author: By tub Court — Bobertson, J.

text:
    Henry C. Gardiner et al., Plaintiffs and Appellants, v. Jeremiah Pollard et al., Defendants and Respondents.
    1. A stockholder of a corporation cannot, in an action for damages against the directors, whom he alleges have fraudulently misapplied the property of the corporation, and thereby rendered his stock valueless, recover for any damage which consists solely of his loss of the share of the assets embezzled by them.
    2. To maintain such action, he must show that he has sustained damages beyond the intrinsic depreciation of the value of the stock, by the removal of such assets. An allegation, in the complaint, that the stock had become valueless, is not sufficient.
    3. In order to recover his share of the damages for injury done to the corporation, by the embezzlement of its assets, he must make the corporation a party to the action.

      4. Where the plaintiff in such an action seeks to charge the defendants as trustees, a third person who combined with them in the wrongful acts complained of, cannot properly be made a party defendant.
    (Before Bosworth, Ch. J., and Moncrief and Robertson, J. J.)
    Heard, February 1;
    decided, February 21, 1863.
    This was an appeal from an .order sustaining a demurrer to the complaint of the plaintiff.
    The defendants in the action were Jeremiah Pollard, William M. Eddy, Samuel B. Caswell, Newton Deuel, Augustus Z. Huggins, Alden H. Eddy, Henry Wood, and Joseph J. Van Burén.
    The contents of the pleadings are stated in the following opinion of the Chief Justice, before whom the demurrer was heard and sustained, at Special Term, in January, 1863.
    Bosworth, Ch. J. This action is brought to recover damages for alleged acts of the defendants, whereby the plaintiff’s stock in the Nevada Water Company has, as it is charged, been rendered valueless, and the plaintiff has been deprived of dividends he otherwise would have received, to a large amount.
    The misconduct imputed to some or all of the defendants, and which, it is alleged, has caused this injury, consists;—first, of the receipt by the defendant Pollard, and the wrongful appropriation to his own use and that of the said Eddys, between February 3, 1859, and November 5, 1861, of the net income of the property of the corporation, to the amount of over $150,000; — and if the tenth and eleventh articles of the complaint are intended to specify additional misappropriations, then, second, of the misappropriation of the sums therein mentioned, in the manner therein stated.
    The allegations of the complaint are, in substance, to the effect, that between the 3d of February, 1859, and the 1st of December, 1860, the defendants, Pollard, Wm. M. and A. H. Eddy, and S. B. Caswell, all but Caswell being Trustees of the Company, entered into a conspiracy to embezzle the income of said Company, and to defraud the plaintiff of the value of his stock and of- the dividends thereon; and that by the aid and acts of the other defendants, in pursuance of said conspiracy, all the income, amounting to over $200,000, has been embezzled, the Company rendered insolvent, and the plaintiff’s stock, of the value of over $80,000, rendered valueless; and that the plaintiff has also been deprived of more than $15,000 in dividends; xvherefor he prays judgment for damages to the amount of $100,000.
    Caswell has separately demurred to the complaint, and the other five defendants above named have jointly demurred to it, on the grounds that it does not state facts constituting a cause of action; that there is a misjoinder of causes of action; and that there is a defect of parties in that the corporation is a necessary party."1
    There are several adjudged cases, to the effect that the corporation is a necessary party. (Bdbinson v. Smith, 3 Paige, 232; Cunningham v. Pell, 5 Id., 607; Allen v. Curtis, 26 Conn., 456; Stetson v. Faxon, 19 Pick., 155; Smith v. Surd, 12 Mete., 371; Sodsdon v. Copeland, 16 Maine, 314; Sersey v. Yeazie, 24 Id., 9.)
    These decisions proceed on the principle, that all the moneys misappropriated by Pollard, whether gross proceeds or net income, were the moneys.of the corporation, and the damage caused by the misconduct is primarily and directly caused to the corporation; the defendants are liable to the corporation, and the latter can recover therefor, and is the only party having, at common law, any right of action by reason of the premises.
    It is quite obvious, that if the abstraction of this money has rendered the company insolvent and thereby made the stock valueless, a recovery of the money by the corporation itself, with interest, might restore the value of the stock and enable the company to make dividends. And if the plaintiff can maintain this suit, and recover on it his aliquot part of the whole damage, he may obtain a double compensation, by means of the recovery in Ms suit and of one by the corporation for the same cause.
    It is difficult to state any rule which authorizes a stockholder, as such, to release one who has embezzled funds of a corporation, with such effect as to impair the remedy or right of the corporation to recover the whole sum embezzled, with interest.
    The corporation is the only party that can properly sue. If it refuse, then a stockholder, on allegation of that fact, may sue on behalf of himself and other stockholders, and make the corporation a party defendant.
    This complaint is defective in substance, in that the suit is neither brought by the corporation, nor is" it made a defendant on an allegation showing the necessity therefor.
    Ho decision has been cited in conflict with those above quoted.
    The case of Gaffney v. Colville, (6 Hill, 567,) is brought on a statute giving, in a particular class of cases, a right of action to a stockholder.

      Cageaux v. Mali, (25 Barb., 578,) was brought to recover damages for impairing the value of plaintiff’s stock, by issuing spurious stock. The Court assumed (whether correctly or not, I do not stop to consider) that the company was not liable for the spurious stock, and that the damage was primarily and directly damage to the stockholders.
    The grounds on which the judgment in that case proceeds, does not conflict with the decisions (snjwa) to the point that, in a case like the present, the corporation is a necessary party.
    Upon authority, therefore, as well as principle, the demurrers are, in this respect, well taken.
    It is also objected to the complaint, that several causes of action are improperly united. The complaint (in its eighth article) alleges that, between the 3d of February, 1859, and the 1st of December, 1860, Pollard, the two Eddys and Caswell entered into a conspiracy to injure the plaintiff and plunder the corporation.

      The allegations of the complaint next following, down to its twenty-first article, consist of statements of acts done by the defendants severally, except the defendant Van Burén. The name of the latter is not mentioned, except in the title of the complaint, prior to the twenty-first article.
    That article states, that between the 1st of June and the 4th of ^November, 1861, Deuel, Wood, Huggins, Van Burén and A. H. Eddy “ entered into a further combination-for the fraudulent purpose of further carrying out “the objects of the said conspiracy,” tc? cause themselves to be elected trustees, and as such trustees to do certain acts therein mentioned; the doing'of these acts; and that they did such acts “ with full knowledge of said conspiracy and of the objects of the same, and of all the acts and transactions hereinbefore charged against the other defendants.” The twenty-second article states, that each and every act and transaction of the said defendants herein-before charged, were done by them and each of them for the fraudulent purpose of carrying out the objects of the said conspiracy.
    I am not prepared to hold, peculiar and inartificial as the structure of this complaint may be, that all the defendants are not liable, assuming it to be true, that each did what he is charged with doing, with knowledge of the conspiracy first stated, in pursuance thereof, and for the purpose of consummating its fraudulent and unlawful objects.
    Whether concert of purpose can be shown, or that each did what he is charged with doing, with knowledge of the fraudulent scheme and purpose first stated, and what proof will establish such facts, are questions which do not arise on these demurrers.
    The defendants must have judgments for the cause first above considered, but with liberty to the plaintiff to amend his complaint and make the corporation a party, on stating sufficient cause therefor, on payment of the costs of the demurrers.

      Prom the order entered on this decision, the plaintiff appealed.

      H. C. Gardiner, plaintiff, appellant, in person.
    I. A demurrer founded on the 6th subdivision of the statute, applies only to such defects as would render the count bad on a general demurrer at law, or bad for want of equity in Chancery. (Richards v. Edick, 17 Barb., 262; Graham v. Camman, 5 Duer, 698; Peabody v. Washington Co. Mut. Ins. Co., 20 Barb., 340.)
    A complaint is not bad on demurrer, if it actually contain the elements of a cause of action, however inartifieially they may be stated. (People, &c., v. Mayor, &c., of New York, 28 Barb., 240 ; 8 Abbotts’ Pr., 7; Buzzard v. Knapp, 12 How. Pr., 504.)
    A joint demurrer to a complaint by several defendants will be overruled, if the complaint shows a cause of action by the plaintiffs, or a portion of them, against some of the defendants. (The People v. Mayor, &c., of New York, 28 Barb., 240.)
    II. The defendants, being trustees and officers of the Nevada Water Company, stand in the relation of agents and trustees to the plaintiff, as stockholder in said company. (Cumberland Coal Co. v. Sherman, 30 Barb., 571; Robinson v. Smith, 3 Paige, 222; Percy v. Millaudon, 3 La. R., [O. S.,] 568; Hodges v. New Eng. Screw Co., 1 R. I. R. 312; Verplanck v. Merc. Ins. Co., 1 Edw. Ch., 84; Redfield on Railways, 494; Benson v. Heathorn, 1 Younge & Coll., 326; The York & North Midland Railway Co. v. Hudson, 16 Beav., 485; Aberdeen Railway Co. v. Blakie, 1 McQueen, 461; Scott v. Depeyster, 1 Edw., 542; Clagett v. Kilbourn, 1 Black. U. S. R., 349; N. Y. & N. H. R. R. Co. v. Schuyler, 17 N. Y. R., 595; 1 Lind. Law of Part., 494; Story’s Agency, §§ 217, 232; Crook v. Jewett, 12 How. Pr., 19; Bissell v. Michigan, &c., R. R. Co., 22 N. Y. R., 275; House v. Cooper, 16 How. Pr., 293; Austin v. Daniels, 4 Denio, 301; Attorney-General v. Corporation of Leicester, 7 Beav., 176; Ponchartrain R. R. Co. v. Paulding,
      11 La. R., [O. S.,] 41; Angel & Ames on Corp., § 314, p. 372; Gaffney v. Colville, 6 Hill, 567; Cross v. Sackett, 6 Abbotts’ Pr., 265; Id., 270, note; Cazeaux v. Mali, 25 Barb., 578; Mead v. Mali, 15 How. Pr., 347.)
    III. The cause of action stated in the complaint is the damage to the plaintiff on account of his stock being made valueless to him. And the facts which constitute that cause are the unlawful acts of the defendants in pursuance of a conspiracy.
    , The damage sustained by the plaintiff is the ground of the action, not the conspiracy. (Skinner v. Gunton, 1 Saund., 230; Jones v. Baker, 7 Cow., 445; Hutchins v. Hutchins, 7 Hill, 104; Livermore v. Herschell, 3 Pick., 36.)
    1. A conspiracy makes every act done in pursuance of it illegal and. fraudulent, though innocent and lawful in itself. 1
    All confederacies wrongfully to prejudice another are misdemeanors at common law, whether the intention is to injure his property, his person, or his character. (Chitty’s Crim. Law, 1139; approved, 4 Metc., 125; also, in case of Lambert v. The People, 9 Cow., 579; People v. Fisher, 14 Wend., 16; 1 Bishop on Crim. Law, § 437; 2 Id., §§ 160, 161; Van Pelt v. McGraw, 4 Comst., 110, 9 Coke, 55; 6 Term R., 628; Cockshall and the Mayor, &c., of Boalton's Case, Mich. R., 31 & 32 Eliz. in Com. Pleas; Leonard’s R., 189, A. 269; Gregory v. Duke of Brunswick, 47 Eng. Com. L., [1 Car. & K.,] 23; Phelps v. Goddard, 1 Tyler, 60 ; Rex v. Mawbey, 6 T. R., 636; Commonwealth v. Judd, 2 Mass. R., 336; State of Maryland v. Buchanan, 5 H. & J., 317-368; Domat’s Civil Law, [by Stranahan,] 350, § 783.)
    2. And in addition to the fraudulent and unlawful character given to the acts done, it makes each and. every, the joint act of all. (Sheple v. Page, 12 Verm. R., 533; Hutchins v. Hutchins, 7 Hill, 107 ; Regina v. Murphy, 34 Eng. Com. Law, [8 Car. & P.,] 297 ; People v. Mather, 4 Wend., 230; Livermore v. Herschell, 3 Pick., 36 ; Forsyth v. Edminston, 11 How. Pr., 411.)

