author: Monell, J. Bosworth, Ch. J.' Barbour, J. (dissenting.)

text:
    John H. White, Plaintiff and Respondent, v. Peyton and Frank Jaudon, Defendants and Appellants.
    Where a stock broker, without disclosing his principal, or the fact that he acts as broker, contracts to purchase stock, and deposits with the other party to the contract, merely as security for its performance, money which he received from his principal for the purpose, such contracting party, not having parted with anything on the faith of the deposit,- cannot, when sued by the principal to recover back the deposit, set off a debt due to him from the broker. (Barbour, J., dissented.)
    (Before Bosworth, Ch. J., Monell and Barbour, J. J.)
    Heard, April 11, 1862;
    decided, June 28, 1862.
    This was an appeal by the defendants from a judgment in favor of the plaintiff, entered upon the report of S. P. Fash, Esq., Referee, before whom the cause was tried.
    On the 18th of July, 1861, S. Draper, the broker of White, the plaintiff, gave the defendants, who were also stock brokers, a written order, as follows:
    “ Few York, 18th July, 1861.
    “ Messrs. Peyton and Frank Jaudon :
    “ Please buy one hundred • (100) shares of Chicago and Rock Island and two hundred shares of Cleveland and Toledo, both buyer 60, for account and risk of
    “ S. Dr., per J. H. D.
    “ This order good until countermanded.”
    On the same day the defendants made an agreement for the purchase of 100 shares of Chicago & Rock Island, notified Draper of the purchase, and requested ten per cent deposit. Draper obtained the ten per cent from the plaintiff, and paid it to the defendants as security to the seller on the purchase. Fo purchase was, in fact, made by the defendants, but a contract to purchase and to receive within sixty days at the buyer’s option.
    On the 31st August the contract was closed by Draper, by the plaintiff’s order, at a loss, leaving, however, out of the 81,000, a balance of $613.38 in the defendants’ hands,t to recover which the action was brought.
    The defendants claimed to set off a debt due from Draper to them, which more than exhausted the balance in their hands.
    The Referee overruled the set-off, and reported in favor of the plaintiff for the full amount of the balance and interest*

      It did not appear that at any time Draper disclosed, or the defendants knew that he was the plaintiff’s broker, or that the $1,000 was his money.

      Clarkson N. Potter, for defendants, appellants.
    I. Plaintiff had no right of action. The action should be by Draper.
    II. And the parol evidence to show that Draper was an agent, was evidence to contradict what the writings say, and therefore inadmissible. (Newcomb v. Clark, 1 Denio, 229; Fenly v. Stewart, 5 Sandf., 101.)
    III. In any event defendants were entitled to prove the offset they claimed.
    Where one deals with another, on behalf of a third person, the person dealt with has a right to set off, when called on by such third person, any claim which he may have against the agent. (Story on Agency, §§.390, 404, 420, 423; Paley’s Agency, by Dunl., pp, 325, 151; 1 Parsons on Contracts, 53.) And this whether the amount to be set off was due when the credit was given the agent, or subsequently. For the principal derives his rights through his agent, and stands in his stead. (Authorities cited; George v. Claggett, 7 Term B., 359 ; Rabone v. Williams, Id., 361; Lime Rock Bank v. Plimpton, 17 Pick., 159 ; Hogan v. Shorb, 24 Wend., 458.)
    IV. Nor does defendants being stock brokers affect this rule, for the course of dealing among stock brokers is not as brokers,- but as principals. (Child v. Morley, 8 Term R., 614.)

      Jeremiah Larocque, for plaintiff, respondent.
    I. It was competent for plaintiff to prove that the written order from Draper to defendants was in fact given for plaintiff’s account and benefit. This did not contradict the order. (Gunn v. Cantine, 10 Johns., 387; Dykers v. Townsend, 24 N. Y. R., 57.)
    II. Plaintiff could sue in' his own name, although the defendants had not previously known him as the principal in the transaction. (Del. and Hud. Canal Co. v. Westchester. Co. Bank, 4 Denio, 97, and cases cited; White v. Chouteau, 10 Barb., 202, and cases cited, p. 204; 1 Chitty’s Pleading, 7, 8, 9, marg. fols., and cases cited in notes; Vischer v. Yates, 11 Johns., 23; Yates v. Foot, 12 Id., 1.)
    III. If plaintiff could sue in his own name, there was, of course, an end of any right of set-off. (2 R. S., 354, marg. page; Code, § 150.)
    IV. Defendants, neither by their answer nor offer of evidence, sought to, nor could they, assert or maintain any right of lien upon the balance of this special deposit, for the prior indebtedness of Draper to them.
    1. A stock broker, as such, has no general lien upon anything which has not been specifically pledged to him. (Russell on Factors and Brokers, 193 and 194, and cases cited; 32 Law Library, N. S., 127, 128.)
    2. Even in such eases, the right of lien exists only in regard to claims arising out of the same factorship, banking or insurance business. It does not exist in regard to indebtedness not connected with that business. (Cross on Lien, 260,277 ; 18 Law Library, N. S., 172,182; Smith’s Mer. Law, 340; 1 Law Library, N. S., 202; Weldon v. Gould, 3 Esp. N. P. R., 268; Houghton v. Matthews, 3 Bos. & Pul., 485; Lanyon v. Blanchard, 2 Camp. R., 597; 1 Condy’s Marshall, 301.)
    V. The evidence as to defendants’ prior knowledge, that the orders given by Draper were not for his own account, having been withdrawn, the- exception falls, taken by the defendants; but if it had not been withdrawn, although unnecessary, it would have been admissible.
    VI. Defendants’ offer of proof that they understood the order to be for Draper’s own account, and had no notice to the contrary, was irrelevant and inadmissible.
    VII The evidence of usage of brokers in Hew York, was also entirely irrelevant and inadmissible. (Horton v. Morgan, 19 N. Y. R., 170.)
    VIII. The exception to the Referee’s not finding whether the order was or not given by Draper as an order on his own personal account, without notice or knowledge of any agency, is not well taken. He did. find that it was for plaintiff’s account; and the question of knowledge was immaterial.
   Monell, J.

That Draper was in fact the broker of the plaintiff; was employed by him to make the purchase; and that the plaintiff furnished the $1,000 deposit, is conceded. The defendants claim of set-off rests, in Draper’s having-given the order in his own name, and his furnishing the money as his own, without disclosing his principal. The elementary writers make a distinction between factors and brokers. The latter are described as persons employed to make bargains and contracts between other persons in matters of trade, for a compensation commonly called brokerage; while the former is intrusted with the property which is the subject of his agency. (1 Parsons on Contracts, 78; Story on Agency, ^ 28.) Parsons says, (vol. 2, p. 250,) a broker being one to whom goods are not intrusted, and who usually and properly sells in the name of his principal, and who is understood to be only an agent. Whether he sells in his own name or not, he stands only on the footing of an agent; and hence, he says, if an action be brought by the agent, in his own name, for a debt due to his principal, the defendant may set off a debt due from the principal. And Story says, (§ 28,) if a broker sells the goods of his principal, in his own name, (without any special authority to do so,) inasmuch as he exceeds his authority, the principal will have the samé rights and remedies against the purchaser, as if his name had been disclosed by the broker.

The right to set off a debt against the factor when the principal is not disclosed, arises, first, from the factor’s having the goods in his possession, and, second, from his general lieu. In the case of brokers, with the single exception of insurance brokers, a general lien does not exist. (Russell on Factors, 193.) And it is only in virtue of this general lien in favor of factors, that they have the right to dispose of the property as their own.

The $1,000 deposit was as security that-the contract of purchase would be fulfilled. It was to indemnify the defendants against loss, if Draper should fail to comply . with the terms of the contract. It could be held for that purpose, and for no other. Upon Draper’s failing to complete the purchase, it could be retained to meet any loss occasioned by a depreciation of the stock. In this case it was so used to the extent of $386.62.

The defense of set-off of a debt against Draper was properly overruled. Feither under the Revised Statutes, as a set-off, nor under the Oode, as a counterclaim, cohid it be allowed. It did not exist in favor of the defendants against the plaintiff. (3 R. S., (5th ed.,) 635, Code, § 150.)

The transaction constituted Draper the broker of the plaintiff, and it is immaterial whether he made the contract in his own name or in the name of his principal. He had no general lien on the plaintiff’s money which gave him a right to dispose of it to the plaintiff’s prejudice; and so long as the defendants parted with nothing, made no new advance upon the contract or upon the moneys deposited as sécurity, they acquired no right to absorb the plaintiff’s money in extinguishing a debt due from Draper to them.

