author: Jones, J.

text:
    WILLIAM GREGORY, Plaintiff and Respondent, v. SARAH GREGORY, Executrix, and CYRENUS BLOODGOOD, Executor, &c., of JOHN GREGORY, deceased, Defendants and Appellants.
    A receiver will not be appointed over specific property alleged to belong to a partnership without proof satisfactory to the court that such specific property is in fact property of the partnership.
    Before Barbour, C.J., Jones and Fithian, JJ.

      [Decided October 30, 1869.]
    There are two orders appealed from: one dated November 2, 1868, and entered December 26, 1868 : one dated January 15,1869.
    As to first order:
    This appoints a receiver over the specific real estate described in the complaint, and therein averred to belong to a partnership therein alleged to have existed between William and John Gregory, as well as generally of debts due that copartnership.
    The appeal papers show, among other things, that by an order dated November 2,1868, and entered the same day, a receiver was appointed of the property, assets, effects, and credits of said firm mentioned in the complaint; that on the 25th of November, 1868, an order was made, on the application of the receiver named in the order entered November 2, 1868, requiring the plaintiff and defendants to this action to show cause, at the chambers of this court, why the said order, entered November 2,1868, should not be amplified as to the description and location of the property in this action, the same as mentioned in the complaint; that the proceedings initiated by this order to show cause terminated in the order first appealed from; that the' complaint specified a number of parcels of real estate which it alleged were purchased by the copartnership alleged in the complaint to have existed, out of the avails and profits thereof, and now constitute a part of the partnership property; that the answer of the above-named defendant and of Sarah Gregory individually, she' then being a defendant in her individual as well as in her relative capacity, denied the existence of such alleg’ed copartnership, and also denied that the said real estate was purchased with the avails and profits of the alleged partnership or any partnership, and that the same now are or ever were a part of the property of said alleged partnership or of any partnership, and alleged that the whole purchase-money was furnished by their testator; out of his individual estate and property. The appeal papers further show that the issues formed by the complaint and this answer, and also formed by the complaint and the general answer of the infant children of John Gregory, who were then parties defendant) were tried at a Special Term before a single judge (Justice Hoffman), who decided and decreed that the plaintiff, William Gregory, was a partner with the deceased John Gregory, in the business mentioned in the complaint, from the 19th of November, 1842, until the 31st of December, 1848, when the partnership was dissolved ; that from the 15th of February, 1850, to the 2d of April, 1858, the plaintiff was in the employ of the said John as clerk, and entitled to a compensation for his services as such; that there was due said plaintiff on said partnership account §14,756.25, and for his services as clerk §5,541.10; that plaintiff recover from the executrix and executor of the will of John Gregory the sum of §20,277.35 out of the property of said John in their hands, or which might come to their hands, with costs; that as to the other defendants, and the said Sarah Gregory, in her individual capacity, the complaint be dismissed, with costs. The appeal papers also show that judgment was entered in accordance with this decision, and from this judgment the executrix and executor appealed.
    But the present appeal papers do not show what was the result of this appeal, nor whether the plaintiff appealed from any part of the judgment, nor whether the defendants (other than the executrix and executor) appealed. The counsel, however, conceded, on the argument, that neither the plaintiff nor any of the' defendants (other than the executrix and executor) appealed from the judgment- or any part thereof, and that on the appeal taken by the executor and executrix the General Term reversed the judgment below.
    "'he present appeal papers, however, do show (in addition to the matters above referred to) that, after this j ndgment by the Special Term and the appeal taken therefrom by the- executor and executrix, the plaintiff moved to have issues settled and tried by a jury; that issues were settled and were tried by a jury, who found, in response to the questions submitted to them, that William and John Gregory were copartners in the business of tin and copper smiths, and dealing in stoves, and tin and sheet-iron ware, and iron and tin kitchen and household utensils and furniture ; that such partnership commenced in April, 1837, and continued until the death of John; that they were unable, from the evidence, to decide what each of the partners contributed to the capital and stock-in-trade of the firm; but that each partner contributed his time, skill, and industry to the business, and all the proceeds and property of the business resulted from such joint contribution of their skill and industry, and that each of such partners is entitled to one half of all the proceeds, profits, and assets of said partnership, whether invested or existing in real or personal estate.
    The papers also contain an extract from the opinion of Justice Hoffman, delivered on the decision of the cause by him, as follows :

