan'l Lord, H. G. De Forest, and John A. Weeks, for defendants,
    made and argued the following points—•
    The. defendants claim to set up the lawful title of Messrs. Grant and Ensign, from whom the goods in question were fraudulently taken by the plaintiffs ; Grant & Ensign having demanded the goods, and having indemnified the defendants against the plaintiffs’ claim.
    As to the defendants’ right to set up the title of Grant & Ensign—
    I. It is competent for the carrier to set up the rightful title of the time owner, from whom the possession has been fraudulently taken by the bailor, after notice by the true owner of his superior title.
    1. If the earner delivered the goods to the bailor, after notice from the true owner, he does so at his peril (Story on Bailments, 4th ed. § 102; Wilson v. Anderton, 1 Barn, and Adol. 450; Ogle v. Atkinson, 5 Taunt. 759; Taylor v. Plumer, 3 M. and Selw. 562; Hardman v. Wilcock, 9 Bingham, 382).
    2. The bailor cannot improve his title by a mere delivery to the carrier, and if his possession be originally tortious, it must remain so (Story on Bailments, § 281; Wilson v. Anderton, 1 Barn. and Adol. 450).
    3. There is no valid distinction, as related to the present case, between a tortious and a felonious taking by the bailor. As the felony must avoid the possession even of a bond fide purchaser, so the fraudulent taking can pass no title by the mere deposit with the carrier.
    4. It is the basis of the contract between the parties, that the bailor is lawfully possessed of the goods; and the innocent carrier should not be made to suffer by means of the bailor’s fraudulent misrepresentations, or concealment of his wrongful title.
    5. The policy of the general rule, as to setting up the jus tertii, is not impaired by the allowance of these exceptions to it, and on authority and principle they must be admitted (Shelbury v. Scotsford, Yelv. 23; Angell on Carriers, p. 336, and cases cited; see especially King v. Richards, 6 Whart. Penn. Rep. 418; Hardman v. Wilcock, 9 Bingham, 378).
    6. A bill of interpleader is not the proper remedy of the defendants in the present case, because the plaintiff and. Messrs. Grant & Ensign claim under independent and inconsistent titles.
    As to the effect of the judgment record—
    II. The judgment record, produced in evidence, is complete in itself as a final judgment, notwithstanding the writ of error pending at the time of the trial of this cause (Mass. Rev. Stat. chap. 82, § 6, § 12.)
    » HI. If the record was insufficient, it is enough that the defendants produce, upon this hearing, a new exemplification, showing that the judgment is now complete and final.
    IV. The judgment in favor of Grant & Ensign, in the Massachusetts suit, is conclusive against the title of the plaintiff to the goods in question; and conclusive as to his fraudulent taking of them: the judgment need not be specially pleaded (Miller v. Maurice, 6 Hall, 114).
    1. The judgment relates to the identical subject matter of this suit, and the issue was upon the fraudulent taking of the goods by Bates: this appears by an inspection of the judgment record.
    2. The defendants are the privies of Grant & Ensign, and defend this suit simply as their representatives, under their title and upon their indemnity (1 Greenleaf’s Evidence, § 523).
    3. If the plaintiff be allowed to recover in this action, Giant & Ensign will then be held liable to the defendants, under this ■ indemnity; and thus, in spite of the Massachusetts judgment, they will be compelled to pay, for the benefit of Bates, the value of the very goods adjudged to have been fraudulently taken from them by him.
   By the Court. Duer, J.

That a bailee cannot, in ordinary cases, dispute the title of his bailor, no more than a tenant that of his landlord, is familiar law, but we have not been able to discover that the rule applies with greater stringency to the relation between a common carrier and a shipper, than to any other form or species of bailment. The bill of lading, it is true, contains an admission of the ownership of the goods, and it contains also an admission of their actual shipment and of their sound condition. It appears, however, to be settled, that in neither of these cases does the admission operate as an estoppel. It is strong prima facie evidence of the truth of the facts to which it relates, but not conclusive (Berkely v. Watling, 7 Adol. and Ell. 29; Barret v. Rogers, 7 Mass. 297; Maryland Ins. Co. v. Ruden, 6 Cranch, 338).