It was not necessary to prove that Draper was the plaintiff’s broker. The transaction itself sufficiently characterized the nature of his agency, and the existence of the fact ■of agency., whether known to the defendants or not, would deprive the defendants of the right to retain the plaintiff’s money to pay Draper’s debt.

Any evidence, therefore, tending to show that the defendants were informed for whose account the order was given, was immaterial, and its admission under objection was error.

The subsequent withdrawal of this evidence, however, .by the plaintiff, cured the error.

The defendants have no equity. They lost nothing, and should not gain anything from a third and innocent party.

I see no reason for' disturbing the judgment. It must therefore be affirmed.

Bosworth, Ch. J.'

Bussell, on Factors and Brokers, states the law to be, that only one class of brokers possess the right of general lien possessed by factors, (pp. 191, 196.) That class consists of insurance brokers. I find no case which holds that a stock broker possesses this right. The justice and equity of the case are with the plaintiff, and I am unwilling to reverse a judgment which is just in itself, without any authority to justify the reversal, especially when the judgment is supported not only by its intrinsic justice, but by standard writers upon elementary law.

Barbour, J. (dissenting.)

It is quite clear, upon the testimony, that the funds furnished to the defendants by Draper, to be used as security, were not the identical $1,000 which had been sent to the latter by the plaintiff; Draper having given his own check to the defendants for a much larger amount, out of which the $1,000 was to be taken and applied by them, and having deposited to his own credit, or otherwise appropriated the funds transmitted to him by the plaintiff. The plaintiff, therefore, is not entitled to recover the specific funds deposited, as in an action of replevin, or for the delivery to him of personal property of which he is the owner, and which is unlawfully detained from him. If he has any standing in Oourt to recover the money deposited by Draper, it must be by virtue of his right to claim the substituted fund. It may be added here, that the finding of the Beferee to the effect that the $1,000 placed in the .hands of the defendants by Draper was the same money which was received by him from the plaintiff is erroneous, the evidence, which is entirely uncontradicted, showing that it was not the same. He has also erred in finding, as a fact, that the' deposit was made with the defendants when the order was given, instead of at the time the statement of the purchase was rendered by them. As these questions of fact, particularly the former, may be. of importance if the case should be taken to the Court of dernier resort, I think that, under the defendants’ exceptions, the General Term should reverse the judgment and direct a new trial for this reason.

Upon the trial the defendants offered evidence to prove, first, that in receiving the order, the defendants understood the order to be for Draper’s account, and his only, and that they had no notice or information to the contrary until after this action was commenced; second, that by the uniform and established usage and custom of brokers and dealers in stock in the City of Hew York, the purchaser and seller are uniformly regarded and treated, each by the other, as principal, and as making any sale and purchase on his own account, unless at the time of giving the order he declares the same to be for the account of some other person named by him; and, third, that at the time the order was given, Draper was indebted to the defendants in a sum exceeding $9,000, which, at the time of the trial, was still due and unpaid. The testimony in each case was objected to by the counsel for the plaintiff, and excluded by the Referee, whereupon the defendants duly excepted.

The exclusion of the evidence thus offered was erroneous in each instance. The proof of the non-disclosure of' the name of the plaintiff, and of the custom of 'brokers, was not offered for the purpose of invalidating the order, or changing the effect of the terms employed, but to support it by removing any ambiguity that might have been supposed to exist, involving the intentions of the parties, by reason of the relation which had been proved between the plaintiff and Draper, and was therefore admissible. It was upon this principle that the Court held, in Child v, Morley, (8 Term R., 614,) that the fact as to whether, by the general usage of the Stock Exchange, brokers contracting for the sale of stocks, and not disclosing the names of their principals, were considered as impliedly pledging their own credit for the faithful performance of the contract, may be proven.

So, too, as to the evidence of Draper’s indebtedness to the defendants. It is true that an unknown principal may recover for goods sold by his agent, and will be liable, when discovered, for goods purchased by him; but, Avhen the name of the principal is not disclosed, that is so only in eases where he assumes the liabilities and obligations of his agent, and stands in his place. Where a principal permits his«,agent to deal as apparent principal, and after-wards intervenes, the person dealing with such agent is entitled to be placed in the same situation as if the agent had been the real contracting party, and is entitled to the same defense, whether it be by payment or set-off, as he would have been entitled to against the agent and apparent principal, had there been no such intervention. (Carr v. Hinchliffe, 4 B. & C., 547; Gordon v. Ellis, 2 Com. B. R., 821; George v. Clagett, 7 Term R., 359; Ratone v. Williams, Id., 360, n.; Tucker v. Tucker, 4 B. & Ad., 745; Isberg v. Bowden, 22 L. & Eq. R., 551; Hogan v. Shorb, 24 Wend., 458; Story on Agency, §§ 390, 404, 420, 423; Paley on Agency, 151, 325; 1 Parsons on Cont., 53.) And, in this case, Draper so dealt with the defendants as to exclude the idea that he acted as agent for another person. It is not a mere .question of lien; but the defense of the defendants rests upon their right to offset a demand which they had against the person with Avhom they dealt, in liquidation of a balance that otherwise would have been due from them to Mm, according to the conditions of the contract between them.

It may properly be said, too, that although the defendants are called brokers, they did not act simply, if at all, as brokers, in the restricted sense in which that term is used in the books; that is, as applied to persons who are merely gobetweens for the parties in interest, within the knowledge of such parties, maMng their bargains for them, selling by samples, &e., and never having the property in their possession, nor meddling with its proceeds. Here the defendants, under Draper’s directions, did all this; and may, therefore, be considered, with reference to this transaction, as factors.

The admission of parol evidence to show that the plaintiff was the real party in interest, although that fact was not disclosed to the defendants, seem also to have been erroneous,'the only object and effect of it being to contradict the written order, which directs the defendants to purchase the. stocks for the account and risk of Draper, and the bought and sold note, furnished to Draper*at the time the $1,000 was advanced, which declares upon its face that the stock was purchased for his account and risk.

The judgment should therefore be reversed, and a new ■trial granted.

Judgment affirmed.


source: Caselaw Access Project

author: By the Court—Barbour, J.

license: Public Domain

text:
    The Mayor, &c., of the City of New York, Plaintiffs and Respondents, v. The Exchange Fire Insurance Company, Defendants and Appellants.
    1. The Corporation of the City of New York, with the consent of the counsel to the Corporation-,, may appear, in actions to which they are . parties, by other attorneys of record; and other counsel.
    2. Under a lease of vacant ground, at a nominal rent, with covenants on the part of the lessees to erect a valuable building of a permanent nature, and at the expiration of the term to surrender the premises in as good condition as reasonable use and wear will permit, damages by the elements excepted, and with no reservation of a right to remove the building, such building belongs to. the lessors, at the expiration of the term, and they then have an insurable interest therein.
    3. ' Where a building was originally constructed, and several times used, for •the purposes of an exhibition of industry, or fair; and the defendants, knowing'its use, had several times insured its owners or lessees in respect
    • to- it, and the plaintiffs, subsequently becoming its owners, procured the defendants to insure them in respect to it:

      Held, that the plaintiffs had a right, after obtaining such insurance, to occupy and use the building for the same purposes; but, that, if it was used • otherwise than as a mere place of exhibition, or was so occupied or used as to render the hazard greater at the tiine of the fire than when the insurance was effected, the plaintiffs were not entitled to recover thereon*, Held further, that, in the plaintiffs' action upon the policy issued to them, evidence of the former insurances was admissible as tending to show, in connection with other facts, that the defendants were aware of the general purposes for which the- building was used, and designed to assume a risk of the same character.
    4. An exception to a refusal to charge as requested cannot be sustained, where the case states that the Judge refused to give the instructions requested, except so far as they were embraced in the charge which was in fact given, but does not state the whole of the charge given, so as to make it appear that the request was actually disregarded.
    (Before Bosworth, Ch. J., Barbour and Monell, J. J.)
    Heard April 11, 1862;
    decided June 28, 1862.
    Tras action was brought upon a fire insurance policy, issued by the defendants ■ to the plaintiffs, in 1858, upon “ the iron and glass building in the City of New York, known as the Crystal Palace, on Beservoir square, the furniture and fixtures lately owned by the Association for the Exhibition of the Industry of all Nations, and the property of exhibitors remaining in the said building.”
    When the cause was called for trial, before Mr. Justice Woodbtjff, and a Jury, on the 21st of May, 1861, the counsel for the defendants moved to strike the same from the calendar, or to dismiss the complaint, on the ground that the attorney of the plaintiffs, of record, was not the counsel to the Corporation, nor in any way connected with the law department of the city, and, therefore, that the plaintiffs were not legally represented before the Court; which motion was overruled and an exception taken.
    The following facts were established by the pleadings, and by the evidence given on the part of the plaintiffs upon the trial:
    On the 23d of March, 1852, the Mayor, Aldermen and Commonalty of the City of New York, then being the owners in fee of the lot of ground in the city, known as Beservoir square, by their indenture, leased the said premises to Edward Biddle and his associates, for the term of five years, if required and used by them for the purpose mentioned in the lease, or, if not, then for such period, not exceeding five years, a's- they might use the same, at an •annual rent of one dollar, in quarter-yearly payments, whereon to erect a building of iron and glass, of a certain description, for the purpose of ap Industrial Exhibition of all Rations. The lease provided that the price of admission to the building, for individuals, should at no time exceed fifty cents, and that in case of default in payment of rent, or in any of the covenants, on the part of the lessees, the lessors might re-enter and remove all persons from the premises; and the lessees covenanted and agreed, in said lease, that they would erect such building and charge no more than fifty cents for admission, and that, at the expiration of the term they should quit and surrender the demised premises in as good state and condition as reasonable use and wear thereof would permit, damages by the,elements excepted. «
    The building, a costly structure, of a permanent character, was erected by the lessees, and used by them for the purposes mentioned in the lease, for some time. In December, 1854, John H. White was appointed by the Supreme Court, Receiver of the property of the association, including their interest in the Crystal Palace building, and entered into possession. In the fall of 1856 the American Institute was permitted, by the Receiver, to hold a fair in it, for six or eight weeks, and again in 1857. Rent was paid to the city, according to the provisions of the lease, up to the first of May, 1857.
    On the 31st of May, 1858, the Comptroller of the city sent an officer, with some policemen, who in the absence of the Receiver then having the superintendence of the building, took possession thereof, and, on the return of that person, upon the same day, he surrendered the premises to the officer.
    In June, 1858, the Corporation procured from the defendants a policy of insurance against fire, upon the building, then known as the Crystal Palace, together with the furniture and fixtures therein, lately owned by the Association for the Exhibition of Industry of all Rations, for account of whom it might concern. The policy covered a risk of $5,000, and contained the usual clauses in regard to hazardous and extra hazardous goods, or occupations, requiring the company’s consent to their exercise or deposit, to be expressed in writing in or upon the policy, in default whereof the policy should be of no effect. In October, 1858, the building, with most of its contents, was destroyed by fire, the loss upon the building largely exceeding the amount of insurance upon it; and proofs of such loss were duly made by the plaintiffs.
    Upon the trial the plaintiffs waived all claim for loss on the property insured, other than the building itself.
    At the conclusion of the plaintiffs’ evidence, the counsel for the defendants moved to dismiss the complaint, which motion was denied and the decision excepted to.
    The defendants then proved that the plaintiffs let the premises to the trustees of the American Institute, two days after the policy was issued, and that the fire occurred while they were in possession of the building, with their property and fixtures, and the property of their exhibitors.
    The defendants then produced testimony" showing, among other things, that at the time of the loss there were in the building a number of articles deposited, and operations carried on, as a part of the exhibition, which were specified in conditions of the policy as extra hazardous; and evidence was also given tending to show that the exhibition of the Institute was then ah unusually large one, and that the quantity of steam machinery, &e., was greater than in former years.
    The plaintiffs subsequently offered in evidence policies of insurance, which the defendants had issued to the Eeceiver of the property of the Association for the Exhibition of the Industry of all Nations, before the plaintiffs took possession; and offered, in connection with these policies, which were in substantially the same terms as the one sued on, to prove that the exhibition, at the time of loss, was substantially of the same character as those which were had during the life of such former policies. To all this evidence the defendants objected, but their objection was overruled, and the evidence received.
    Exceptions were taken by the defendants to sundry other rulings of the Judge during the progress of the trial, and also to portions of his charge, as well as to his refusal to charge as requested.
    The Jury returned a verdict for the plaintiffs for the amount claimed, and from the judgment entered thereon the defendants appealed.

      John W. Edmonds, for defendants, appellants.
    I. It is not -competent for attorneys, not counsel to the Corporation, to prosecute this suit. The charter and ordinances of the city devolve on the counsel of the Corporation, “all the law business of this Corporation.” (1 Laws of 1857, p. 882, § 26.) An attorney may always be called on to show his authority, unless there has been an acquiescence in his appearance. (Campbell v. Bristol, 19 Wend., 101; 99 Plaintiffs v. Vanderbilt, 4 Duer, 636; King of Spain v. Oliver, 2 Wash. C. C. R., 429; Gillespie's Case, 3 Yerg., [Tenn.,] 325; Allen v. Green, 1 Bailey, [S. C.,] 448; McKiernan v. Patrick 4 How., [Miss.,] 333; West v. Houston, 3 Harring., [Del.,] 16; Cartwell v. Menifee, 2 Pike, [Ark.,] 358.) And if he does not show it the name of the party may be struck out. (Maries v. Maries, 23 Eng. L. & Eq., 221.) Or perpetual stay be awarded. (Campbell v. Bristol, 19 Wend., 101.) Or the suit be dismissed on defendant’s motion. (Frye v. Calhoun Co., 14 Ill., 132.)
    Hor can an attorney delegate his authority. Delegatus non potest delegare; Vicarius non habet vicarium. (Broom’s Legal Maxims, 384; Story on Agency, §§ 13, 14, 24; 2 Kent Com., 633; Paley’s Agency, 175; Kellogg v. Norris, 5 Eng. [Ark.] R., 18 ; Ratcliff v. Baird, 14 Texas R., 43.) Personal trust and confidence, which cannot be delegated. (Hitchcock v. McGehee, 7 Porter, [Ala.,] 577; Johnson v. Cunningham, 1 Ala., 249; Tomlin’s Law Dict., Tit. “Atty.;” 13 Edw. I., 2 Westm.)
    And this is a public office, not merely ministerial, and cannot be delegated. (Ramson v. Mayor, &c., of New York, 24 Barb., 226; Lynch v. Livingston, 8 Barb., 463 ; 2 Seld., 422.) Moreover, plaintiffs being a corporation, can appear only by attorney duly authorized.
    II. The city had no insurable interest. Such interest to the amount of the loss claimed must be averred and proved. (Pars, on Merc. Law, 408, 507; Howard v. Albany Ins. Co., 3 Denio, 301; Murdock v. Chenango Ins. Co., 2 Comst., 210.) A mere possibility of ownership is not enough. (Pars. on Merc. Law, 507 ; Carter v. Rockett, 8 Paige, 437; Niblo v. American Ins. Co., 1 Sandf. S. C. R., 551; Laurent v. Chatham Ins. Co., 1 Hall, 44, and see 18 Pick., 419.)
    There was no forfeiture of the building to the lessors, on the expiration of the term, by reason of the non-removal of the building during the term. In support of this point the counsel cited and commented on the following authorities, as showing the true doctrine of forfeiture of fixtures by an outgoing tenant. (Penton v. Robart, 2 East, 88; Weeton v. Woodcock, 7 M. & W., 14; per Ld. Holt in Poole’s Case, 1 Salk., 368; Prince v. Case, 10 Conn. R., 378; Parker v. Redfield, Id., 496; King v. Wilcomb, 7 Barb., 265; Smith v. Benson, 1 Hill, 176; Russell v. Richards, 1 Fairfield, 429 ; Godard v. Gould, 14 Barb., 662; Mason v. Penn, 13 Ill. R., 525; Whiting v. Brastow, 4 Pick., 310; Wansborough v. Maton, 4 A. & E., 884; Lawrence v. Kemp, 1 Duer, 365; Holmes v. Tremper, 20 Johns., 29; Doak v. Wiswell, 38 Maine R., 569; Fuller v. Tabor, 39 Id., 519; Mott v. Palmer, 1 Comst., 564; Smith v. Jenks, 1 Denio, 580; 1 Comst., 90; Godard v. Gould, 14 Barb., 662; Van Ness v. Packard, 2 Pet., 145; Dubois v. Kelley, 10 Barb., 495; Pemberton v. King, 2 Dev., 376; Preston v. Briggs, 16 Verm. R., 124; Curtiss v. Hoyt, 19 Conn. R., 154; Ombony v. Jones, 19 N. Y. R., 238; Grady on Fixtures, 183; 35 Law Lib., N. S.)
    III. The Court erred as to the violation of the conditions, both in the charge and in refusals to charge as requested.