      “ I have concluded that the amount which shall thus be ascertained to be due to William shall be deemed. a debt, as so much money left in the hands of John, up'on which interest shall be charged. It may be true that William may be looked on as occupying the position of a retiring partner, and the general rule is that such partner has an election between interest and profits (Collyer, 324, and note). But it is conceded that the profits are now exhibited in the real estate purchased, and I doubt whether, after a dissolution, when the title is taken by the continuing party in Ms own name, there is any right to any lien upon such real estate. It may be said it is the partner’s money which in part makes up the consideration-money. The statute (1 R. S., 728) may be an answel to this view. Neither do I think that John would stand in such a situation, as trustee, as to make any of the cases, giving the cestui q%ie trust a right to trace Ms funds into a purchase and make it available, applicable.”
    As to the second order appealed from :
    This arose thus : Defendants’ attorney, claiming that the order entered December 26,1868, first appealed from, was obtained by taking his default, and that the recital therein that it was made after hearing Mr. Lockwood, of counsel for defendants, was erroneous, obtained an order requiring plaintiff and the receiver to show cause why the order entered December 26 should not be set aside, resettled, reformed, or amended to correspond with the facts in its recital, or be vacated ;■ and why the defendants’ default upon the motion, whereon said order, entered December 26, was made, should not be opened, and they be allowed to come in and read and file their affidavits and exhibits (copies of which were annexed) in opposition, and be heard on the merits. This order to show cause was founded on the pleadings in the action, the decision of Justice Hoffman at Special Term, the decree of Justice Hoffman made in that decision, the judgment entered on that decree, the issues as settled for trial by the jui‘y} and the finding of the jury thereon; the first order for a receiver, the order amplifying the order for a receiver (being the order first appealed from), and an extract from the opniion rendered by Justice Hoffman on the decision made by him; all of which papers were before the court when the above-mentioned order, amplifying the' order for a receiver, was made, and have been sufficiently referred to in the abstract of the facts out of' which the first appeal arose. It was also founded on these additional papers, viz.: Issues as proposed for settlement, two affidavits of the managing clerk of the defendants’ attorney, one of the defendants’ attorneys, and one by Sarah Gregory, one of the defendants. The only material matters in these affidavits are as follows : In the first affidavit of the managing clerk, he swears that Mr. Stoughton was retained by defendants as their counsel before the motion to amplify the order for a receiver; that two affidavits, and the exhibits thereto annexed, were prepared by defendants’ attorneys in opposition to the motion to amplify; that these affidavits and exhibits, and the papers served for the motion, were handed to Mr. Stoughton about December 1, and he was then instructed and employed to argue and defend the motion; that the hearing of the motion was adjourned from time to time until December 18; that Mr. Stoughton was unable,, by reason of sickness, to attend on that day, and he (the deponent) was unable to procure the opposing papers, but attended court and requested an adjournment, which was opposed by the counsel for the receiver, who insisted upon submitting the motion at once, which course the court directed, informing the deponent that the motion would he held open a few days to enable Mr. Stoughton to hand in his papers; that Mr. Stoughton continued ill and confined to his house until December 25, when he was called away to attend thé fatal illness of Ms nephew, who died on the 26th; that on the 26th the court, without having heard argument, and without defendants’ affidavits or other papers in opposition, granted the motion and made the order first appealed from ; that the effect of the order is to give the receiver possession and control of all the real estate whereof John Gregory died seized, amounting in value to $100,000; that it has never been pretended that the estate of John Gregory is insolvent, or otherwise than perfectly able at all times to pay any judgment that may be obtained in this action, or that there was or is any waste or danger of plaintiff losing his claim by reason of said real estate being held and controlled by defendants.
    In his second affidavit the managing clerk swears that neither Mr. Lockwood nor any other counsel was heard on behalf of the defendants on the motion to amplify the order for a receiver.
    The exhibits referred to by the managing clerk, in the first affidavit, as having been intended for use in opposition to the motion to amplify, were all before the court on that motion, and have been above referred to and their contents sufficiently abstracted, except the proposed issues. The only difference between the proposed issues and the issues as settled is, that the proposed issues contained'the following question, which was not contained in the issues as settled: “ Did any (and if any, what) real estate at any time, and what time, and for what period of time, constitute any part of the capital or investment of the said copartnership ?”
    The two affidavits referred to in the first affidavit of the managing clerk, as having been prepared to oppose the motion to amplify, are those of Sarah Gregory and of one of defendants’ attorneys. These affidavits set forth, in addition to the matters set forth in the other papers, as follows:
    The additional matters set forth by the affidavit of Sarah Gregory are, that all the debts due in the business conducted in the names of John Gregory, William Gregory, and J. & W. Gregory, to persons other than the plaintiff, have long since been fully paid, and all claims and demands due said business, which were collectable, have long since been collected that there are no subsisting assets, chattels, credits, or effects of said business; that all the stock, furniture, and chattels of said business have been sold and converted into money; and all the choses in action, claims, and demand of any value have been collected, and all the moneys thus realized have been used and applied in the payment of debts due in said business, and by said John Gregory, and in current expenses.
    Those set forth in the affidavit of the defendants’ attorney are, that the executor and executrix alone appealed from the judgment rendered on the decision of Justice Hoffman; that they appealed only from so much of the judgment as was rendered against them; that neither any of the other of the then defendants nor the plaintiff appealed from any part of that judgment; that since the entry of the judgment on the decision of Justice Hoffman the action has proceeded against the executor and executrix alone; that there is no evidence in the case that any particular piece of real estate mentioned in the complaint was purchased or paid for in whole or in part with money or property belonging to or arising out of the property, assets, or effects of the business which is mentioned in the complaint, and which is the subject-matter of the action; and that the aforesaid question, contained in the proposed issues for trial by jury, was not contained in the issues as settled, because it was stricken out by the court, on the objection made by defendants’ attorney; that the ground of objection made and stated to the court was “that the widow, in her individual capacity, and the heirs-at-law of John Gregory, deceased, who were also his devisees, were seized of the fee of all the real estate of which John Gregory died seized; that they were no longer parties to this action; that by the judgment of this court, which then stood, and still stands, it was adjudicated and adjudged that this action be discontinued as to said widow individually, and as to said heirs-at-law and devisees, and that they recover their costs against the plaintiff, upon the very ground that the plaintiff did not have, and could not have, any lien upon or interest in any of the real estate of which John Gregory died seized; and that no question as to the title to said real estate could be litigated so as to affect the rights of said widow and children therein, in a suit in which they were not parties; ” that the court sustained the objection thus made to the form and substance of the proposed issue, and disallowed it.
    The affidavit of Mrs. Gregory contains several allegations other than those referred to, tending to show the absence of any necessity for the appointment of a receiver, and the hardship that would arise to her and her children from such appointment; but it is unnecessary to refer to them, as the receiver was appointed by the order of November 2, which has not been appealed from or sought to be disturbed in any way.
    The defendants’ motion, founded on the above-mentioned order to show cause, having come on to be heard, it was opposed on the affidavit of the attorney for the receiver, who swears that, after several adjournments, the motion for the amplified order was finally set down peremptorily for December 18,1868; tliat on that day the managing clerk of defendants’ attorney appeared and handed up his papers, and the motion was finally submitted on both sides, the judge stating that he would hold the matter open for two or three days, in case the said clerk wished to hand in any further authorities; or in case Mr. Stoughton wished to be heard, he would hear him at his house any evening within that period.
    Upon these papers, the motion to open default and be allowed to read the additional papers above set forth, &c., was heard before the judge who heard and decided the motion to amplify, and he denied it, and the order of denial, dated January 15, 1869, is the one that is secondly appealed from.

      Mr. E. W. Stoughton for appellants.

      This court, hy its judgment and decree entered on the 18th day of September, 1861, adjudged in this action, so that it has become, and mast remain, res adjudicata, that the plaintiff has no legal or equitable right, title, or interest in, or Hen upon the real estate mentioned in the complaint, the title to which was talcen in the name of John Gregory, and of which he died seized. Hence the order appointing a receiver in respect to such real estate was, and is, entirely unauthorized and void.
    If John Gregory was alive and the defendant in this action," dr if the widow and heirs-at-law and devisees of John Gregory were parties to it, and the judgment of September 18,1861, had not been entered, and the court had authority to appoint a receiver in respect to said real estate, such authority could only extend to the appointment of a receiver of half the rents and profits of the real'estate. As to one half, there-is no pretence that it did not belong wholly to John Gregory in his lifetime, or that it does not now belong wholly to the heirs-at-law and devisees of John Gregory. It was only as to the other half that the plaintiff ever made any legal or equitable claim.
    Substantially, this is an effort to determine the title to land on a motion to appoint a receiver. The order appealed from violates every principle of law and equity, for the reason, among others, that it strips the heirs-at-law and devisees of John Gregory of all their income and all control over this real estate, the legal title to which is in them, without any charge of fraud or Waste, when not the least necessity is shown, and when plaintiff’s claim to-airy ¡legal or equitable interest in the land is not only denied, and has not been established, but right in the face of the judgment of the court that he has no such interest.
    The real estate is not in any way the subject-matter of this action. If it should be said that the jury have found that the plaintiff had some interest in this real estate, or that the same was in any sense partnership property, the answers to such an assertion are brief but conclusive; to- wit:

      They did not so find. They found that plaintiff was entitled to half the proceeds, profits, and assets of the partnership, ■“ whether invested or existing in real or personal estate.” The last nine words are mere surplusage. They are the equivalent of the words “ however -invested.” The jury did not find, as a fact, that there was any investment in real estate. The unmeaning words above quoted contain the only allusion to real estate in the verdict.
    But if they had so found, such finding would have no effect, because no such issue was framed, or tried by, or submitted to, or passed upon by the jury.
    Ho such issue could have been, with any sort of propriety, tried, or passed upon by, or submitted to the jury unless all the heirs and devisees of John Gregory were before the court.
    The issues tried by the jury were simply: Did a partnership exist? When did it begin and end? What capital did each partner contribute, and to what share of the profits was each partner entitled ? There was no issue which authorized the jury to inquire into or find'the amount or nature of the copartnership assets or investments.
    If the" real estate in question had been purchased by John Gregory and the plaintiff as partners, with partnership moneys <md for partnership purposes, and the title had been taken in the name of both of" them, they would have been seized of it as

      tenants in common, and not, as partnership property is held, as joint tenants. There would have been no survivorship which would have entitled either, on the death of the other, to hold and control the land as against the heirs or devisees of the deceased partner, but the latter would take by descent or devise the legal estate of their ancestor or devisor, of which they would be seized as tenants in common with the survivor (Coles v. Coles, 15 Johns. R., 161; Smith v. Jackson, 2 Edw. Ch., 28).
    A receiver is never appointed in favor of a pan'ty having only an equitable lien, unless the property is being wasted or destroyed, or in some way mismanaged, to such an exteut that its value as a security will be lost unless the court interpose. There has never been any pretence in this case, and there is not the least foundation whatever for any pretence, that there has been any waste, destruction, mismanagement, or danger of loss. On the contrary, the real estate is well managed, and is constantly growing in value. The appointment of a receiver in such a case is an unprecedented proceeding.
    Assuming the allegations in the- complaint to be true, the surplus profits of the business were invested in the real estate in question. But it has never been held in this country or in England that real estate purchased by partners with partnership funds, as an investment of realized profits, is impressed with any attribute of partnership property, or that land so acquired is subject to any legal or equitable lien or claim in favor of creditors' of the firm, or in favor of eitherpa/rtner, or that any trust in the grantee can be thus created.

