text:
    Samuel T. Kissam, Plaintiff and Respondent, v. John S. Roberts, Defendant and Appellant.
    1. In an action for the forcible and wrongful taking of goods from the possession of the plaintiff, he need not allege or prove ownership of the goods.
    2. If ownership be alleged in the plaintiff, and such ownership be denied by the defendant, the issue is immaterial.
    3. In such an action the defendant cannot defend by proof that the goods are the property of a stranger.
    4 If the defendant seeks to justify the taking by proof of ownership of the goods in a third person, he must set up in his answer not only such property in the third person, but also connect himself with such owner by averring that the taking was by his authority, or by virtue of process or right against such owner; and if such authority or right to take the goods be not set up in the answer, it cannot be proved on the trial.
    5. A refusal to permit an amendment of the answer on the trial to introduce such averments, is not the subject of an exception which can be reviewed on an appeal from the judgment.
    (Before Hoffman, Woodruff and Moncrief, J. J.)
    Heard, January 9th;
    decided, February 18th, 1860.
    Appeal from judgment on a verdict for the plaintiff for $4,210, had on a trial before Mr. Justice Woodruff and a jury, on the 15th day of November, 1858.
    The complaint in the action avers, that on, &c., at, &c., “the defendant forcibly and wrongfully took from the possession of the plaintiff and carried away the following goods and chattels, of which he is the owner, viz.: a schooner known by the name D. W. Bagley, her apparel, tackle,” &c., &c., (enumerating the articles,) “ which goods and chattels were of the value of $5,500.” Wherefore the plaintiff demands “damages to the sum of $10,000, with interest,” &c.
    The answer of the defendant first “ denies that the plaintiff was or is the owner of the schooner, goods and chattels in the complaint mentioned, or any of them.” And second, denies “that the defendant -forcibly or wrongfully took from the possession of the plaintiff or carried away the schooner, goods or chattels, or any or either of them. And, third, denies that the same wrere of the value of $5,500.”

      On the trial no point was taken that this answer did not sufficiently put the plaintiff’s possession and the taking by the defendant in issue.
    The plaintiff gave evidence tending to prove that he was in the actual possession of the schooner, her tackle, apparel, &c.; that he employed the captain, and after two or three voyages he discharged the captain and took the command himself; that he afterwards employed another captain and sent her to the West Indies, whence she returned to New York; that while he was looking for another voyage, she was taken possession of by the Sheriff by direction of the defendant. The Sheriff testified that he took possession by parol directions from the defendant and sold her, and that he thought the defendant purchased her. On cross-examination by defendant’s counsel, he said that he took such possession as Deputy-Sheriff, by virtue of process, and sold her by virtue of that process. Other evidence was given tending to prove the plaintiff’s actual possession and control of the schooner,1 &c.; his employment of her men, and payment of their wages, &c.; and that the value of the schooner, &c., was $4,500.
    Upon these proofs the defendant moved to dismiss the complaint, upon the grounds, 1st. That the plaintiff had not proved any ownership of, or any such right to or in, the schooner in question as entitled him to maintain this action; 2d. That the plaintiff had not proved any such taking of, or interference with, the schooner by the defendant as was sufficient to authorize the plaintiff to maintain this action; 3d. That the proof did not make out the case stated in the complaint. The motion was denied, and the plaintiff excepted.
    Proof was then given by the defendant in relation to the value of the schooner, &c., and how much she sold for at the sale; and in the course of that evidence, it appeared that there were many bidders at the sale; that the defendant was present; and that “ she was knocked down to Mr. Roberts” (the defendant).
    The exceptions taken by the defendant to the rejection of testimony offered by him on the trial were numerous; but they were taken to rulings, all made upon substantially one ground, viz., that, under the answer of the defendant, he was not entitled to prove that the plaintiff was not the owner of the schooner and other property taken, and that they belonged to his father, Samuel Kissam, and himself jointly, or to his father alone, even though he may have held a bill of sale in his sole name. Thus, he proposed questions and offered testimony, the bearing of which went to show that the schooner, &c., was the property of the firm of S. Kissam & Company, (a firm composed of the plaintiff and his father, Samuel Kissam,) although the bill of sale was made out to the plaintiff and he held the title in his own name: also, that the plaintiff held the schooner, &c., merely as agent for S. Kissam & Company: also, that Samuel Kissam had received portions of the freight by direction of the plaintiff: also, that plaintiff had offered to convey the same in part payment of a debt of his said father: also, to convey her -in part payment of a debt due by S. Kissam & Company: also, that the plaintiff had made statements in relation to his or his father’s ownership of the schooner—(the counsel, however, disavowing any intent, by such proof, to contradict any testimony given by the plaintiff as a witness in his own behalf.) And the defendant also offered to read in evidence a writ of attachment which, on the cross-examination of the Deputy-Sheriff, the latter had stated was the process by virtue whereof he made the seizure and sale. This writ, though not printed in the case on appeal, was not claimed to be a process against the plaintiff.
    This evidence was rejected, on the ground that proof of title in a third person was no defense to an action for the forcible taking and carrying away goods from the lawful possession of the plaintiff; and that the answer did not set up title in any person with whom the defendant connected himself, or under whom or against whom the defendant alleged any right to take the property. 'v

    To the rejection of the evidence, the defendant excepted.'
    The defendant then moved to amend his answer by inserting an averment that the property “was owned by the firm of S. Kissam & Co.” and that it “was taken and sold by the Sheriff under legal process.” The motion was denied, and the defendant excepted.
    The case states that the defendant’s counsel requested the Court to charge and instruct the jury—

      First. That the plaintiff had not, by his proof, shown any trespass or unlawful taking of the schooner in question by the defendant.
    (The Court refused so to charge; to which decision defendant’s counsel excepted.)

      Second. That the plaintiff had shown no title to or interest in pq.id schooner; and, in any event, was entitled to recover only nomin al. damages,
    (The Court refused so to charge; and to this decision, as to each part of said request, defendant’s counsel excepted.)
    The Court thereupon charged and instructed the jury, among other things, as follows :
    That, if the schooner in question was taken from the possession of the plaintiff by the defendant, or by his direction, and he turned the plaintiff out of possession, the defendant was liable.
    (To which last charge and instruction of the Court, the counsel for defendant excepted.)
    That the mere fact that, at the Sheriff’s sale, the schooner was knocked down to the defendant, was not sufficient to make him liable in this action.
    That, if the defendant was liable in this action, he was liable, upon the proofs in this case, for the value of the schooner, with interest from the time of the taking from the plaintiff’s possession.
    (To which last charge and instruction of the Court, the counsel for defendant also excepted.)
    The case was then submitted to the jury, who found a verdict for the plaintiff for $4,210, that is to say, for the value of the vessel, $3,800, and interest thereon from the 17th December, 1856.
    From the judgment for the plaintiff entered upon the verdict, the defendant appealed to the General Term.

      Benjamin W. Bonney, for the defendant (appellant).
    I. The process (writ of attachment) under which the Sheriff seized and sold the property in question was competent evidence, when offered by defendant; and the exception to its rejection is well takpu. It was certainly part of the res gestee, which defendant was entitled to have before the Court and jury.

      It was also admissible evidence in relation to the question of damages.
    II. The complaint alleges that plaintiff was owner of the property in question. The answer denies that allegation. This was a material issue, under the Code, in relation to which either party might give evidence; and the exceptions to the rejection by the Court of defendant’s testimony relative to the ownership are well taken. (Walrod v. Bennett, 6 Barb., 144; Robinson v. Frost, 14 id., 536; Davis v. Hoppock, 6 Duer, 254; Schermerhorn v. Van Volkenburgh, 11 J. R., 529.)
    III. The evidence of title to the property out of the plaintiff, and to show that he was only agent in relation to it, was admissible to regulate the rule of damages; also to show that the plaintiff was not the party in interest. (Fitzhugh v. Wiman, 5 Seld., 559; Spoor v. Holland, 8 Wend., 445; Higgins v. Whitney, 24 id., 379; Sherry v. Schuyler, 2 Hill, 204.)
    IV. The motion by defendant’s counsel to dismiss the complaint should have been granted, and the exception to the decision of that motion is well taken.
    There was no sufficient proof of the taking of the property by defendant to sustain the action.
    V. The motion by defendant’s counsel for leave to amend his answer should have been granted, and the exception to the denial of that motion by the Court is well taken.
    VI. The refusal of the Court to charge that plaintiff had not, by proof, shown an unlawful taking of the schooner by defendant, and the charge in relation to defendant’s liability for the taking, were erroneous, and the exceptions thereto are well taken.
    VII. The refusal of the Court to charge that plaintiff was, under the proofs, entitled to only nominal damages, and the charge that defendant, if liable upon the proofs, was liable for the value of the schooner, with interest from the taking, were errors; and the exceptions thereto are well taken.
    The judgment should be reversed, and a new trial granted.

      P. Y. Cutler, for the plaintiff (respondent).
    I. The action is trover. The answer is a general denial. It does not allege that the vessel was taken under process against a third person, and that title is in that third person.