      1. This is not an equitable action to reform the contract, but a strictly legal action to enforce a contract set out in hcec verba.

    And the only question is, what are the terms of the contract, and have they been violated ?
    2. In order to arrive at the terms of the contract, its language is to determine where there is no ambiguity.
    In insurance law, this rule is very rigidly adhered to. (2 Park on Ins., 975; Hobby v. Dana, 17 Barb., 111; Sillem v. Thornton, 26 Eng. L. & Eq., 238; Mead v. N. W. Ins. Co., 3 Seld., 530; 7 Gray, 257; Stokes v. Cox, 37 Eng. L. & Eq., 561; Wall v. E. Riv. Ins. Co., 3 Duer, 264; see also 3 Gray, 583; 30 Penn. R., 315; 3 Dutch., 134.)
    3. In this policy there was no ambiguity. It is an insurance on the building described, its fixtures, furniture and contents, and not a word as to any use that was to be, or might be made of it.
    The risk was on the building, &c., as then used, and as then situated.
    And the insurance was to protect the property in its then condition.
    4. There was also a large increase to the risk, not only beyond the condition of things when the insurance was made, but beyond that of any former use of the premises.
    Any alteration materially increasing the risk voids the policy. (2 Parsons on Mer. L., 504; 1 Dutch., 78; Westfall v. H. R. Ins. Co., 2 Kern., 289; Glen v. Lewis, 20 Eng. L. & Eq., 364; S. C., 8 Exch., 607.) And it was out of this increase of risk that the loss occurred in this case.

      5. Yet the Judge ruled, that the plain language of the contract might be disregarded, and an increase of the risk be set aside, by evidence of the manner in which the building had been used in times past.
    The plaintiffs’ remedy, if any, was in an action to reform the contract. (1 Story Eq. Jur., § 152 ; Wood v. Dwarris, 11 Exch., 493; S. C., 33 Eng. L. & Eq., 514 ; Wheelton v. Hardisty, 8 Ellis and Bl., 232 ; Lyman v. U. Ins. Co., 2 Johns. Ch. R., 630.)

      But even in such case it must be made out by proof that such was the intention of the parties to allow such increase of the risk, and it would be open for the insurance company to show that they had no such intention, whereas it is now taken for granted, without proof, that they had. (1 Story Eq. J., §§ 152, 158; Gillespie v. Moon, 2 Johns. Ch. R., 585; Lyman v. U. Ins. Co., Id., 630.)
    Now, there is no proof in this case that the insurance company intended to assume the risk of another exhibition in the building. It is a mere inference from a former use of the building.
    And, at all events, if such an inference is to be drawn, it is for the Jury, and not an inference of law, as assumed by the Judge in his charge. (Gillespie v. Moon, 2 Johns. Ch. R., 585; Keisselbrack v. Livingston, 4 Johns. Ch. R., 144.)
    IY. The Court erred in admitting the evidence of previous insurances on the premises, and in its charge to the Jury on the evidence thus introduced.
    This was in effect admitting parol evidence, to vary the written agreement, and permitting the Jury on such evidence to read the policy in a manner differing from its language and plain import.
    1. It is of paramount importance that parties should be held to perform contracts as they have made them, and in no other manner. (Chaffee v. Cattaraugus Ins. Co., 18 N. Y. R., 384; Brown v. Same, Id., 390; Plumb v. Same, Id., 394; Lamatt v. Hudson R. Ins. Co., 17 N. Y. R., 199; 1 Parke on Ins., 46; Pars, on Mer. L., 494.)
    2. The “ conditions ” relate not merely to the state at the time of the policy, but are a warranty that it shall remain so. (Westfall v. Hudson R. Ins. Co., 2 Duer, 490; Sillem v. Thornton, 26 Eng. L. & Eq., 238; Parsons on Mer. Law, 499, and note; Williams v. N. Eng. Mutual, 31 Maine, 219.)
    3. The conditions must be strictly performed, whether the risk be increased or not. (2 Park on Ins., 661.)
    4. Proof of usage is not admissible to explain or vary the language, unless it be so general a usage of trade as necessarily to enter into and form part of the contract. (1 Park on Ins.,46; Blackett v. Royal Ass. Co., 2 C. & J., 244; Gabay v. Lloyd, 3 B. & Cr., 793; Robertson v. French, 4 East, 134; 2 Greenl. Ev., § 377 ; Illinois Mutual v. O'Neile, 13 Ill., 89; Pars, on Mer. L., 490.)
    5. Evidence of a particular use of the building before-the policy is not admissible, and is no excuse for a departure from the language of the contract. (Mead v. N. W. Ins. Co., 3 Seld., 534; Macomber v. Howard Ins. Co., 7 Gray, 257; Illinois Mutual v. O'Neile, 13 Ill.., 89; State Mutual v. Arthur, 30 Penn., 315; Wall v. E. R. Ins. Co., 3 Duer, 264.)

      Daniel Lord, for the plaintiffs respondents.
    I. The plaintiffs, as owners of the fee of the land, in possession at the time of the insurance and of the fire, had an insurable interest. The building was not a removable fixture, but a part of the realty.
    II. The policy described the building as “ the iron and “ glass building known as the Crystal Palace on Reservoir “ Square; it also covered the furniture and fixtures lately “ owned by the Association for the Exhibition of the
    Industry of all Nations;” also, “ the property of exhibitors “remaining in the said building.” This description of a building and its contents, was a description of the purpose of its occupation, as much so as if described as a cabinetmaker’s warehouse, or a distillery, or a printing house.
    It was also a conspicuous object in a public square of the city in which all parties resided, and which had been continuously a public place of exhibition long before and up to the date of the policy. It was of course insured as a building to be occupied and used for the purpose indicated by the description, and not as a building to be left vacant.
    The restriction of the modes of use in the policy on which the defendants place their defense admits the right of use in every way not within the restriction. (Harper v. Albany M. Ins. Co., 17 N. Y. R., 194; Bryant v. Pough

      keepsie M. Ins. Co., 17 N. Y. R., 200; Delonguemare v. Tradesmen's Ins. Co., 2 Hall, 589; appr. 17 N. Y. R., 197; Harper v. City Fire Ins. Co., 22 N. Y. R., 442; Townsend v. N. W. Ins. Co., 18 Id., 168; Grant v. Howard Ins. Co., 5 Hill, 10.)
    III. The merchandise, machinery, &c., in the building were all within the use described in the policy, of a place of the public Exhibition of the Industry of all Rations; and they were therefore within the description covered by that of the building insured as a'building to be used.
    IV. The use and occupation of the building was not “ an appropriation, applying or using, for the purpose of carrying on or exercising any trade or vocation specified “ in any of the classes of proscribed hazards, nor a storing “ or keeping therein of any of the goods or merchandise “ proscribed as hazardous.”
    1. The exhibition, by way of experiment, of machinery, Sc., or of articles of industry, was not carrying on or exercising any trade, nor the storing or keeping of merchandise. These latter* clauses apply to a substantial business, and not to a mere exhibition. (1 Phil. Ins., 479, pl. 882, 883, and cases there cited; Hynds v. Schenectady Ins. Co., 1 Kern., 561; O'Niel v. Buffalo Ins. Co., 3 Com. 3., 122 ; Langdon v. N. Y. Ins. Co., 1 Hall, 226; 6 Wend., 623.)
    2. Exceptions to exempt an insurer are all to be restricted in their construction, the policy being a contract framed by him. (Anderson v. Fitsgerald, 4 House of Lords’ Cases, 484; 24 Eng. L. and Eq., 1.)
    V. There is no evidence that the risk was increased by any means within the control of the insured.
   By the Court—Barbour, J.

The objection of the defendants’ counsel to the appearance of Mann & Rodman as attorneys for the plaintiffs in the action, was not well founded. The General Term of this Court has decided, in a similar case, that, although it is made the duty of the counsel to the Corporation, by statute, to bring and defend their suits, and to perform all their law business, there is nothing in the statute intended or calculated to prohibit the employment of other attorneys or counsel by the city authorities, as was done, with the consent of the Oorporation Counsel himself, in this case.