    The statute in respect to uses and trusts (sec. 51, art. 2, tit. 2, chap. 1, part 2, R. S., vol. 1, page 728) proves an insurmountable obstacle to any legal or equitable claim of the plaintiff to any interest in the real estate in question. While it may be true that since that statute there might be a resulting trust, or an equitable lien in favor of creditors, in respect to lands purchased by partners with partnership funds and for partnership purposes (not as an investment of realized profits), where the conveyance is made to one of the partners, with the knowledge and consent of the other partner, there cannot be any such resulting trust or equitable lien in favor of the latter (Garfield v. Hatmaker, 15 N. Y., 475 ; Davis v. Graves, 29 Barb., 480 ; Wright v. Douglass, 10 Barb., 97; Lounsbury v. Purdy, 18 N. Y., 515).

      Mr. John E. Parsons for respondent.
    The motion to set aside the order of December 26,1868, specifying the rents and profits of the real estate, as embraced in the receivership, was wholly irregular. That order was made on a submission of the motion by counsel on both sides, after numerous postponements, at the request of defendants, and after defendants had obtained leave to submit further papers within a few days. They allege the absence of counsel as the reason for not doing so; but as they did not'inform the court of that reason, they are in no condition to complain that, after waiting a week, he should decide the motion.
    The defendants have disproved the pretence that that order was by default by appealing from it.
    The court has undoubted power to appoint a receiver in a partnership case. It is in just such cases that the power is most frequently exercised. The propriety of its exercise in this case is not questioned. From the order appointing a receiver the defendants did not appeal. The practical reason may have been their supposition that they had got rid of every thing of which the receiver could take possession; but that very circumstance makes conclusive the necessity of the appointment.
    On Judge Hoffman’s decision, that the partnership only extended from November 19,1842, to December 31,1848, there was found to be due the plaintiff $20,297.35.
    This was on the basis that he had no interest in the advance on the real estate investments. The jury have found that the partnership extended from April, 1837, to April 2,1858. On any theory plaintiff must recover a much larger amount on the verdict of the jury. The real estate is the only source form which it can be paid. That it should be protected for the payment of such claim is most manifest, especially in view of the fact that defendants have used all of the personal assets.
    The verdict of the jury remains in full force. The papers do not disclose that defendants have in any way even assailed it.
    By it the plaintiff is entitled to half the profits existing in the real estate. Until that verdict shall be got rid of, it certainly cannot be claimed that the plaintiff may not be able to reach his share of the real estate; and in the mean time his rights should be secured ,and protected. If the real estate shall be lost, and the defendants have a full power of sale, the plaintiff is remediless.
    Judge Hoffman’s position proceeded upon the idea that after the dissolution John Gregory had invested the firm money in real estate. He held that the plaintiff in that case, perhaps, could not follow the investment. -
    It is needless to discuss whether he was right or wrong. The jury have held that it was during the partnership that the firm moneys were so used; and that plaintiff is entitled to his half if' invested in real estate.
    Equity does not permit so great a cheat as where real estate of the firm has been taken to the name of one partner, to suffer him to appropriate the advance (Story’s Eq. Im., sec. 614, and cases cited; Collyer on Part., sec. 160).
    Much is made of the fact, that as to the devisees the complaint stands dismissed.
    An examination of the will will show that the defendants hold the real estate in trust, so that the devisees were unnecessary parties. However this may be, the receivership only operates upon the present defendants, and they cannot claim that, as against the devisees, it should not be maintained.
   By the Court:

Jones, J.

The order denying the motion to open the alleged default must be affirmed. The papers presented a disputed question of fact, as to whether defendants suffered a default to be taken against them, or appeared and submitted the motion on the merits. The judge below decided this question of fact against the defendants, holding that they appeared and submitted the motion on the merits. I see no cause to disturb such finding; in de,ed, I think it is correct.

The order amplifying the order appointing a receiver should be reversed.

That order is based on the alleged ground that the real estate described in the complaint belonged to the copartnership composed of William and John Gregory. Of this there was not the slightest evidence before the court. Whether it did belong to that copartnership or not, is distinctly put in issue by the pleadings ; and it devolved on the plaintiff to prove that it did. He offered no evidence whatever in support of his allegations.

It may be urged that the denials and allegations in the answer, that tins real estate did not belong to that copartnership or to any copartnership, are based on and incident to the principal denial of the existence of a copartnership between William and John, and that upon the falling of this principal denial by the verdict of the jury, the incidental denial, falls with it. The answer does not, however, expressly thus limit these denials; and, I think, they cannot be thus limited by implication merely. It may well be that although the firm did ex;ist, yet that no part of the real estate belonged to it. The defendants were entitled to put both matters in issue; the answer appears to have been framed to that end, and, I think, fully accomplishes it.

Reliance may also, perhaps, be placed in the following expression in Justice Hoffman’s opinion: “ But it is conceded that the profits are now exhibited in the real estate purchased.”

A statement of a fact contained in an opinion of a judge or a referee is not evidence either in favor of or against a party. To have that effect, it must be embodied as a decision in an order, judgment, or findings of fact.

But, even giving this expression weight as evidence, it does not determine how much or what part of the real estate mentioned in the complaint belonged to the partnership.

Ho costs of appeal to either party.

FrraiAn, J., dissented.


source: Caselaw Access Project

author:
Jones, J.
      Barbour, C.J.

license: Public Domain

text:
    WILLIAM E. HOY, Survivor, &c., Plaintiff and Appellant, v. WILLIAM READE, Defendant and Respondent.
    An agent to purchase, who pays the purchase-money, has a lien on the goods purchased for his reimbursement, his disbursements, and commissions.
    He is nob obliged to resort to the goods in the first instance for his reimbursement; but if, after demand, the principal does not reimburse the agent and pay his disbursements, charges, and commissions, he may immediately sue the principal for the amount expended in the purchase, and for the amount of his disbursements, charges, and commissions, "without resorting to the goods purchased.
    In such an action, proof that the goods were purchased pursuant to the principal’s direction, of the amount expended therefor, and of the amount of the disbursements, charges, and commissions, and that the same were necessary and usual, makes out a prima facie case.
    If, before action brought by the agent, he has wrongfully converted the goods purchased, such conversion does not constitute a defence to the action, but the principal, if he still remain the owner of the property, may offset,' recoup, or counterclaim the value of the property so converted.
    If, in such action, the complaint, in addition to the requisite averments, also add a sale by the agent of the goods purchased, the amount received on such sale, and that such amount was less than the sum due the agent, and demand judgment for the difference between the two sums, such additional averments do not change the cause of action, but amount simply to giving a credit on the sum which otherwise would be due them.
    Before Barbour, C.J., Jones and Fithian, JJ.