      II. The defendant, under the general issue or a general denial, cannot prove, in such an action, that title was in a third person, and claim title under that third person.
    1. “ Under not guilty, the plaintiff’s title to the goods cannot be contested.” (Barton v. Brown, 5 Mees. & Welsb., 298; Saunders’ Pl. & Ev., tit. Trover, deft’s ev. under not guilty. Vernon v. Shipton, 2 Mees. & Welsb., 9; White v. Teal, 12 Ad. & Ellis, 106, 4 P. & D., 43; Isaac v. Belcher, 5 Mees. & Welsb., 139; 8 Carr. & P., 714; Duncan v. Speer, 11 Wend., 54.)
    III. The plaintiff proved all that he was required to prove his possession, and that he was deprived of that possession by the defendant. (Duncan v. Spear, 11 Wend., 54; McLaughlin v. Waite, 9 Cow., 670; 1 Chitty, 151.)
    IV. The defendant, who is the party and not a public officer, cannot prove that the seizure was upon execution as against old Mr. Kissam, because it is not set up in the answer. Judge Seldest, in McKyring v. Bull, (16 N. Y. R., 307,) says: “ The rule of Hil. T., (4 Wil. IV.,) and the system of pleading prescribed by the Code, have in one respect a common object, viz.: to prevent parties from surprising each other, by proofs of which their pleadings give no notice.”
    Section 149 of the Code is so plain that “ he who runs may read,” and is conclusive on the question. The answer must contain —
    1. Sec. 149, sub. 2: “A statement of any new matter constituting a defense, or counterclaim.” (Voorhies’ Code, 168, note C; Jackson v. Wheedon, 1 E. D. Smith, 142; Baker v. Bailey, 16 Barb., 54.)
    V. The conversion was distinctly proved. Any interference on the part of the officer, by the direction of the party, is a conversion. (23 Wend., 461.)
    YI. The defendant’s exceptions are not well taken. They point to the trial of an issue not presented by the pleadings, and which, if allowed, would entirely subvert the present system of trials, and render pleadings useless, as a means of informing parties before the trial, of the cause of action or defense.
    The judgment should be affirmed.
   Hoffman, J.

An analysis of the complaint in this action, guided merely by the provisions of the Code, without regard to former precedents and rules, presents this case. That the defendant forcibly and wrongfully took from the possession of the plaintiff, the goods in question and carried them away; that he, the plaintiff, was the owner of such goods; that they were of a given value, and he demands judgment for his damages.

The defendant denies that he did forcibly or wrongfully take from the possession of the plaintiff, the said goods or any of them. He also separately denies that the plaintiff was or is their owner.

We notice that there is not in the complaint any express allegation of possession in the plaintiff, although the averment that the defendant took the property from the possession of the plaintiff involves possession in him by the strongest of implications. Nor is there in the answer any express denial of the plaintiff’s possession, but there is a strong implied admission of it in the negation of a wrongful or forcible taking from his possession.

The explicit allegation of the plaintiff’s ownership in the complaint is met by the explicit denial of it in the answer, and there is nothing more.

Now the theory of the plaintiff, the theory on which the cause was tried, and of the rulings of the Judge, appears to be this: The Code recognizes the principles of the old actions, although all the forms of pleading are abolished. Among them, is the action for damages on account of the wrongful taking of personal. property from the possession of another, known as trespass de honis asportatis, as well as the other action in which the property itself is demanded, or in which ordinarily a question of property is involved, such as trover and replevin, at least in the detinet. y That the present action is not trover, but is precisely that of trespass de honis asportatis, under the former system; that this action proceeds upon the ground of a possession in the plaintiff, wrongfully interfered with by the defendant; that the right to sue is wholly independent of the question of property in himself; that neither the allegation nor proof of such property is requisite to sustain the action; that a defendant by special plea, but not upon a general issue, or mere denial under the Code, could defeat the claim by showing property in himself, or some one under whom he has acted, but not property in a stranger; and that the aver* ' ment in the complaint of ownership, and the denial in the answer, is mere surplusage—it raises an immaterial issue — because it was needless for the plaintiff to have averred, as it is > needless for him to prove it at the trial.

The learned counsel of the plaintiff insists that in all the similar actions of trover, replevin and trespass to personal property, title in another cannot be set up in defense.

It is stated by Justice Sutherland, in Duncan v. Spear, (11 Wend., 54,) that, in an action of trover, the defendant cannot set up property in a third person, without showing some claim, title or interest in himself. The language of Chief Justice Thompson, in Cook v. Howard, (13 John., 284,) however, is, “ that, in trover, the defendant may show title in a third person,” (citing 11 John., 529.) This was so held on certiorari from a Justice’s Court.

Duncan v. Spear was the case of trover upon a mere possession, obtained by a purchaser of chattels under a void execution; and the defendant was not allowed to set up a title in one Reid, with which he had no connection. Daniels v. Brown & Ball is cited in the note (11 Wend., p. 57) to the same point.

Justice Nelson, in Rogers v. Arnold, (12 Wend., 30-36,) repeats this rule, and applies it to trespass, and, as it seems, to replevin in the cepit. He says: “ These cases (13 John., 284; 11 id., 132,) expressly decide that, in the action of trespass, as the possession of a chattel is, prima facie, evidence of right, a mere stranger could not deprive the party of that possession without showing some authority or right derived from the true owner to justify the taking. This sound and incontrovertible principle has also been extended to the action of trover, and we think it apnlicable to this action, (replevin,)” &c. The head-note states this last proposition with, “ It seems.”

As I understand Prosser v. Woodward, (21 Wend., 205,) it strongly intimates that, as to replevin, a plea of property in a third person is good, without connecting the defendant with his title; but it is explicit in stating the rule to be otherwise in trespass and trover.

Pattison v. Adams, (1 Lal. Supp. to Hill & Denio, 426,) determines that, in replevin, property in a stranger, as well as in the defendant, may be pleaded. Ingraham v. Hammond, (1 Hill, 353,) is equally clear to this point; and so is Simpson v. McFarland, (18 Pick., 427.) The reason for this rule deserves attention. Justice Cowen" quotes it from Salkeld: “Whether the property be in the defendant or a stranger, the defendant ought to have a return, because he had the possession, which was illegally taken from him by the replevin.”

It may also be observed, that, in Pattison v. Adams, (7 Hill, 126,) it is stated by Justice Beardsley “ that the usual allegation is that the goods taken or detained were the goods of the plaintiff. An averment of this nature is essential to the plaintiff’s right of action, as it asserts Ms right of property in the goods, although any other words of equivalent import may be substituted.” A declaration that the defendant took goods and chattels of which the plaintiff was entitled to the possession, was held bad on demurrer.

A case by the same title is reported in Lalor’s Supplement (ut supra); and the declaration there alleged that the plaintiffs were the owners of the goods and chattels in suit, and entitled to the possession thereof. This last clause was held nugatory, and might be overlooked as surplusage. The allegation of ownership implied a right to the possession, and was equivalent to an assertion of property in the goods.

And in regard to what would have been an action of trover and conversion, the case of Davis v. Hoppock, (6 Duer, 254,) must be noticed. The action was to recover damages for a wrongful conversion by the defendant of goods and chattels. The complaint averred that at the time of the alleged conversion, the plaintiff was the owner of and entitled to the immediate possession of the goods. The answer denied that at the time of the alleged conversion, the plaintiff was the owner and entitled to the immediate possession of such goods. The defendant offered to show that the property was vested in one Frances Jackson, under whose authority he claimed.. This was excluded. The Judge charged that the defendant could not go into the question of ownership under the pleadings. It was held upon appeal,' that this was erroneous. It was competent for the defendant to prove that the ownership and right of possession was in Mrs. Jackson. (Hurst v. Cook, 19 Wend., 463.) But in respect to a proper action of trespass de bonis asportatis, the authorities are consistent and overwhelming, that possession is a sufficient title to the plaintiff in an action of trespass vi et armis against a wrongdoer ; and that the defendant in such an action cannot set up property in a stranger. (Hoyt v. Gelston, 13 John., 151, Spencer, J.; Cook v. Howard, id., 276-284, Thompson, Ch. J.; Aikin v. Buck, 1 Wend., 466-469; Demick v. Chapman, 11 John., 132; Squire v. Hollenbeck, 9 Pick., 551; Hanmer v. Wilsey, 17 Wend., 91; Root v. Chandler, 10 id., 110.)

The case of Ely v. Ehle, (3 Comst., 506), may be added, in which it was held “ that for any tortious or unlawful taking of a chattel out of the possession of another, actual or constructive, the party injured may, at his election, have trespass de bonis asportatis or replevin in the cepit. The plea of non cepit puts- only in issue the taking of the goods, and the place where they were taken, if that is material. Any matter of justification must be specially pleaded.

In Parker v. Hotchkiss, (25 Conn., 321,) the subject is fully examined. The action was trespass quare clausum fregit, and the declaration alleged possession and an indefeasible estate in fee simple in the plaintiff. It was held that the plaintiff on the trial was only bound to prove possession. (Todd v. Jackson, 2 Dutch., [N. J.,] 525; 3 Sand., 717; 16 Barb., 311.)

If it were held, that in an action of trover for the wrongful' conversion of goods, the defendant might show property in a third person, it would by no means follow that such a defense is admissible in trespass for a wrongful taking. The action of trover is consistent with the idea that the goods came into the possession of the defendant without wrong, and that the only wrong on his part may be that he has converted them to his own use. If, in such case, it were held that the owner of the goods could alone recover their value as damages, still it would be true that for a wrongful taking from the lawful possession of another, it is no defense that a third party owns the goods unless the defendant also shows that he took them by authority of the owner, or by virtue of process under which he had a right to take goods of such owner; and if he would show this, the justification must be set up in his answer. It would be dealing with great and unreasonable indulgence with a tort-feasor, if when sued for illegally, forcibly and wrongfully taking goods from the lawful possession of another, the plea that some stranger was in fact the owner of the goods, were held a justification. And notwithstanding the apparent, concession of the plaintiff’s counsel, in his points herein, that this, is an action of trover,1 we think that is not the true construction of the pleadings. The action is trespass de bonis asportatis, and nothing else.

The English authorities seem.to be equally clear.

In Ashmore v. Hardy and Partridge, (7 Car. & P., 501, 1836,) the action was trespass for entering into the.plaintiff’s house and taking his goods. The plea was first,. not guilty ; second, that the goods were not the goods of the plaintiff, in manner and form as. in the declaration mentioned. There was a third plea, which it is needless to notice. Under the second, it was proposed to show that the goods did not belong to; the plaintiff,- but to one Riley. It was ruled that the plea did not raise any question that could not have been raised on the old plea of not guilty in an action of trespass. The plaintiff was not called upon to prove his title to the goods, and it was enough for him to show that they were taken out of his possession.