Neither the exception of the defendants to the denial of their motion to dismiss the complaint when the plaintiffs rested, nor their exception to that part of the charge of the Judge, in which he instructed the Jury that the plaintiffs, as the owners of the land upon which the building stood, had an insurable interest to the extent of the value of the building, was well taken. The plaintiffs were the owners in fee of the land upon which the building stood. They were, therefore, the owners of the building, which was a permanent structure, and attached to the freehold and formed a part of it, unless there was something in the lease to the association taking the case out of the general rule, that buildings of that description belong to the realty, which, clearly, there is not. No right to remove the building is reserved or granted to the lessees in the lease; but, on the contrary, the "premises, which were of great value, were demised to the lessees at a merely nominal rent, in consideration of which, they, on their part, undertook and covenanted that they would erect thereon a building of a certain description, and that, at the expiration of the term, they would quit and surrender the demised premises, in as good state and condition as reasonable use and wear thereof would permit, damage by the elements excepted. This language imports an intent to surrender the structure which was, by the terms of the léase, to be erected, as well as the land upon which it was to stand. It seems hardly possible to suppose that the parties designed to provide against an injury by use and wear to a block of ground, then wholly vacant, and which,, under the lease, was only to be used by placing a building upon it; nor that they intended to except mere land, occupied as this was to be, from damage by the elements.

There is nothing in the case, as presented to the General Term, showing, or tending to show, that the Justice before whom the cause was tried refused or omitted to charge the Jury, in substance, everything that he was requested to charge them by the counsel for the defendants. The case states that the Judge refused to give the instructions to the Jury, as requested, “ except so fa/r as they tvere embraced in the charge which was, in fact, given;” and that he charged the Jury, “ among other things,” certain matters as set forth in the case; but there is no statement showing what those other things, charged by him, were. For aught that •«appears, therefore, none of the requests were omitted by the Judge; and it follows that the exception, in this regard, cannot be sustained.

The evidence of former insurances upon the property, by the defendants, tended to show, in connection with other facts proved, that the defendants were fully aware, at the time the policy was issued to the plaintiffs, of the general purposes for which the Crystal Palace had been, and then was used; and that they designed to assume a risk of the same character as those covered by the prior policies, in almost the same words. It was, therefore, properly admitted.

There was but one important fact, to be determined by the Jury, upon which there was any doubt; that is, whether the risk was so increased, after the issuing of the policy, as to render the same inoperative. Upon that subject the Judge charged, substantially, that the plaintiffs had a right, after the policy, to occupy and use the building for the same purposes for which it had theretofore been used within the knowledge of the defendants when the risk was taken•, but that if it was used otherwise than as a mere place of exhibition, or was so occupied or used as to render the hazard greater at the time of the Are than when the insurance was effected, the plaintiffs were not entitled to recover. The charge, in this regard, was undoubtedly correct.

Upon a careful examination of the entire case and exceptions, we are of opinion that no error, was committed upon the trial which authorizes us to disturb the verdict. The judgment must, therefore, be affirmed.

Ordered accordingly.


author: By the Court—Bosworth, Ch. J.

text:
    Thomas Fielden et al., Plaintiffs and Appellants, v. Pierre Francois Lahens et al., Defendants and Respondents.
    1. The common law rule that in an action on a joint contract, against several persons, the plaintiff cannot recover against either, without establishing that the contract sued upon is the joint contract of all, still applies in actions which were commenced before the enactment of the Code of Procedure.
    2. The provision of section 274 of the Code of Procedure, altering this rule, does not affect actions commenced before the Code; and section 459 of the Code, as amended in 1851, which makes all its provisions apply to future ‘‘proceedings” in actions theretofore commenced, merely prescribes the forms to be observed, and does, not modify or repeal any rule of law affecting a defendant’s liability or a plaintiff’s right to recover.
    3. One who receives a note, indorsed in the name of a partnership, knowing at the time that the indorsement was not given for a partnership debt or in the partnership business, but was written by one member of the firm, in a matter not relating to the firm’s business, hut on the contrary for the accommodation of another person, cannot recover thereon against the other members of the firm.
    4 The Court will not.reverse a judgment because the Referees, before whom the cause was tried, excluded an offer of further evidence on the part of the plaintiffs, made after the plaintiffs had rested and a nonsuit had been directed, unless the offer of such evidence sho.wed at least the counsel’s belief that the evidence, if admitted, would aid the plaintiffs. ■

      5. A deposition is not to be excluded on the ground that the witness was incompetent, by reason of interest, at the time when it was taken, if his oral testimony would be competent bylaw at the time of the trial, notwithstanding the existence then of the same interest.
    (Before Bosworth, Ch. J., and Moncrief, Robertson, White and Monell, J. J.)
    Heard, May 17.;
    decided, June 28, 1862.
    This action was brought by Thomas Eielden, Daniel Campbell and William C. Pickersgill, survivors of Joshua Fielden, John Fielden and James Fielden, composing the firms of W. 0. Pickersgill & Go., of New York, and of Fielden Brothers & Co., of Liverpool, England, against Pierre Francois Lahens, Edward Ernest Lahens, and Louis Emile Lahens, survivors of Augustin Edouard Gaudard, composing the firm of J. Lahens and Company, of New York, and of Havre, France, seeking to charge them as indorsers of three promissory notes, all made by one Alexander Caselli, .of New York, to the order of J. Lahens & Co., and indorsed in their name, all dated May 25th, 1844. The amount of the three notes was nearly $49,000. The action was commenced before the enactment of the Code of Procedure; and after issue it was - referred for trial to Bobert Emmett, George 0. Goddard and William Betts, Esqs.
    It appeared on the trial that at the time of making the notes, Alexander Caselli, the maker, was a merchant in New York, engaged in purchasing and shipping cotton and other produce to Europe for sale on his account. He had obtained from Mr. Pickersgill, of the plaintiffs’ New York firm, large advances, afid, as security, had deposited with him a large amount of business paper and bonds. Caselli desiring .to obtain these, induced Mr. Pickersgill to return them to him, upon his promise to give him immediately other negotiable paper in lieu thereof, and, in pursuance of this promise, Caselli drew the notes in suit, and procured Louis Emile Lahens, (who was the only member of defendants’ firm resident in this country,) to indorse these notes in his firm name, and these notes, so indorsed,. Caselli delivered to Pickersgill in exchange for the business paper and other securities referred to. Lahens being examined as a witness at the trial, testified that Caselli applied to him to indorse the notes, saying- that he had received notices of sale of produce abroad, but not the regular accounts; that Mr. Pickersgill agreed to advance the amount appearing due if he, Caselli, would give security that Ms statement was correct, and that he wished to give these notes in exchange for other securities already given for this purpose, and “being convinced of Hr. Oaselli’s accuracy, and, out of friendship to him, he agreed to indorse said notes, with the express understanding that said notes should be delivered to Messrs. Piekersgill & Co. in behalf of Eielden,- Bros. & Co., of Liverpool, and remain in Piekersgill & Co.’s hands, for no other purpose than they should be security that the account or statement should be correct.
    Caselli, on remitting the notes to Mr. Piekersgill, stated in one of his letters : “In order to please you, I have left my desk and procured the signature of J. Lahens & Co. to the two notes herein inclosed.” In another he said: “I now beg to remit you my note, indorsed by Messrs. J. Lahens & Co., for balance of securities. I would have sent it to you yesterday, had not these gentlemen been too much engaged to attend to my own matters.”
    The Referees decided that Louis Emile Lahens alone could be held liable on the indorsement; but that the other members of the firm having been joined with him as defendants, the plaintiffs could not recover in this action against any of the defendants, and they directed a non-suit. The plaintiffs’ counsel then called Louis Emile Lahens as a witness to produce the articles of partnership between the defendants; and being required to state what he expected or intended to prove by the witness, the counsel stated : “We intend to prove what was the authority conferred on Louis Emile Lahens by his copartners, as a member of the firm of J. Lahens & Co., we ourselves not knowing what that authority was.”
    The Referees deemed the statement indefinite and insufficient, and excluded the evidence.
    In the course of the trial, the defendants’ counsel offered in evidence a deposition of Mr. Caselli, taken de bene esse, in ther year 1845, to the admission of which the plaintiffs’ ■counsel excepted on the ground that, by reason of his interest in the suit, he was incompetent as a witness when the deposition was taken.

