source: Caselaw Access Project

author: Marvin, J. Taggart, J.

license: Public Domain

text:
    Burrows, Receiver, &c., against Smith. Same against Herrick; Same against Swift.
    Where articles of association are prepared with the view of organizing a hanking association under the general banking law, in which commissioners are named to obtain subscriptions to the capital stock, and subscriptions are obtained by such commissioners, payable in bonds and mortgages upon unincumbered lands, upon their promise to the subscribers that the bank, when organized, will advance money to pay off prior incumbrances upon their lands so that their bonds and mortgages may be accepted in payment for slock, the bank cannot enforce such subscriptions without complying with the promise of the commissioners by means of which the subscriptions were obtained.
    Bonds and mortgages obtained from such subscribers, by means of similar promises, by persons acting as directors of such bank, cannot be enforced by the bank without first performing, or offering to perform, such promises. Where articles of association are materially altered without the consent of all the subscribers, after them subscription and before the complete organization of the bank, such articles cease to be binding upon the non-consenting subscribers.
    A certificate executed in pursuance of the 16th section of the general banking law, by which the subscriber certifies that he holds a certain amount of stock, does not of itself show any obligation on the part of the subscriber to pay for that amount of stock.
    Where the subscriptions for stock exceed the amount authorized by the articles, and no distribution appears to have been made, no recovery can be had against a subscriber who does not appear to have been recognized by the association as a stockholder.
    In Equity. Appeal from the supreme court. These •causes were commenced by bill of complaint filed by the plaintiff as receiver, &c., of The Farmers’ Bank of Orleans, in the late court of chancery, before the vice-chancellor of the eighth circuit. The vice-chancellor made a decree in each cause, dismissing the bill filed therein without costs to either party. The plaintiff appealed to the supreme court, sitting in the eighth district, and the decrees of the vice-chancellor were affirmed in that court.
    The facts in each case are substantially as follows, viz.: In May, 1838, certain citizens of the county of Orleans commenced the organization of an association under the general banking law, and William W. Ruggles, one of their number, devised certain articles of association, declaring the name, place of business, amount of capital, manner of opening books for subscriptions, and designating certain individuals as commissioners for that purpose, and declaring the manner in which subscribers might have the privilege of paying for stock, the liability for non-payment, the rights of the stockholders, and providing generally for the future government of the association ; but which did not contain any express promise to take or pay for stock, or any express covenants or obligations inter partes. The defendants in these causes had nothing to do with the preliminary arrangements.
    On the 19th of May, 1838, a portion of said commissioners commenced receiving subscriptions to said articles, and continued to receive such subscriptions from that time to the third of June inclusive, at which time they closed the books, having received subscriptions to the «amount of $200,900, being four thousand and eighteen shares. The defendant Smith was the last person who signed on that day. Smith was on that day at Barre Centre, where said commissioners then were, on business. The commissioners present urged him to subscribe for stock, which he refused to do because his land was incumbered. They still urged him to sign, and promised him that the bank, when organized, should furnish him moneys by loan to pay oif his former incumbrances, so that a mortgage on his farm could be received for stock; and upon that express condition he consented to sign, and did sign for $2,000 of stock, relying on such promise of the commissioners.
    The books were re-opened at a meeting of the subscribers, on the eleventh of June, at Gaines; the defendants Herrick and Swift were present, and were severally urged to subscribe for stock; they severally stated to the commissioners that their farms were incumbered, that they had no means to pay, and could not subscribe and take stock unless they would clear the incumbrances. The commissioners then promised them, that if they would subscribe, the bank, when it went into operation, would furnish money to remove the incumbrances, or would remove them. Upon that express condition, each of them consented to subscribe for $2,000, and did subscribe for that sum.
    The persons who had subscribed, chose thirteen directors on the said eleventh day of June, and all persons who had subscribed were permitted to vote, without regard to the fact whether they had paid for any stock or not. About that time, the directors fixed the capital stock at $200,000.
    On the twenty third of July, the directors executed a certificate, supposed to be in compliance with the 16th section of the general banking law, in which they fixed the capital at $200,000, divided into four thousand shares.
    On or about the thirty-first of July, Nichols and Lee, two of said directors, accompanied by Mr. Ruggles as attorney and acknowledging officer, called on said defendants at their respective residences, to obtain their mortgages. The defendants respectively refused to execute the mortgages, on the ground that the association had not furnished them money to remove the incumbrances, according to the condition of their subscriptions. The directors urged them to make the mortgages then, as it would save them the trouble of coming again, and it would make no difference to the defendants, stating that they might execute the mortgages subject to the conditions on which they subscribed, to be held on such conditions till the incumbrances should be removed. The defendants finally consented to execute their bonds and mortgages on these conditions. Their lands had not been appraised, and the mortgages were made for as large a sum as the directors thought the appraisal would warrant. Smith’s mortgage was made for $3,500, Herrick’s for $2,500, and Swift’s for $2,500. The bonds and mortgages were taken by Ruggles, subject to the conditions, and remained in his possession till September, 1838, when he handed them to Bessac, a commissioner appointed by the comptroller to appraise lands. They remained in Bessac’s hands till September 10, 1841, when he left them at the bank at Medina (to which village the office of the bank had been removed from Gaines, its original location), “because he got tired of keeping them.” They were never, by the authority of the defendants, delivered to the bank or its officers otherwise than as above stated; were never used by the bank, or claimed or called for by it; and the president of the bank directed Bessac to deliver them up on their being called for by the parties. The lands were never appraised, and the incumbrances remained thereon. No moneys were ever furnished or offered to defendants to remove the incumbrances; but the money was refused to them for that purpose. The mortgages were recorded without defendants’ knowledge. The association was not organized under the original articles, as signed by the defendants. Those articles were altered on the 22d day of September, 1838, by striking out the tenth article wholly; altering the ninth, twelfth and twenty-fifth; substituting a new article in place of the tenth; and adding the thirty-first. The following is the original tenth section:
    “ 10th. Every stockholder having active capital in the bank may receive discounts to the amount of three-fourths of his active capital on his own note with one indorser, but he shall not be allowed to sell his stock while he has a note wherein he is principal or indorser unpaid in the bank, without the consent of a majority of the directors.”
    In place of it, this section was substituted:
    “ 10th. It shall be the duty of the directors to see to and take care of the bonds, and mortgages which may be sold or pledged for state stocks, and they may retain the amount of interest accruing on the bonds and mortgages put in as stock, out of the dividends of the mortgagor.”
    By the original 25th section it was provided that all bonds and mortgages put in as stock should be made payable to “The Farmers’ Bank of Orleans,” and that all state stocks, or securities assigned as stock, should be assigned to “ The Farmers’ Bank .of -Orleans.” The amendment to this section consisted in inserting the words, “ the president of',” before the words, “ The Farmers’ Bank of Orleans,” where they occurred in said section. The bonds and mortgages in suit were, made in. accordance with the section as amended. ■ =
    The additional section was as follows:
    “ 31st. The directors may make all necessary by-laws for the government of the association, not inconsistent with the act aforesaid or the articles of - association.” -
    The other amendments were less material.
    The original articles subscribed by- the parties contained the following provision:
    “These articles of association-may be altered at any time on a notice of six weeks, to be published by advertisement in the newspapers of the county of Orleans and the state paper, on a vote of a majority of two-thirds of the stockholders who shall attend the meeting- so called for such purpose.”
    The ' notice calling the meeting-of the■ twenty-second September did not point out any particular object of the meeting-. •
    On the same day, a new certificate was prepared and presented to the meeting by Buggies, fixing the capital at $200,000, divided into four thousand shares. Buggies represented to the signers of the original articles that it was a mere matter of form; that signing it would make no difference with them; that their "rights and privileges would not be affected by it. The defendant Herrick signed his name alone to the certificate, and Nichols afterwards - affixed the figures 50 in the column of shares without authority. Smith signed his name with the figures 70 shares opposite, and the defendant Swift signed his name only, and Nichols inserted 50 shares opposite, as in the case of Herrick. Ninety-two persons signed the certificate, with an aggregate of four thousand one hundred and ninety-five shares, amounting to $309,750. Gideon Hard, who was not at the meeting, signed thirty shares the next day.
    The bank, thus organized, commenced business in November following, and continued to do business until the 1st of January, 1842.
    No apportionment of the stock subscribed was ever made among the subscribers. No stock certificate was ever made out for either of the defendants, and no stock was ever declared or allotted to either of them, and no charge or credit for stock was made to either of them on the stock ledger of the bank. Yearly dividends, equal to the interest on the mortgages, were declared and credited to each stockholder, and no such dividend was ever declared or credited to either of the defendants.
   The other facts in the cause will sufficiently appear in the following opinions. In the supreme court, the following opinion was delivered by Mr. Justice Marvin, in the case in which Ransom S. Smith was defendant; and the other causes were decided in accordance with it:

Marvin, J.

The act to authorize the business of banking, passed April 18, 1838, does not attempt to prescribe the steps to be taken in order to bring into existence the bank, or legal being, which is to possess the power specified in the act. It speaks, however, of articles of association in several places. The 16th section provides for the evidence of the organization. It is to be a certificate under the hands and seals of the persons associated. This certificate is to be proved or acknowledged. It is to be recorded in the county clerk’s office, and a copy is to be filed in the office of the secretary of state. Until the certificate required by the sixteenth section is made, no legal being of the associates, known by the name designated in the articles, exists; and as the statute requires those persons who associate to make this certificate, those who do not unite in it are not members of the association. It has been held, that those who subscribed the first articles of association, and agreed to take stock in, the Farmers’ Bank of Orleans, but refused to unite in the certificate of the twenty-second September, were not bound by their subscription, and that the receiver could not enforce payment. It is not necessary in this case to express an opinion upon that question. I remark, however, that the articles of association do not contain any express promise to pay. They contain rules in relation to the subscription for stock, and also for the government of the institution.

The “ deeds of settlement,” under which joint stock companies and banks are organized in England, are instruments inter partes. The parties to the instrument are the trustees, the directors or managers, and the shareholders. And iit contains a variety of covenants. The subscribers for shares covenant with the trustees to pay the amounts which they, subscribe, and they may be sued in the name of the trustees upon their express covenant. (Wordsworth on Joint Stock Companies, 85, 86, 316.). ' Our act to authorize the business of banking follows closely many of the provisions of the English acts in relation to joint stock companies. But, as already remarked, it does not specify any preliminary steps to be taken. It does not require any articles of association, nor does it require any subscription for stock. It provides for the evidence of organization, and requires that the persons associated shall, under their hands and seals, make a certificate specifying the name of the association, its place of business, the amount of its capital stock, the name and residence of the stockholders, and the number of shares held by each of them respectively, the period for the commencement and termination of the association. This certificate is to be proved and recorded, and then it may be used as evidence for and against the association. It would seem that no person could be a stockholder at the time of the organization, unless he united in this certificate. Those who'unite become the associates, and the legal being, upon which the powers, duties and liabilities specified in the act are conferred, springs into existence.

Those who do not unite in this certificate, are not at that time members of the association. They may become so by a purchase of stock. But it is clear that a person who had bound himself to take stock, would not be liable in an action by the bank upon his agreement. In Stanton, President of Albany Exchange Bank, v. Wilson (2 Hill, 153), which was an action to recover the amount of a stock subscription in the name of the president of the bank, after its organization, it does not appear whether Wilson had signed the certificate required by the 16th section of the act. In that case, there was an express engagement in writing to pay to the directors, or such person or persons as they should appoint, &c. I do not think it necessary, in this case, to express an opinion upon this question. It is clear, from all the evidence in this case, that the defendant Smith never subscribed for stock at any time, except on the third day of June, when he subscribed for forty shares, payable in a bond and mortgage, under the circumstances disclosed in the evidence. This position is clear from the evidence adduced by the plaintiff. The plaintiff does not seek to recover this subscription. On the contrary, he disavows it, or, in other words, he claims that, by some agreement between the defendant and the commissioners or other officers of the association, the defendant increased the amount of his subscription for stock to $3,500, being seventy shares, and agreed to take, and did take and hold in said association, stock to that amount; and the plaintiff claims a decree for this amount as so much subscribed for by the defendant, in case the bond and mortgage shall be held to be invalid in his hands.