1 Whittington v. JBoxall, (5 Queen’s Bench R., 134,1843,) appears to me to cover every point of the present case. The action was trespass for entering upon the plaintiff’s close, and shaking down apples then growing on the plaintiff’s trees, and carrying away said apples, &c. The plea was, 1st. Not guilty. 2. That the said close, trees, apples, &c., in the declaration mentioned, were not, nor was any part thereof the property of the plaintiff. Issues thereon.

On the trial, the possession by the plaintiff of the close, &c., was .sufficiently proven. The question sought to be raised by the defendant was, that the close really belonged to him; and evidence was gone into of the title.

It was explicitly stated by Lord Denman, in delivering the opinion of the Court, that, in trespass guare clausum fregit, with the general issue pleaded, the plaintiff, before the new rules, (Hil. Term, 4 Will. IV.,) was obliged to prove possession at the time of the trespass, and such proof, without any evidence of title or right to the possession, would support a prima fade case against the defendant, who was at liberty, however, under a plea of not guilty, to show that, as against him, the plaintiff had no right to the possession, because such right was either in himself or in some person by whose authority he acted.

But that the new rules put nothing in issue in such an action, under not guilty, except the fact of committing the alleged act of trespass.

“ The Court of Common Pleas, in the case of Heath v. Milward, (2 New Cases, 98,) and this Court, in the case of Browne v. Dawson, (12 Adol. & Ellis, 624,) took the same view of a traverse of the allegation that the close is the close of the plaintiff, and considered that it put the possession only in issue.”

The precedents in the books which I have examined state that the defendant took, &c., the goods of the plaintiff. (Chitty, vol. 2, p. 866, &c.; Burrill’s Practice, Appendix, p. 303.) This, I apprehend, is as much the assertion of property, so as to ascertain what is issuable upon a plea of the general issue, as the allegation of ownership in the present complaint. (7 Hill, 127.)

The principles asserted, or decided, in McKyring v. Bull, (16 N. Y. R., 301,) are applicable to the present question. Neither payment nor any other defense which confesses and avoids the cause of action can in any case be given in evidence as a defense under an answer containing simply a general denial of the allegations of the complaint.

It seems to me quite clear that under these pleadings all testimony showing title out of the plaintiff was inadmissible, and that, even upon an answer specially averring title in some other person, the defendant would have had to connect himself with that person’s right.

We have examined the other exceptions which do not depend upon the point discussed, and think none of them well taken.

The exception to the refusal of liberty to amend the answer is not re viewable on an appeal from the judgment.

I think the judgment should be affirmed.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: By the Court—Bosworth, Ch. J.

license: Public Domain

text:
    The Marine Bank of the City of New York, Plaintiffs and Respondents, v. Nelson Clements, Defendant and Appellant.
    1. In a suit, by a second or subsequent indorsee against the maker of a subscription note given and in terms payable to the International Insurance Company or order, indorsed by the President of the Company, evidence that, for several months in succession prior to such transfer, it was the usage of said Company to borrow money for the purposes of its legitimate business and negotiate its notes as security for the repayment of the money so borrowed, and that the moneys borrowed were so used, and that its notes, when thus used, were indorsed by its President as such, is sufficient to warrant a-jury in finding that the indorsement of the note in suit was made by sufficient authority to vest title in the plaintiffs, so far as their title depends upon the mere question of the indorsement being authorized by the Company.
    2. And it further appearing that the plaintiffs were holders for value, in good faith, and became such in due course of business before the maturity of the note, they are entitled to recover notwithstanding the negotiation of it to the first indorsee was not authorized by the Company nor valid, and jvas not authorized by a.previous resolution of the Board of Trustees, and the Company was then insolvent.
    3. Where special questions of fact are submitted to a jury, and the charge of the Judge in submitting them is not stated in the case, it will be presumed, on appeal, that such instructions were correct, especially if there be nothing in the case to rebut the accuracy of such presumption.
    (Before Bosworth, Ch. J., and Hoffman and Moncrief, J. J.)
    Heard, December 14th, 1859;
    decided, February 25th, 1860.)
    Appeal by the defendant from a judgment entered on the verdict of a jury rendered on a trial had before Mr. Justice Woodruff, on the 27th of January, 1859.
    The plaintiffs sue as second indorsees of a note made by defendant, dated August 14, 1855, for $1,000, payable to the International Insurance Company or order, at the Bank of Commerce in New York, twelve months after its date.
    The complaint alleges the making of the note; its terms; the indorsement and delivery of it by the payee; the plaintiffs’ ownership of it; that it is past due and wholly unpaid, and prays judgment for the amount of it, with interest from its maturity.
    The answer, 1st, puts at issue the indorsement and delivery of the note by the payee; 2d, plaintiffs’ ownership of it, and avers that it belongs to the payee, or to the firm of McCready, Mott & Company, or to one James D. Fish; and, 3d, as a separate and distinct defense, alleges that the only indorsement made of it was made by the President, without authority from the Trustees, and that it was indorsed and assigned by such President, with other effects of the payee, amounting to more than $1,000 in value, and that such assignment, when made, was not authorized by any previous resolution of the Board of Trustees; that the payee was at the time iqsolvent, and that such assignment was made with intent of giving to the assignee, who was a creditor of the payee, a preference over its other creditors; and that the plaintiffs, if holders, became such with notice of the said want of authority in the President to assign and transfer it.
    The note was indorsed thus: “ For International Ins. Co., Alanson Marsh, Pres’t.” Marsh indorsed the note, and was then the president of the Company, and had been some four months previously. The note was negotiated by the Company, and it was soon thereafter taken up by the Company. Subsequently, and about the 8th of May, 1856, Moses Starbuck, who had been president of the Company since about the 6th of February previous, as such president, obtained for the Company from the firm of McCready, Mott & Company, a loan of their notes amounting to $3,500, for the stock note of the Company, amounting to the same sum due July 28, 1856, on the security of the note in suit, and other notes belonging to the Company, of the aggregate sum of $5,002.50.
    The Company failing to pay their stock note, McCready, Mott & Company sold these collateral notes to J. D. Fish & Company for $3,500, on the 12th of August, 1856. On the 13th of August, 1856, the plaintiffs, on the application of said J. D. Fish, discounted said note and passed the proceeds to the credit of this said firm of J. D. Fish & Company.
    The note not having been paid at maturity, the present action was brought.
    The evidence affecting the decisions made at the trial and considered by the Court on the appeal in determining the exceptions passed upon, is stated in the opinion of the Court, and renders a repetition of it, or a more detailed statement, unnecessary.

      J. L. Jernegan, for the appellant.
    I. The transfer of the note to McCready not having been authorized by a previous resolution of the Trustees, is void under the 8th section of the act to prevent the insolvency of moneyed corporations. (1 R. S., 591, § 8.)
    ' II. The fact that the note was a subscription note, does not exclude it from the operation of the 8th section.
    It should appear that the note was transferred in “ bona fide settlement of a presumed loss, contingent or absolute, made with the dealers of the Company, in the usual course of business,” or to raise money with a view to.such settlement. (Howland v. Myer, 3 Comst., 290, 293; The Exchange Bank v. Monteath, 24 Barb., 371.)
    The plaintiffs cannot escape from the operation of said 8th section, on the ground that they are “ purchasers for valuable consideration without notice.”
    The note bears on its face evidence that it originally belonged to the Company, and had been transferred by it. This was sufficient notice to put the plaintiffs on inquiry, and prevent their setting up the want of notice. (Smith v. Strong, 2 Hill, 241, 245; Blunt & Pruyn v. Martin, [Cleaveland’s Banking Laws, 7, note 4,] Williamson v. Brown, 15 N. Y. R., 354; The Exchange Bank v. Monteath, supra.)

    Add to this, that Fish did not indorse the note when he transferred it to the plaintiffs, (Calder v. Billington, 15 Maine, 398,) and that they discounted it within three days of its maturity; that Fish is chargeable with full notice, and was a director of the plaintiffs when he obtained the discount; and then, this becomes a much stronger case of notice than that of Smith v. Strong, supra.

    IV. The suit is, virtually, for the benefit of Fish, and the plaintiffs have no substantial interest in it. Notice to him is notice to them. As the transaction is conceded to be illegal, it follows that the President had no authority, as against the Company, to transfer the note.
    V. Thé Court erred in refusing to submit to the jury the question of insolvency, because the defendant had a right to show the transfer of the note void under the 8th section of the act to prevent the insolvency of moneyed corporations.

      And McCready was a creditor of the Company at and from the moment he received its stock note for the money he loaned to it. The collaterals were transferred to secure this debt. It is of no importance whether he was a creditor of six months or ten minutes’ standing. He was a creditor, and the transfer of the notes preferred him to other creditors.
    The Company having been insolvent at the time, it is not necessary to show that the plaintiffs had knowledge of it, as the transfer is absolutely void. (Brouwer v. Harbeck, 5 Seld., 589, 593.)
    VI. The plaintiffs must show affirmatively, not only that the President had the apparent authority to make the transfer, but that it was actually made for the benefit of the Company. (Exchange Bank v. Monteath, 24 Barb., 371; Mechanics’ Bank v. New York and New Haven R. R. Co., 3 Kern., 599.)
    VII. The Court erred in the instruction on the question of notice, and in that on the question of authority.

      W. Hutchins, for respondents.
    I. The note in suit was given upon a good and sufficient consideration, was used by the International Insurance Company in the course of its business, and in a manner authorized by its charter. (Ch. 156, Sess. Laws, 1844; ch. 295, id., 1855.)
    II. The proceeds of the note, on the discount of it, were paid to the said Company in cash. By receiving and applying the same in their business, the Company ratified the acts of its agents in procuring the money on the note.
    III. But the plaintiffs in this suit are the bona fide holders of the note, for value; and took the same before it became due, in the regular course of business, and without any notice of a defense to the same, either legal or equitable, on the part of the defendant. Under these circumstances the plaintiffs are entitled to judgment. (1 Sand. S. C. R., 160.)
    The judgment of the Court below should be affirmed.
   By the Court—Bosworth, Ch. J.