      Jeremiah Larocque, for appellants.
    I. Conceding for the present, for the sake of the argument, that the plaintiffs could not recover against Pierre F. and Edouard E. Lahens, the deduction of the majority of the Beferees as a consequence, that the plaintiffs must fail against Louis E. Lahens, was manifestly erroneous under the authorities, the point being res acljudicata by the decisions of the General Term of this Court as well as of the Court of Appeals. (Code, § 136, subd. 3; § 169; § 274; § 459, subd. 2; Claflin v. Butterly, 5 Duer, 327; McKensie v. Farrell, 4 Bosworth, 192; Brumskill v. James, 1 Kernan, 294; Marquat v. Marquat, 2 Kernan, 336; Pruyn v. Black, 21 N. Y. R., 300.)
    II. Section 459 of the Code, both in letter and in spirit, brings this case, commenced before the Code was adopted, within its operation. (Code, § 459, subd. 2; Dunham v. Watkins, 2 Kernan, 556; Fellows v. Emperor, 13 Barb., 92; Davis v. Smith, 14 How. Pr., 187; Reynolds v. Davis, 5 Duer, 611; Fitch v. Livingston, 4 Sandf., 712.)
    III. The articles of copartnership of the defendants, and the evidence of L. E. Lahens offered in connection with them, were competent for the plaintiffs on the question of the authority, of Louis E. Lahens to bind his copartners by the indorsements in question, and were improperly excluded. They were excluded because the plaintiffs’ counsel could not state “ on his honor ” whether they would make for or against him. In other words, he could not tell whether the answer of a witness to a pertinent question would b$ favorable or unfavorable to his clients. The rule applied is believed to be a novel one in reference to the admission or exclusion of testimony.
    IV. The deposition of Alexander Caselli under the commission was improperly received by the Beferees, and the exception on that account was well taken. He was incompetent from interest when he was “ offered as a ivitness,” by being examined under the commission, (February 20, 1845,) and the case is therefore not helped by the Code. He was incompetent, because the defendants were his accommodation indorsers, and he, having notice of the suit by being examined as a witness, was liable to them for their costs and expenses, in addition to the amount of the recovery which might be had against them on the notes, and his interest, therefore, was not balanced. (Code, § 398; Hubbly v. Brown, 16 Johns., 70; Tilden v. Gardiner, 25 Wend., 663; Bowne v. Hyde, 6 Barb., 392; 1 Greenleaf’s Ev., 401; 2 Id., 218, and cases.)
    V. The defendants, Pierre E. and Edouard E. Lahens, are not absolved from liability under the indorsement of their firm name, by their copartner, Louis E. Lahens, on the ground that the indorsements were made for the accommodation of Oaselli, and for that reason beyond the scope of their partner to bind them. Upon the evidence, it is not to be presumed that Mr. Pickersgill had notice as to the circumstances attending the making and negotiation of the indorsements. .

      Charles O'Conor, for respondents.
    I. The defense of the absent brothers Lahens is based on the familiar rule that a partner has no more authority than a mere stranger to execute such bills, &c., in his own business, or for the accommodation of others, and in .such cases the instrument, as against the firm, “ is void in the hands of any party having knowledge of the consideration for which it is given.” ’(Farmers' Bank of Kent v. Butchers' and Drovers' Bank, 16 N. Y. R., 135, per Selden J.; N. Y. Fire Ins. Co. v. Bennett, 5 Conn. R., 580.)
    II. The form of the security taken by the ¿plaintiffs was full and express notice to the plaintiffs that the signature of Lahens & Co. was placed thereon by one member of the firm, by way of, and as a guaranty of the obligation to pay entered into by Oaselli. (Foot v. Sabin, 19 Johns., 156; Laverty v. Burr, 1 Wend., 529, in point; Stall v. Catskill Bank, 18 Wend., 478, per Walworth; Bank of Vergennes v. Cameron, 7 Barb., 150.)
    1. Indorsing as surety for another, is not a legitimate or regular branch of banking business. (Bank of Genesee v. Patckin Bank, 3 Kern., 316, 321.)
    2. The attempt to connect the firm of Lahens & Co. with the consideration moving between Caselli and Pickers-gill, by force of any inferences deducible from the fact that some of the business notes given up to Caselli by Pickersgill bear the indorsement of Lahens & Co., is not consistent with any legal view of the evidence, and is well refuted by Laverty v. Burr, (1 Wend., 529, above.)
    III. It was the duty of the Beferees to dismiss the complaint as to these defendants. (Carpenter v. Smith, 10 Barb., 664, and cases there cited; People v. Cook, 4 Seld., 74, 75.)
    IV. The plaintiffs’ several exceptions are not well taken.
    V. Whether the judgment was erroneous or not as to the defendant Louis Emile Lahens, it ought to be affirmed as to the defendants Pierre F. and Edouard Ernest Lahens. (Code, § 330; Montgomery Co. Bank v. Albany City Bank, 3 Seld., 459; Giraud v. Stagg, 4 E. D. Smith, 27; Ogden v. Gardner, 22 N. Y. R., 327.)
   By the Court—Bosworth, Ch. J.

I. An important question presented by this appeal is, whether in an action on contract, commenced before the enactment of the Code against several persons as partners, the plaintiff can recover against either, without establishing a cause of action against all. z

It was settled before the Code, that in such an action if the evidence disclosed that there were too many, or too few, plaintiffs, or too many defendants, a nonsuit was inevitable.

The codifiers, in their note to section 230, (now 274,) state the existence of this rule, and the consequences arising from the nonjoinder or misjoinder of parties, and that “ this section will prevent them hereafter.” (Codifier’s Report of February 29, 1848, p. 194.)

Having proposed this section for the purpose of accomplishing this object, (among others,) and the Legislature having enacted it in the form proposed, with this explanation of its design before them, that body must be presumed to have enacted it for the purpose of giving effect to this intent. The language of the section is appropriate to produce the change proposed to be effected by it.

These considerations are sufficient to show that it was never contemplated that § 169 [145] would be construed as sufficient to produce the same result; and that it was not enacted with a view to make such a result possible. The codifiers, after having drafted that section, and appended to it a note explanatory of its design, drew § 274, [230,] and by a note added to it state that the latter section was proposed as drawn, to obviate the unjust consequences imputed to the common law rule as to parties, to which that note refers.

Section 8 of the Code declares that part two of the Code (in which these sections are found) “ relates to civil actions commenced in the courts of this State after the 1st day of July, 1848, except when otherwise provided •therein.”

An act was passed cotemporaneously with the Code, (April 12, 1848,) entitled “ An act to facilitate the determination of existing suits in courts of this State.” (Laws of 1848, p. 566.) That act applied to existing suits sections 145 to 151 inclusive, (now 169 to 176 inclusive,) but did not apply section 230, (now 274.)

When this act, and the Code, were amended in 1849, the same condition of things was continued. (Laws of 1849, p. 705.) There can be no pretense that the law has been changed in this respect, unless it has been effected by § 459 of the Code, as amended in 1851. It must, therefore, be conceded, that up to 1851 the Code had not only not attempted to modify the common law rule as to parties in suits commenced prior to its enactment, but, on the contrary, it expressly provided that the very section which was enacted to abrogate it as to suits to be commenced subsequently, should not apply to existing suits.

There would seem to be good reason for not applying it to existing suits. The enactment of a law, pending a suit, which should deprive a defendant of a perfect defense to the action and of the costs consequent upon establishing it, and enable a plaintiff to recover damages, and not only absolve him from a liability to pay costs to all the defendants, but confer a right to recover costs from some of them, would be extraordinary legislation ; and it was evidently the design, that a plaintiff who had a suit pending at the time the Oode took effect, in which, by the settled rules of the common law, he could not recover, although it might be for the reason he had sued too many persons as defendants, should be controlled to the conclusion of the litigation by the rules regulating the right to recover at all, which were in force at the time when his suit was brought.

I do not find that chap. 380, of the Laws of 1848, as amended by chap. 439, of the Laws of 1849, has been repealed.

Section 459 of the Oode, as amended in 1851, should be construed in the light of this legislation, and in harmony with the policy and provisions of chap. 380, Laws of 1848, and chap. 439, Laws of 1849, unless by the obvious meaning of its terms, it repeals the last named act. That act is not, by any statute, in terms, repealed; and if repealed, it is by force of a construction to be given to § 459 of the Code.