Can the plaintiff, under these allegations in his bill, recover upon any subscription, unless he establishes one for seventy shares ? Can he resort to the subscription for forty shares, after having stated that that was abandoned and a subscription for seventy shares substituted? It seems to me that he cannot. The decree must be in accordance with the allegations and proofs of the parties, and it must be consistent with the case made by the bill. The bill in effect declares that the agreement to take forty shares of stock was at an end; that it had ceased to be binding upon the parties; that they had made another agreement. And this latter agreement stated in the bill is the one which the plaintiff seeks to enforce. He must establish this agreement, or fail upon this part of his case. I think we may, therefore, dismiss the question of the liability of the defendant upon his subscription for the forty shares. It is proper, however, to keep in mind the circumstances under which that subscription was made, and the subsequent acts of the parties, with a view of ascertaining whether the defendant became bound in any subsequent part of the history of the case. I think the evidence fairly shows that when the commissioners applied to Smith to subscribe for stock, he informed them that his land was incumbered, and that he could not take stock, and they gave him assurances that the bank would furnish him money to pay off his incumbrances, so that his mortgage could be received in payment for stock. Some of the evidence goes further, and shows that Smith subscribed upon the condition that the bank should furnish money to pay off previous incumbrances. I do not think it very material to inquire as to the precise language used on that occasion. It is clear to my mind that Smith was induced to subscribe from the representation that he should have money to pay off previous incumbrances before he should be called upon to pay his subscription in a bond and mortgage, and that he relied solely upon that source for money to pay off the incumbrance.

When he was applied to, on the thirty-first day of July, at his residence, by two of the directors and Mr. Buggies (who was present when he subscribed), for his bond and mortgage, he at first declined to give them, alleging that his land was incumbered, and that the1 bank was to furnish the means of paying off the incumbrances. He was prevailed upon to execute the bond and mortgage at that time, as a matter of convenience to the persons then engaged in taking bonds and mortgages; and the amount for which they were given was $3,500, equivalent to seventy shares. .Smith’s land was not at that time appraised, and it was suggested that the bond and mortgage should be made for that sum; and in case the appraisal should not warrant that amount of stock, they should be indorsed down, and he should have such an amount as they would warrant. They were accordingly made and delivered to the attorney conditionally, not to be used until other things were done. The land was to be appraised, and money was to be furnished by the bank to pay off the incumbrances. They were not taken in satisfaction of the subscription for forty shares. That seems to have been waived and disregarded. There is no necessary connection between them.

At this stage of the case, no one would contend that the bank would be bound to issue seventy shares of stock to the defendant, and take the bond and mortgage upon incumbered lands. The bank would not take the bond and mortgage absolutely as payment for so-much stock, without an appraisal. Here, then, was no absolute delivery of the bond and mortgage; and unless they were subsequently delivered to the bank by the defendant, or with his consent, and accepted absolutely by the bank, they cannot be enforced.

The circumstances under which the bank became possessed of them a long time after it commenced business, are clearly stated in the evidence. And I do not understand that it is alleged that the defendant directed or consented to their delivery. They were handed, with some other bonds and mortgages, in September, 1841, to the president of the bank, by an individual who had been appointed one of the appraisers, &c., of the lands mortgaged. The land of Smith had never been appraised. The receiver found this bond and the mortgage in the bank. Nothing had been done with 1

It is now claimed that the act of Smith, in making the certificate of the twenty-second September, was a waiver of any conditions attached to the delivery, and that it was equivalent to a delivery; or, if not, that he is estopped from alleging that he was not a stockholder for seventy shares. The certificate made by the directors on the twenty-third day of July was supposed by them to be sufficient, but they learned, early in August, that it was not according to the 16th section of the act; and a meeting of the stockholders. was called for twenty-second September.

The notice for this meeting was published. It did not indicate the object of the meeting. At that meeting, the attorney who had prepared the papers and taken the bonds and mortgages, and was acting as the agent of those who were attempting to organize the bank, presented the certificate for signatures. He stated the certificate that had been filed was wrong, and it t was necessary to have the one he presented. Some objections were made to signing it; and he told them it would make no difference, that their rights and privileges would not be affected by it.

The defendants, with others, signed and acknowledged the certificate, by'which he declared that he was a stockholder to the amount of seventy shares. This certificate after stating that the subscribers have associated themselves under the act to authorize the business of banking, certifies the name of the association, its place of business, the amount of the capital stock, its commencement and termination, and concludes'; “In testimony whereof, we have hereunder written our names, and affixed our seals, at, &c., the 22d day of September, 1838, and have placed opposite our names, the place of residence of each of us, and the number of shares of capital stock that we severally hold.” Opposite the name of the defendant, under the heading “ Shares,” is written “ 70.”

Is this certificate evidence of the delivery of the bond and mortgage ? If the land had been appraised at a sum sufficient to entitle the defendant to seventy shares, and the previous incumbrance had been removed, a strong presumption might from this act be raised in favor of a delivery in law. But all the facts in the case are against such presumption. The incumbrance had not been removed, the land had not been appraised, and there is no evidence to show any new agreement by which the associates or the bank, agreed to take the bond and mortgage, and give the defendant seventy shares of stock. No reference is made in this certificate to any bond and mortgage, it is a simple declaration that the defendant holds seventy shares of stock. It does not, in my judgment, prove any delivery of the bond and mortgage, even prima fade, much less does it contain upon this point, that species of evidence which concludes the party.

If this act was a delivery, then there was an acceptance on the part of the bank, and the defendant would have been entitled to demand and receive the seventy shares of stock. The bank never so understood this obligation. We are to suppose that they understood the arrangement under which the mortgage was executed. But it is insisted by the plaintiff’s counsel that although the bond and mortgage may be invalid in the hands of the plaintiff, still the defendant is liable as upon a subscription for seventy shares, and that having United in the certificate, he is now concluded from showing that he did not subscribe. An estoppel, says Lord Coke, is when a man is concluded by his own act to say the truth. As estoppels exclude the truth, they are not favored. They are required to be certain, and they are never carried beyond the plain language of the record, or instrument resorted to, by the party setting them up.