      3. The conspiracy need not be alleged, for it is a conclusion to be drawn from the facts stated. (Upton v. Vail, 6 Johns., 182; Patten v. Gurney, 17 Mass. R., 185; People v. Mather, 4 Wend., 230; Hooker v. Vandewater, 4 Den., 349; Jones v. Baker, 7 Cow., 445; Eason v. Westerbrook, 2 Murphy, [N. C.,] 329.)
    4. - And if it appear that two or more persons, by their acts, are pursuing the same object, often by .the same means, one performing part of an act, or a series of acts, and the others completing it for the attainment of the object, it is a conspiracy. (Regina v. Murphy, 34 Eng. Com. Law, [8 Car. & P.,] 297 ; People v. Mather, 4 Wend., 261; Savil v. Roberts, 1 Salk., 13; Anon., 3 Id., 97; Molony v. Dows, 15 How., 263 ; 2 Greenl. Ev., 257, § 254; Dexter v. Speur, 4 Mason, 115, per Story, J.; Upton v. Vail, 6 Johns., 183, per Kent, J.; Barney v. Dewey, 13 Id.. 225; Yates v. Joyce, 11 Id., 140 ; Swan v. Saddlemire, 8 Wend., 680.)
    IY. The ground of demurrer that several causes of action have been improperly united, is in the nature of a plea in abatement.
    It does not distinctly specify the grounds of objection to the complaint, in that it does not point out the alleged several causes' of action, nor does it show, how they have been -improperly united. (Purdy v. Carpenter, 6 How. Pr., 362; Hinds v. Twedle, 7 Id., 278; Grant v. Lasher, 2 Code R., 2; Hunter v. Frisbee, Id., 59; Loomis v. Tifft, 16 Barb., 541.)
    A demurrer does not lie to a complaint for the defect of not separately stating two causes of action, they being such as might be united in one complaint. If improperly stated, the remedy is by motion.
    Moreover, there is but one cause of action. (Brinkerhoff v. Brown, 6 Johns. Ch., 139; Fellows v. Fellows, 4 Cow., 696.)
    The subject of this action is The llevada Water Company, and its property; The cause or ground of the action is the damage to the plaintiff, as stockholder in said company, occasioned by the fraudulent acts of the defendants in connection with the said company audits property. (Hammond v. Hudson River Iron and Manuf. Co., 20 Barb., 384; Dennis v. Kennedy, 19 Id., 529 ; Jeroliman v. Cohen, 1 Duer, 633; Spier v. Robinson, 9 How. Pr., 329; Durant v. Gardner, 10 Abbotts’ Pr., 445; Brinkerhoff v. Brown, 6 Johns. Ch., 139 ; Code, § 167; N. Y. & N. H. R. R. v. Schuyler, 17 N. Y. R., 604.)
    Y. If true that the defendants have been improperly joined, the defendants could not demur on this ground, either at common law or under the Code. And if it was a good ground, it could not be assigned by joint demurrer.' (1 Chitt. Pl., 86; Peabody v. Washington Mut. Ins. Co., 20 Barb., 342; Brownson v. Gifford, 8 How. Pr., 389 ; Richards v. Edick, 17 Barb., 262; De Witt v. Swift, 3 How. Pr., 282; Simpson v. Loft, 8 Id., 236; N. Y. & N. H. R. R. Co. v. Schuyler, 7 Abbotts’ Pr., 41; 17 N. Y. R., 592; Churchill v. Trapp, 3 Abbotts’ Pr., 306; Pinckney v. Wallace, 1 Id., 82; Gregory v. Oaksmith, 12 How. Pr., 134; Whitbeck v. Edgar, 2 Barb. Ch., 106; Cherry v. Monro, Id., 618.)
    YI. The objection that The Eevada Water Company should be made a party to the action either as plaintiff or defendant, would be, at common law, a plea in abatement, and the same rules are applicable to it. In this respect the Code has made no change. (Gardiner v. Clark, 6 How. Pr., 449.)
    1. The language used in assigning the fourth ground of demurrer is so vague and uncertain that it is impossible to understand what the pleader intended.
    The demurrer certainly does not state that there is a defect of parties plaintiff, nor does it state that there is a defect of parties defendant.
    Ho ground of demurrer is here assigned. (Purdy v. Carpenter, 6 How. Pr., 362; Skinner v. Stuart, 13 Abbotts’ Pr., 442.)
    2. The Hevada Water Company is not a proper party to be joined as plaintiff. (Code of Pro., §§ 111, 117; Ang. & Ames on Corp., 7th ed., 525, § 560; Cazeaux v. Mali, 25 Barb., 582; 1 Chitt. Pl., 63.)
    3. The company is not a proper party defendant. (Van Santv. Pl., 155; Brinkerhoff v. Browm, supra.)

    VII. The Court cannot allow the defendants to withdraw their demurrer and plead over. (2 R. S., 3d ed., 448.)
    It does not appear that this demurrer was interposed in good faith, but, on the contrary, it does appear that it was interposed in bad faith, and solely for delay.
    VIII. The Court erred in not overruling the demurrers, and rendering judgment absolute for the plaintiff.
    The value of the stock will, of course, depend on the condition of the corporation, but the corporation, so far as its own property is concerned, is not affected by that value. (Hart v. State Bank, 2 Dev. Eq., 111; Brightwell v. Mallory, 10 Yerg., 196; State v. Franklin Bank, 10 Ohio R., 90-97.)
    Each stockholder sustains his separate loss on his own stock. (Mead v. Mali, 15 How. Pr., 350.)
    A depreciation of the market value of stock is a legal damage to the owner. (Cazeaux v. Mali, 25 Barb., 578; Mead v. Mali, 15 How. Pr., 347; Kortright v. Commercial Bank of Buffalo, 20 Wend., 90.)
    The allegation of damage in the complaint is sufficient, and the plaintiff is entitled to recover, both immediate and consequential damages. (Molony v. Dows, 15 How., 263, and cases there cited; Phelps v. Goddard, 1 Tyler, 60; Patten v. Gurney, 17 Mass. R., 185; Barney v. Dewey, 13 Johns., 225; Gallager v. Brunel, 6 Cow., 346.)
    The plaintiff has shown fraud, coupled with damage, and, upon principles as permanent as any in our jurisprudence, is entitled to recover, and be completely indemnified.
    The law is well settled, and beyond question, that parties may be liable in damages for fraud, and to be punished criminally for mutually agreeing to do that which would have rendered neither of them liable, if singly he had done, by the same means, the thing agreed upon. (State v. Buchanan, 5 Harris & Johns., 317; Sydserff v. Reg., 11 Q. B., 245; 12 Jur., 418; People v. Richards, 1 Mich. R., 216;
      Commonwealth v. Ridgway, 2 Ashmead, 247; Reg. v. Gompertz, 9 Q. B., 824; 16 Law J., Q. B., 121; Twitchell v. Commomwealth, 9 Barr, 211; Commomwealth v. Warren, 6 Mass. R., 74; Commomwealth v. Ward, 1 Id., 473; Patten v. Gurney, 17 Id., 182, 184; Bean v. Bean, 12 Id., 21; Rhoads v. Commomwealth, 3 Harris, [Pa.,] 272; Reg. v. Macarty, 2 East, P. C., 823 ; 6 Mod., 301; 2 Ld. Raym., 1179; Reg. v. Orbell, 6 Mod., 42; Reg. v. Button, 11 Q. B., 929; The State v. Simons, 4 Strob., 266; The State v. DeWitt, 2 Hill, [S. C.,] 282; The State v. Younger, 1 Dev., 357; Lambert v. People, 7 Cow., 166; 9 Id., 578; Levi v. Levi, 6 Car. & P., 239; Reg. v. Wilson, 8 Id., 111.)
    The defendants are liable directly to the plaintiff, on the ground that they are his agents, and have violated their duties and obligations to him by acts of gross fraud. • (Story’s Agency, § 217.)
    IX. The law is well settled in this State, in England, and by the Supreme Court of the United States, that the directors of a corporation are the agents of its stockholders. (Cumberland Coal Co. v. Sherman, 30 Barb., 159, and cases cited; Scott v. Depeyster, 1 Edw., 542; N. Y. & N. H. R. R. Co. v. Schuyler, 17 N. Y. R., 595; 1 Lindley’s Law of Partnership, 495; Bennett’s Case, 18 Beav., 339; 5 De G., M. & G., 284; Benson v. Heathorn, 1 Y. & C. C. C., 326; York, &c., R. R. Co. v. Hudson, 16 Beav., 495; Maxwell v. Port Tennant Co., 24 Id., 495; Aberdeen R. R. Co. v. Blaikie, 1 Macqueen, 461; Claggett v. Kilbourn, 1 Black’s U. S. R., 349.) It thus appears that plaintiff, upon two grounds, is entitled to recover full compensation in damages, for:
    1. The depreciation of the value of his stock.
    2. For being deprived of the use of his dividends.
    3. The dividends themselves.
    4. For his trouble, inconvenience and expense. But, under the complaint in this action, he can only recover for the injuries sustained under the 1st and 2d specification of damages. And these are injuries to him individually, and for which he alone can sue.