That section, by enacting that “ the provisions of this act (the Oode) apply to future proceedings in actions or suits heretofore commenced and now pending * * where there is an issue of law or fact, or any other question of fact to be tried, to the trial and all subsequent proceedings,” merely prescribes the forms to be observed, and does not modify or repeal any rule of law affecting a defendant’s liability in the action, or a plaintiff’s right to recover in it.

In Rich v. Husson, (1 Duer, 617, 620, 621,) the meaning of the word “proceeding,” as used in this section, was a matter of consideration and comment, and it was construed as corresponding with “modal.” The Court say: “It means, in all cases, the performance of an act, and is wholly distinct from any consideration of an abstract right. A proceeding in a civil action is an act necessary to be done in order to attain a given end. It is a prescribed mode of action for carrying into effect a legal right.”

The first subdivision of section 439 requires “the pleadings and all subsequent proceedings,” where there has been no pleading, to be in the form prescribed for suits brought under the Oode; the second applies the forms of the Oode “to the trial and all subsequent proceedings;” and the third, its forms of proceedings, “to enforce, vacate, modify or reverse ” a judgment or order.

The object of this section, which by amendment received its present form nearly three years after the Oode took effect, was to prescribe in regard to all steps that might be taken subsequently in existing suits, that they should be in the form provided by the Oode. From that time forward, all proceedings then subsequent, whether in suits commenced before or after the Oode was passed, were to be the same in form, as if the suits were brought under the Code.

In this view of the law, the Beferee did not err, in holding that the plaintiffs could not recover against either defendant, as they had failed to prove a joint liability of all.

Ho case has been cited, which holds that in an action commenced prior to the Oode, against several, as joint contractors, the plaintiff can recover against some of them, without so far establishing a right to recover against all as consists in proof that the contract sued upon is the joint contract of all. In such a case, a plaintiff could recover, though one or more of the defendants might establish a defense merely personal, as infancy, or the like; but he was compelled to establish that it was, in fact, the joint contract of all, and failing to do this, he could not recover against either.

II. The plaintiffs, at the time they received the notes in question, received them from A. Oaselli, the maker, and knew that the indorsements were not given for a partnership debt, or in the partnership’s business, and that they were written by one of the Arm in á matter not relating to the Arm’s business, but, on the contrary, to accommodate the makers. (Laverty v. Burr, 1 Wend., 529; Stall v. Catskill Bank, 18 Wend., 478; Foot v. Sabin, 19 Johns., 156; Boyd v. Plum, 7 Wend., 309; Joyce v. Williams, 14 Wend., 141; Wilson v. Williams, 14 Wend., 158.)

If the Referees had found the fact which the appellants’ counsel insists they might have- found upon the evidence, viz.: that the business paper delivered by Pickersgill to Oaselli, on the 23d of May, was intrusted to the latter, under an agreement to the effect that Pickersgill was to receive in exchange for it other good business paper to the" amount of $27,500, and J. Lahens & Oo.’s two notes, with Caselli’s indorsements, for $27,500 more; even then, no liability as against any defendant other than Emiie Louis' Lahens, would have been established. The insurmountable difficulty would still remain, that the consent óf his partners to the transaction is not proved, and no evidence is furnished of any grant of authority to him to pledge the Arm’s name in matters not in any manner relating to its business.

All exceptions taken to the admission or exclusion of evidence directed to establish the fact that, as between Pickersgill and Oaselli, the consideration for the reception of the indorsements was such as, it is insisted on behalf of the appellants, the evidence tends to show it was, are unimportant ; the fact remains that the indorsements are not the indorsements of the Arm; that they have no connection with its business, and were made without the authority or consent of the members of the Arm other than of the one who wrote them, and all this Mr. Pickersgill knew when he took them.

HI. The exception to the exclusion of the defendants’ articles of copartnership is untenable. The articles were offered after the plaintiffs had rested and the Referees had announced their conclusion to nonsuit the plaintiffs. It was discretionary- with the Referees to admit further evidence, and it certainly was not error to exclude proffered evidence when the-plaintiffs’ counsel would not state his belief that it would tend to show any authority in Emile Louis Lahens to make the indorsements in question. As the case is made up, the Court cannot see or conjecture that, if admitted, it would have aided the plaintiffs, and therefore cannot see that they have been prejudiced by its rejection.

IV. The fact that the defendants are accomodation indorsers of A. Caselli, and that he is therefore interested in the event of the suit, did not affect his competency as a witness at the time his deposition was read in evidence. Had he been examined orally at the trial as to the same matters, he would have testified under precisely the very interest that existed when he was examined under the commission; and the fact that he testified under the bias which the existing interest may have created, did not affect the competency of his testimony when offered. (And see 3 Phil, on Ev., Cowen & Hull’s and Edwards’ Votes, 120.)

If the deposition of A. Caselli, taken under- the commission, be rejected and stricken from the case, there could not, even then, by any probability, be a recovery by the plaintiffs; there would be a total absence of evidence tending to show a joint liability of all the defendants.

The judgment should be affirmed.


author: By the Court—Robertson, J. Barbour, J., (dissenting.)

text:
    Henry Delafield, Plaintiff, v. William R. Holbrook et al., Defendants.
    The following agreement “For value received, I hereby guaranty to A., that the bond of,” &c., “Shall be of the value of,” &c., “on," &c., “at which price and at which date I will purchase the same if offered to me,” contains both a contract of guaranty, and a contract of purchase; and it gives A. his option to recover on the guaranty, retaining the bond, or to recover as on a sale of the bond upon delivering it up. (Barboto. J. dissented.)
    (Before Robertson, White and Barbour, J. J.)
    Heard, June 12;
    decided, July 31, 1862.
    Motion for judgment upon a verdict taken subject to the opinion of the Court at General Term.
    This action was brought against William R. Holbrook and Elizabeth J. Holbrook, executors of the will of D. B. Holbrook, deceased, upon the following instrument in writing:
    “ For value received, I hereby guaranty to H. and W. “ Delafield that the bond of The Newfoundland Electric “ Telegraph Company, Ho. 19, for two hundred pounds “ sterling, shall be of the value of nine hundred and sixty “ dollars, on the 7th day of March, 1855, at which price, “ and at which date, I will purchase the same if offered to “ me. Hew York, March 8,1853.
    D. B. HOLBROOK.”
    Upon the trial, it was proved by the plaintiff that the bond was of no value on the 7th of March, 1855; but there was no evidence that such bond was, upon that date, or at any time prior to the death of Holbrook, which subsequently occurred, offered to him to purchase. The defendant, thereupon, moved to dismiss the complaint, upon the ground,—first, that the guaranty expresses no legal consideration; and, secondly, that there was no proof that the bond was ever offered to Holbrook. The motion was refused, and verdict rendered for the plaintiff for the amount claimed, viz. $960, and interest from March 7, 1855, subject to the opinion of the General Term.

      L. L. Delafield, for plaintiff.
    I. This agreement may be regarded either as a contract of guaranty, or as a contract of purchase and sale, at the option of the plaintiff.
    II. It cannot be held to be an entire contract without disregarding the rules of construction. As an entire contract, it is impossible to give effect to more than one-half of the agreement; it is then either a guaranty only, or an agreement of sale only.
    And there is more reason in plaintiff’s insisting that it is a guaranty only, than in defendants’ claiming that it is a sale only, because when clauses are repugnant and incompatible, the earlier prevails. (2 Parsons on Cont., 26.)
    If the contract be entire, and is to be construed as an agreement of sale, the whole of the first portion is disregarded.
    But Courts will, when possible, give effect to all the parts and words of contracts. (Miller v. Cook, 23 N. Y. R., 495; Howard v. Holbrook.