The plaintiffs sue as indorsees of a note made by the defendant; which note and the indorsement thereon, when produced in evidence at the trial, were as follows, viz.:

“ $1,000. New York, August 14, 1855.
“ Twelve months after date, I promise to pay the International Insurance Company, or order, for value received, one thousand dollars, payable at the Bank of Commerce in New York.
“NELSON CLEMENTS.”
(Indorsed) “For International Insurance Company,
Alanson Marsh, President."

The defendant during the progress of the trial, took exceptions to decisions admitting and rejecting evidence; to portions of the charge to the jury; and to the refusal of the Judge to submit to the jury the question whether the Insurance Company was insolvent, when it transferred the note in question. The appellant’s points take no notice of certain of the exceptions appearing in the case; all such exceptions we regard as abandoned.

Preliminary to the consideration of the exceptions discussed in the appellant’s points, it is proper to remark, that when the testimony was concluded, the defendant’s counsel requested the Court to charge the jury in conformity to five several propositions, which he stated. The plaintiffs’ counsel then stated to the Court, that he rested their claim to recover on the facts; that the plaintiffs are Iona fide holders of the note for value; and that the Insurance Company is, upon the evidence given, bound as against such holders of the note, by the indorsement of it as it was in fact indorsed.

Thereupon the counsel of the parties agreed upon certain facts, viz.:

11 First. That the note in question was a subscription note, and as such was made and delivered to the International Insurance Company.

Second. That in the month of January, 1856, Alanson Marsh, the then President of the said Insurance Company, in his official character, as such President, placed his indorsement upon such note with a view to negotiating the same for such Company. That after such indorsement the said note was again returned to and remained with said Company, as the holder thereof, until passed to McCready, Mott & Co., as hereinafter stated.

Third. That on the 2d day of February, 1856, the said Marsh ceased to be the President of such Company.

Fourth. That Moses Starbuck became the President of such Company in the place of said Marsh. That said Starbuck, while being such President, and assuming to act as such, negotiated such note, as so indorsed, to McCready, Mott & Company, who loaned said Company the sum of $3,500, taking at the same time from said President a stock note of the Company therefor, together with the note in question, and other notes, to the aggregate of about $5,000, held by such Company, as collateral security for such loan. There was no vote of the Board of Directors authorizing the above loan, or the giving of such collaterals.

Fifth. That the note in question passed, by successive transfers, from said McCready, Mott & Co., to the plaintiffs. That said plaintiffs received such note and discounted the same in the regular course of its business, three days before its maturity.

The Judge thereupon stated the foregoing concessions to the jury, and among other things instructed them—

“ Upon .the question whether the plaintiffs were bona fide holders of the note in question for value paid before maturity without notice. That the circumstances proved do not amount to notice to the plaintiffs of the circumstances under which McCready, Mott & Co., received the note, however invalid the loan made by them was, as in fact it is conceded to have been.

To this instruction the defendant’s counsel excepted.

And upon the question, whether the transfer of the note was made by sufficient authority, the Judge charged the jury,

That, if they should find that for a succession of several months prior to the transfer of this note by the Company, it was the usage of the Company to borrow money for the purposes of its legitimate business, and negotiate its notes for the purpose of raising money for such purposes, and the moneys so borrowed were so used, and such notes when negotiated were uniformly indorsed in the same form as the note now in question was indorsed, that is evidence enough to warrant the jury in finding that the indorsement of this note was by sufficient authority to make it binding in favor of these plaintiffs, so as to give them title to this note, so far as such authority is in question.

And to this instruction the defendant’s counsel excepted.

The Judge refused to submit to the jury the question whether the' Company was insolvent when the: note was transferred by the Company. ...

And to such refusal the defendant’s counsel excepted.

The jury found a verdict for the plaintiff for the.amount of the note in suit, with interest, $1,169.

And in pursuance of a direction to find specially upon the facts next mentioned; which direction was given by request of the respective counsel, the jury also found specially:

1. That the plaintiffs are bona fide holders of the note in suit, for value paid in due course of business-before the maturity thereof, and without any notice of the circumstances under which the note was transferred to MeCready, Mott & Company, or of any want of authority in the President of the. Company to indorse the note for the Company, or of other facts impairing its validity.

2. That the President of the Company had authority to indorse and transfer the note in the manner and form in which it was indorsed.

The Court thereupon ordered, that- the defendant’s exceptions. be heard in the first instance at the General Term, and that the judgment be in the meantime suspended.”

The only exceptions noticed in the appellant’s points, are those above stated; and exceptions to decisions .excluding evidence, that “the Company was reported to be solvent” when Marsh was President; and that the Company was insolvent when the note in suit was transferred to .MeCready, Mott & Company, which was in May, 1856.

Exceptions were taken to two propositions contained in the charge. The Judge charged, “ that the circumstances proved do not amount to notice to the plaintiffs of the circumstances under which MeCready, Mott & Co. received the note, however invalid the loan made. by them was, as it is in fact conceded to have been.”

To this instruction the defendant excepted.

James D. Fish testified that he, on the 12th of August, 1856, about 3 P. M., bought this note and others, amounting together to the principal sum of $5,002.50, of McCready, Mott & Company, for $3,500. “ McCready, Mott & Co. told me at the time that they had made a loan to the International Insurance Company, which was past due, and they were authorized to sell the notes, which they held as collateral.”

McCready, Mott & Company, assuming the concession of plaintiffs’ counsel, (in stating the grounds on which he based their right to recover,) that their “ stock loan was not authorized or valid,” to be the truth of the case, acquired no title to the notes, nor any right to sell them. Fish, when he took this and the other notes, knew that McCready, Mott & Co.’s right to hold or sell them depended upon the terms and validity of a contract between them and the Insurance Company, in regard to a loan alleged to have been made to the Company on the security of such notes. If this knowledge was sufficient to put him upon inquiry of the Insurance Company, then the presumption must be, that, if he had inquired, he would have ascertained the fact to be, as upon the trial it was conceded to be, that the transfer of the note to McCready, Mott & Company was unauthorized and invalid.

On the 15th of August, 1856, the first of the three days of grace given by law to the maker within which to pay it, Mr. Fish, then a Birector of the Marine Bank, presented this note to the President and Cashier of the Bank, and asked them to pass it to the credit of his firm, which was done. “ Hothing else was said by either party in relation to the note. Williams (the President) asked me if Clements was good,” . . . About the time the note was protested, the Bank requested Fish to pay it, or signified a wish to that effect. Fish replied, “ Sue the maker of the note: if you cannot get it of him, look to us.” The Cashier of the Bank was examined, and was asked by defendant’s counsel, “Has it ever been your practice to discount single notes of similar amounts two or three days before they fell due?” His answer was, “Yes. We had for a longtime a written guaranty from Mr. Fish of the payment of all notes discounted by us for him. My impression is that the date of it is subsequent to our discount of this note.”

As the part of the charge now under consideration was given as a guide to the jury in determining “ the question whether the plaintiffs were bona fide holders of the note in question for value paid before maturity without notice,” we must consider the evidence above recited (in order to sustain the charge, if this were the whole of the charge on that point,) as not justifying the inference that the plaintiffs’ President and Cashier had cause to sus- ' pect that Mr. Fish was anxious, for some reason, as to which they chose not to inquire, to make a formal transfer of the note to some one who would, in form at least, be a holder of the note for value before its maturity, (although only two days before,) and who, as such, on the note being protested, would sue the maker and attempt to collect it.

I cannot resist the conclusion that the facts tend to show, though not at all conclusively, that the plaintiffs’ officers, who passed this note to the credit of the firm of which Mr. Fish was a member, had reason to believe, and that it is not improbable they did believe at the time, that the whole object in procuring a formal discount of the note was to make the plaintiffs apparent indorsees for value, and thus discourage an attempt to defend a suit brought by them, when one would be attempted to a suit brought by Fish.

The evidence does not disclose that the firm of Mr. Fish had any present use for the money passed to their credit, or that they have not at all times since had on deposit a larger sum to their credit in the Bank than the nominal proceeds of the discount of the note. The accommodating conduct of the Bank in suing Clements, and forbearing to sue Mr. Fish, furnishes some evidence in favor of this view.

I think these circumstances should have been considered by the jury in determining whether the plaintiffs took the note without notice; which question involves the inquiry whether they took it without knowledge of any circumstances which should have put them upon inquiry into the circumstances under which it was obtained from the Insurance Company and by Fish. And if the case did not disclose that this question was not disposed of under this instruction alone, I should be strongly inclined to think that it must have been understood by the jury as importing that the evidence would not justify them in finding that the note was not taken by the plaintiffs in good faith, in the usual course of business, for value paid, and before maturity; and that, if not so meant, it was calculated to mislead.

But as it appears, that the question whether the plaintiffs were such holders, was specially submitted to the jury, and answered by them in the affirmative, it is perhaps a just construction of the part of the charge first excepted to; that all it was- meant or ■understood to affirm is, that the circumstances proved, do not show, or justly tend to show, that the plaintiffs had notice of the transaction between McCready, Mott & Company, and the Insurance Company. That may be conceded to be true, as I think, it must be; and it may also be true that the jury were instructed to weigh all the circumstances proved, in determining the question whether the plaintiffs took the°note in actual good faith, and in the ordinary course of business, and without any knowledge or notice which should have led them as men of ordinary prudence to inquire into the circumstances under which the note was obtained from the Insurance Company and acquired by Fish.

The case states on its face, that it does not contain the whole charge; and we, therefore, conclude that we are bound to presume, that the instructions pertinent to a proper disposition of the special question first submitted were given, and were satisfactory to both parties.

The second exception to the charge, may be briefly disposed of.