      [Decided December 4, 1869.]
    This case was tried before Chief-Justice Robertson and a jury,
    The action was brought by agents to purchase, to recover against the principal the amount paid by them in the purchase, and also their commissions and expenses, less the sums realized by them on a- sale of the goods purchased, made by them after their principal had refused to reimburse them.
    On the trial the plaintiffs proved the contract between them and defendant to have been, that they, plaintiffs, were to purchase for defendants, through their agents, Fowle, Bain & Co., of Baltimore, and Howe & Heddeburn, of Alexandria, from 100,000 to 300,000 bushels of corn, at a limit, of 86j- cents a bushel, subject to defendant’s order to stop at any time; the corn to be delivered on boats, or placed in store subject to liis order; the drafts of the agents, or plaintiffs’ own drafts, were to be presented to Marquand & Dimmock for payment, were to be sufficient guarantee that the corn was purchased, and the face of them was to be paid on presentation; and defendant was to come into plaintiffs’ office every day to receive reports of purchases.
    ■ The- other evidence, so far as it bears on the points discussed and. decided by the court, is sufficiently referred to in the opinion.
    Upon the plaintiffs resting their case, defendant moved for a dismissal of the complaint on the following grounds :
    • 1st. That there is no evidence of what was paid for the corn at Baltimore and Alexandria.
    2d. That no notice of the time and place of sale of the corn was given to the defendant, but that Fowle & Co. assumed the transaction as their own and converted the corn to their own use.
    3d. That a portion of it, according to the plaintiff’s own showing, was shipped by him to some other place without the knowledge or consent of, or any notice to the defendant.
    4th. That the plaintiffs by their manner of dealing with the property had converted the same to their own use, and had assumed the purchase as their own, and absolved the defendant from any responsibility.
    The court dismissed the complaint. Judgment was entered on such dismissal against plaintiffs in favor of defendants.
    From this judgment the present appeal is taken.

      Mr. Charles Tracy for appellant.
    The plaintiffs’ evidence established every fact which was necessary to entitle them to recover.
    The- defendant having wholly refused to accept or pay for the corn, the plaintiffs had a right to -resell it, and look to him for the deficiency of proceeds (Harfield v. Goodhue, 3 N. Y., 62, 73,1 Sandf. S. C. R., 360; Corlies v. Cumming, 6 Cowen, 181; Gihon v. Stanton, 9 N. Y., 476; Bryce v. Brooks, 26 Wendell, ,367; Knapp v. Alvord, 10 Paige, 205; Blackman v. Thomas, 28 N. Y., 67).
    The plaintiffs were not hound to sell at auction, nor to give particular notice of the time or place of sale. The demand of payment and the general notice that the corn would he sold for reimbursement were sufficient (Crooks v. Moore, 1 Sandf. S. C. R., 267; Pollen v. Le Roy, 30 N. Y., 549, 10 Bosw., 38; 2 Parsons on Contracts, 484; Pollen v. Le Roy, 30 N. Y., 558).
    The case is one of great equity in favor of the plaintiffs.
    The defendant engaged the plaintiffs in this transaction upon assurances of prompt payment of the drafts to be drawn for the purchase price, which, if fulfilled, would have required no cash advance from the plaintiffs. The purchases were necessarily ■made in the plaintiffs’ name, and on their personal responsibility. The defendant’s default cast upon the plaintiffs the burden of payment.
    The defendant’s refusal to pay, at first, was on the pretence that storage receipts were required; but the contract had made the drafts themselves evidence entitling the plaintiffs to payment. This objection was promptly removed by the production •of the receipts.
    The next pretence was that .the corn was not merchantable, which was a false pretence.
    The next objection appears for the first time by the answer, namely, that the defendant did not have notice of the purchases, and so could not ship, and thereby lost the sale of exchange. But, by the contract, the defendant undertook to call daily and inquire whether there were purchases, and by the, evidence he had very early notice of the purchase, and then placed his refusal to pay on another ground, namely, that the corn was not merchantable, and no evidence was given of the intention to ship and to sell exchange, nor of any loss of the sale of exchange, and the corn was in fact, sound and merchantable.
    The whole course of the defendant has been contrary to his obligations, and he has wrongfully subjected his commission, merchants to the necessity of paying for the corn and the storage, and to seek a partial relief by the resale of the corn which the defendant had refused to accept.

      Mr. Joseph Larocque for respondent.
    There was no competent evidence in the case to submit to the jury as to the first cost of the corn in question, or the amounts, if any, actually expended for storage, cartage, insurance, or any other expense or charge in connection therewith.
    There was no competent evidence in the case to submit to the jury as to the amount realized upon the pretended resale of the corn.
    The plaintiffs’ own witness proved a course of dealing with the property which absolutely absolved the defendant from any responsibility. -
    . A factor who has purchased property for account and by order of his principal, and has advanced money of his own on such purchase, has a lien upon the property for such-advances. His right to sell the property for his reimbursement, in the evenf of his principal’s failure to repay his advances, is the same as that of an ordinary pledge, and to be exercised in precisely the same manner (Marfield v. Goodhue, 3 N. Y. Rep., 62, at p. 73; Taylor v. Ketchum, 35 Howard Pr. R., 289).
    When there is no special contract prescribing the time and conditions of a sale by the pledgee, a sale binding upon the debtor can only be made after proper demand by him of payment, and reasonable notice to him of the time and place of sale; and such sale must necessarily be at public auction. The rule on this subject is well settled by Dykers v. Allen, 7 Hill, 499; Wheeler v. Newbould, 5 Duer, 34; Genet v. Howland, 45 Barb., 560; Milliken v. Dehon, 10 Bos., 328; 27 N. Y. R., 365.
    Even if the factor to purchase should be regarded as authorized to sell for his reimbursement, on the default of his principal, in the same manner as a vendor on default of his vendee, the plaintiffs have, nevertheless, so dealt with the property in. question as to absolutely absolve the defendant from any responsibility. When a vendee, refuses to accept or pay for goods according, to the terms of his contract, the vendor may resell the goods, and recover from the vendee the difference between the contract price and the market price at the time of delivery as his damages.
    . To charge the vendee, however, with this difference, the vendor is bound to make a proper ’demand of payment, to give notice of his intention to resell, and to make the resale in accordance with the ordinary usage of the particular trade (Pollen v. Leroy, 30 N. Y., 549).
   By the Court:

Jones, J.

The general rule is, that a lienor may, the moment the demand for which he holds the lien becomes due, bring an action thereon, without first having recourse to the property on wdiich he has a lien (Cross on Liens, p. 69).

In such action he would make a grima faoie case for a recovery by proving his demand.

If, however, before action brought, he had wrongfully eonverted the property on which he had the lien, the defendant, if he remained the owner of the property, might offset or recoup the value of the property so converted (Stearns v. Marsh, 4 Denio, p. 227; Edwards on Bailments, p. 213).

It is conceded in this case that plaintiffs were defendant’s agents to purchase the corn, under an agreement that they were themselves to pay the purchase-moneys to the vendor in the first instance, and then call on defendant for repayment; and that they, having so paid the purchase-money, had a lien on the corn therefor. This being so, then, under the above principles, the . plaintiffs, unless they were bound to resort for their repayment to the corn in the first instance, were entitled to bring an action at once to recover the sum paid by them, and their charges and commissions, and to recover in that action the full amount thereof, upon proof of having bought the corn and paid therefor pursuant to the defendant’s instructions, and of the amount of such their payments, charges, and commissions.

If, however, the plaintiff had wrongfully, and without any authority, sold the corn, the defendant might set up as a defence by way of counterclaim, the fact of such unauthorized sale, and ask to set off the value of the corn against the plaintiffs’ demand.

But this would be an affirmative defence, and the defendant would be called on to sustain it by affirmative proof. He would be bound to prove not only the unauthorized sale but the value of the corn.

.Ho such counterclaim is set up in the answer, and there is no proof of the value of the corn either at the time of or subsequent to its sale by plaintiffs, other than such as is furnished by plaintiffs’ admission of what it brought on its resale, which is less than plaintiffs’ demand; and, consequently, plaintiffs, if they have proved their demand, and are not obliged to have recourse to the corn in the first instance, are entitled to recover the amount of their demand, less the credit they have voluntarily given.

First, then, were plaintiffs bound, in the first instance, to resort to the corn \

For if they were, then, in addition to proving the contract, their compliance therewith, and the amount of their commissions and charges, and the amount paid by them in the purchase, they would have to prove a proper sale by them, and the amount realized from such sale, 'in order to enable them to recover.