The present case, therefore, stands upon the same ground as other bailments, in respect to which the general rule undpubt- ' edly is, that in an action by the bailor, a jus tertii, a right of property in a third person, cannot be set up by the bailee to defeat a recovery. But to this general rule there are many exceptions. The defendant in such a suit may doubtless show that the property had been taken from him by process of law, or by a person having a paramount title, or that the title of the bailor had terminated, or that he, the bailor, was himself a mere agent, and that, the return of the property to him had been forbidden by his principal (Shelby v. Scotsford, Yelv. 23; Edson v. Weston, 6 Cranch, 278; Ogle v. Atherson, 5 Taunt. 758; Watson v. Anderton, 1 Barn. and Ald., 450; Whittier v. Smith, 11 Mass. 211; Story on Bail. § 120, 266). Kor are these the only exceptions; we are strongly disposed to think that the right of thejrue owner may be set up, in all cases, where upon his demand, the property has been in fact delivered to him before the commencement of the suit^and are satisfied that such a delivery is an absolute bar, where it appears that the plaintiff had obtained possession of the property feloniously or tortiously, by felony, force, or fraud (Hardman v. Wilcock, 9 Bing. 382-4; King v. Richards, 6 Whart. Penn. R. 418; Story on Bail. § 582; Angell on Carriers, § 336). In Hardman v. Wilcock, this doctrine was expressly and with great decision, affirmed 'by two of the most eminent judges of the present day, Justices Alderson and Patterson, and was held to be entirely reconcilable with all the prior authorities, including most of those on which the plaintiff’s counsel in the present case has relied.

In King v. Richards, a case bearing a close analogy to the present, the same doctrine, nearly in the terms in which we have stated it, was made by the Supreme Court of Pennsylvania the ground of its decision, and was even applied to defeat the claim of an innocent plaintiff to whom a bill of lading of the goods in controversy had been assigned for value by the fraudulent shipper. In this last case Mr. Justice Kennedy, as the organ of the court, delivered an elaborate and able opinion, in which he reviews with acute discrimination all the English cases, and sustains the conclusion at which he arrives by reasons of unanswerable force; reasons that commend themselves alike to the judgment and the conscience. We cannot at all hesitate to follow those decisions. It would be a serious reproach to the administration of justice, if the principle which they sanction—a principle not only of sound policy but of sound and obvious morality—were not felt and acknowledged to be the law. Ho one can doubt that he to whom stolen goods have been delivered, is bound to return them to the true owner when satisfied by due proof of the justice of his claim, and when the fraud is established by similar proof the moral obligation is exactly the same.

It would be a shock to the most "ordinary sense of justice to permit the thief or the swindler, in such cases, to recover in a subsequent suit the value of the goods from the honest bailee. The rule which forbids a bailee to deny the title of his bailor, confined within its proper limits, is wise and salutary; but if no exceptions are to be allowed, it would deserve to be condemned, in numerous cases, as arbitrary and unjust; confined within its proper limits, it inculcates and enforces the observance of good faith; carried beyond these limits, it would be an encouragement and a protection to injustice, violence, and fraud.

The defence, therefore, which is set forth in the answers in this case, was justly held upon the trial to be valid in law, and the only question that remains is, whether the truth of this defence was conclusively established by the record of the judgment which was given in evidence. The Chief Justice so decided, and we are satisfied,' upon full consideration, that his decision, although not resting upon the authority of any case exactly similar in its circumstances, is sound in its principle, and as such must be sustained. It is true that a prior judgment is only conclusive when it appears that the same questions were litigated and determined in the suit in which it was rendered, and it may also be admitted that it is only conclusive between ’ parties and privies, and that the estoppel which it raises must be mutual in its operation. But if we mistake not, all these necessary conditions are fulfilled in the case before us.