There was uncontradicted evidence, that transfers ot notes belonging to the Company were made upon loans negotiated by “ the finance committee,” and that" in all cases the mode of indorsing their paper on transferring it, was the same as that of the indorsement upon the note in question, and that all this was ‘ known to the Company. There was evidence enough to justify the jury in finding that it was the usage of the Company, to make the notes belonging to it and payable to. its order, negotiable by the indorsement of its President as such.

And I think there can be no doubt, that after such a usage has been uniformly pursued for months, any one who becomes a holder of its paper so indorsed in good faith, in the due course of business, for full value, before its maturity, will acquire a good title to it, and can recover upon it. As against such a holder of its paper so indorsed, I think it quite clear that the mere fact that the Company was insolvent when the note was first negotiated to some prior holder, constitutes no defense.

This case is open to the further observation, that the defendant has no defense to the note, except the single one that the plaintiffs have no title to it. Neither the Company nor its receiver, so far as can be seen from the evidence, has questioned, or given notice of an intention to question, the plaintiff’s title. The Company had of McCready, Mott & Company, $8,500, which was advanced on the security of this and the other collaterals, and has used the same in its business. Mr. Pish had realized at the time of the trial of this action (the 27th of Jan., 1859,) about $2,800, from all the collaterals, exclusive of the sum passed to the credit of his firm on the discount of the note in suit. McCready, Mott & Company obtained no more on the sale of the notes to Fish, than they loaned to the Company, and Fish has received less than he paid, (excluding the sum received on the discount of this note). We do not see that any injustice will result to any one from an affirmance of the judgment, or that any rule of law will be violated by it.

Judgment affirmed.

       (See Scott et al. v. Johnson 5 Bosw., 213; Brookman v. Metcalf, id., 429; Ogden v. Andre 4 Bosw., 583.)


text:
    Charles & Philip Alt, Plaintiffs and Respondents, v. Jacob Weidenberg, Defendant and Appellant.
    1. One having only a special property in a chattel, may recover of a person who wrongfully takes or converts it, its full value; such person not being the general owner nor acting under his authority.
    2. A person not engaged in the business of warehousing or storage, who permits another to deposit a chattel in an unoccupied room of his premises, does not thereby acquire any lien on such chattel for the value of the storage of it.
    (Before Bosworth, Ch. J., and Robertson, J.)
    Heard, February 13th;
    decided, February 25th, 1860.)
    This is an appeal by the defendant from a judgment entered on the report of Stephen P. Nash, Esq., as Referee.
    The action is brought to recover damages for the wrongful taking and conversion by the defendant on or about the 18th of April, 1856, of a piano forte, then in the lawful possession of one Herman Schlarbaum, of the value of $325.

      The piano, prior to such conversion, had been deposited by a third person (then the owner of it) with Schlarbaum by way of pledge or as security for $150, which the latter lent to him.
    Schlarbaum while he had possession of the piano, by the license and permission of the defendant placed it in a room on his premises; and the defendant subsequently claimed rent or storage and a lien on the piano therefor, and the defendant on the piano being demanded of him prior to the 25th of August, 1856, refused to give it up unless his said claim for storage was paid, and subsequently took and carried away the piano. The defendant when the piano was put in his room, was not engaged in the business of warehousing or storage, but was a merchant tailor; the room in which the piano was placed being a room of his premises not used by him at the time.
    On the 25th of August, 1856, Schlarbaum by a written transfer, sold and assigned to the plaintiffs “ a certain claim and demand” which he had against the defendant “for on or about the 18th of April, 1856, wrongfully and unlawfully taking and converting to his own use a certain piano forte which then belonged to me (Schlarbaum,) with full power to said Charles Alt and Philip Alt, to sue for, recover and collect the said claim and demand.”
    The pledgor of the piano subsequently, and after this suit was commenced, agreed with Schlarbaum, that the latter might keep it absolutely for the $150.
    The Referee held that the defendant had no lien on the piano, that he was liable for the value of it, and that the assignment transferred to the plaintiffs a right to recover such value, and ordered judgment for the plaintiffs for $393.25, besides costs. The report is dated May 12,1859. The defendant duly excepted to the Referee’s decisions, and from the judgment entered on his report, appealed to the General Term.

      John C. T. Smidt, for appellant.
    Insisted that the assignment did not transfer the piano itself, but only Schlarbaum’s damage by reason of the alleged detention.
    That Schlarbaum had not become absolute owner when he made the transfer to the plaintiffs; and could still maintain replevin for the piano itself notwithstanding such transfer, and hence he had not suffered any actual damage by the refusal to give it up when demanded, and therefore the plaintiffs could recover nothing.
    ■ At all events Schlarbaum could, at most, recover only $150, the amount of his advance; and the plaintiffs as his assignees could not recover more.

      Lewis S. Thomas, for respondents.
   By the Court—Bosworth, Ch. J.

We think there was evidence sufficient to warrant the conclusions of the Referee that the plaintiffs’ assignor was lawfully possessed of the piano; that the defendant wrongfully took it from his possession; and that its value was the sum found as damages.

The defendant being a trespasser, the measure of damages is the value of the property. (Clark v. Pinney, 7 Cow., 681, note a; Kissam v. Roberts, ante, 154.) Where the plaintiff has only a special property, and the suit is against the general owner, the recovery will be limited to the amount of such interest. (Id.) In this case the plaintiffs’ assignor, it is true, had only a special property at the time of suit brought; but, as the defendant was a trespasser and neither the general owner nor acting under his directions, the measure of damages was the value of the property.

The defendant had no lien upon the piano. There was no agreement by the terms of which he was to have one. He did not store it in such capacity as to have a lien by the rules of the common law. (Grinnell v. Cook, 3 Hill, 491, 492; Rivara v. Ghio, 3 E. D. Smith, 267, 268.)

McKee v. Judd, (2 Kern., 622,) is to the point that the assignment to the plaintiffs was sufficient in form to transfer Schlarbaum’s right of action, and that the cause of action is assignable.

We think, therefore, that the judgment cannot be disturbed, either on the ground that the findings of fact are not warranted by the evidence, or that there is error in the conclusions of law, held by the Referee on the facts as found.

Judgment affirmed.


author: By The Court — Bosworth, Ch. J.

text:
    Samuel W. Davenport, Plaintiff and Respondent, v. Jasper W. Gilbert, Defendant and Appellant.
    1. A notice directed to the indorser of a note, dated the day the note matures, which states the name of the maker, its amount, and that such note, “ indorsed by you, is protested for non-payment, and that the holders look to you for payment," is sufficient in form.
    2. Although such indorser, at the time of receiving such notice, was also indorser of another note in all respects like it, except that the latter note matured three months earlier, he cannot avoid liability on account of the general terms of such notice, if it be found as a fact, upon competent and sufficient evidence, that when he received the notice he had actual knowledge that it related to the note in question.
    (Before Bosworth, Ch. J., and Robertson, J.)
    Heard, February 13th;
    decided, February 25th, 1860.)
    Appeal by the defendant from a judgment entered on a verdict rendered on a trial had before Mr. Justice Woodruff, without a jury, on the 3d of October, 1859.
    The defendant is sued as payee and first indorser of a note for $524.63, dated January 1, 1854, made by P. J. Thomas, payable to defendant’s order, six months after date, at the Seventh Ward Bank.
    When the plaintiff had read in evidence the note, and the notary’s certificate of protest and service of notice, and rested, the defendant testified, in his own behalf, that, when the note in suit became due, and thence until after this suit was brought, there was another note outstanding, in all respects like the one in suit, except that it was payable three instead of six months after date.
    That a suit was brought on the three months’ note; that he put in an answer; and that suit was pending when this was commenced. The answer in that suit was read in evidence in this.
    , The defendant, when the evidence was closed, moved to dismiss the complaint, on the ground that the notice served was fatally defective, in not specifying the note in suit as the one to which it referred. The motion was overruled, and he excepted.
    The Judge found, among other facts, that the defendant had actual knowledge that the notice related to the note in suit, and gave judgment for the plaintiff for the amount of the note and interest.
    ■ From this judgment the defendant appealed to the General Term.
    Further particulars are stated in the opinion of the Court. The action had been previously tried; and, on appeal from the judgment then recovered by the plaintiff, a new trial was granted. (See 4 Bosw., 532, for the questions then presented and the opinion then delivered.)

      Jasper W. Gilbert, appellant (in person).

      Weeks & De Forest, for respondent.
   By The Court — Bosworth, Ch. J.

The defendant is sued as the payee and first indorser of a note dated the.lst of January, 1854, at six months for $524,63.

It was proved that the note was duly presented for payment on the 3d of July, 1854; that payment of it was demanded and refused, and that it was thereupon protested, and that notice thereof was duly served on the defendant on the 5th of said July. The notice so served was read in evidence, and in form is like the one served in Youngs v. Lee. (2 Kern., 552.) In the absence of proof that other notes existed which might render the applicability of the notice to the Rote in suit uncertain; the notice must be understood to mean that the note of which it speaks had beén presented for payment, that payment of it “had been demanded and payment refused on the day when it became due.” (Youngs v. Lee, 2 Kern., 554.)

The only extrinsic fact shown to render the applicability of the notice to the note in suit uncertain, is, that the defendant was the indorser of another note in all respects like it, except that such other note was payable at three months, while the one in- suit was payable at six months.

This evidence was met by proof that at the time the notice-in question was served, a suit had been pommenced against the defendant upon the three months’ note, and the defendant had answered the complaint in that suit, and such answer contained no averment that the three months’ note had not been regularly protested, or that notice of it had not been duly served.

It was found as a fact, that the defendant was not misled or left in uncertainty as to the applicability of the notice to the note in suit, “ but was by the aforesaid notice of non-payment informed, and from all the facts had actual knowledge that the said notice related to the note described in the complaint in this action.”

We think the evidence sufficient to justify the finding of the facts, as they were found. That the facts as found entitled the plaintiff to judgment, is settled so far as this Court is concerned, by Cook v. Litchfield. (2 Bosw., 137.) The opinion of the Court when this cause was previously before it, at General Term, favors the same conclusion.