It is. claimed that a factor to sell is bound, in the first instance, to resort for repayment of his advances to the consignee of the consigned goods, and can only hold the consignor personally liable for the difference between the advances and the sum produced by a sale of the. consigned goods, and that the burden of proving the amount of that difference rests on the factor; and it is further claimed that the same doctrine is applicable to an agent to purchase.

The doctrine in relation to factors to sell is properly laid down.

In Gibson v. Stanton (9 N. Y., 476), the action was assumpsit, brought to recover money paid on four drafts, drawn by defendants on plaintiffs, and paid by plaintiffs. The plaintiffs were commission merchants, and'defendant consigned to them goods to he sold on commission, of which consignment defendant notified plaintiffs by letters, accompanying the said drafts.

The cause was tried before a- referee. On the trial plaintiffs sought to recover, upon proof of the payment of the drafts by them, and that they were drawn against the consignments aforesaid, without showing what disposition had been made of the goods, or what were their proceeds, or that they had rendered any account of such proceeds. The referee reported in favor of defendants. From the judgment entered on that report plaintiffs appealed to the General Term, where it was affirmed; on appeal taken to the Court of Appeals, that court affirmed the judgment below.

. The decision necessarily proceeded upon the following propositions :

1. That a factor for sale, has a lien for his advances on the goods consigned to him.

2. That he must exhaust that lien before he can resort to the personal responsibility of his principal.

Consequently, we see that those propositions are laid down in the opinion of the court; and the case is a direct adjudication that the factor must show that he has exhausted the lien before he can sustain an action against his principal on account of his advances.

It results that such an action can only be sustained for the balance remaining due after exhausting the lien, and that the burden of proving what the balance is rests on the factor.

Whether this doctrine applies to an agent to purchase, or not, depends on the applicability of the principles on which it is founded.

The doctrine, as is well said in Corlies v. Widdifield (6 Cowen, 181), arises out of the very nature of the transaction.

The consignee, with power to sell, receives the proceeds of sale in the first instance, and is bound to account for and pay over the same to the consignor. Now, says the consignor, I desire to use a portion of the anticipated proceeds of the sale at present, and wish you to pay me now a portion of what you will owe me when you sell the goods. This is the correct exposition of the word “ advance,” when used to indicate payments made by a consignor—with power to sell, to the consignor on account of the consignment, as is ably shown in the case of Gibson v. Stanton. It is, in fact, a prepayment on account of a debt anticipated by both parties to arise to that or a greater amount, from the consignor to the consignee, out of the performance by the consignee of a contract existing between them. It necessarily results that before the consignee can call on the consignor to pay back any portion of this prepayment, he must show the performance of this contract, and that his indebtedness arising thereout did not, as was anticipated, amount to the prepayment.

This principle is inapplicable to an agent to purchase. In such case there is no anticipated debt to become due from the agents to the principal, arising out of the sale of the goods by the agent, on account of which any prepayment can be called for or made; and consequently there is no debt the inadequateness of which, to absorb a prepayment, is necessary to be ascertained before any portions of a prepayment thereon can be recovered back. Again, there is no, anticipated fund t to come to such agent’s hands, to which the parties contemplate that he must first look for satisfaction of Ms advances; that would be in direct conflict with the nature of the transaction; it would be absurd for one to employ another to purchase goods and advance the purchase-money, with the view of having that other retain the goods and sell them to pay back to himself his advances, holding his principal for any deficiency, and paying over any surplus.

If there were such anticipated fund, the application of wMch was thus contemplated, the effect of the transaction would be the employment of one by another to purchase goods, and advance the purchase-money with the sole view of having such employe retain the goods, and sell them to pay back to himself his advances, holding his principal liable for any deficiency, and pay over any surplus. The result of this would be that the principal would never obtain possession of the goods purchased for him, and the whole transaction would be simply one for the settlement and paying over of differences.

I therefore conclude that an agent to purchase is not bound to resort, in the first instance, to the goods purchased to obtain payment of the purchase-money advanced by him, but that his advance is a loan to the principal, he having a lien on the goods as collateral security.

. The next point for consideration, is: Have plaintiffs proved their demand ? It is claimed they have not.

(a) Because by their act they have rescinded the contract.

(b) Because they should have notified defendant of their purchase, and received directions from him before incurring the expense of storage and extra cartage.

(c) Because, as it is said, they have not proved how much they paid on the purchase of the corn, or for its cartage or storage.

The claim of a rescission is based on the act of plaintiffs in selling the corn, whereby they became unable to deliver it.

So far as the plaintiffs are concerned, this, under the evidence (whatever might be its effect if there were no proof on the subject), was not a rescission by them. The evidence is that they declined to assume the corn, and notified defendant that they would sell the corn tó reimburse themselves, and would not compromise with him except on full payment of every dollar they had lost.

This, instead of being a rescission, is a clear avowal of intention to hold defendant hable for his breach of the contract which had already occurred.

" Nor can defendant, on his own part, rescind the contract for this act of the plaintiffs; he had broken his contract, had refused -to pay plaintiffs the amount of their demand, and to receive the corn. A cause of action had already arisen in favor of plaintiffs for such breach, and he cannot discharge that cause of action by rescinding a contract, already broken by him, on account of .a subsequent act done by plaintiffs, which resulted from his own breach. What might be his rights in case of a sale prior to a demand on him for payment it is unnecessary here to determine.

Under the evidence, plaintiffs were not to notify defendant of their purchases, but he was to call into their office every day and receive their reports. He did not call at their office, and therefore it was his own neglect if he did not receive immediate notice.

Although defendant had vessels at the place where the com was purchased, yet he did not notify plaintiffs of that fact or give them any directions concerning the corn; they were, therefore, justified in storing it.

Defendant agreed that the drafts of the firms at Baltimore and Alexandria should be a sufficient guarantee that the com was purchased, and that they would pay the face of the drafts: When the drafts were presented payment was refused, because storage receipts were not attached; the storage receipts were produced, then payment was refused on different objections ; finally, defendant promised to pay if the corn was in good merchantable order. The corn was proved to have been in good merchantable order. Defendant had also been informed of the quantity of corn purchased and the prices paid for it, and had also been shown the invoices. During the negotiations for a settlement of the controversy, although defendant endeavored to get plaintiff to throw off the commissions and storage, yet no objection was raised to the correctness of the charges for storage and commissions and for moneys paid for the corn. This was sufficient to authorize the jury to find an acquiescence by the defendant in the correctness of those charges shown on the invoices, especially in view of the fact that, by his agreement, he in effect stipulated that the drafts of the houses in Baltimore and Alexandria should be evidence of the purchase of the corn, and of the price paid for it, which stipulation seems by the proof to have been one of the considerations upon which plaintiffs entered into the contract.

■ The plaintiffs then, having sufficiently proved their demand, and not being obliged to resort, in the first instance, to the corn itself or its proceeds, were improperly nonsuited.

It may be suggested that they have brought their action on the theory that they were obliged to resort to the corn in the first im stance, and could only hold defendant for the balance remaining due after application of the proceeds of the corn, and can, there- > fore, recover on that theory only.

It is true they allege in this complaint that they did sell the corn, and the sum they obtained for it, and that it was less than the sum due them, and demand judgment for the difference between the two sums..

These allegations are wholly unnecessary to the cause of action contained in the complaint. They amount simply to giving a credit on the amount which would otherwise be due them, and' showing how that credit was produced. The giving a credit and showing how it was produced does not change the cause of .action.

It will be observed that the question as to the right of an agent to purchase, who has paid the purchase-money, in the first instance, to sell for his reimbursement, after demand for repayment, without giving notice of the time and place of sale, and bind the principal by the result of such sale, has not been discussed. That question does not arise in the case as now presente^.