      X. Upon the authority of the eases cited, it appears that the facts stated in the complaint, and the prayer for relief show:
    -1. That this is a special action on the case, in the nature of , a conspiracy, and that the plaintiff is entitled to a judgment in damages for such amount as the Jury shall find. The defendants are clearly nob privileged to coinmit frauds because of their fiduciary relations to the plaintiff.
    2. That it is an action on the case for fraud, coupled with damage.
    3. That it is au action in assumpsit for the fraudulent violation by the defendants of their duties as the agents of the plaintiff. Such is the form of complaint in this action, that not one cent of the damages recovered under it could ever be sued for by the company.
    XI. If the Court can grant relief such as is specified in the prayer, without additional parties, it should do so, although the plaintiffs would be entitled to further relief if the proper parties were before the Court. (Dart v. Palmer, 1 Barb Ch., 99.)
    XII. Where conspiracy is charged, the defendants cannot demur on the ground that several causes of action have been improperly united. The conspiracy must first •be denied. (Conro v. Port Henry Iron Co., 12 Barb., 57; Fellows v. Fellows, 4 Cow., 696.)

      John E. Burrill, for defendants, respondents.
    I. The gist of the action is the damage by the wrongful acts of the defendants, and the allegation of conspiracy is of no importance as respects the cause and ground of the action. (Hutchins v. Hutchins, 7 Hill, 107; Jones v. Baker, 7 Cow., 445.)
    II. The plaintiff must show that some wrong has been done which has been attended with special damage to himself, and that all of the defendants have united in the commission of such wrong. (Same cases.)

      III. All the acts charged against the defendants (other than those alleged to have been done by them as trustees,) consist of having misappropriated and converted the mon eys and property of The Nevada Water Company.
    IY. For any misappropriations or conversion of property of the companjs defendants are liable to the company only. (12 Metc., 371; 1 Freem. Ch., 174; Rohinson v. Smith, 3 Paige, 232; Allen v. Curtis, 26 Conn. R., 457; Bate v. Graham, 1 Kern., 237.)
    Y. If the action could be maintained in the name of the plaintiff, the corporation must be a party. (Same cases; 16 How. Pr., 293; Wells v. Jewett, 11 Id., 242; Bell v. Mali, Id., 254; Cunningham v. Pell, 5 Paige, 607, 613.)
    YI. The action, if maintainable by any stockholder, should be brought in the name of all, or in the name of the plaintiff for the benefit of all. (Wells v. Jewett, 11 How. Pr., 242; Cunningham v. Bell, 5 Paige, 607, 613.)
    YII. If Pollard used the money of the company to purchase mining claims, and used the money and property of the company to work them, the company may maintain an action, either to establish their claim to the property purchased, and to compel an account of earnings, or to recover the money and value of the property.
    YHI. If the company or those having the charge and control of its affairs do not choose to institute proceedings to enforce such rights, but refuse so to do, the plaintiff may, on an averment of such facts, entitle himself to prosecute such action in his own name. (Oases under 5th and 6th points.)
    IX. An action against the trustees of the company, for any breach or omission of duty, depends upon principles peculiar to the relations of trustees, and wholly inapplicable to the defendants not standing in that relation. (Oode, § 167, sub. 7.)
    X. Part of the charges against the defendants, Deuel, Wood, Huggins, Yan Burén and Eddy, are for violation of duty as trustees. The trustees are responsible individually, not jointly. (Franklin Fire Ins. Co. v. Jenkins, 3 Wend., 138.)
    XI. There is a misjoinder of causes of action, because:
    1. Some of the causes of action are against some of the parties as trustees, and are based on claims against them as such, while others are made against the same and other defendants in an individual capacity.
    2. Some of the charges based on claims against the defendants as trustees, do not affect all the defendants. Caswell never was a trustee.
    3. These charges against the several defendants as trustees, are improperly united with charges made against the defendants as individuals, and which do not affect all the defendants.
    XII. The plaintiff fails to show that the acts complained of have been productive of special damage to himself.
   By tub Court — Bobertson, J.

The plaintiff complains of the decision at Special Term, because the Court viewed what he considered as a special action on the case at common law, as a suit in equity for an account to which the corporation of which he is a stockholder should be a necessary party. He virtually, however, surrenders any special right of action against the defendants, for what he terms, in the complaint, a “ conspiracy” independently of their acts. Xor does he urge that, by reason of such conspiracy, such acts became more or less actionable. He only seeks to avail himself of such conspiracy as an element in the cause of action against the defendants, in that they are thereby made jointly liable (Sheple v. Page, 12 Verm. R., 533; Hutchins v. Hutchins, 7 Hill, 107) for every act charged. The injury really complained of is the reduction of his stock to worthlessness by the joint acts of the defendants.

The cases certainly sustain the view, that no action lay at law for merely conspiring together to injure a third person. In respect to it as a misdemeanor and crime, a different rale prevailed. (Chit. Crim. Law, 1139; Lambert v. People, 9 Cow., 579; People v. Fisher, 14 Wend., 16; 2 Bishop on Crim. Law, §§ 160, 161; 9 Coke, 56; King v. Mawbey, 6 Tenn. R., 636; Commonwealth v. Judd, 2 Mass. R., 336.) In a civil suit, the only cause of action must be acts done pursuant to the conspiracy, whereby the plaintiff was injured. Tlie eases to sustain this, cited by the plaintiff, are Skinner v. Gunton, (1 Saund., 230,) Jones v. Baker, (7 Cow., 445,) Hutchins v. Hutchins, (7 Hill, 104,) and Livermore v. Herschell, (3 Pick., 36,) which they do fully.

It is true there are cases in which acts, innocent or praiseworthy in themselves, may become the subject of an action, when they are the cause of injury and committed with that object in view. Such is the discharge of a party without giving bail, which is blameless when done in the exercise of judicial discretion, but becomes actionable when done for an improper motive, which is conclusively established by an agreement to that effect between a magistrate, his clerk and the jailer. (Cockshall v. The Mayor of Boalton, Leonard’s R., 189, A 269.) Or hissing at a theatre, an authorized mode of expressing disapprobation, becomes actionable when done maliciously, as evidenced by a previous combination for the purpose, to drive an obnoxious performer from the stage. (Gregory v. Duke of Brunswick, 47 Eng. Com. L., [1 Car. & P.,] 23.) So, too, the arrest of a party' in a State, although lawful otherwise, is unlawful, if done after bringing him within its jurisdiction by deceitful practices. (Phelps v. Goddard, 1 Tyler, 60.) In such cases the previous concert of the parties is conclusive evidence of an evil intent, and the action is, therefore, though improperly, called one for a “ conspiracy.” But, in this case, the acts done were illegal and did not need to-be referred to the previous conspiracy, in order to be characterized, and the injury to the plaintiff was complete without regard to it; it is not, therefore, even technically, an action for a conspiracy. It is true the acts done accomplished the injury designed; but the law always infers that parties intend the natural consequences of their acts. And hence the action is resolved into one simply of indemnity to the plaintiff for a wrong done to him by acts imputable to the defendants jointly.

In this view it becomes important to ascertain whether the injury to the plaintiff was done solely to property of his, distinct from that of any other person, or to an interest held jointly by himself and others; and, if the latter, whether the injury to his interest was special and separate. The allegation in the complaint is, that by reasoji of the conspiracy, and the acts of the defendants to carry out the same, the plaintiff has been deprived of a large sum, “which he would otherwise have received as dividends,” and his stock has also been rendered valueless to him. The acts complained of were the appropriation, by different defendants, of.the income and assets of the corporation, to their own use. I do not think the allegation, that the stock had become valueless, equivalent to one that it had sunk below the point it would reach in consequence of all the property of the company being misappropriated, or that the plaintiff’s share of the assets so embezzled, if restored to him, would not completely indemnify him for any loss. In other words, that it was not equivalent to alleging that the plaintiff sustained any loss by the defendants’ acts beyond Ms interest as stockholder in the property embezzled by them, as property of the corporation.

Possibly there may be cases in which directors or other agents of a corporation may be liable, directly, to stockholders, for acts done by them, inflicting special injury on the latter beyond that done to the corporation as an artificial person. Thus, slanders affecting the value of the stock, the issue of spurious stock, which is equivalent to a false assertion of the amount issued, (Cazeaux v. Mali, 25 Barb., 578,) the depreciation of the market value of stock below its intrinsic worth, by abstraction of the funds of a corporation, as in Stetson v. Faxon, (19 Pick., 147,) may be the subjects of individual actions by stockholders. But in the last case stockholders ought only to be allowed to recover as damages the difference between the depreciated market value of the stock and its intrinsic depreciation by the removal of the assets. Because, for the injury to his interest in the assets of the company by the withdrawal of such assets, he is entitled to a share of the damages recovered by the corporation, and, therefore, he has not sustained damages to the full amount of the depreciation of the stock caused by such removal of assets. Although, in such cases, it may be a presumption of law that the value o£ the stock has fallen by the embezzlement of the assets, (N. Y. & N. Haven R. R. Co. v. Schuyler, ubi sup.,) there is no such presumption that it has fallen below what its diminution would be by the defraudation of the stockholder of his right to the assets embezzled. If it has fallen in the market below that, so as to deprive the plaintiff of. the benefit of a sale, and render the restoration of the value of such assets not a sufficient indemnity, the plaintiff is bound to allege it in his complaint, and prove it.