The judgment must be affirmed.

       See Hodges v. Shuler, 22 N. Y. R., 114.


text:
    The Farmers’ and Citizens’ Bank of Long Island, Plaintiffs and Appellants, v. Austin Sherman, Defendant and Respondent.
    1. Where, in an action against the maker of a note, the answer alleges that the note was paid and satisfied to the plaintiffs by a third person, for whose accommodation it was made; proof of any facts which amount to actual payment by such third person, is admissible.
    2. If such an answer is deemed defective by reason of its not specifying the facts relied upon to establish payment, the plaintiffs’ remedy is a motion, to make it more definite and certain.
    3. An agreement with the holder of a note by one for whose accommodation it was made, to pay it in a specified manner, when fully executed, inures to the benefit of the maker.
    4. An agreement having been made by some of the directors of a bank, with a third person, its debtor, that the bank shall take specified property at designated prices in payment of the debt, an acceptance of such property by the Bank under such agreement, is an adoption by the Bank of the agreement as its contract, and will conclude it as effectually as if such agreement had been made originally by the Bank itself.
    (Before Bosworth, Ch. J., and Robertson, J.)
    Heard, February 14;
    decided, February 25, 1860.

      This is an appeal by the plaintiffs from a judgment entered on a verdict rendered on a trial had before Mr. Justice Slosson and a jury, in May, 1859; and also from an order refusing a new trial.
    The defendant is sued as the maker of a note for $1,980, dated July 5, 1854, payable to the order of Thompson, Stillman & Company, sixty days after its date.
    The answer alleges that the note was made without consideration, and for the accommodation of Ralph Pomeroy, one of the payees; that the plaintiffs without defendant’s knowledge, by agreement with Pomeroy, after the note was due, extended the time for the payment thereof, “ and that the same was afterwards fully paid and satisfied by the said Ralph Pomeroy before the commencement of this suit.”
    At the trial Ralph Pomeroy testified, that the note was an accommodation note, that it was borrowed for the accommodation of his firm, who gave their note in exchange for it.
    The defendant, against the objection and exception of the plaintiffs, produced and read in evidence two agreements, one dated May 12, the other September 11, 1855.
    The agreement of May 12, 1855, was, in terms, one between Ralph Pomeroy of the one part, and Laurens Reeve and Thomas J. Van Sant of the other part. It recites that the plaintiffs “hold certain securities now or formerly belonging to Ralph Pomeroy ” amounting to about $9,000, and claim that he is indebted to them about $13,000, exclusive of such securities; and théy agree with Pomeroy that the plaintiffs shall surrender him such securities, and that the plaintiffs will buy of him, to whom he agrees to sell, sufficient lumber of descriptions, and at prices therein named, to pay and cancel his indebtedness to the plaintiffs in full. The Bank to notify Pomeroy within two weeks of the quantity of any two or more of. said descriptions of lumber, so to be received, in payment, or in default thereof Pomeroy had the right to make such designation.
    The lumber so designated to “ be delivered by said Pomeroy upon the line of the Potsdam & Watertown Railroad, at or near the junction of the railroad with the grade leading to Pomeroy’s mills as soon as conveniently may be, and at least as fast, as follows: $1,000 worth thereof in the month of July next; $3,000 August , $3,000 September , $3,000 October , and the balance to make up such indebtedness, in the month of November next. Upon the delivery of the lumber so to be delivered in each month, the said Bank shall return to the said Pomeroy such paper to the amount of the value of the delivery in each month, as the said Pomeroy may require to be returned, out of the paper held by the said Bank against him—except the Sherman note now in judgment.”
    The agreement of the 11th of September, 1855, was as follows, viz.:

      “ Farmers’ and Citizens’ Bank,

      Williamsburgh, September 11, 1855.
    “ Ralph Pomeroy, Esq.,
    “Dear Sir—Our Board have agreed to give you longer time to fulfill the contract made with you by Mr. T. J. Van Sant, Laurens Reeve and L. S. Richardson, on the part of this Bank, provided that you deliver us the $1,000 worth of lumber agreed by you with T. J. Van Sant this fall. You can send us as large a number of sugar shooks this fall as you are able—
    price as per contract.
    _ “ S. W. LOWERS, President.
    “ O. M. BEACH, Cashier.”
    Evidence was given, to the effect that Van Sant and Reeve were directors, Lowere president, and Beach Cashier, of the plaintiffs. Evidence was given upon the question of the amount of lumber delivered under these agreements, the time of such delivery and its value at the contract prices. It was proved that Pomeroy’s mills were at Potsdam and his “ woods in Franklin county.” The evidence of Pomeroy tended to show that lumber amounting in value to $8,800 had been delivered under these agreements and received by the plaintiffs, before the close of November, 1855. This evidence, as it was given, was all objected to as irrelevant and incompetent to prove any issue raised by the answer, and because the agreement of May 12,1855, was not proved to be the plaintiffs’ contract.
    The plaintiffs offered evidence of the value of the lumber at Potsdam, which was received, and the defendant excepted. • - -

      " The defendant read in evidence a letter, dated July 14, 1856, directed to said Pomeroy* and signed “ O. M. Beach, Cashier,” which stated the lumber received by the 15th of November, 1855, to amount to, “say, $8,840.20,” and that he has charged to that account-certain notes (specified) amounting to ...... $8,925 58
    “Cr. by lumber,................................. 8,840 20
    $85 88
    “To this, add” various items, including the note in suit, making a debit balance against Pomeroy of $5,422.63.
    Pomeroy testified, that prior to the receipt of this letter, he had notified Mr. Beach, the plaintiffs’ cashier, that he wished to withdraw the note in suit, and that immediately on receipt of thatfietter; he wrote to him that he wished to withdraw the said note¡ Mr. Beach was examined as a witness by the plaintiffs, but .Was not interrogated in respect to these matters.
    .■ A. letter from Pomeroy to the plaintiffs’ cashier, dated New York, June 22,-1857, requesting him, inter alia, to deliver to the defendant the note in suit, was read in evidence. The plaintiffs excepted to the decision, allowing it to be read. The defendant testified that this letter was delivered to him on the day of its date, and that he delivered to the cashier on the 27th of January,- 1858. This suit was commenced in November, 1857. The defendant testified against the objection and exception of the plaintiffs, that the bank designated Dr. Henry Hewitt to receive the lumber; that he inspected and received all the lumber delivered,- and that-he was not the defendant’s agent.
    : -.-Whefi the testimony was closed, the plaintiffs moved to strike out. .all'the evidence relating to the agreement of May 12th, 1855; the. extension of it ; and the alleged execution of it. The motion was denied, and they excepted.
    . • The plaintiffs then requested the Justice to charge the jury-r—
    . 1st.. .That-none of the agreements, in evidence inured to the benefit of, or could -be taken advantage of by the defendant in this action: which request the said Justice denied, and he refused so to,charge; to which denial and refusal, the plaintiffs then and there duly excepted..

      2d. That the agreement of May 12th, 1855, had not been so proved as to show that the Bank is bound by it, and that the testimony respecting it should be disregarded by the jury: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.
    3d. That the answer set up an unconditional payment by the defendant, and the defendant’s evidence tended to show an accord between the Bank and Pomeroy, and did not sustain the defense, and that the plaintiffs were entitled to recover on their evidence: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.
    4th. That, if the agreements were binding on the Bank, and had been set up in the answer, the defendant was bound to show full performance of it in all respects; and that, if the jury believed that Pomeroy failed to perform it in any respect, the plaintiffs were entitled to recover, unless a sufficient excuse..were .shown: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.
    5th. That, it being conceded that the agreement of May 12th, 1855, was not performed according to its terms, it became incumbent on the defendant to show that it was lawfully extended, and that all the conditions of the extension and all the terms of the agreement were afterwards fully complied with, to entitle the defendant to a verdict: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.
    6th. That the defendant was bound to show, not only a full performance by Pomeroy, but an acceptance of such performance in satisfaction by the plaintiffs, in order to make the defense amount to a full payment; and the defendant having failed to do this, the plaintiffs were entitled to recover: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.
    7th. That, if the jury believed that Pomeroy failed to comply with the conditions upon which the extension was given, either by not sending lumber of the value of $1,000, or by not sending sugar shooks, but box shooks of an inferior quality and value, the plaintiffs were .entitled to recover: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.

      8th. That, if the jury believed there was a failure to perform the agreement of May 12th, 1855, the plaintiffs were entitled to recover: which last request the said Justice refused; and the plaintiffs duly excepted to such refusal.
    His Honor the Judge, after stating the nature and object of the action, and of the defense generally, charged the jury—
    1st. That, for the purposes of this trial, the defendant might avail himself of the transactions between Pomeroy and the Bank to sustain his defense. To which charge, the plaintiffs then and there excepted.
    2d. That the value of the lumber and stuff at the place of delivery, for the purposes of this trial, was to be taken as the value contemplated by the agreement. To which second item of said charge, the plaintiffs then and there duly excepted.
    Sd. That, if the jury were satisfied that the condition in the extension paper was performed, and that the lumber therein mentioned was delivered and received by the Bank, and of the value therein mentioned, then Pomeroy had all of the Fall within which to deliver the lumber and stuff specified in the agreement of the 12th of May. To which third item of said charge, and each and every part thereof, the plaintiffs then and there duly excepted.
    4th. That, under that agreement, Pomeroy had aright to withdraw securities to the amount in value of the lumber and stuff described in the contract delivered and received. To which fourth item of said charge, and each and every part of it, the plaintiffs then and there duly excepted.
    5th. That, if the jury were satisfied that, at the time he gave the order on the Bank for this note, there was then an amount of lumber delivered to the Bank exceeding in value the amount of the note, and that none of the securities had then been withdrawn, the defendant would be entitled to a verdict; otherwise, the plaintiffs would be entitled to a verdict. To which fifth item of said charge, and each and every part of it, the plaintiffs then •and there duly excepted.
    Whereupon, the jury found a verdict for the defendant.
    The plaintiffs moved af Special Term for a new trial on a case, and on an affidavit of Cashier Beach to the effect “ that he was greatly surprised by such testimony (the testimony given to show the agreements and performance of them,) and the admission thereof under the pleadings in said action,” and “ that he believed that abundant evidence of the non-performance of said agreements on the part of Pomeroy, and of the non-acceptance of the alleged performance as a condition for the delivery of said note to Pomeroy,” could be produced on another trial. The motion was denied in October, 1859, and from that order and from the judgment entered on the verdict, this appeal is taken.
    Some other items of evidence are stated in the opinion of the Court.