If the defendant should amend his answer setting forth such a sale by the plaintiffs, alleging the value of the corn, and seeking to counterclaim such value, then the question would arise ; or, perhaps it might be raised under the present pleadings by an offer to prove the actual value, though that is exceedingly doubtful-

As the testimony now stands, however, it is not raised, for even conceding that the defendant may, under the present pleadings, claim that the sale, admitted in the complaint, was a wrongful conversion of the com, yet there is no proof of its value at that' time Or subsequently, other than the admission in the pleadings as to its proceeds on such sale (Story on Agency, p. 371), and for these proceeds plaintiffs have already given credit in their complaint.

Judgment reversed, and new trial ordered, with costs to the appellant to abide event.

Barbour, C.J.

(dissenting). To entitle the plaintiffs to recover in this action, they were bound to prove upon the trial, first, that they purchased the corn for the defendant, under and in pursuance of the powers in that regard conferred upon them by the latter; secondly, that the defendant, upon being duly advised of such purchase, and of the amount of the plaintiffs’ advances or liabilities, refused to take the corn or pay such charges; and thirdly, that the plaintiff thereupon sold the corn in open market, after notice to the defendant that he would do so, for the best price it would bring, or that the price for which it was sold was then the fair marketable value of the corn at the places where it was purchased. \

Sufficient evidence was given upon the trial to warrant a finding by the jury, if credited, that, by the original agreement between the parties, the plaintiffs were to purchase the corn through their agents in Baltimore and Alexandria; that such agents should draw upon the plaintiffs’ house for the amounts of their purchases, and that, upon the presentation of those drafts, or those of the plaintiffs’ firm, to the firm of Marquand & Dim-mock, they should he paid immediately; it being understood that tire presentation of the drafts to Marquand & Dimmock would be a sufficient guarantee that the corn was bought, and they would pay the face of the draftsand that the price was limited at first to eighty-five cents, and subsequently, to eighty-six and a half cents, per bushel.

Mo evidence was given for the purpose of proving what the corn actually cost beyond the agreement touching the presentation and payment of drafts, above referred to, and the presentation thereof, unless it was to he found in two letters written by the plaintiffs’ firm to their agents in Baltimore and Alexandria, respectively, certain accounts rendered by such agents to the plaintiff, showing purchases of corn by them for the latter, with their disbursements, and the testimony of those agents as witnesses, to the effect that some corn was purchased by them for the plaintiff, without stating in detail the prices paid therefor. By one of those letters the plaintiffs’ firm directed their agents to purchase two hundred and fifty thousand or three hundred thousand bushels, not at or under eighty-six and a half cents per bushel, which was the highest price limited by the instructions of the defendant, but at eighty-six cents; or, if such agents should be able to secure a desirable lot for a cent more, they were ordered to pay it. The other letter directs the agents to pay eighty-five cents; which price, one of them testified, was afterward extended by the plaintiffs to eighty-seven cents per bushel. The accounts show that more than half of the corn charged for therein was purchased at eighty-seven cents ; being half a cent per bushel in excess of the price at which the plaintiffs’ firm were limited by the defendant.

Considering that those letters or orders of the plaintiffs’ firm did not disclose any agency, on the part of the writers, that the persons to whom they were written were directed to purchase at a price exceeding the extreme limit fixed by the defendant, and that more than half the corn purchased by the plaintiffs’ agents was bought for a price beyond such limit, it seems to me impossible to conclude, as a legitimate deduction from the evidence, that the corn in question was purchased by the plaintiffs, as agents of the defendant, under and in pursuance of the power conferred upon them by the' latter. Hay, more, I am clearly of opinion that the evidence ‘in that regard given upon the trial, was such as would have required the jury to find that the corn in question wa's not purchased by the plaintiffs as agents for the defendant, and under his instructions, if that question had been submitted to them.

• Having arrived at this conclusion, it is unnecessary for me to consider the somewhat singular claim of the plaintiffs’ counsel, that the presentation to the firm of Marquand & Dimmock of the drafts which had been drawn upon the plaintiffs, by their own agents, was, under the agreement between the latter and the defendant, at least, prima facie evidence before the court and jury that com had been purchased for the defendant, in pursuance of such agreement, equal in amount to the drafts, so as to throw the onus of proving the contrary upon the latter. I may say, however, that the sole object of that portion of the contract seems to have been to provide for the prompt payment of the drafts, without delays for settlements of accounts; an arrangement, probably, which was sufficient to render the defendant liable for damages on protest, in case of failure to meet such drafts as should actually be drawn in accordance with the provisions of the agreement, but not enough to charge him, in an action of this character, with the amount of the drafts, as for moneys expended for him under the contract. It is sufficient, however, to say that, even if such' presentation of the drafts could be taken as prima faoie. evidence that corn to that amount had been purchased under that agreement, the presumption arising therefrom was removed by the testimony which showed that more than half the corn represented by such drafts was purchased at a price exceeding the limit fixed by the contract, and, therefore, not under it: The evidence to establish the purchase and expenditure under the agreement was, therefore, wholly insufficient ; and, for that reason, the complaint was properly dismissed.

I am also of opinion that the plaintiffs failed upon the trial to prove such a sale of the corn, or marketable value, as would have enabled the jury to ascertain and determine the amount of damages sustained by the plaintiffs, even if they had succeeded in showing that the corn mentioned in the complaint was purchased under the contract. If such purchase had been made, and the defendant had failed to perform the agreement on his part, the plaintiffs would have had a right to sell the corn at auction, at the places where they had bought and stored it, on due notice to the defendant, and to have charged the latter with the deficiency. Or, at their option, they could, themselves, have kept the corn, upon the refusal of the defendant to receive the same, and upon proving the market value at the places of purchase at the time of such refusal, they would have been entitled to recover the difference between such-market value and the amount properly expended by them in the transaction. But no notice of a contemplated sale was given to the defendant, nor was any legal evidence presented upon the trial tending to show what was the market value of the corn where purchased, eitherwhenthe defendant refused to receive the same or at any time. Not ónly were the sales accounts read by the plaintiffs insufficient, of themselves, to prove the fact that the sales mentioned therein were actually made, but, even if that deficiency had been supplied, the market value would not thereby have been proven. The market value of an article of merchandise is not usually established merely by proving the price for which it has been sold by private negotiation.

The judgment should be affirmed, with costs.


author: Monell, J.

text:
    MADELINE LOUISE GENTIL, Plaintiff and Appellant, v. P. ARNAUD and VICTOR GIRAUDY, Defendants and Appellants.
    Where the tenant of a second story, with privilege to use a tin roof in the rear, complained that the tenant on the first story had erected a skylight in such roof—Held, notu ground for an injunction.
    The injury is one a court of law is competent to compensate in damages, especially if the injury is not claimed to be irreparable, and the defendant is not alleged to be unable to respond.
    Before Monell, McCunn, and Fithian, JJ.

      [Decided December 4, 1869.]
    This was an appeal from an order made at Special Term, by Mr. Justice McCunn, dissolving an injunction which restrained the defendants from cutting through and erecting a skylight upon the roof of the premises No. 815 Broadway.

      Mr. J. Henderson for appellant.

      Mr. Roger A. Pryor for respondents.
   By the Court:

Monell, J.

This is a controversy between the tenants of different portions of the building No. 815 Broadway, each claiming the right to the possession of a certain tin roof over a rear building. The plaintiff alleged in her complaint that she had hired the whole of the second floor with the privilege of using the tin roof, which is on a line with such second floor, and upon which, with the permission of the landlord, she had constructed an apartment or work-shop; that the defendants, who occupy such rear building, were about to cut through the tin roof and erect a skylight therein, to the injury of the plaintiff. The defendants claim the right to the possession of the tin roof as the tenants of the rear building, which is covered by such tin roof.

This is a controversy which a court of law is competent to settle. The act complained of would at most be a mere trespass. " If the plaintiff has the best right to the tin roof, then the use of it by the defendants is unauthorized, and they must pay such damages as the plaintiff can show she has sustained. Or if the landlord, after leasing to the plaintiff, gave another lease to the defendants, it may be that such an interference might be a constructive eviction which would relieve the plaintiff from the payment of rent.