There is no reason why, if the depreciation of the value of the stock by the embezzlement of the assets is only equal to the share of such assets belonging to each stockholder, the interposition of the artificial person of the corporation, the mere creature of the law, should entitle such stockholder to double compensation for the same loss. In the-case of an unincorporated association, or partnership, the same acts might be done by employees, and yet no one has ever thought of contending that each associate or partner had a right of action for injury to his interest in such association or firm against such employees, in addition to the joint action maintainable by the partners or associates, and yet the only difference between that and the case before us is that an act of incorporation, rendering the . association an artificial person, is interposed? because the interest in the former is as much a vendible commodity, capable of having a market value, as shares of stock, and, therefore, is as capable of depreciation by the acts of agents. Upon the principles contended for in this case the creditor of a solvent debtor might bring an action directly against any agents of the latter, who, being intrusted with all his property, should convert it to their own use, and thereby deprive him. of the means of recovering his debt.

I cannot doubt, therefore, that this complaint is defective, if the action be one at common law, in not alleging special damage to the plaintiff, by the defendants’ acts, beyond that inflicted on the corporation, and indirectly on all the stockholders jointly, (Stetson v. Faxon, 19 Pick., 147,) because the corporation represents the plaintiff in prosecutions for all such damages, and to the extent of that sum the plaintiff has not directly sustained damage* because he has the means of indemnity.

I do not perceive that any supposed liability by the defendants, as trustees or agents, if they were all such, would help the plaintiff’s case. It is not very clear from the cases where Courts have undertaken to make directors responsible to stockholders directly, for misconduct, upon what principle they proceeded. They are termed both trustees and agents of the stockholders; widely different relations. In none of such cases were all the consequences of a trust or agency attributed, such as constantly to have accounts rendered, or the profits distributed as fast as they were received. There may be a confidential relation subsisting between a stockholder and a director, creating a certain duty by the latter to the former, or certain rights in the former, which gives the former a right to prevent or sue for malfeasance of the latter. But I think it will be found that neither “ trustee” nor “ agent ” expresses such relation, and that bailee of the capital of the corporation to perform specific duties therewith, comes much more near to it. The Revisers deemed it necessary to provide expressly for the direct liability of directors to stockholders, (2 R. S., 589, § 1; Id., 591, § 10,) which was unnecessary, if they were either trustees or agents. The cases- cited of The Attorney-General v. Corporation of Leicester, (7 Beav., 176,) Ponchartrain R. R. Co. v Paulding, (11 La. R., O. S., 41.) Benson v. Heathorn, (1 Younge & Coll. C. C., 326) Hodges v. N. E. Screw Co., (1 R. I. R., 312,) Verplanck v. Merc. Ins. Co., (1 Edw. Ch., 86,) York and Midland R. W. Co. v. Hudson, (16 Beav., 485,) Aberdeen Co. v. Bleakie, (1 McQuirk, 461,) made the corporation a party. In Austin v. Daniels, (4 Den., 301,) only the liability to the corporation is spoken of. The case of Robinson v. Smith, (3 Paige, 232,) does not state to whose benefit the personal liability of the defectors is to accrue, or by whom the suit is to be brought. In Scott v. Depeyster, (1 Edw. Ch., 542,) it was merely decided that directors of a corporation were not liable for the forgery and embezzlement of an officer whom they had no reason to suspect of any misconduct. And in the case of The N. Y. & N. H. R. R. Co. v. Schuyler et al., (17 N. Y. R., 595,) the complaint was sustained as demurrer on the ground that the corporation was the trustee and guardian of the stockholders entitled to protect them against the claims of the holders of spurious stock. ^Notwithstanding, therefore, what is said in Cumberland Coal Co. v. Sherman, (30 Barb., 571,) Robinson v. Smith, (ubi sup.,) Scott v. Depeyster, (ubi sup.,) Verplanck v. Merc. Ins. Co., (ubi sup.,) N. Y. & N. H. R. R. Co. v. Schuyler et al., (ubi sup.,) and even in Crook v. Jewett, (12 How. Pr., 21,) the law does not appear by any means settled that the director holds the relation of either trustee or agent to the stockholder, with all its attributes, so as to incur all the legal liabilities attached to that relation. If the directors, however, are trustees, there is a misjoinder of defendants, as the defendant Caswell was not a director, but a mere bookkeeper.

If this action, therefore, be not a common law action, it is only sustainable as one in equity, commenced by a party interested to compel the defendants to restore to the corporation. property converted by them, so as to enable the plaintiff to get his share. And to such an action the corporation is a necessary party as the trustee of the other stockholders. The plaintiff does not, in such case, by making the company a defendant, proceed against it for any misfeasance or seek any relief, except having his share of what is restored by the defendants. And he cannot even make it a party defendant without giving it the option of becoming a party plaintiff jointly with himself. The cases cited by the Ohief Justice, in his opinion at Special Term, sustains the necessity of adding the corporation as a party.

In Crook v. Jewett, (12 How. Pr., 21,) on a motion to discharge an order of arrest, it was held that the illegal sale of certain property belonging to a corporation by certain of its officers, was an embezzlement in a fiduciary capacity, making such officers liable to arrest, and that it was no objection that the action was brought in the name of a stockholder, because such an action might be so brought against directors of the corporation for injury to his interests. It does not appear that any objection was taken in such case, for want of parties, or how far the plaintiff had sustained peculiar injury, and it was on a summary application. It can hardly be relied on as authority to show that where there is no peculiar damage to the plaintiff, he can bring suit against directors without the intervention of the corporation as a party, if its omission is objected to.

The law of this case may be summed up in three propositions:

I. That the plaintiff cannot recover in an action at law against the defendants as trustees of the corporation for any damage by their acts, which consists solely of his loss of his share of the assets embezzled by them.

II. That he has not alleged any damage to himself specially, beyond such loss.

III. That in order to get his share of the damages, for injury done to the corporation by the embezzlement of its assets, he must make such corporation a party to the action.

And if the defendants are to be made liable as trustees, then the defendant Caswell is not properly a party as not being one, and the order in his favor should at least be affirmed.

The order below should, therefore, be affirmed, with ten dollars costs, with liberty to the plaintiff to amend in twenty days.


source: Caselaw Access Project

author: Barbour, J. Bosworth, Ch. J.

license: Public Domain

text:
    Patrick O. H. McCartan, Plaintiff and Appellant, v. Elbridge Van Syckel, Defendant and Respondent.
    1. Where an action for an accounting between partners is referred to a Referee, with power to require defendant to' produce an account, and the defendant, when required by the Referee to produce such account, offers proof that the partnership books have been taken from his possession by the plaintiff, and that he is unable to render such an account, it is the duty of the Referee to receive such proof, and an absolute direction to render the account, without inquiring into such fact, is improper.
    2. Under such circumstances an attachment ought not to be granted to punish the defendant for not complying with the order.
    3. A party should not be adjudged guilty of a contempt by reason of not complying with an order of the Court, where he is incapacitated to comply by the act of the adverse party, though that act be lawful. (Per Boswokth, Ch. J.)
    4. It seems, that the Sheriff is not bound to permit parties, whose books are in his custody under an attachment, to examine them.
    (Before Bosworth, Ch. ¡L, and Robertson and Barbour, J. J.)
    Jffcard, December 27, 1862;
    decided, February 28, 1863.
    This was an appeal from an order denying plaintiff’s motion for an attachment against the defendant as for a contempt.
    The action was brought by one partner against another, for an account and settlement of the partnership affairs. An order was made by the Court, at Special Term, referring the cause for trial and determination, and also direct-, ing “ that the defendant produce before the Referee all “ books of account, vouchers, and other documents and “ writings, relating to the premises, and render and furnish “ to the Referee, under oath, a true, just and full account “ of the business and transactions, in the pleadings men- “ tioned, whenever he should be thereto required by the “ Referee.”
    When the cause came on for trial before the Referee, and before any testimony was taken, the plaintiff’s counsel moved that the defendant file a sworn statement of the business and transactions of the firm, and the Referee directed the defendant to furnish such statement at a future meeting. The defendant failed to furnish the statement as required, and thereupon the plaintiff applied to the Special Term, upon the certificate of the Beferee, for an attachment against the defendant for his contempt in thus disobeying the order of the Oourt.
    Upon the hearing of the last motion, at Special Term, before Mr. Justice Monell, in November, 1862, the counsel for the defendant read an affidavit, made by the latter, stating that since the commencement of this action, but before the order of reference was made, the plaintiff, under and by virtue of an attachment against the defendant, took and carried away all the books and papers of the firm, containing the entries of the account sought; and averring that it was utterly impossible for him to comply with the provisions of such order. The defendant’s affidavit further states that he offered to prove before the Beferee, at the time he was directed by the latter to render an account, that it Avas impossible for him to do so, for the reason that the books and papers had been so taken from Ms possession by the plaintiff. But it also appeared, from a certificate, or statement of the Beferee, read by the defendant on that motion, that some shipments to foreign countries had been made on partnership account, from which no returns had been received; that those shipments did not appear upon the books, and that these facts were brought to the notice of the Beferee on the day when the defendant was to render the account, if not at the time the Beferee made his direction that such account should be rendered.
    The motion was denied, and the plaintiff appealed.

      G. Dean, for the plaintiff, appellant.

      W. W. Niles, for the defendant, respondent.
   Barbour, J.

The question whether an account should be rendered before proofs were taken as to the conditions of the alleged partnership, was entirely within the discretion of the Beferee. (Palmer v. Palmer, 13 How. Pr., 363.)

There can be no doubt that the order of the Court directing the defendant to render an account of the partnership business, whenever he should be required to do so by the Referee, fully empowered the Referee to require such account to be rendered. (Fraser v. Phelps, 4 Sandf., 682.) But the authority given to the Referee to require an account to be rendered, necessarily included the power to omit such requisition, if the facts before him showed that the account was unnecessary, or that it was impossible for the defendant to make it. It was his duty, therefore, to receive the proofs offered to show that the books and papers were in the possession of the plaintiff himself, and beyond the control of the defendant; for, had that fact been established, it might safely have been assumed, not only that no further account of the matters contained in the books was necessary, but that it was not in the power of the defendant to make it. That matter the Referee ought to have inquired into before requiring the defendant to render an account of all the partnership business; and the absolute direction to render such account without that inquiry was, therefore, improper.