But suppose the defendant is estopped from denying any and all the facts stated in the certificate, does that contain facts enough to entitle the plaintiff to recover? What facts bearing upon the question of liability made by the bill, are established? The certificate does not contain any agreement, any promise to pay. It contains no declaration that the defendant had ever subscribed for stock. It simply declares him one of the associates, and that he holds seventy shares of stock; and it is claimed that this is conclusive proof that he subscribed for seventy shares. The position must go to that extent, or it will not sustain the case made by the bill. The claim is there founded upon a subscription. Besides, the certificate does not contain any promise or undertaking, and the plaintiff found it necessary not only to state in his bill a subscription, but to give all the proof upon the question that in reality existed. No inference can be drawn from the certificate beyond its language, which may not be rebutted.

The certificate declares then that he holds stock. How be acquired it does not appear from the certificate. It would be entirely consistent with the certificate, if it should appear that he purchased the stock the day before. There is nothing in the act to prevent the issuing of stock, previous to the making of the certificate. Indeed, the fourth subdivision of § 16, seems to contemplate the issuing of the stock before the certificate is made. It will hardly be insisted that the plaintiff could recover upon simply proving the certificate of the twenty-second September. He must prove something else, he is driven to make other proof, and the case is open to all proofs and explanations, which do not violate the great leading rule of evidence, that parol evidence cannot generally be received to contradict, alter or explain written evidence. The case is not, I think, embarrassed with the principle of estoppels. The defendant was then at perfect liberty to show that he did not subscribe for seventy shares. Indeed, it was necessary that the plaintiff should show that he did subscribe, or agree to take the seventy shares. The proof of the plaintiff shows as clearly as a negative can well be shown, that no such subscription was ever made.

The bill is framed with a double aspect: first to enforce payment of the bond and mortgage. Secondly, in case they should be declared invalid, then the plaintiff asks for a der cree to enforce the payment of $3,500, due from him on his subscription for the seventy shares of stock. It is claimed that this remedy is given in a court of equity, by 2 R. 8., 490, § 69. Before the receiver can avail himself of this section, lie must show a subscription for stock. He lias failed to do so. The certificate of the twenty-second September does not prove it. He does not seek to recover for the forty shares, and if he did I do not think under the circumstances in this case, that he could succeed.

I might stop here, having, as I think, shown that the bond and mortgage are not valid obligations in the hands of the receiver, as they were never delivered, that the bill is not for the collection of the subscription for the forty shares, and that the certificate of the twenty-second September does not prove conclusively that the defendant ever subscribed for stock. But it is proper to add, that it appears in this case, that the bank has paid all its debts, and that the stockholders only are interested in a recovery in this suit. They must be bound by the acts of their agents. And it clearly appears that the bank did not regard the defendant as a stockholder. No stock was ever issued to him. He was distinctly told, a year or two after the bank commenced business, that he was not a stockholder. No dividends were declared in his favor, nor was he ever required to pay interest upon his mortgage. It appears to have been understood that something more was to be done before he could be a stockholder.

The controversy is between him and his associates, and they had repudiated all the preliminary undertakings, and had excluded him from any participation in the affairs of the bank. They did not claim him as an associate, and I see no objection as between these parties to showing these facts.

The public, other than the associates, have no interest in the matter. As among themselves they only are bound by their agreements. (Wordsworth on Joint Slock Companies, 85, 86, 260, 261, 262, 316, 317, 31S.)

The only express agreement which, the defendant made, was at the time he subscribed for the forty shares, and that was an agreement to pay in a bond and mortgage. If the plaintiff sought to enforce this agreement, I submit that the bill would be in the nature of a bill for a specific performance.

A specific, performance cannot be decreed consistently with the rules of equity. The defendant cannot now have stock. It is not a matter of course to decree a specific performance. There must be equity in the plaintiff’s case, and after having repudiated for years all the arrangements with the defendant, and denied him the rights of a stockholder; the associates, by their receiver, who represents them, cannot now be permitted to come in and claim the defendant as -a stockholder or partner. They are concluded by their acts. I think the decree of the vice-chancellor should be affirmed.

Judgment being entered in the several causes in accordance with this opinion, the plaintiff brought this appeal.

H. R. Selden, for the appellant.

N. Ranis, Jr., for the respondent.

Taggart, J.

I have, in my examination of these cases, endeavored to consolidate the facts together, with my views of them, into a single cause, instead of examining each by itself. There are some slight differences in the facts of the cases, but not sufficient to affect in any degree the merits.

Section 15 of the general banking law, passed in 1838, authorizes any number of persons to associate to establish offices of discount, deposit and circulation, upon the terms and conditions, and subject to the liabilities prescribed in said act; but the actual capital of such association must not be less than $100,000.

Section 16, requires the associates, under their hands and seals, to make a certificate which shall specify: 1st, the name of the association; 2d, the place where the operations of discount and deposit are to be carried on; 3d, the amount of capital stock of the association, and the number of shares in which it shall be divided; 4th, the names and places of residence of the shareholders, and the number of shares held by each of them, respectively; 5th, the period when such association shall commence and terminate; which certificate shall be proved or acknowledged and recorded in the office of the clerk of the county where any office of such association shall be established, and a copy thereof filed in the office of the secretary of state. Until the certificate required by the % 16, is made, there is no legal institution existing, and those who did not unite in the certificate of the 22d of September, are not members of the association. But it is unnecessary to discuss this branch of the case, as our opinion and decision in these cases are placed on other grounds.

There was no absolute delivery of the bonds and mortgages. It was distinctly understood that mortgages on incumbered lands could not be received as payment for the stock. The bonds and mortgages were left with Buggies, but not to be used unless the incumbrances were removed. (Clark v. Gifford, 10 Wend., 310; Gilbert v. The North American Fire Insurance Company, 20 Wend., 43; Johnson v. Baker, 4 Barn, and Ald., 440.) These cases show, that the mortgages in question were delivered conditionally, and not absolutely.

Besides, those mortgages were never treated as delivered, or as belonging to the bank. They were not received in payment of stock, either absolutely, in full, or in part. The defendants were not treated as stockholders by the bank in any way. The suit to foreclose the mortgages cannot therefore be sustained.