■ However that may be, the parties must be left to a court of law, especially as the injury to the plaintiff is not claimed to be irreparable, nor are the defendants alleged to be unable to respond in damages. The injunction was, therefore, properly dissolved.

The order should be affirmed, with costs.


author: Fithian, J.

text:
    DAVID OGDEN, Plaintiff and Appellant, v. GEORGE A. LATHROP, Defendant and Respondent.
    A general authority in a stock note to use, transfer, or hypothecate” the pledged property, does not authorize a sale by the pledgee for his own account, before maturity of the note. Held, That a sale of such pledged property by the pledgee, before the maturity of the note, was a conversion for which an action would lie.
    How the interest of a pledgor is to be foreclosed: the rights and authority of a pledgee over the pledge: construction of a contract of pledge: what notice required in selling a pledge—considered. Per Fithian, J.
    Before Monell, McCunn, and Fithian, JJ.

      [Decided December 4, 1869.]
    This is an appeal from a judgment entered upon the report of a referee. The action was brought to recover the value of fifty shares of the capital stock of the Columbian Insurance Company, alleged to have been the property of plaintiff and wrongfully converted by the defendant to his own use. The facts found and conclusions of law were:
    That, on the thirtieth day of December, 1865, the plaintiff was the owner of fifty shares of the capital stock of the Columbian Insurance Company. That, on said day, he borrowed from the said defendant, upon the pledge and security of said fifty shares of stock, the sum of twenty-five hundred dollars, and thereupon made and delivered to the defendant his certain note or obligation, in the words and figures following, to wit:
    $2,500. New York, Dec. 30, 1865.
    At one week’s notice, I promise to pay, to the order of George A. Lathrop, twenty-five hundred dollars, for value received, with interest at the rate of seven per cent, per annum, having deposited with the payee, as collateral security, fifty shares of Columbian. Insurance Co. stock of the City of New York; and in case tMs note shall not be paid within one week after demand due, I give the said payee, or order, authority to sell the said security, or any part thereof, for my account, on. the maturity of this note, or at any time thereafter at the Brokers’ Board, or at public sale, at the payee’s discretion, and with authority to use, transfer, or hypothecate the same, at payee’s option, payee being required, on payment or tender, at the proper time, of the amount loaned and interest, to return an equal quantity of said security, and not the specific stock deposited, and to apply so much of the proceeds of said security to the payment of this note as may be necessary to pay the same, with all interest due thereon, and also to the payment of all expenses attending the sale of the said security ; and in case the proceeds of the said security shall not cover the principal, interest, and expenses, I hold myself bound to pay the balance.
    DAVID OGDEN.
    That afterward, and on or about the third day of January, 1866, the defendant sold the said fifty shares of stock at public auction, in the city of Hew;, York, without notice to the plaintiff, and received the proceeds thereof.
    The conclusions of law were :

      First. That, by the terms of the said note, the said defendant was authorized to use, transfer, or- hypothecate the stock so pledged at any time, so long, as said note remained unpaid, being • required, on payment or tender, at the proper time, to return an equal quantity of said security, and not the specific’ stock deposited.

      Second. That the sale at public auction, so made by the defendant, was not a conversion of the said fifty shares of stock.

      Third. That the defendant is entitled to a judgment that the complaint be dismissed, and that he recover his costs in this action against the plaintiff.
    The plaintiff’s counsel excepted to such findings and conclusions, and appealed.

      Mr. Elbridge T. Gerry for appellant.
    By the clear terms of the contract, if the note was not paid within one weeh after demand, the respondent had authority to sell the stock then, or at any time thereafter, at the Brokers’ Board, or at "public sale, in his discretion; or to use, transfer, or hypothecate the same.
    The sale of the stock by the respondent, without notice to the appellant, almost immediately after the execution of the note, and without any demand, was an unlawful conversion, and authorized this action. ■
    By the general law of pledge, the pledgee cannot sell without .demand of the debt and notice of sale to the pledgor (Stearns v. Marsh, 4 Denio, 227; Cortelyou v. Lansing, 2 Caine’s Cas., 200 ; Wilson v. Little, 2 Coms., 443; Lewis v. Graham, 4 Abb. Pr., 106; Castello v. City Bank, 1 N. Y. Leg. Obs., 25).
    This must be a notice of the time and place of sale (Wheeler v. Newbold, 16 N. Y. R., 392.)
    Both by these rules, and by the fact that the parties erased a clause allowing the pledgee to make a sale “ without advertising the same or giving any notice,” it is clear that, in exercising the authority to sell, the pledgee was bound to give notice (Millikin v. Dehon, 10 Bosw., 325.)
    Inasmuch as the instrument contains provisions authorizing a forfeiture of a pledgor’s right in the thing pledged in a manner-less favorable than the general rules of the law of pledge would secure to him, the rule of construction is, that such provisions, must be construed strictly against the pledgee or lender, and favorably to the pledgor or borrower. The forfeiture will not be fmored or helped by construction (Jackson v. Topping, 1 Wend., 388).
    The instrument being partly written and partly printed, the wi-itten portions must control the construction rather than the printed, if there is an inconsistency. And by cancelling portions of the printed blank, and executing the paper leaving such portions standing cancelled in it, the parties showed a clear intent that whatever was stated in those portions should he excluded from the contract (Leeds v. Mechanics’ Ins. Co., 4 Seld., 351; Harper v. Albany Mut. Ins. Co., 17 N. Y., 194; Weisser v. Maitland, 3 Sand., 318 ; Woodruff v. Commercial Mut. Ins. Co., 2 Hilt., 122; Benedict v. Ocean Ins. Co., 31 N. Y., 389).

      Mr. Charles H. Van Brunt for respondent.
    It is clear that the defendant did not sell this stock under the authority contained in the note to sell in case of default in payment of the note, because no default could have occurred, the sale taking place within four days from the date of the note.
    It is evident, then, that the sale was made by the defendant, under" the supposition that the clause contained in the note, “ and with authority to use, transfer, and hypothecate, &c., at payee’s option,” applied to the time during which the note was running.
    This clause gave the payee, at Ms option, the right to use, transfer, and hypothecate the stock.
    The authority to' sell at his option, in this clause, is given in contradistinction to the authority to sell upon default, contained in the previous clause, and the words at Ms option must mean something different from a sale upon default. Without this construction the last clause would be entirely meaningless.
    The referee, in his opinion, says it is apparent that this authority was intended to operate before any default, for the pledgeeundertakes to return an equal amount of stock.
    The payee, upon payment or tender at the proper time of the amount loaned and interest, is to return not the specific stock but a like amount.
    The obliteration does not affect the relation of the clause in question to the rest of the note in any respect.
    The rule is that in a contract, partly written and partly printed, where there is a conflict between the written and printed portions, the written must prevail.
   By the Court:

Fithian, J.

Two questions only arise in this case, and both must depend for solution upon the construction to be given to the contract of pledge before set forth. First, does the authority to use, transfer, or hypothecate ” the stock in the contract named, authorize a sale of the stock by the pledgee for his own account before the note matures or becomes due ? If so, can such sale be private, and without notice to the pledgor ?

Formerly, at common law, before a pledge could be sold, the pledgee wa°s required to bring a suit in. equity and obtain authority to sell by judicial proceeding. Subsequently the rule was so far modified that now (in, the absence of any special agreement on the subject) the pledgee may resort to his bill in equity and have a judicial sale, or he may (after the pledgor has made default) sell at public auction without judicial process, having first demanded payment of the debt from the pledgor, and given him reasonable personal notice of the time and place of sale. In case such personal notice could not be given, then resort must be had to a suit in equity (Stearns v. Marsh, 4 Denio, 227).