      John M. Martin, for appellant.
    Presented and argued written points, embracing the several exceptions taken at the trial.

      Charles W. Sandford, for respondents.
   By the Court—Bosworth, Ch. J.

This action was commenced on or about the 21st of Movember, 1857. It is brought against the defendant as the maker of a note dated July 5, 1854, for the sum of $1,980, payable sixty days after its date to the order of Thompson, Skillman & Company, and by them indorsed.

The defense set up in the answer is, that the note was made without consideration, to accommodate one Ralph Pomeroy, and that after it became due and payable, it was “fully paid and satisfied to the said plaintiffs by the said Ralph Pomeroy, before the commencement of this suit.”

The action was tried in May, 1859, before Mr. Justice Slossoh, and a jury. The defendant obtained a verdict in his favor, and from the judgment entered on it, and from an order denying a motion for a new trial, the plaintiffs appealed to the General Term.

The plaintiffs insist that the evidence admitted to- show payment was erroneously admitted, because the answer did not contain any allegations as to the particular facts thus proved and relied upon as amounting to a payment; and that an answer of the general form of the one interposed in this suit, will only permit evidence of a cash payment.

Van Gieson v. Van Gieson, (12 Barb., 520, and which, was affirmed by the Court of Appeals, 16 N. Y. R., 304,) does not favor this view.

If the particulars of the transaction between Pomeroy and the plaintiffs were not sufficiently disclosed by the answer, the plaintiffs’ remedy was a motion under section 160 of the Code. They could not accept the plea and go to trial upon it, and there interpose the objection for the first time, that it was not sufficiently descriptive of the particulars relied upon as constituting payment. (Seeley v. Engell, 3 Kern., 548, [II.])

If the note was made for the accommodation of Pomeroy, or of the firm of Thompson, Skillman & Company, of which he was a member, and if the Bank held this note and others as collateral security merely, for debts owing to it by Pomeroy; and if there was an executed agreement between him and the plaintiffs by which they agreed to take lumber at prices designated in payment of his indebtedness and of the collaterals held by them, and that Pomeroy might specify the collaterals to which the payments should apply, and if he designated this note as one to be deemed paid after sufficient lumber had been delivered and accepted to satisfy it; then from the time of such designation the note is in fact paid not only as between Pomeroy and the plaintiffs, but as between the defendant and the plaintiffs.

Although Pomeroy, while he testified that this note was made for the .accommodation of himself or of his firm, also testified that the firm’s note was given in exchange for it, yet, throughout the trial, it seems to be assumed, as a fact proved, that the note was an accommodation note. Ho objection was taken to the admission of any evidence offered, nor was any request to charge based on the pretense that the noté was not an accommodation note. I think, therefore, that in examining the exceptions taken, we should consider that there is no question that such is the character of the note.

There can be no question that the only claim of the bank upon the notes it had received from Pomeroy or his firm, (including the one in suit,) was as. security for his and their debts.

There was no controversy that all the lumber delivered by Pomeroy under the agreement of the 12th of May, 1855, and the agreement of the 11th of September, 1855, was received by the bank under those agreements, and that the bank sold it and received the proceeds. The cashier testified to these facts. Nor can there be any doubt that, at the contract prices, the lumber delivered and received amounted to $8,840.25. It was proved without an attempt at contradiction that, soon after the 14th of July, 1856, and after this amount of lumber had been delivered, and “ immediately on receipt of the letter of 14th of July, 1856,” by Pomeroy, that he notified the cashier of his wish to withdraw the note in suit. Pomeroy, therefore, did not acquiesce in the appropriation of the $8,840.25, which the bank, by the paper of July 14th, 1856, indicated a purpose to make, but on the contrary notified it, without delay, that this note must be given up. It was his right to make this requirement.

This view of the admissibility of the evidence under the pleadings, and of the meaning of the contracts adopted by the bank, even if not originally made by its authority, is an answer to all the exceptions taken to the admission or rejection of evidence.

As the bank took, and was to take the lumber at Potsdam, at a stipulated price; it was immaterial what was its net value in New York, or what was its actual value at Potsdam, or whether S. Austin sold it after it was delivered.

That Hewitt was the agent of the bank, was proved by its cashier, and although he testified that Hewitt was the agent of both parties, it was competent for the defendant to prove that Hewitt was not Pomeroy’s agent.

We think the evidence given presented a case not calling for the submission to the jury of any other questions of fact, than those embraced in the charge of the Judge, if it called for the submission of any question. The agreement between Pomeroy and the bank was made on the 12th of May, 1855, and the time for performing it was extended by the agreement of the 11th of September, 1855.

The communication from the cashier to Pomeroy of the 14th of July, 1856, represents that Hewitt (the bank’s agent) sent to the bank a statement dated November 15th, 1855, of lumber then delivered amounting to $8,840.25.

This communication concedes payment to that amount, and makes no suggestion that the $1,000 worth of lumber called for by the extension agreement of the 11th of September, 1855, was not so delivered as to comply fully with that agreement.

As the original agreement only called for the delivery of $1,000 worth in July, 1855, and of $3,000 worth in August, 1855, and as the extension agreement of September 11, 1855, was given because Pomeroy could not perform the original contract according to its terms, and inasmuch as by the 15th of ¡November, 1855, $8,840.25 worth of lumber was delivered; the fact is clearly demonstrated that more than $1,000 worth was delivered between the 11th of September and the 15th of ¡November, 1855. The conditions of the agreement of the 11th of September, 1855, having been complied with, and the $8,840.25 worth of lumber having been delivered and accepted under the agreement of May 12,1855, as thus extended, it needed only the fact that Pomeroy should require the note in suit to be returned to him, to entitle the defendant to have it deemed paid; treating it as a note made for the accommodation of Pomeroy.

It being proved without contradiction that Pomeroy “immediately, on receipt of the letter of the 14th of July, 1856,” gave notice to the Cashier that he “wished to withdraw the note in suit; ” the defendant was entitled to an instruction that the request thus communicated and the receipt of the lumber, the delivery of which was acknowledged by that letter, entitled the defendant to a verdict, if none of the other securities had been withdrawn. There was no pretense that any others had been 'then withdrawn.

The fifth instruction, instead of being unjustly prejudicial to the plaintiffs, was more favorable than they had a right to claim, as it left the jury at liberty to find for the plaintiffs if other securities had been withdrawn when the order on the Bank was given, (June 22, 1857,) though they may not have been withdrawn when the verbal notice was given on or about July, 1856, unless this part of the charge can be construed as referring to the verbal and not to the written order to give up this note.

If the views stated are correct, neither of the first three nor the last request to charge was properly made.

There was nothing in the evidence to justify an instruction in accordance with the fourth request. It was so clearly proved that $1,000 worth of lumber was delivered in the fall of 1855, subsequent to the 11th of September, that a verdict to the contrary would be manifestly against evidence. This view is an answer to the exception to charge as fifthly and seventhly requested.

If by the sixth request it was intended to insist that even if -the $1,000 worth of lumber was delivered within the time required by the agreement of the 11th of September, and if the amount of lumber delivered to and accepted by the Bank under the two agreements, exceeded in value the amount of the note in suit, the plaintiffs were entitled .to a verdict, although this note was an accommodation note and Pomeroy had required before this suit was brought that it should be returned to him; then an instruction was asked to which the plaintiffs were not entitled.

There could be no question on the evidence that the Bank received the lumber under the two agreements, and as performance of them to the extent of the price they agreed to pay for it. And there is no pretense that.they intimated, prior to bringing this suit, that they ceased to regard it as an open and subsisting contract.

Although, according to the evidence the Bank made an unprofitable contract with Pomeroy, yet the defendant’s equities are as strong as those of the Bank, and upon the written testimony and unconflicting evidence, and the fact determined by the jury, we think a defense to the note was established, and that no error was committed to the prejudice of the plaintiffs which entitles them to a new trial.

The judgment should be affirmed. Ordered accordingly.


text:
    Hartman and Eberspacher, Plaintiffs and Respondents, v. Proudfit, Defendant and Appellant.
    1. Where the statement contained in a Referee’s report of the facts found by him, diifers from his specification “of the facts found by him,” inserted by him in the case on settling it under sections 272 and 268 of the Code; the latter will be deemed to contain a true statement of the facts as actually found.

      2. If his conclusion is erroneous, assuming the latter facts to be as he has found them, a new trial must be granted.
    3. The statements contained in the report will not be resorted to, to impute thereby a meaning to the language employed in the case as settled to declare what facts were found, which could not be given to it according to the natural construction of such language.