      )

    III. The plaintiff, having the option, has elected to treat this agreement as a guaranty. It was therefore unnecessary that he should offer any proof that the bond was offered to Holbrook to be purchased.
    IV. This agreement, when construed as a guaranty, is perfectly valid and binding. (Miller v. Cook, 23 N. Y. R., 495.)
    V. This instrument cannot be regarded as a wager contract. But if the Court should be of the opinion that it is, and that on such a wager the defendants are not liable, a new trial should be ordered, to allow the introduction of evidence of the res gestee of the transaction, and of the consideration for the agreement, so as to negative such intent.
    VI. If, however, this agreement be a wager, it is not an unlawful one, and an action will lie on it.
    1. The statute concerning stock jobbing is the only one that can apply to this case,- and it, (2 R. S., 116, § 7, 4th ed.,) has been repealed. (Laws 1858, p. 251.)
    This repeal repealed the consequences of the statute as to contracts entered into while it was in force. (Central Bank v. Empire Stone Dressing Co., 26 Barb., 33 ; Wash-burn v. Franklin, 13 Abbotts’ Pr. R., 140.)
    2. Wagers on the future market price of foreign stocks were not, at common law, and are not-now, illegal. (Chitty on Contracts, 5th Am. ed., 1842, 496; Morgan v. Pebrer, 2 Bing. N. C., 457; Wells v. Porter, Id., 722; Oakley v. Rigby, Id., 732; Elsworth v. Cole, 2 M. & W., 31; 3 Stephens N. P., 2739, Tit. Wagers.)

      R. Goodman, for defendants.
    I. The manifest intention of the parties was, that the bond should be offered to the guarantor at the time named in the guaranty, and that he should then have the privilege of purchasing it.
    This intention is always the paramount rule for the interpretation of every contract.
    II. Offering the bond to the guarantor at the time specified, was a condition precedent. (Antrobus v. Davidson, 3 Meriv., 569; Samuel v. Howarth, Id., 272, &c.; Elworthy v. Maunder, 2 Moody & P., 482; Pearse v. Morrice, 2 Adolph. & El., 84; Muskett v. Rogers, 5 Bing. N. C., 728; Hunt v. Smith, 17 Wend., 179.)
    III. The option accorded to the guarantor was for his benefit, and was equivalent to a demand being required upon him before the bond could be sold for less than its nominal amount, or he in anywise made liable. (Alcock v. Blowfield, Noy, 95; Russell v. Buck, 11 Vermont R., 166; Payne v. Ives, 3 Dowl. & Ryl., 664 ; Theobald on Prin. and Surety, 139; Howard v. Holbrook.)

      Reported ante, 23T,

       Reported míe, 231.

   By the Court—Robertson, J.

In the recent case, decided at a General Term of this Court, (Howard, v. Holbrook, ante, 237,) I had occasion to consider a precisely similar agreement as that now before the Court, and to say that the plaintiff had his option between the contract of guaranty and that of sale; assuming that there could be no controversy that there were two such contracts in the instrument in question. A still further examination and consideration have not shaken my views then expressed.

A contract to guaranty the value of an article, and one to purchase it, arise from the use of different words, and lead to different results and obligations. The first requiring a consideration to support it, and the second being supported by the mutual agreement to buy and sell. Ho one could have the slightest doubt that if this instrument' had ended with the date of March 7,1855, it contained as complete a contract of guaranty as could have been drawn. The words “for value received,” expressed the consideration, and implied something more than the future payment of the expected value; “guaranty that the vakie shall be,” is peculiarly expressive of such an undertaking, and does not approach in any way the language of an undertaking to purchase. The question remains, whether the addition of the words, “ at which price and at which date I will pur- chase the same if offered to me,” change the whole contract to one merely of purchase, upon condition of a tender.

There is no inconsistency between the two clauses of this instrument, no indication that the second was meant to qualify the first, and no necessity of reconciling any conflicting meanings. There is no impossibility, arising from grammatical rules, of these containing two distinct obligations. Instead of the relative pronoun “ which,” the parties might have employed a conjunction, and the demonstrative pronoun “ that,” so as to have read, “ and “I will purchase the same if offered to me at that time and at that price.” Belative pronouns have precisely that effect. The sentence does not remain the less double, because of their use; it contains two undertakings,—“I “hereby guaranty the value,” and “I will purchase,” whether there be one sentence or two. A deed, by which A. conveyed to B. certain premises, the title to which A. warranted, would not the less operate as a conveyance, because it contained the warranty which referred to the premises by a ■ relative pronoun; There is no more authority for making the agreement to purchase predominate over and absorb the contract of guaranty, than for making the latter, which comes first, control the former. The “ value received ” was stated to be for the guaranty and not for the agreement to purchase. If the order had been inverted, placing the contract for purchase first, so as to have read: “ I will buy such a bond at such a price, on “ such a day, if offered to me, whose value I guaranty shall “ he such price,” would the last part be rejected as surplusage ? Did any one ever before draw a simple agreement to buy in the form in which this instrument is drawn, placing the main idea last, and thrusting in a guaranty before it? I cannot doubt that the legal effect of every word of the instrument expressed the intention of the parties, and was necessary to do so.

Interpreted as a double agreement, the object is very plain. It is not to be assumed that the defendants’ testator believed or expected the bond mentioned would be entirely worthless; he wished the plaintiff to retain it in his possession for two years, he, therefore, guaranteed that the value should be a certain sum at the end of that time; this, however, would give the plaintiff the right to recover only the difference between the actual and named value, on retaining the bond; but he intended to give the plaintiff the option to recover the whole of the sum named, on giving up the bond if he preferred it. A mere agreement to sell and buy would deprive the plaintiff of the right of retaining the bond, being indemnified against loss; besides, such an agreement would require the plaintiff to tender on the day, (see Howard v. Holbrook, ubi sup.,) which he might not be able to do ; whereby the defendants’ testator would escape all liability; whereas, the liability on a contract of guaranty would be fixed on the day named, and could not be increased or diminished afterwards.

I do not consider it very hard, that the plaintiff should retain the bond on being paid its inferiority of value to the sum named; what the value received was, that induced the defendants’ testator to agree thereto does not appear; he may have sold the bond to the plaintiff at the price at which he agreed to take it back, and in such case he ran the risk of its falling in value instead of the plaintiff; it is sufficient that the defendants’ testator, agreed that the plaintiff might so retain such bond receiving the difference of its value.

I am of opinion, therefore, the plaintiff should retain his verdict for the amount which has been given in his favor and have judgment for that amount with costs.

Barbour, J., (dissenting.)

The words “ for value received,” in an instrument of this kind, undoubtedly express a sufficient consideration to support it. (Howard v. Holbrook, ante, 237.) The sole question for consideration, therefore, is, whether the offer of the note to Holbrook, for purchase, at the time in that regard mentioned in the contract, was a condition precedent to a recovery under the guaranty.

The counsel for the plaintiff claims that two distinct and several undertakings, on the part of the obligor, are embraced in the contract in this case ; one being purely a warranty that the bond shall be worth $960 upon a certain day, and the other an undertaking by Holbrook that on the day designated he will buy it for that sum, if offered to him; and that the defendants had a right either to present the bond and require Holbrook to purchase it, or to proceed against him, upon the guaranty, without such presentation. Upon an examination, however, it will be found that the contract signed by Holbrook consists of one continuous sentence not susceptible of a division; and it appears to me to contain but a single proposition or undertaking, to wit: a guaranty on the part of Holbrook that the bond shall be worth $960 to the plaintiff and his then partner, at the end of two years from that date, which undertaking he agreed to perform so as to render the same effective in a particular manner; that is, by purchasing the bond if presented to him for that purpose on the day mentioned in the agreement, and paying therefor the amount he had covenanted it should then be worth. This construction, I think, is perfectly consistent with the probable design and intention of both parties. The obligors clearly desired nothing further than to receive $960 for their bond; for that is all they would be entitled to under either construction. The mere guaranty secured to them that, and the provision for the purchase of the instrument was therefore worthless to them. But it is. quite reasonable to suppose that Holbrook designed, at the time he signed the guaranty, to provide for his own safety against loss, by selling the bond to some one else, conditionally, during the two years which were to elapse before he was to pay for it, or' that he hoped to realize a profit from the sale of the bond at some future time, in case he should be compelled to purchase it; and it is difficult to believe that the parties designed to permit the obligees to deprive him of this very equitable right at their option, by retaining the bond in their own hands after they had received from him its full value. I am of opinion, therefore, that the contract signed by Holbrook must be considered as simply an agreement to purchase the bond at the price fixed, provided it should be presented to him for that purpose on the 7th of March, 1855 ; and that such presentation was necessary to entitle the plaintiff to recover against Holbrook or his personal representatives upon the contract.

In this view of the case, it is unnecessary to consider what would have been the duty of the plaintiff as obligee in a mere covenant of guaranty.

The verdict should, therefore, be set aside as contrary to evidence, and a new trial granted, with costs and costs of appeal.

Judgment for the plaintiff on the verdict.