It is true that, so far as concerned the foreign shipments by the defendant, for the benefit of the firm, not contained in the books, an account, I think, could have been rendered by him, and might, properly, have been directed by the Referee, notwithstanding the returns had not yet been received; and that account the plaintiff was entitled to have. But the direction made by the Referee went far beyond this, and required the defendant to perform an act which we must assume was impossible, and which was unnecessary for the purposes of the reference.

I think, therefore, that the Judge below decided correctly in denying the motion for an attachment; and that such order should be affirmed, with costs.

Bosworth, Ch. J.

Though the order of reference remains in force, the defendant should not be adjudged guilty of a contempt, by reason of not complying with any of its requirements, where he is incapacitated to comply by the act of the plaintiff, though that act be lawful.

The Court should not grant an attachment where, on the conceded facts, it would not convict. The plaintiff can move, at his peril, by an order to show cause, without the issuing of an attachment. (Watson v. Fitzsimmons, 5 Duer, 629; affirmed in the Court of Appeals.

I do not assent to the proposition that the Sheriff is obliged to permit either of the parties to examine the books, or to incur the inconvenience and hazards of granting the free exercise of that privilege, or of allowing them to exercise it, and providing a guard to watch the parties, in a case where such precaution would be necessary.

I doubt whether an order granting or refusing an attachment, involves the merits. It is merely process, to bring the party before the Court to answer, to an allegation of misconduct; the granting of it is not essential to the right of the complaining party to be heard, or to convict the opposite party of the alleged misconduct, or to enforce any decision that may be made.

For these reasons, as well as those assigned by Mr. Justice Monell, on making the order, and by Mr. Justice Barbour, on the appeal, I think the order should be affirmed.


author: By the Court — Moncrief, J.

text:
    John Crawford, Plaintiff and Respondent, v. John Kelly, Sheriff, &c., Defendant and Appellant.
    1. Term fees are not taxable for terms, during which the cause was reserved generally, not by order of the Court, but by a consent filed.
    2. Where an order made at Special Term is correct on the facts there presented, the Court will not interfere with it on appeal upon an agreed statement, presenting, essentially, different facts.
    ( Before Moncrief, Robertson and Monell, J. J.)
    Heard, January 24;
    decided, February 28, 1863.

      This was an appeal from an order made by the Chief Justice, directing a readjustment of the defendant’s costs as taxed by the Clerk.
    The facts admitted on the hearing at the Special Term, and for the purposes of this appeal reduced to writing, and agreed to by the respective parties, were as follows:
    1st. This action was first placed upon the trial calendar of this Court for February Term, 1862.
    2d. On the 21st day of March, 1862, the cause was upon the day calendar of the Court, was called, and on consent of both parties, reserved generally by the Court.
    3d. The cause continued reserved generally, under above reservation, ufitil the 10th October, 1862, when, upon defendant’s motion, it was set down for trial on October 14th, 1862. It was postponed from day to day until the last day of term, when, being too long a cause, it was postponed by the Court until Kovember Term, 1862.
    4th. At Kovember Term, 1862, the cause was tried, and a verdict rendered for defendant.
    5th. Upon the adjustment of the defendant’s costs, the clerk allowed him five term fees; this adjustment giving to the defendant fees for two of the terms at which the cause stood reserved generally, in addition to the term fees for February, March and October, 1862.
    6th. The plaintiff having objected to the allowance of the above term fees for the two terms when the cause stood “ reserved generally,” appealed to the Justice at Special Term at Chambers, (Chief Justice Bosworth,) who made the order which is now appealed from by the defendant.
    ■- -, for the defendant, appellant.

      Lewis S. Thomas, for plaintiff, respondent.
   By the Court — Moncrief, J.

It seems to me that the case agreed upon for the purposes of this appeal by the counsel for the respective parties, plainly is not the case heard by the learned Chief Justice at the Special Term.

Fact “second," as agreed upon, presents au action upon the day calendar, of the 21st March, 1862, for trial, which, upon being called, on consent of both parties, was reserved generally by the Court.

The fact presented to the learned Chief Justice at the Special Term, differs most essentially from this. The order appealed from, recites: “It appearing that, during tioo of the terms taxed by the clerk, " * * the cause was reserved generally by the cleric on consent. ■* * *

“ Bule 20 of this Court, providing ‘ regulations as to the calendars,’ permits causes to be reserved generally by a written consent of the attorneys, filed at any time before the case is on the day calendar.” It would seem to follow that, if this action was upon the day calendar, it could be reserved generally only by the order of the Court, and that a written consent was filed under the rule.

The order made at the Special Term, was correct upon the statements of fact there presented, and it must be affirmed; we cannot entertain an appeal from an order made at Special Term, though a statement of facts be agreed upon, where it is manifest no such case was presented to the Court below.

The order appealed from must be affirmed, with costs.


text:
    James B. Glentworth, Plaintiff, v. Richard E. Mount, Defendant.
    It was decided in this case that there is no limit to the number of term fees taxable' for terms in which a cause has been necessarily on the calendar of the Court of Appeals.
    (Before Bosworth, Ch. J., and Moncrief and Robertson, J. J.)
    Heard at General Term, February 7;
    decided, February 28, 1863.
   See the points decided, in the index to this volume, under the title “ Practice—Costs.’ ’ 1

And. see the appeal from an order reported at length, with the opinion of the Court at General Term, in 17 Abbotts’ Pr. R., 15.


text:
    Henry Dubois et al., Plaintiffs and Appellants, v. Jenks Budlong et al., Defendants and Respondents.
    It was held in this case that, in general, an injunction should be dissolved upon the coming in df the answer of the defendants, denying the whole merits and equities of the complaint.
    (Before Bosworth, Oh. J., and Monorief and Robertson, J. J.)
    Heard at General Term, February 13;
    decided, February 28, 1863.
   See the points decided in the index to this volume, under the title “Practice—Injunction.”

And see the decision of the motion, with the opinion of Monell, J., and the appeal from the order, with the opinion of the Court at General Term, in 15 Abbotts’ Pr. R., 445.


author: By the Court, Monell, J.

text:
    The President, Directors and Company of the Lee Bank, plaintiffs and respondents, vs. George B. Satterlee, defendant and appellant.
    1. On appeal, the respondents are entitled to the benefit of any presumption which will uphold their judgment.
    2. On appeal from a judgment in which the validity of a married woman’s contract is involved, if it does not appear from the evidence, properly in the case, that she was the wife of the person with whom the contract was made, the appellate court will, in support of the judgment, presume that she was not his wife, even although the surname of the two may be the same.
    3. Where one draws a bill of exchange payable to the order of his wife, her indorsement of the bill gives the indorsee a title which enables him to recover upon it against the acceptor. The validity of the indorsement does not depend upon a question of contract or obligation as between the husband and wife; but by his directing the bill to be paid to her order, she is made his agent to receive the money, with necessary authority to transfer the bill.
    (Before Bakboue and Moxell, JJ.)
    Heard April 9, 1863;
    decided May 9, 1863.

      This was an appeal by the defendants from a judgment in favor of the plaintiffs.
    The action was brought upon three bills of exchange drawn by one Pierre 0. Kane, at Lenox, in Massachusetts, payable to the order of his wife, Mrs. Edith Kane, upon and accepted by the defendant. The bills were subsequently indorsed by Mr. Kane, and negotiated, and were afterwards discounted by the plaintiffs.
    The allegations of the complaint were as follows :
    I. That the plaintiffs were, at the times therein mentioned, a corporation of the state of Massachusetts, organized pursuant to an act of the legislature of said state, located and established at Lee, in said state, and capable of suing and being sued in any court of record.
    II. That on the 24th day of October, 1857, one Pierre 0. Kane made a bill • of exchange in writing, dated on that day, of which a copy was given. '
    III. That subsequent to the making of said bill, the said Kane delivered it, for valuable consideration, to his wife, Mrs. Kane;-and that subsequent thereto, and before its maturity, the same was presented to the defendant, George B. Satterlee, for acceptance, and accepted by him in due form of law, by his writing across the face thereof, the words, “ accepted. Geo. B. Satterlee.”
    IY. That subsequent thereto, and before the maturity of said bill, the same' was duly indorsed by the said Mrs. Edith Kane to the plaintiffs herein, for valuable consideration, and at the maturity thereof was duly presented to the defendant for payment, and payment thereof demanded, but refused, and no part has since been paid, but the same is wholly unpaid, although long past due.
    Then followed similar allegations as to two other bills, as second and third causes of action. The complaint concluded by alleging that “the plaintiffs are now the lawful owners and holders of each and every one of said bills of exchange above mentioned, and that the defendant is now justly indebted '' to the plaintiffs thereon in á certain sum.”