The question then arises on the liability of the defendants to pay for the stock subscribed by them. Are they legally subscribers for stock and liable to pay therefor ? They signed the original articles for the number of shares affixed to their names respectively. The bank, however, was never organized under these articles, but was in reality organized without reference to them. There can be no good reason for holding the defendants, or either of them, upon the articles signed in June. Those articles were never in any manner carried out, but were substantially abandoned. The only plausible ground for charging the defendants, is, upon the certificate of September 22, 1838.

A corporation may maintain an action at law against a subscriber to the stock of the company for his unpaid subscription. (Goshen and Minisink Turnpike Company v. Horton, 9 J. R., 217; The Dutchess Cotton Manufacturing Company v. Davis, 14 J. R., 238; Spear v. Crawford, 14 Wend., 20.) In all those cases there was a promise to pay for the stock. In the present cases there is no such promise. But admit that no express promise is necessary, what is the situation of these parties? The defendants acknowledged themselves to be stockholders when in fact they were not such. They agree to take stock and pay for it, but do they agree to pay for the stock with the,absolute certainty that they cannot have it? Do they agree to pay for what they neither have nor can have? They have never been regarded, or treated as the owners of the stock while the bank had the power of allotting stock to them. It has never been either allotted or offered to them.

We think the language of the vice-chanceller, in his opinion in the case against Smith, is very appropriate, viz.: “I believe it will be conceded as sound, both in morality and equity, that the corporation which grew out of their actions should not have the benefit of a subscription unless they performed the condition upon which the subscription was obtained even though those who made the promise were not agents of the corporation,” citing Edwards v. Grand Junction Railway Company (7 Simons, 337); Same v. Same (1 Milne § Craig, 650).

We are willing to go still further than" the vice-chancellor. We believe it sound both in morality and equity that the corporation should not have the benefit of these subscriptions unless they can perform the obligations on their part to allot the stock which was to be the fruit of such subscriptions. This they have not done, nor the power to do.

The language of Mr. Justice Marvin in delivering the opinion of the supreme court in the same case, is perhaps still more appropriate, viz.: “There must be equity in the plaintiff’s case, and after having repudiated for years all the arrangements with the defendants and denied them the rights of stockholders, the associates, by their receiver who represents them, cannot now be permitted to come in and claim the defendants as stockholders, or partners. They are concluded by their acts.”

The judgment of the supreme court must therefore be affirmed.

Ruggles, Ch. J., Johnson, Morse, Jewett and Willard, Js., concurred in the foregoing opinion.

Mason, J., gave no opinion.

Gardiner, J., having been counsel in the court below, did not sit in these cases.

Judgment affirmed.


author: Willard, J.,

text:
    Furman, Executor, &c., et al., against The Mayor, &c., of the City of New-York.
    The corporation of the city of New-York, by virtue of its ancient charters, confirmed by the constitution of the state, is the owner in fee of the land under water along the East and North rivers, to the extent of four hundred feet beyond the line of low water mark, at the time when the charters were granted.
    A grant by the city, of the land under water, by specific boundaries falling short of the four hundred feet, with a covenant on the part of the city that the grantee, on building, within three months after request by the corporation, wharves along the front of the land so conveyed, should be thereafter entitled to the wharfage and emoluments accruing from such wharves, does not deprive the city of the right to sell the space between the front of the lands so conveyed and the outer line of four hundred feet to other parties, and to require them to build wharves on such outer line and to fill up the intermediate space, the first grantee never having been required by the corporation, under the provisions in his deed, to build wharves on .the land conveyed to him.
    Such prior grantee, whose land does not extend to the exterior line of four hundred feet, is not within the provisions of the act of April 3, 1798. (2 R. L., 432, % 220, 221, 222.)
    In Equity. Appeal from the superior court of the city of New-York. The facts are fully stated in 5 Sandford's S. C. it., 16. From the judgment there rendered, the plaintiffs appealed to this court.

      Edward Sandford, for the appellants.

      Henry E. Davies, for the respondents.
   Willard, J.,

delivered the opinion of the court.

On the 20th July, 1804, and long before that time, the corporation of the city of New-York were the owners in fee simple absolute of the land adjoining that owned by Gabriel Furman, the appellants’ testator and ancestor, and extending from high water mark to low water mark, and from thence four hundred feet into the East river. This is obvious from the charter. The riparian owner of the land bounded on tide water, is limited by high water mark. Beyond this, the land under water, including the shore or bank to high water mark, belongs to the public, and at common law to the King as parens patria, to the extent of four hundred feet from low water mark, the land under water in the East river in front of the lot of the appellants’ testator, was vested by the charter in the corporation and confirmed by the constitution of 1777. This principle is well settled in this state, and admits of no' dispute. (See Lansing v. Smith, 4 Wend., 9, in the court for the correction of errors.)

The respondents being so seised, on the 20th July, 1804> conveyed to Furman the ancestor, in fee, by definite boundaries, and adjoining his lot No. 20 at Corlaer’s Hook, a certain piece of land under water, extending from high water mark easterly to Corlaer street, and southerly to Front street, opposite the said G-abriel’s land, according to a map which is made part of the bill. Under this grant Furman took nothing but what was included within the described boundaries of his deed, and there is no covenant which prevents the corporation from using, in such way as they please, the residue of the land, remaining in them, and extending several hundred feet further into the river. With respect to such land they have the same rights as any other owners. (Lansing v. Smith, 8 Cowen R., 146; S. C. in Error, 4 Wend., 9.)

The complainants’ right to relief is based upon the assumption in their bill, that the corporation have no right or title to the lands under water adjacent to the land granted by them to Furman; that their claim to the ownership of four hundred feet below low water mark is invalid; and if valid, their title has been divested by virtue of the 220th and 221st sections of the act of 9th April, 1813, entitled an act to reduce several acts, relating particularly to the city of New-York, into one act. (2 R. L., 420.)

It has been seen that Furman as owner of lot No. 20, at Corlaer’s Hook, was limited to high water mark, and that the grant of the corporation to him of July, 1804, was of the land under water adjoining his lot, between high water mark and low water mark, and by definite ánd easily ascertained boundaries. The terms of the grant could not by construction carry the grantee beyond the actual limits prescribed by the grant and thus lose what was not included in the grant, remaining in the grantor. The title of the corporation to four hundred feet beyond low water mark, it has been seen, was granted by the charter, and has long been recognized as the property of the corporation. To the validity of that title no well founded objection has been raised. It has been recognized and confirmed by the state in repeated instances.