      4. Where, by a contract between the plaintiff and defendant, the latter is to pay in part, for work which the former contracts to perform, by giving, when the work is completed a bond and mortgage for a specified sum “ to run one year;” the plaintiff cannot, in an action brought before the year expires, recover such sum, unless the defendant, after the work has been duly .completed and before suit brought, has refused to give or is in default for not having given a bond and mortgage for the sum required by the contract.
    (Before Bosworth, Ch. J., and Robertson, J.)
    Heard, February 17th;
    decided, February 25th, 1860.
    This is an appeal by the defendant from a judgment entered against him on the report of Benjamin D. Silliman, Esq., as Referee.
    The action was commenced on the 17th of March, 1857.
    The complaint states five separate causes of action: The first cause of action stated, is upon a contract dated September 9, 1856, by which the plaintiffs agreed “to do all the mason work and furnish all the materials according to plan and the specifications hereto annexed for the lager bier vaults to be built on two lots, ” &c., for $5,500, “ all the work to be done in a good, substantial and workmanlike manner,” * * to be completed by the 21st of November next. Three payments, amounting to $3,000, were to be made as the work progressed, and “a bond and mortgage for $2,500, to run one year,” was to be given when all the work was finished and ready for use. The specification annexed to and forming part of the contract contains this clause, viz.: “And if anything is left out in this specification that is required to make the vaults and cellars a good and substantial lager bier building, the mason does agree to do it.” The complaint alleges full performance by the plaintiffs, payment of $3,500, by the defendant in cash on account of it, and a refusal to give a bond and mortgage for the remaining $2,000, and claims a right to recover the $2,000, with interest from the 1st of December, 1856, when, as it alleges, the defendant was requested to execute such bond and mortgage and refused.

      The defense to this cause of action is that the plaintiffs did not perform this contract on their part, but on the contrary failed in many essential and specified particulars to do so, and the answer insists that only $3,000, cash, was paid on this contract, and that the other $500 of cash paid, was paid on another contract, viz.: on a contract dated November 10, 1856, between the plaintiffs and the defendant, by which the former agreed to build “ a brewery and stable ” for the defendant, and that defendant had a right even if there had been full performance by the plaintiffs, to give a mortgage for $2,500.
    The Referee, among other things found, according to the statement of the facts found by him, as he inserted them in the case on settling the same.
    “ 2d. That the plaintiffs performed the work and furnished the materials required of them by said contract.”

      “ 3d. That the work done by the plaintiffs did not, in its results, produce a good and substantial building; that the walls and vaults were defective, the former bulging very much and requiring external braces to support them, and that the building was not such a one as the defendant had in view when he made the contract with the plaintiffs."
    4th. That the defendant paid $3,500, in cash, and that $500 of it was on account of the sum for which the bond and mortgage were to be given.
    6th. That the defendant had not paid the remaining $2,000, or executed a bond and mortgage to secure it, but had refused to do either.
    As a conclusion of law on these facts, he held that the plaintiffs were entitled to recover the $2,000, with interest from December 1st, 1856, that being the day of the defendant’s refusal to execute such bond and mortgage.
    It was not found that the defendant waived full performance, or accepted of the work as being done according to the contract. The Referee’s “report,” purports to contain a statement of the facts found, and of his conclusions of law thereon, and also contains a brief statement of some of his reasons for the conclusions therein expressed. On settling the case, the Referee inserted at the end of it, a formal specification of the facts found, and of his conclusions of law. Some of the matters stated in the one, which are not stated in the other, are noticed in the opinion of the Court.
    The moneys paid by the defendant to the plaintiffs, amounting in all to $3,500, consisted in part of a payment of $1,000 made on the 15th of November, 1856. The defendant insisted that only $500 of this payment was made on the first contract; and that the other $500 of it, was made expressly on account of the contract of November 10th, 1856. The evidence affecting this question is sufficiently stated in the opinion of the Court.
    During the trial, two paper writings were produced by the defendant dated December 23d, 1856, one being a copy of the other, purporting to be contracts between the defendant of the first part, and the plaintiffs of the second part, relating to the aforesaid two contracts; and they contained various recitals and covenants. One of these was signed by Hartman only, and the other by the defendant. It was proved by S. E. Cowdrey who drew them, that when thus executed, they were delivered to him in escrow; to the end that he might deliver that signed by the defendant to the plaintiffs, when that signed by Hartman had been signed by Eberspacher. That he was induced to lend the latter on a promise that it should be returned to him; and that the person so borrowing it had never returned it.
    The Referee allowed these papers “ to be read as admissions by a party to the action, but refused to allow them to be read as evidence of a new contract.”
    To this decision, the defendant excepted.
    Some part of the contents of these papers is stated in the opinion of the Court.

      J. S. Lawrence, for the appellant.

      H. R. Cummings, for the respondents.
   By the Court—Bosworth, Ch. J.

The meaning of the second and third findings of fact, is not so perspicuous as to place it beyond criticism.

All that the second necessarily imports, is, that the vaults were built of the size, in the form, and of the materials required by the contract. It does not state that the plaintiffs did this work in a “ good, substantial and workmanlike manner.” This they, in the body of their contract, agreed to do.

As the third finding states, that “ the work done,” “ did not produce a good and substantial building;” “that the walls and vaults were defective, the former bulging very much and requiring external braces to support them; ” and as the facts found suggest no cause for these marked defects, except “the work done,” the only meaning which we can attach to these two findings is, that the work was defectively performed; and that in consequence of such defective performance the walls bulged and required external braces to support them.

The Referee’s report contains some statements which, it is claimed, show that the second finding was designed to declare as a fact that the work was really done in a workmanlike manner, and that whatever was unsubstantial or defective was the fault of the plans; and not of the manner in which the work was executed.

Even if this construction of the report be correct, we are of the opinion that if its statement of the facts found, differs from that inserted in the case by the Referee on settling it, as required by sections 272, [227,] 268, [223,] of the Code; either in that the one specifies some facts not found in the other, or in that some of the facts are stated differently in the one from what they are in the other, the court should look at the facts stated in the case by the Referee on settling it, as the facts actually found by him.

In that part of the “ report ” which professes “ to find and report ” the facts proved, there is no statement either in form or substance corresponding with the third finding contained in the “case” itself. In the commencement of the “report” conclusions are stated substantially corresponding with the third finding; and in that part of the “ report ” the Referee, after specifying the positions taken by the parties as to the cause of the defects, and commenting upon the evidence given in relation to them, remarks, that he thinks, “on the whole, that the plaintiffs have shown a substantial compliance with the contract on their part.”

We think the “report” cannot be resorted to for the purpose of imputing, by the aid of its contents, a meaning to the finding of facts inserted in the case on settling it, which could not be given to them by any natural construction of the language in which they are stated.

If these views are correct, then it follows that, as their contract in terms required them to do the work in a good, substantial and workmanlike manner, and especially as the specification forming a part of the contract declares that, “ if anything is left out in this specification that is required to make the vaults and cellar a good and substantial lager bier building, the mason agrees to do it,” and inasmuch as it is found that the building, as the plaintiffs left it, ‘‘was not a good and substantial building,” but, on the contrary, the walls were so defective that they bulged and required external braces to support them, the plaintiffs cannot recover without the further fact being found that the work was done in a good, substantial and workmanlike manner, and that vaults good and substantial could not be made by conforming to the plans and specifications which the plaintiffs were bound to follow.

Whether a party who agrees to erect a building according to a designated plan and specifications, and to make it good and substantial, but fails to erect one which can stand without external braces to support it, can recover, if he has conformed to the plans and executed his work well, is a question which it is unnecessary to decide. For, assuming that he can, we are of the opinion that the Referee’s conclusion of law, upon the facts which he has found, is erroneous. We are not satisfied with the Referee’s finding that the $8,500 of cash paid was all paid on this contract. Whether it was or not, depends upon the question whether the $1,000 paid on the 15th of November, 1856, was wholly paid on this contract, or whether only half of it was, and the other half on account of “the brewery and stable” which the plaintiffs were erecting under a contract dated the 10th of November, 1856.

Hartman testifies that the payment of $1,000, on the 15th of November, was an overpayment of $500; that “ the defendant said he was able to pay the whole of the amount due on the contract without giving a mortgage; the defendant said the $500 overpaid was on account of the amount coming to us on the mortgage.”

The defendant testified that he never said any such thing; that “Mr. Hartman at that time said he was in want of money, and if I would give him $500, on account of the brewery, he would not ask for more until the brewery was done.” * * “ I gave it to him, and told him it was on account of the brewery.”

The plaintiffs’ receipts for this and the two previous payments were produced. That of October 4th, for $1,000, and that of November 1st, for $1,500, states that those payments are “ on account for building his brewery cellars,” while that of November 15th, for $1,000, states that it is “ on account for his buildings.” The difference in the terms of the receipts, and the phraseology of the last receipt, favor the accuracy of the defendant’s version of the matter. Besides this, the Referee allowed the defendant to read a paper writing, signed by Hartman on the 23d of December, 1856, “ as admissions by a party to the actionand that paper states that the $3,500 was paid “ on account of the said contracts, and of a claim of five hundred dollars for extra work performed on the said building," and that a bond and mortgage for $2,500 was to be given on the completion of the building.

Whether this writing was rightly received in evidence or not, it is unnecessary to determine. (2 Denio, 149.)

It was admitted in evidence as containing admissions of Hartman ; the admissions contained in it were made after the money was paid and receipt given, and if the slightest weight is attached to them, it must be conceded that as the defendant directly contradicted Hartman as to the purpose or account, for or on which the extra $500 was paid, and as the defendant was corroborated and Hartman was not, the Referee’s finding that the $500 was paid on account of the sum for which the mortgage was to be given, is contrary to evidence.

It is not found that the defendant was asked or refused to give a bond and mortgage for $2,500, and unless he so refused, no action would lie before the expiration of the year to recover any part of that sum.

We think the Referee was right in holding that no such agreement was made as the paper writings of the 23d of December, 1856, import.

The papers were not to be delivered until the one signed by Hartman was signed by his partner also. I think Mr. Cowdrey held the papers in escrow and quo ad hoc, as a stranger to all of them. While so held, the paper signed by Hartman was not his agreement, nor an agreement of his firm. (2 Denio, 149.)

But I think a new trial should be granted on the grounds that the facts found do not entitle the plaintiffs to recover on the first cause of action; and that the finding that the overpayment of $500 was made on account of the $2,500, to be secured by the bond and mortgage of the defendant, is contrary to evidence.

Ordered accordingly.