      The answer traversed the incorporation of- the plaintiffs, the delivery and indorsement of the bills for value, the plaintiffs’ ownership and interest, and the non-payment of the bills, and averred that they were paid at maturity by a mortgage given by Mrs. Kane to the plaintiffs. It further averred that they were accepted by the defendant for the accommodation of Pierre 0. Kane or Edith Kane, and without consideration, of which the plaintiffs had notice. It further alleged, that when or after the bills became due, the plaintiffs and Pierre 0. Kane made an agreement whereby the time for payment of said bills was extended without the consent of the defendant, and to his damage; and the defendant prayed that the plaintiffs be compelled to collect their claim against Pierre 0. Kane and Edith Kane, on the bills, by the foreclosure of the mortgage, and that the bills, as to the defendant, be cancelled, and his name be erased therefrom.
    The new matter stated, in the answer was denied by the plaintiffs’ reply.
    By a stipulation between the attorneys of the respective parties, the incorporation of the plaintiffs, the signature of Mrs. Kane, the indorser, and the fact that she was a married woman, were admitted.
    The cause was tried on the 19th day of May, 1862, at special term, before Mr. Justice Barbotjb, without a jury. The signatures to the bills, which were offered in evidence by the plaintiffs, were admitted by the defendant. The plaintiffs’ counsel thereupon offered in evidence a mortgage dated 10th of November, 1859, purporting to have «been made by Pierre 0. Kane and Edith his wife, to the plaintiffs. The admission of such mortgage in evidence was objected to by the counsel for the defendant, and the court sustained the objection ; to which the plaintiffs’ counsel excepted. Thereupon, with proof of the computation of interest, the plaintiffs rested their casé. The counsel for the defendant thereupon moved to dismiss the complaint, on the ground that the facts therein set forth did not constitute a cause of action against the defendant—that a married woman, by common law, has no right to indorse or transfer a bill of exchange, and that such indorsement gives no valid title thereto. The judge denied the motion; to which such counsel excepted. He then, to sustain the issues in his behalf, offered in evidence a deed of - trust, dated September 26th, 1853, between Edith Brevoort of the first part, Pierre 0. Kane of the second part, and trustees of the third part, and the case was afterwards submitted; and the judge gave judgment in favor of the plaintiffs for the amount claimed, and interest, with costs.. The following opinion was delivered by him:
    Barbour, J. This action was brought by the indorser and holder, upon three bills of exchange, drawn in Massachusetts by Pierre 0. Kane, upon the defendant, payable to the order of Edith Kanei, the wife of the drawer, three, four and six months, after date, respectively, and indorsed by her, and duly accepted by the drawee, before maturity.
    The counsel for thé defendant insists that the drawing of a bill of exchange, and its delivery to the payee, constitute a contract between the drawer and drawee, whereby the former becomes bound to pay to the latter, or to his indorsees, the amount of such bill, in case the same shall not be accepted or paid upon due presentment; that a husband is incapable of thus contracting with his wife; that the wife, in this case, took no title by such delivery; and that the bills in question were and are, for these reasons, void, and inoperative as "against the acceptor. •
    In the absence of all evidence of mala fide possessio in the holder, proof -of possession of the bills by the plaintiffs is, prima facie, sufficient to éstablish their ownership of them. (Gonroy v. Warren, 3 John. Gh. 259. Peacock v. Rhodes, 2 Doug. 633. Mottram v. Mills, 1 8and/. 37.) The plaintiffs are therefore entitled to recover, if the bills are valid obligations as against the acceptor. •
    It is true that by the common law, which, in that regard, must control in this case, a husband and his wife are, in general, incapable of contracting-with each other so as to create a right of action in favor of the one- as against the other. But a bill of exchange is not merely a contract between the drawer and the payee. It is, when accepted, a new contract between the acceptor and the then holder, who in this case was the indorsee of the wife; nor is such a bill always a contract as between the drawer and the person to whom or to whose order it is payable. It may be made payable to the order of the drawer himself, or to some one receiving the same for collection for the benefit and the use of the drawer; or, what is a very common occurrence in commercial communities, it ."may be payable to the order of some person who indorses it simply for the accommodation of the maker. In none of those cases is there any contract which can be enforced by the payee named in the bill, against the maker. In each instance, it is a mere direction to pay, and has no validity whatever as an obligation, until indorsed to a bona fide purchaser or acceptor.
    In this case the defendant held in his hands moneys belonging to the drawer, to the amount mentioned in the bills. (Griffith v. Heed, 21 Wend. 502.) He was directed by the drawer to pay those moneys over to his wife, or to such person as she should, by her order, appoint to receive.the same; and by the same instruments, such drawer, in effect, constituted the wife his agent to receive the moneys, or by her order to appoint their payment to such other person as should become the holder of the bills, as he might well do. (Go. Lift. 52, a.) Under authority thus conferred upon her, the wife indorsed the bills; the defendant duly accepted them; and the plaintiffs are their bona fide holders.
    The obligation of the defendant to pay, rests not upon any supposable interest or want of interest in the wife as the payee named in the bills of exchange, but on his promise, implied in the acceptance, to pay the amount out of the funds of the drawer, and which are now in his possession.
    There must be a judgment for the plaintiffs for the amount claimed in the complaint, with costs.
    The defendant’s counsel excepted to the findings of law, and appealed to the general term of the court, from the judgment entered in favor of the plaintiffs.

      Richard O’Gorman, for the appellant,
    urged: That there was no evidence in the case that Mrs. Kane was the wife of the drawer, Mr. Kane, and no facts from which any presumption of the existence of an agency on her part, or consent upon his part, could he founded. That the bills having been drawn and negotiated in Massachusetts, and no evidence being before the court as to the statute law of that state, the questions arising in this case must be examined by the light of the common law; and that under the common law a married woman could not take and convey title to property in a chose in action. (Barlow v. Bishop, 1 East, 432. 3 Esp. 266.) That the cases which go to show that a married woman may indorse with consent of her husband, have no application to this case, for in all those cases there was direct evidence of such consent, as the court had .valid grounds to presume that such consent existed; but there was here no evidence, direct or indirect, of the kind; and where a married woman, without her husband’s authority or consent proved, indorses a note or bill, her act is a nullity, and her indorsement transfers no property in the bill or note. (Savage v. King, 17 Maine R. 301.) One class of cases supports the proposition that the acceptor is estopped by his acceptance from pleading, or offering evidence of the fact that the indorser was a married woman; but in the present case, that fact being admitted by the plaintiffs, no objection being made to its introduction as evidence, or estoppel being urged, and it being in the case, it was now too late to say that the defendant was estopped from alleging it. Moreover, the proposition is not correct, that the acceptor of a bill of exchange does by his acceptance admit the capacity of the payee to indorse. The acceptor admits the signature of the drawer— no more. (Williams v. Drexel, 14 Md. R. 566.)

      F. C. Bliss, for the respondents.
    I. The mortgage, and also the trust deed, prove that Mrs. Edith Kane, who indorsed these bills, had separate property; and, if so, she would be personally liable in equity upon these bills indorsed by her. (Byles on Bills, 4th Am. ed. 134, and

      cases there cited. Bullpin v. Clarke, 17 Ves. 366.) No personal claim, however, is made against Mrs. Kane, the action being against Mr. Satterlee, the acceptor, alone, who stands in the same position as the maker of a promissory note. The acceptor of a bill of exchange is the principal debtor, while the drawer and indorsers are merely sureties. (Pearce v. Wilkins, 2 N. Y. Rep. [2 Comst.] 469. Hall v. Newcomb, 3 Hill, 233. Atlantic Fire Ins. Co. v. Boies, 6 Duer, 583. Seabury v. Hungerford, 2 Hill, 80. Lee Bank v. Kitching, 11 Abbott's Pr. 435. Am. Law Reg. vol. 1, N. S. 627.)
    II. A wife may act as agent for her husband, and with his knowledge and consent may indorse bills or drafts, even in her own .name for him, if he authorizes her so to do. (Chitty on Cont. 3d ed. 161, note. Prince v. Brunatte, 1 Bing. N. C. 485. Prestwick v. Marshall, 5 M. & P. 513. Cotes v. Davis, 1 Camp, 485. Miller v. Delamater, 12 Wend. 433. Church v. Landers, 10 id. 79. Gates v. Brower, 9 N. Y. Rep. 205. 2 Bright on Husb. and Wife, 42. See also Doe v. Biggs, 1 Taunt. 367.)
    III. It is no defense to Mr. Satterlee, the defendant, that . the payee or indorser of these bills was a married woman, for he is estopped, by his own act, from contesting her right or authority to indorse the same. Having accepted the bills as drawn by Mr. Kane, thereby agreeing to pay the sums therein specified to her order, he is estopped from saying that they were indorsed by a married woman, for by his acceptance he admits her right and authority to indorse them as the agent of her husband, or otherwise. (Smith v. Marsack, 6 Com. Bench R. 486. Prince v. Brunatte, 1 Bing. N. C. 485. Prestwick v. Marshall, 7 Bing. 565. Cotes v. Davis, 1 Camp. 485. Bank of Limestone v. Penick, 5 Mon. 25. Bank of Commonwealth v. Curry, 2 Dana, 142. Byles on Bills, 4th Am. ed. 250-256.) There are some cases and authorities analogous to the present case. (See Wotkyns v. Abrahams, 14 How. Pr. 191; Dorrance v. Scott, 3 Whart. 309; 15 Mass. Rep. 272; Borst v. Spelman, 4 N. Y. Rep. 284; Philliskirk v. Pluckwell, 2 Maule & S. 393.)

      IY. The deed of trust, introduced in evidence, does not aid the defense herein, and is wholly irrelevant for the purposes of the defense.
   By the Court, Monell, J.

The only question to be examined in this case is, whether the plaintiffs, through the indorsement of the payee of the bills, a married woman, acquired a title to them, which they can assert against the acceptor.

It nowhere appears who was the husband of Mrs. Edith Kane. The justice has not found the fact; nor is there any evidence which.shows that she was the wife of Pierre C. Kane, the drawer of the bills. The plaintiffs are entitled to the benefit of any presumption which will uphold their judgment; and in the absence of all proof, we must presume she was not the wife of the drawer. The mortgage from Kane and wife to the plaintiffs, which is printed in the case, was not admitted or read in evidence and we can not therefore look into it for evidence on the subject.

Whether the payee of the bills was the wife of the drawer, or otherwise, is perhaps not material. By the common law, a married' woman was incapable of making any legal contract binding upon herself. Husband and wife were one person, and the legal existence of the wife was merged in that of her husband. Hence a married woman could not make, indorse, or accept notes or bills, as acting for herself; nor would the indorsee of a note or bill acquire any title through the indorsement of a married woman indorsing in her own name. (Barlow v. Bishop, 1 East, 432. Cotes v. Davis, 1 Camp. 485. Savage v. King, 17 Maine, Rep. 401. 1 Pars. on Notes and Bills, 78.) In Barloiu v. Bishop, the defendant gave his note to a married woman, who was conducting business on her .own account, and who transferred it by indorsement in her own name, in payment of a debt contracted by herself; and it was held that the property in the note vested in her husband by the delivery to the wife, and that no interest passed by her indorsement in her own name to the holder. If, therefore, Edith Kane was the wife of a person other than the drawer of the hills, the property in the notes, by the common law, upon delivery to her, became vested in her husband, which title could not be divested by her indorsement and transfer to the plaintiffs.