If the pledgee sell without such demand and .notice, the 'pledgor may have his action to recover the value of the pledge, without tendering the amount of the debt, because by such wrongful sale the pledgee has incapacitated himself from returning the pledge on tender of the debt (2 Caine’s Cases in Error, 204; 10 John. R., 472). This is the extent of the pledgee’s rights and authority in the premises, in the absence of any express contract on the subject. In this case it is conceded the pledgee sold the pledge and applied the proceeds to his own use before the debt became due, and without any demand of, or any notice of sale to the pledgor; and he claims the right thus to do by virtue of the provisions of the contract in evidence. On the trial of the case, the plaintiff’s counsel put in evidence a facsimile of the contract of pledge as it was executed and delivered by the parties, from which it appeared that the promise to pay (or npte), and the agreement as to the pledge, were in one instru ment, which was drawn or prepared for execution by filling up in writing certain blanks and erasing certain printed words, from a printed form previously prepared for use in such cases. The form, as printed, contained an authority to the pledgee to sell at “public or private sale.” The words, “or private ” were erased. So, likewise, the form as printed contained these words, viz., “hereby giving the payee or assignees authority to be the purchasers of the whole or any part of said security, without advertising the same or giving any notioe,” all which were erased before execntion, as were also the words in the body of the note, leaving the contract finally agreed upon between the parties, as hereinbefore set forth. It becomes necessary carefully to analyze this contract, to see if there can be found in it an authority to sell the pledge without demand or notice, and before default made in the payment of the note. First. The contract contains a promise on the part of plaintiff to pay to defendant two thousand five hundred dollars, with interest, at a time to be fixed by defendant, viz., “ one week after demand or notice to plaintiff,” from the defendant, to pay. Second. The contract acknowledges the receipt by defendant, from the plaintiff, of fifty shares of stock as “ collateral security ” for the performance of the promise to pay. Third. The contract then proceeds to specify the power which the pledgee shall have over the pledge, and when that power shall vest and be exercised. And, in that respect, it will be seen that no power or authority whatever is granted over the pledge (unless found in words hereinafter mentioned), except in a certain contingency, viz., “ in case the note shall not be paid ” at maturity, then and only then is the pledgee clothed with authority to sell the pledge “ on the maturity of the note, or at any time thereafter,” at public sale, at the Brokers’ Board, for account of the pledgor, and out of the proceeds to pay the note and net expenses of sale, and if there be a deficiency the pledgor to be liable for it. Thus far the contract is plain and unequivocal. If this were all, there could be no pretence of any authority to sell the pledge, or use or dispose of it in any manner before maturity of the note, or without demand and notice first made and given. But the contract of pledge contains' another provision. Following the first clause, authorizing a sale after defaudt, and which concededly could only be upon notice to the pledgor, and previous to the provision directing the application of the proceeds of a sale, there is inserted in the body of the contract these words: “And with aurthority to use, transfer, or hypothecate the same, at payeds option, payee being required, on payment or tender, at the proper time, of the amount loaned, and interest, to return an equal quantity of said security, and not the specific stoch deposited?

It will be seen that in this provision there are no express, exclusive words of sale, but only such as are claimed to be equivalent words. Assuming for the present that the words “ to use, transfer, or hypothecate,” are broad enough to include an authority to sell, then when can the sale take place ? It will he seen that in all the clauses of the instrument, when a power of sale is 'expressly and in explicit terms given, the pledgor has been sedulous to protect himself against any sale before the maturity of the note, and any whatever, except such as shall he open and public, and on due personal notice to him. He has stricken the negotiable words from his note even, and deprived the holder of' the power to transfer that as an ordinary negotiable instrument. Are we to conclude, then, that in the next sentence the pledgor, knowingly and intentionally, permitted the insertion of a clause which rendered all these precautions substantially useless, and conferred on the pledgee authority to deal with the pledge in all respects as if it were his own, free and clear from any rights or z interests of the pledgor? Clearly such a construction should not be given to the provision unless the language of the instrument absolutely demands it, which it does not. Again, if the words use ” and “ transfer ” be equivalent to a power of sale, in what manner is that power to he exercised? The pledgee claims it gives him the right to sell at once, privately and without any notice to the pledgor, he being- required, in case he so sells, to produce similar stock “ at the proper time? Such a construction is in derogation of the rules of the common law, and contrary to the general scope and spirit of the contract of pledge as a whole, and should not be adopted unless compelled by the explicit and specific words which admit of no other meaning. There are no such words in this provision. There is no explicit or other direction specifying when or in what manner, as it respects notice, the authority to “ use, transfer, or hypothecate” is to be exercised. And I am of opinion that if that use or transfer ” take the form of a sale, it can only be exercised in the manner provided by law by a notice to the pledgor.

But is the authority to use, transfer,” &c.,. stated in the contract, to be construed as authorizing any “ sale ” of the stock other or different from the one first provided for in the instrument? It is claimed .by defendant’s counsel that the provision of the contract authorizing the pledgee, on payment or tender of the debt at the proper time, to return other similar, and not the specific stock deposited, evidences an intent to permit a sale other and different from the public sale expressly provided for in the first part of the contract, and that such intent should determine the'kind of disposition intended by the words to “ use and transfer.” I am of opinion, however, that in endeavoring to ascertain the specific or particular disposition of this pledge, intended to be authorized by the words “ authority to use, transfer&c., regard must be had as well to the words which were erased from the printed form before execution of the contract, as to those provisions now included in the instrument. By the printed form, as originally prepared, it is clear that the person drafting it intended and did provide for two distinct modes or methods of dealing with pledges to be deposited under such proposed agreements, either mode to be at the option of the pledgee. First. That the pledgee might safely keep the pledge until after a breach of the obligation, for the performance of which it was a security, and then sell the same at public auction, without notice or demand, or at the Brokers’ Board. Second. Or he might, at his option, at any time, sell at private sale, without advertisement or “ any notice,” with authority to himself to become the purchaser. That is to say' he might sell, use, transfer, hypothecate,” and in all respects deal with the pledge ess if it was his sole property. How, in this case, it is clear that the pledgor refused to acquiesce in this latter method of dealing with his pledge. He has erased from the form all words authorizing ány “private ” sale, or any sale without full advertisement and notice to him. The court ought not, therefore, to permit a construction to be put upon any general words left in the contract which would have the effect to thwart and subvert this clear and manifest intent of the pledgor. Accordingly, the words “ use and transfer” must be held to mean some “use or transfer” other than an absolute sale. I am confirmed in this view of the case by a consideration of the effect of a construction claimed by the counsel for the pledgee. It is a reasonable presumption that when a creditor requires and a debtor deposits collateral security by way of pledge, it will be something having a market value at least equal to the. amount of the debt. Ordinarily, I believe it is more. In which case, under an agreement, such as claimed by the defendant here, the pledgee may immediately sell the pledge privately and without notice, and reimburse himself for the full amount of his debt, while at the same time he holds his debtor’s note for the full a'mount on interest unsatisfied, and due only at the pledgee’s option. But that is not all, after such sale, if, as in this case, the pledge be stock, and the market value depreciate, the pledgee may buy it in, call for his debt, and collect the full amount, thus making a clear profit of the difference between the depreciated amount at which the stock was purchased and the face of the debt, as well as double interest. If, upon the other hand, the pledge rise in value, after a sale, and the pledgor should tender the amount of the debt and demand an equal quantity of stock, it is, to say the least, questionable whether under the terms of the contract the pledgee would be bound to deliver stock until after the maturity of the note, which occurs only at the option of the pledgee. The pledgee is only bound to deliver stock on “ the payment or tender ” of the full amount of the debt and interest “ at the proper time.” If “ the proper time ” means after default, or at maturity of the note, then it is just such time as suits the pledgee’s convenience. When a pledgee claims such power and authority over his pledge the contract therefor should be clear auT explicit, and nothing be left to interpretation.

The judgment should be reversed, order of reference vacated, and a new trial granted, costs to abide the event.