0 It has been clearly shown by the learned judge who delivered the opinion of the superior court, that Furman does not come within the purview of the sections of the act cited, having no land adjoining South street. The duty of building the street was not imposed upon him, nor is he entitled to the benefit contemplated by those sections.

The hill was rightly dismissed by the superior court, and their judgment should be affirmed.

Taggart and Morse, Js., gave no opinion.

Denio, J., did not hear the argument.

The other judges concurring in the foregoing opinion,

Judgment affirmed.


author: Taggart, J.,

text:
    Johnson against Carnley.
    In an action against a sheriff to recover the possession of personal property seized by him by virtue of an execution against the former owner, evidence that the plaintiff, who claimed the property by purchase from the judgment debtor, kept a house of ill-fame at the time of the purchase, is not admissible as hearing upon the question of good faith in such purchase.
    An actual possession of the property by the plaintiff, coupled with an equitable interest therein at ilie time of the seizure liy the sheriff, is sufficient 10 maintain the action, and to entitle the plaintiff to a return of the property, although the general property and right of immediate possession he at the same rime in a stranger, the defendant showing no privily between himself and such stranger.
    Where, in an action to recover the possession of personal property, the plaintiff takes judgment for the value of the property, instead of an alternative judgment for a return, or for the value in case a return cannot be had, the irregularity should be corrected by motion in the court below, and is not a ground for reversal on appeal to this court, upon exceptions taken at the trial not involving that question.
    Appeal from the court of common pleas of the city and county of New-York. The defendant was sheriff of the city and county of New-York, and the action against him, commenced in February, 1850, was brought to recover the possession of personal property, consisting of a horse, and a quantity of cigars, alleged to belong to the plaintiff, and to be wrongfully detained by the defendant.
    The defendant in his answer to the complaint: First, denied the wrongful detention of the property: Second, alleged that the plaintiff was not the owner, or entitled to its possession : Third, that Oakley Beach and others recovered a judgment against William A. Burbridge and William B. Morgan, in the court of common pleas of the city and county of New-York, upon which execution was issued and delivered to the defendant, as sheriff, to be executed, by virtue of which he seized the property in question, which was in the possession of the defendants in the execution, or of one of them, and belonged to them or to one of them, or that they or one of them had some interest therein liable to execution at law, and that he detained the same to satisfy the execution.
    The plaintiff replied, traversing the allegations in the third defence set out in the answer, and alleging that she was the owner of the property and that it was in her possession w'hen seized by the defendant.
    It appeared on the trial, which was had before Woodruff, J., and a jury, in March, 1851, that before the time of the seizure by the sheriff, Burbridge executed a bill of sale of the horse to the plaintiff, for the consideration of $100, of which $70 or $80 was for money previously loaned by the plaintiff to him, and the balance was paid in money at the time of the execution of the bill of sale. That the plaintiff, at the time of the sale, hired the stable in which the horse was kept, and from that time paid the rent of it. That the horse was at the time of the sale delivered to her.
    It also appeared that the premises where the cigars were manufactured, had been leased to Burbridge, and were after-wards, commencing in October or November, 1849, leased to George A. Leonard, who paid the rent for the first three months, and for the fourth month it was paid by the plaintiff. That when the premises were given up by Burbridge and Morgan, who had carried on the business of manufacturing cigars there, Leonard, who had previously worked for them, took possession of the premises, and afterwards carried on the business. No retail trade was carried on there ; it was but a place for manufacturing. No lease of the premises was given; the rent was paid monthly in advance, and the receipts constituted the only agreement in regard to occupancy. There was no sign on the premises at any time.
    George A. Leonard, a witness for the plaintiff, testified, that he was between sixteen and seventeen years of age; that the plaintiff was his aunt; that he had worked for Bur-bridge and Morgan in making cigars; commenced in August, 1849, and worked until November or December, when they ■ gave up the business to him. He had then nearly got the trade. When the business was turned over to the witness, there were no cigars or tobacco there, nothing but the bare room and a few old chairs. He took the business and carried it on for his aunt, at the same place where Burbridge and Morgan had been, and where the cigars in question were taken by the- defendant. His aunt gave him all the money to go on with the business. Her money bought all the tobacco. Burbridge' generally went with him to show him how to buy. The witness paid the hands, but got the money to pay them and to pay the rent, from his aunt. She was in the shop occasionally. Burbridge used to sell the cigars for the witness, and paid the money to the plaintiff. The cigars taken by the defendant were made while witness had charge of the shop. Burbridge had a percentage on what he sold. His duty was to show witness and to sell cigars for him.
    Burbridge, testified, that he had owned the horse; that he bought it some weeks before the levy, of Van Antwerp & Co., in Pearl street, and sold it to the plaintiff. That he had paid for it in cigars, which he had previously made in Wooster street. That when he bought the horse, articles were drawn up in regard to it, which he left with Van Antwerp & Co., when he took the horse away. The articles were to show that the horse belonged to them (Van Antwerp & Co.), until the cigars were delivered. All the cigars were delivered within ten or twelve days after he received the horse, except about one thousand. He delivered none after that, and so far as he knew Van Antwerp & Co. still retained the articles.
    Zechariah Thompson, a witness on behalf of the plaintiff, and who drew the bill of sale of the horse from Burbridge to the plaintiff, testified, on Ms cross-examination, that the plaintiff kept a boarding house, but he could not tell what description of boarding house. He was then asked by the defendant’s counsel the following question: “ Did she not, at the time of the sale of the horse to her by Burbridge, keep a house of ill-fame?” This was objected to by the plaintiff’s counsel, and the objection • being sustained by the court, the defendant’s counsel excepted.
    After the testimony on the part of the plaintiff was closed, the defendant’s counsel moved the court to dismiss the complaint, on the grounds, that the cigars were proved to be the property of Leonard, and the horse the property of Van Antwerp & Co. The motion was denied, and the defendant’s counsel excepted.
    The defendant’s counsel then requested the court to charge the jury, that if they believed the horse and cigars in question were not the property of the plaintiff their verdict must be for the defendant:-Second, that if they find the title to the horse still remaining in Van Antwerp & Co., when the action was commenced, the plaintiff cannot recover as to the horse : Third, that if they find that the cigars belonged to George A. Leonard when the action was commenced, the plaintiff cannot recover as to the cigars.
    The judge charged the jury, that the main question to be determined was, whether the property in controversy belonged to the plaintiff or not; and then, after commenting upon the facts proved, and instructing the jury generally upon what hypothesis they would be authorized to find a verdict for the plaintiff’, and when for the defendant, he further charged, that if the purchase of the horse was made by the plaintiff in good faith, without any design to hinder, delay or defraud creditors, the plaintiff, by the bill of sale, delivery and payment, if they were made as testified to, obtained a sufficient title to enable her to maintain this action, although one thousand cigars remained due to Van Antwerp & Go., on account of the horse. To this part oí the charge the defendant’s counsel excepted.
    The judge further instructed the jury, that whether the transactions in question were made in good faith or in fraud, whether the considerations alleged to have governed the parties were real, or were assumed as a disguise, were questions of fact for their determination; that if in fact the plaintiff was not the owner of the property, the defendant was entitled to a verdict.
    The defendant’s counsel excepted to the charge, in so far as the judge neglected to charge in accordance with his second request.
    The jury found a verdict for the plaintiff, and assessed the value of the property at $209.37, for which sum (no return of the property having been made), and costs, judgment was entered in favor of the plaintiff. That judgment was affirmed at general term, and the defendant brought this appeal. It was insisted in this court, that the judgment should have been in the alternative, for m return of the property, or for its value in case a return could not be had; and that the judgment not having been so entered, was erroneous. It did not appear from the return that this point was made in the court below, but from the opinion delivered in that court it appeared that it was considered and overruled at the general term. The case was. submitted in this court, upon the briefs of counsel, by