The acts of 1848-9, for the protection of the property of married women, declare that she may take by grant or gift from any person other than her husband, and hold to her own sole and separate use, and convey any real or personal property, and any interest or estate therein, in the same manner and with like effect as if she were unmarried. (Laws of 1848, p. 307, ch. 200. Id. 1849, p. 528, ch. 375.) This statute removes the common-law disability from a married woman, and she can now receive real and personal property from any person other than her husband, and may convey and transfer the same with like effect as if she were single. (Dillaye v. Parks, 31 Barb. 132.) The delivery of the bills to Mrs. Kane vested the title in her, if they proceeded from a person other than her husband, and her indorsement and transfer gave to the plaintiffs the legal title as effectually, under the statutes referred to, as if she had been unmarried.

But suppose she was the wife of the drawer of the bills, how would the case then stand P The question of contract or 6f obligation, as between husband and wife, is not involved; nor as between indorser and holder. The husband would not be liable to the wife, nor the wife to the holder. By directing the bills to be paid to the order of 'his wife, the drawer appointed her his agent to receive the money, and conferred upon her the necessary authority to indorse and transfer. The authority is express, and sufficient to bind the husband by her act. (2 Pars. on Bills and Notes, 3. 2 Kents Com. 179, 10th ed.)

In so far as third parties are concerned, the authority to the wife to transfer the bills is as conclusive and binding upon the husband as if he had made them payable to an infant, or to a fictitious person; in either of which cases the indorsements would be valid.

Did the indorsement of Mrs. Kane protect the acceptor, and could the payment by him he questioned P Clearly the husband was estopped, and no other party to the bill could object. To test it, suppose the defendant had paid the bills at maturity to the holders, upon the indorsement of Mrs. Kane, could the husband deny the authority he had given his wife, recall his written consent, and recover the amount of the bills from the acceptor ? There is neither principle nor authority to sustain such' a position.

In short, without pursuing the argument further, the husband is - as thoroughly hound by the indorsement and transfer of the bills as if he had negotiated them himself, directly to the Lee Bank. All the cases which hold a wife’s indorsement to be void, are such as contained no consent or recognition on the part of her husband. Here the consent is complete.

The judgment should he affirmed.'

Judgment accordingly.


author: By the Court, Barbour, J.

text:
    Henry H. Leeds et al. plaintiffs and respondents, vs. Sidney W. Bowen, defendant and appellant.
    1. Under the statute “ of sales by auctioneers,” (1 H. 8. 528,) an auctioneer is entitled to no further compensation for his services respecting a sale, which he is employed to make, beyond two and one half per cent on the amount of the proceeds of the sale made by him,- unless a -written agreement for additional compensation be previously made.
    2. The services mentioned in the statute, for which two and ond half per cent is intended to be a compensation, are not merely the actual offering the goods for saje and striking them off, but include also all duties incidental thereto, which are customary and necessary to .procure a successful sale.
    8. An auctioneer who is employed to sell a stock of goods upon an oral agreement for a compensation greater than two and one half per cent, and prevented, after selling a part, by the employer countermanding the sale, is not entitled to recover commissions on the value-of the whole stock of goods, at the rate so agreed upon.
    (Before Babbour and Monell, JJ.)
    Heard April 10,1863;
    decided May 9, 1863.

      The action was brought by Henry H. Leeds and Allen B. Miner on a contract by which the defendant (Sidney W. Bowen) had employed them, as auctioneers, to sell a stock of goods.
    The cause was tried on the 7th day of March, 1862, before Mr. Justice White, and a jury. The main facts are stated in the opinion of the court. It may be added that one of the plaintiffs (Miner) being examined on his own behalf, testified as follows : “About the first of November, Mr. Bowen called .upon us and engaged us to make a sale of his property. * * * He wished us to take charge of the sale, and do every thing in our power tó make it a successful sale, stating that he would advertise it specially himself, and would either have his catalogue printed, or that it was in process of printing. He wished us to perform all the necessary duties with that exception, and asked me what we would do it for the lowest, and I told him we would provide the proper clerks, distribute his catalogues, and take all the necessary and incidental action to make it a successful sale, for five per cent, if that should be the amount of the sale.” Another witness testified that the plaintiff told the defendant, Sidney W. Bowen, that if the sale amounted to $10,000, he would distribute the catalogues he intended to have made out for paper and paper hangings, and would put in his general advertisement, and furnish the clerks, and perform all the duties of the sale for five per cent.
    Thé testimony on the part of the defendant did not conflict with this, except to deny "any agreement "to have either the whole stock or any particular amount sold.
    The counsel for the defendant requested the judge to charge the jury that unless there was an agreement in writing made between the parties, the plaintiffs were not entitled to recover "a greater amount than two and a half per cent upon the amount of the sales actually made by them. The judge refused so to charge; to which refusal the counsel for the defendant excepted.
    The judge charged the jury that an agreement in writing was not necessary for such a service as the plaintiffs undertook to perform for the defendant. They might make the* agreement verbally. When the service, as proved to be here, was more than the services which the statute contemplated, an agreement made verbally was binding upon the parties; he therefore directed the jury to render a verdict for the plaintiffs for $500; to which charge the counsel for the defendant excepted. •
    The jury found a verdict accordingly, and the judge ordered that the exceptions taken on the trial be heard in the first instance at the general term.

      G. Tillotson, for the defendant, appellant,
    cited Laws of 1817, p. 326, ch. 275; 1 R. S. 3d ed. 648, §§ 27, 28.

      E. D. Mills, for the plaintiffs, respondents.
    The statute (2 R. S. 5th ed. 463, § 36,) has no application to this case. (1.) This action is not brought to recover commissions on sales, but for damages arising from a breach of contract. (2.) The statute is intended to apply to sales actually made. The construction claimed by the defendant might be the true one, if the action had been brought to recover more than two and one half per cent, on sales actually made. ■ The utmost that could be claimed would be, that the plaintiff should be limited in his recovery to two and one half per cent on $10,000. (3.) The construction given to the statute, on the trial, was the right one.
    The statute, in limiting the compensation to two and one half per cent on the amount of sales, has reference to the simple duty or act of crying off the goods. Any other service or means by which a sale is made more successful, are the proper subject of a contract for greater compensation. Such was the agreement in this case.
   By the Court, Barbour, J.

By the pleadings and evidence in this case it appears that the defendant employed the plaintiffs, who were auctioneers in the city of Hew York, to sell his stock of paper hangings at auction, upon a representation that such stock was inventoried at some $18,000 or $20,000, and would sell at auction for $10,000, for which, the plaintiffs were, by the agreement, which was .entirely oral and not in writing, to receive five per cent upon the sales, for their compensation; that the'auction sale contemplated by the agreement was actually commenced, and, after about ninety dollars worth of goods were sold, such sale was stopped by the defendant, for the alleged reason that he had disposed of the remainder of his stock at private sale. The court held that the plaintiffs were entitled to recover five per cent upon the whole $10,000, and dirgcted a verdict accordingly; to which the defendant excepted.

The 36th section of the statute “ of sales by auctioneers,” (2 R. S. 5th ed. 463,) declares that “no auctioneer shall demand or receive a higher compensation for his services than a commission of two and a half per cent on the amount of any sales, public or private, made by him, unless by virtue of a previous agreement in writing between him and the owner or consignee;” and the 37th section imposes a penalty of $250 for a violation of the provisions of section 36.

The services mentioned in the act are not, merely, the offering of the goods for sale, and striking them off. Indeed, the auctioneer need not sell at auction at all, but may dispose of them at private sale. (§ 36.) In addition to selling the goods, it is also, under the statute, the duty of the auctioneer, as such, to advertise the proposed sale in a newspaper ; (§ 34;) and, in case the purchase, money shall not be paid immediately, he must enter the sale, with all necessary details, in a book to be kept by him for that purpose; (§ 39;) and he is also required to have a show or auction house for his business. (§ 30.)

But, aside from the statute, an auctioneer, like any factor, is .bound by his undertaking to sell goods to take all such proper and incidental steps to insure a successful sale as are customary and necessary. If in performing those incidental duties, any expenses are incurred, such expenses will be properly chargeable against the owner; but the auctioneer is entitled to no compensation for his services in the matter of the sale or its incidents, except the two and a half per cent fixed by the statute, unless a written agreement for more shall, previously, have been made. Any agreement providing for a commission exceeding two and a half per cent, unless the same shall be in writing, whether under pretense of covering moneys expended by the auctioneer, or his services, is therefore either an evasion of, or contrary to, the statute, and is void. ,

In this case, the action is brought upon the agreement to sell the merchandise at auction, and nothing else. It is not pretended in the complaint that any services were to be or were performed for the defendant by the plaintiffs, beyond selling a portion of the goods; nor does the evidence show that any other services were rendered.

For these reasons, I-think the direction of the justice was erroneous; and that the verdict should be set aside, and a new trial granted, with costs.


text:
    Shadrach Robinson et al. plaintiffs and appellants, vs. The Corn Exchange Fire and Inland Navigation Insurance Company, defendants and respondents.
    1. Insurers of persons having a special property in goods, for account of whnn it may concern, who after a loss and abandonment intervene and recover a part of the goods as matter of right and receive the proceeds without knowing the owner, in an action against them by such owner, for money had and received, are not liable for interest on the claim against them, until they have notice of his claim.
    2. The right to interest in such a case is a question of law, not of fact. It is only in that class of cases, where by law, interest may be recovered against a defendant as damages, that he has a right to have the jury pass upon the question of liability therefor.
    3. In such an action the necessary expenses of the defendants, paid in recovering and selling the goods insured, are to be allowed to the defendants to be deducted from the proceeds.
    (Before Barbour and Monell, JJ.)
    Heard April 15,1863;
    decided May 9, 1868,