The action of trover in which the judgment was rendered, related to the very goods now in controversy; the plaintiffs were Grant & Ensign, to whom, as owners, the goods have been delivered by the defendants, and the plaintiff here was the sole defendant. .The plaintiffs claimed to recover upon the grounds that they were the true owners of the goods at the very time they were shipped, and that the defendant had obtained the possession from then agent by collusion and fraud. The defendant denied their ownership, and asserted his own title as a purchaser in good faith and for full value from a person having the right to sell. The questions, therefore, of ownership and of fraud were directly at issue, and unless they had been determined in favor of the plaintiffs, they could not have obtained the judgment that was rendered. Exactly the same questions are raised by the pleadings in this case, and if this suit is substantially a suit between the same parties, or a privity has been shown to exist between the defendants and Grant & Ensign, it is impossible to deny that the judgment then rendered must be regarded as conclusive.

It is a- mistake to suppose that the term parties, in the sense of the rule which renders a prior judgment conclusive upon those who sustain that character, is restricted to those who are parties upon the record. On the contrary, it includes all who have a direct interest in the subject matter of the suit; a right to make a defence, or control the proceedings (1 Greenleaf on Evid., p; 523; Smith’s Lead. Cases; Duchess of Kingston’s case, 20 Howell State Trials, 538; Morgan v. Thorn, 9 Dowl. 228). Grant & Ensign were parties upon the record as well as in interest in the trover suit, and in this, although not parties upon the record, they are certainly parties in interest. It appears from the pleadings—for the allegations in the answers to that effect are not denied in the replies—that they have given to the defendants a satisfactory indemnity, and that upon the faith of that indemnity, the goods were surrendered and this suit is defended.

It is for them, therefore, that this defence is made; they have a direct interest in the result of the suit, and in consequence of that interest, have acquired a right to control its proceedings. We are therefore justified in saying that it is by them that this suit is in fact defended, and that they as parties have set up as against the plaintiff the same title which in the former suit they succeeded in establishing against him. The controversy is the same, and substantially the parties, and the prior judgment therefore conclusive.

Even were it granted that those only are to be deemed parties, in the sense of the rule, who are parties upon the record, it is certain that the indemnity which Grant & Ensign have given has created a privity between them and the defendants which authorizes and indeed renders it the duty of the defendants to set up, for their protection, the former judgment as a bar to the plaintiff’s recovery. It is said by Mr. Greenleaf, and our Supreme Court, in the case of Rapelye v. Bruce (4 Hill, 19), has so decided, that he who covenants for the results or consequences of a suit between others (and the indemnity here given is equivalent to such a covenant), by that act connects himself in privity with the proceedings so as to render the record of the judgment in that suit conclusive evidence against him (1 Greenleaf, p. 692, § 523). If Grant & Ensign, therefore, would be concluded by a judgment in favor of the plaintiff in this suit, that is, estopped from denying him to be the true owner of the goods in controversy, it would be most unreasonable to hold that they may not be aided by the defendants in barring his recovery, by setting up a former judgment, which concludes him from denying their title. There ought not to be two judgments directly in conflict upon the same question, and that conflict is only to be prevented by preventing the plaintiff from controverting the judgment that has been obtained against him.

The objection upon which the counsel for the plaintiff seemed greatly to rely, that the record of the proceedings in the former suit, had an opposite judgment been rendered, would not have been evidence against the defendants, has been answered by the observations already made. Such a record would have been conclusive evidence against the defendants upon the questions decided, exactly for the same reasons that the plaintiff is concluded by the record now produced. The defendants would be concluded by the privity that has been shown to exist between them and Grant &■ Ensign. It was admitted upon the argument that the judgment against the plaintiff has been affirmed upon a writ of error, and the objection, therefore, that the record produced did not show the judgment to be final, if not meant to be abandoned, must be considered as overruled.

For the reasons that have now been given, without entering upon other questions which our examination of the pleadings has suggested, the exceptions stated in the case to the ruling and charge of the Chief Justice are overruled, and the motion for a new trial denied with costs.