      Brown & Mathews, for the appellant.

      E. A. Doolittle, for the respondent.
   Taggart, J.,

delivered the opinion of the court.

There are but two questions which we deem of sufficient importance to notice in our examination of this case:

First. Did the judge err in rejecting the offer to prove that the plaintiff kept a house of ill-fame. We have been unable to discover, from an examination of the authorities cited by the defendant’s counsel, that he is in any manner sustained in this point by them. It is held, that in questions of fraud, and in determining the probability of a secret trust, all the circumstances surrounding the transactions are to be considered; the persons who, the time when, the place where, and every fact which can affect or color the relations and motives of the parties.

We are unable, however, to preceive that the fact of the plaintiff’s being a keeper of a house of ill-fame is a circumstance connected with the transaction, in relation to the property in this case. It is true that the plaintiff lent money to Burbridge. It is not, however, shown that Burbridge was connected with the plaintiff in her house by any personal arrangement or intimacy, with the exception of the mere facts that she employed him to aid and advise Leonard in carrying on the cigar business, after his failure, and previous to that time had lent him money. We agree with the court below that the proposed question was quite too remote to affect the question of title to the property claimed. We' think too, that the case of Van Buren v. Wells (17 Wend., 203), is in point to sustain the judge in his decision. The fact offered to be proved was a mere isolated fact, not shown to be relevant by any evidence which had preceded it, and the defendant did not offer to make any subsequent proof which showed its relevancy.

The only question then on which there can be any claim to reverse the judgment, is the refusal of the judge to charge the jury that if they find the title to the horse still remained in Van Antwerp & Co., when the action was commenced, the plaintiff cannot recover; and the charge, that if the purchase of the horse was made by the plaintiff in good faith, and there was no fraud, or intent to hinder, cheat, delay or defraud creditors, the plaintiff, under the bill of sale and delivery and payment, if they were made as testified to, obtained a sufficient title to enable her to maintain the action, even although it be true that one thousand cigars remained due to Van Antwerp & Co., on account of the horse.

The case of Ingraham v. Hammond (1 Hill, 353), was an action of replevin for taking a yoke of oxen. The defendant, Hammond, pleaded property in Meade his co-defendant. Each then pleaded various pleas of property in other persons, strangers to the suit. The pleas did not connect the defendants or either of them with the title set out, and each plea prayed a return of the property. The plaintiff demurred to all of the pleas and the defendants joined in demurrer. .

The court, Cowen, J., says: “It has long been settled and never questioned, that in replevin, the plea of property in a third person is good, and entitles the defendant to have a return thereof without connecting himself with the right of such person or making avowry. The reason assigned is given from Salkcld, 66, whether the property be in a defendant or a stranger, the defendant ought to have a return because he had the possession which was illegally taken from him by the replevin.”

The same doctrine was held in the case of of Prosser v. Woodward (21 Wend., 205). In the case of Rogers v. Arnold (12 Wend., 30), which was an action of replevin for taking the mill irons or machinery of* a saw-mill, being the goods and chattels of the plaintiff. The defendants pleaded, alleging property in the goods and chattels to be: First, in themselves and one Earl Whitford as tenants in common: Second, in themselves as tenants in common with Earl Whitford and the plaintiff: Third, in themselves: Fourth, in themselves and the plaintiff as tenants in common: and Fifth, in Foster Whitford, one of the defendants. Each plea traversing the property of the goods, &c., in the plaintiff. To those pleas the plaintiff replied, reaffirming the property in the goods to be in himself. The court in this case say: “ It has been long settled in this state that the possession of personal chattels by the plaintiff and actual wrongful taking by the defendant are sufficient to support replevin, and that it may be brought where trespass de bonis asportatis will lie,” citing 7 John., 140; 17 Id., 116; 1 Wend., 109; 10 Id., 322, 344.