      This was an appeal by the plaintiffs, from a judgment entered in their favor,, on a verdict rendered by the.jury pursuant to the direction of the court, on the trial of the cause.
    The plaintiffs (Shadrach Robinson and Charles H. Cummins) sued for money had and received by the defendants, to their use, alleging in the complaint that in 1854, the defendants sold a quantity of corn belonging to the plaintiffs, on account of the plaintiffs, and received for it, in or about the months of October and November, 1854, for the use of the said plaintiffs, and for them, $2326.37. That the plaintiffs have often requested the defendants to pay them, the plaintiffs, the said money thus received by the defendants, but the defendants have neglected and refused, and still neglect- and refuse to do so. And that the said defendants have had the use of, and interest upon, said money since it was received as aforesaid by said defendants for the plaintiffs’ use. Judgment was demanded for such' sum, with interest from November, 1854.
    The cause was tried on the 18th day of June, 1861, before Chief Justice Boswobth and a jury. The following facts* were proved on the trial.
    It appeared, by a stipulation in the case, that in September, 1854, the plaintiffs, by their agent, shipped a quantity of corn at the city of Buffalo, on board of tow boats owned by a Mr. Savage, consigned to N. H. Wolfe & Co. in the city of New York. Savage effected an insurance on the corn in the defendants’ company. At Albany the corn was transhipped on board of the barge Hudson, which on' its passage to New York became disabled and partly sunk. The defendants having intervened to save the corn from total loss, raised a portion of it, which they sold at auction for a certain sum, ($2326.37.) The expense of raising the barge to get at the porn, the freight from Castleton, where she sunk, to New York, and the charge for taking out and selling the corn, amounted to a certain sum, ($769.55,) leaving in the defendants’ hands as the net proceeds, a certain sum, ($1556.82.) Nothing was said in such stipulation, nor was there any other evidence, of the reasonableness or necessity of such expenditures. Savage commenced a suit against the defendants, on his policy of insurance, in 1855. In the complaint in that suit he claimed to recover for a total loss; but not the proceeds of the corn. That action being tried in April, 1861, he recovered therein the value of all the corn, less the amount received by the defendants for that part sold. On the 13th of «March, 1860, the plaintiffs demanded of the defendants payment of the sum received by them on the sale of the corn, which was refused.
    Upon the trial "of the present action the chief justice instructed the jury that the plaintiffs could recover only the net proceeds of the corn, and interest from the 13th of March, 1860, the date of their demand; and he directed a verdict accordingly for the plaintiffs. The plaintiffs’ counsel excepted to such charge, and the jury found a verdict for the plaintiffs for $1694.56, for which judgment was entered. The plaintiffs appealed.

      James Crombie, for the plaintiffs, appellants.
    I. The plaintiffs were entitled to recover interest upon the net proceeds of the corn from the time the defendants received them. 1. Because the defendants had used the money, and had received the interest upon it, as is admitted in the pleadings. When a person uses another’s money, or derives interest therefrom, he is as much bound to pay the interest thereon, as the principal. (1 Am. Lead. Cas. 358, and cases cited. Dodge v. Perkins, 9 Pick. 369. Miller v. Bank of Orleans, 5 Whart. 503.) 2. As matter of law upon the facts, the plaintiffs were entitled to recover interest upon the net proceeds, (a.) Because the defendants sold the corn without their consent, and therefore without any right or authority to do so. (2 Phil. Ins. 333, 335, and cases cited. 1 Am. Lead. Cas. 360, and cases cited. Greenly v. Hopkins, 10 Wend. 96. Chauncey v. Yeaton, 1 N. H. Rep. 151. American Ins. Co. v. Center, 4 Wend. 52. Bryant v. Commonwealth Ins. Co., 13 Pick. 553. Parsons Merc. Law, 380.) (6.) Because the defendants ought in good- faith to haVe paid over the money received by them as soon as it was received, without any demand therefor. (Stacy et al. v. Graham, 14 N. Y. Rep. 492. Lynch v. De Viar, 3 John. Cas. 303. Pease v. Barber, 3 Caines, 266. Van Rensselaer v. Jewett, 5 Denio, 135; 2 N. Y. Rep. 135. Mason v. Waite, 17 Mass. R. 560; 1 Dallas, 313, 316. 1 Am. Lead. Cas. 341, 345.) The pendency of the suit of Edward Savage upon the policy was no excuse for the nonpayment of the money, as he did not own the corn, and could not recover the money received for it.
    II. If the court overrule the first point, then we submit that the judge erred in not submitting the question of interest to the jury. (Stacy v. Graham, 14 N. Y. Rep. [4 Kern.] 492. 1 Am. Lead. Cas. 252.. Van Rensselaer v. Jewett, 5 Denio, 135. 1 John. 315. Watkinson v. Laughton, 8 id. 213. Richmond v. Bronson, 5 Denio, 55.)
    III. The plaintiffs were entitled to recover from the defendants the gross amount received by them for the corn.
    The defendants had no right to sell the plaintiffs’ corn without consulting them. In order to excuse a sale, they should have made out a case of absolute necessity, in order to save the corn from destruction. No such necessity existed here. It appears from one of the items of expense, that they took a portion of the corn to New York. If they had time to do this, they could have notified the plaintiffs. . (2 Phil. on Ins. 333, 335, and cases there cited.)

    IV. At any rate, the question of the necessity and reasonableness of the defendants’ charges for expenses, should have been left to the jury.

      T. C. T. Buckley, for the defendants, respondents.
    I. The ruling of the judge, at the trial, on the subject of interest was correct. (Van Rensselaer v. Jewett, 2 N. Y. Rep. 140. Sedgw. on Damages, ed. 1858, p. 379. Phelps v. Bostwick, 22 Barb. 318. Williams v. Storrs, 6 John. Ch. 358. Harington v. Hoggart, 1 Barn. & Adol. 577, 574.) .
    There was no proper demand prior to March 13th, 1860. The order from Savage, if complied with, would have been ho "bar to the plaintiffs’ claim, as he was not their agent, and had no right to transfer the property in the corn.
    II. There is no admission or proof that the defendants have employed the money in question, or, derived any profit from its use. But the defendants, being mere stakeholders, would not be liable for interest, even if they used the money. (Jones v. Mallory, 22 Conn. Rep. 392.)
    III. In no aspect of the case are the defendants liable for the gross proceeds of the corn.
   By the Court, Monell, J.

The only exceptions argued upon this appeal, were to the charge of the judge, restricting the recovery to the net proceeds, and interest from the time the demand was made, and directing a verdict for such amount. The action for money had and received is an equitable action, and the party must show he has equity on his side. The rule in England is that interest is not recoverable in this action, (Walker v. Constable, 1 Bos. & Pull. 307,) but it is otherwise in this country. (Pease v. Barber, 3 Caines, 266. People v. Gasherie, 9 John. 71. Gillet v. Van Rensselaer, 15 N. Y. Rep. 397.) In this state interest is allowable where the circumstances of the case show that the plaintiff is equitably entitled to it.

The corn was rescued from total loss in October, 1854, and the proceeds of the sale were received by the defendants in Eovember, 1854. The insurance was effected by and in the name of Edward Savage, who sued the defendants upon the policy, to recover as for a total loss. There does not appear to be any evidence in the case, that at any time previous to the demand of the 13th of March, 1860, the defendants knew, or had any reason .to suppose the plaintiffs owned or had, any interest whatever in the corn. We asked the plaintiffs’ counsel in vain to point us to any testimony showing, or éven tending to show, such knowledge, or any thing which was calculated to even put the defendants upon inquiry. We are, therefore, to assume, that the defendants were at all times ignorant of the right of the plaintiffs to the proceeds of the corn, until they demanded payment therefor. Indeed, until the determination of the suit upon the policy, in which Savage sought to recover as for a total loss of all the corn, no action would lie against the defendants for the proceeds of the corn sold, either by Savage or the plaintiffs. Savage was liable to the plaintiffs as the carrier of the corn, and a recovery upon the policy by him as for a total loss, would, indisputably, have entitled the defendants to retain, as their own, the proceeds of the corn sold. Until the extent of the defendants’ liability was fixed by the judgment in the. suit of Savage against them, the plaintiffs could not call on the defendants for payment. This last action did not terminate until April 11, 1861, when the jury, under the direction of the court, deducted from their verdict, the net proceeds of the corn sold by the defendants.

It is at least questionable whether any recovery could be had in this action, for principal or interest, until the termination of the other suit, in April, 1861.

There is nothing in the circumstances of this case, which upon the principle of ex cequo et bono, required the defendants to pay the money to the plaintiffs, or to any other party, until their right to retain it was determined in the other suit. And even if this were, not so, and the defendants were mere depositaries of the money, they could not in conscience be called upon to pay either principal or interest until it was demanded of them. In that view they were mere trustees or bailees, who are never, except under special contract, chargeable with interest. (Utica Bank v. Van Gieson, 18 John. 485.)

I am, therefore,, of the opinion that the charge of the judge, if any thing, was too favorable to the plaintiffs. But as the defendants have not appealed, the judgment can not be disturbed for that reason, and the plaintiffs can not object.

There is no force in the argument that by the pleadings the defendants admitted that they had had the use of the money, and of the interest upon it, since they received it. The denial in the defendants’ answer, that they sold the plaintiffs’ corn, or that they received therefor any money whatever to the plaintiffs’ use, is a sufficient denial that they had the use of the money or of the interest upon it. The denial of the substantíve cause of action is enough to controvert all the. mere incidents, to it.., Besides, the allegation in the complaint is equivocal, and would be true, if the defendants had had the use of the money for one day, and no more, before suit brought. , In -rescuing the corn, and making sale thereof, the defendants paid from the gross proceeds, necessary expenses, which they were allowed to retain, under the ruling of the court. That the defendants had a right to intervene to save the cargo from total loss is not disputed; and even if they had no right .to sell without giving notice to the plaintiffs, there is nothing to show that they had any knowledge of the plaintiffs whatever. As the action is an equitable one for money received to the use of the plaintiffs, there is no principle in law or morals, which should make the defendants liable for any more than they actually received. Therefore the necessary expenses paid in raising and selling the corn, were properly allowed to be retained by the.defendants.

The right to. recover interest in a case of'this Idnd, is a question .of law, and not of fact, and the judge properly refused to submit 'it to the jury. Interest is the incident to a debt, and the. law -fixes the time when it begins to accrue. It is only in the- class of-cases where interest may be charged against a defendant as damages, that the jury has a right to pass upon the question. (Richmonds v. Bronson, 5 Denio, 55.)

Had there been any evidence impeaching the reasonableness of the expenses incurred in rescuing and selling the corn, it would probably have been error to have taken that question from the jury. But there is no such evidence; and had the jury, upon the question being submitted to them, found, under .the evidence, that the expenses were unreasonable, the court would have set the verdict aside as contrary to the evidence. • '

There was therefore nothing in the case upon which it was necessary for the jury to deliberate; consequently there was no error in directing a verdict for the plaintiff.

The judgment should.be affirmed.