This case concedes, that the defendant in replevin may plead property in himself or in a stranger in bar of the action, and pr.ay for a return and damages. Mr. Justice Nelson", delivering the opinion of the court, quotes from Baron Gilbert’s Treatise on the Law of Replevin, as follows: “Property in the defendant is a good bar because it avoids the injustice of the caption which is the gist of the action, by showing he had a right to take it; and this not only abates the writ of the plaintiff whereby deliverance was made to him, but destroys all his right to the property.” The learned justice then adds: “ Substantially the same reasons are given for the plea of property in a stranger, though it has been well said elsewhere, that this plea is not founded on very accurate reasoning. For the plaintiff being in possession of the goods at the time of the caption, which is admitted by the plea, it is difficult to see how the defendant shows a right to the return of the property taken on replevin by proving title to it in a stranger. Upon this view of the case, the possession of the plaintiff would be left untouched which, as we have already seen, is a sufficient ground prima facie to sustain the action.” •

Again the learned justice says: “ When we speak of property in the plaintiff or in defendant in this action, it is material to understand what is meant by the term. From the language used in some of the books it might be inferred that the question between the parties involved the absolute ownership of it. The cases already referred to showing under what circumstances this action will lie negative this idea. Right to the possession and dominion of the goods and chattels for the time is all that is essential. This is the view which this court had of the question at an early day. (1 John. Rep., 380.) It is conceded by the learned judge who delivered the opinion in that case, that an interest in the property which would have sustained trespass or replevin would have constituted a good replication to the plea of property in a stranger. The property, then, whether in a defendant or a third person, sufficient to sustain a defence, must be such as goes to destroy the interest of the plaintiff, which, if existing, would sustain the action; or, in other words, such as would defeat an action of trespass if brought in place of this, in case of a wrongful taking, or trover if brought for a wrongful detention. All that can be material for the plaintiff to maintain against a plea in bar is an interest in or connection with the property, which would give to him the action of replevin as an appropriate remedy for a wrongful taking or detention.”

The plaintiff in this case proved a title in herself sufficient to authorize her to recover. She had the possession and rightful possession of the horse, against all the world, including Van Antwerp & Co. She had the absolute right against everybody except Van Antwerp & Co. It would be unjust to allow the defendant, who has no privity of interest with the absolute owners (even admitting Van Antwerp & Co., to be the absolute owners), to defeat her recovery and realize the value of property which he has no possible claim upon, by a mere technicality such as is claimed in this case. As against the defendant, the plaintiff has proved title in herself, and is entitled to recover. The rule that a plea of property in a stranger is a good plea in replevin, without connecting the defendant therewith, is a rule of pleading, and is not infringed upon by the decision in this case.

The charge of the judge was as favorable to the defendant, as to the matters requested, as he was entitled to. The judge charged the jury that if in fact the plaintiff was not the owner of the property the defendant was.entitled to the verdict. The defendant was entitled to nothing more favorable. The part of the charge excepted to was right.

The form of the judgment cannot be taken advantage of by exception. No exception can reach a matter of that kind. If the judgment is wrongly entered up, the defendant should have moved the court to set it aside for irregularity.

On the whole, the judgment must be affirmed.

All the judges concurring,

Judgment affirmed.


author: Edwards, J. Gardiner, Ch. J.

text:
    Dodge & Phillips against Wilbur & Scott.
    D., one of the plaintiffs, acted as the agent in Florida of G., N. & Co., commission merchants in London, to procure consignments of cotton to them, with authority to make advances to the shippers by bills drawn against such consignments, either upon G., IT. & Co., at London, or upon their correspondents at New-York, W. & S. (the defendants), who were authorized by G., IT. & Co. to accept and pay the bills of D. drawn against such consignments, the invoices and bills of lading being made out to G'., N. & Co. and sent with the bills to W. & S., who, if the bills were found to correspondwith the instructions of G., N. & Co. to D., of which they were advised, were to accept and pay them, and forward the invoices and bills of lading to G., IT. & Co., and reimburse themselves the amount of their advances, together with their commissions, by drawing on G.,N. & Co. at London. W. & S. accepted and paid several bills drawn by D. against such consignments of cotton, of which D. and his co-plaintiff were the owners. The corresponding bills of W. & S. upon G., N. & Co. were all accepted; but the acceptors became bankrupt, leaving a part of the bills unpaid. At the time of their failure, a portion of the cotton so consigned to them remained unsold. After all the sales were completed, the net proceeds of the cotton exceeded by several thousand dollars the amount of the acceptances, paid and unpaid, of the consignees and their commissions; but such surplus was less than the amount of the unpaid bills drawn by W. & S.

      Sold, that such surplus belonged to the-owners of the cotton, and not to the defendants;
    That in the acceptance and payment of the drafts of D., the defendants acted as the agents of &., N. & Go., and acquired no personal claim against D., or against the shippers of the cotton;
    That they obtained no lien upon the cotton for the reimbursement of their advances; or, if they obtained any such lien, it was extinguished when G., N. & Co. received from the proceeds of the cotton a sum equal to all the advances which had been made upon it.
    Appeal by the defendants from the judgment of the superior court of the city of New-York. The facts appearing in the case were as follows:
    The firm of A. A. Grower, Nephews & Co. were merchants at London in the year 1847, and for many years previous, and in the course of their business were in the habit of receiving consignments, for sale on commission, of cotton from the United States, on which they made advances, and they had correspondents and employed agents in the United States in their business.
    The firm of Masters, Markoe & Co., of New-York, till dissolved, November 21, 1844, by the death of Mr. Masters, and afterwards their successors, the firm of Markoe, Wilbur & Scott, until the year 1847, were correspondents and agents of said firm of A. A. Grower, Nephews & Co., in the business of such consignments of cotton and advances thereon. The defendants, Jeremiah Wilbur and Thomas Scott, are the survivors of Markoe, Wilbur & Scott.
    The plaintiff, Daniel K. Dodge, was, in the cotton season of 1846-7, and during several seasons before had been, an agent of A. A. Gower, Nephews & Co., at Apalachicola, to procure consignments of cotton to them, with authority to make advances to the shippers by drafts against such consignments.
    The business was carried on by Gower & Co., in the following manner: Dodge received the cotton at Apalachicola, and shipped it direct to Liverpool to the consignment of Gower & Co.; upon doing so, he forwarded to the New-York house of the defendants an invoice and bill of lading of the consignment made out to Gower & Co., and drew upon the defendants’ house in favor of the shipper for the advance authorized by Gower & Co.; the defendants’ house compared the invoice and drafts with the limits and instructions of Gower & Co, and, if in conformity, accepted and paid the drafts; they thereupon transmitted the invoice and bill of lading to Gower & Co. with orders for insurance, and reimbursed themselves by their own drafts on Gower & Co., including in them their own commission of one per cent for those services; these drafts were accepted and paid by Gower & Co., and their amount was charged upon the cotton, and against the shippers, as the advance of the consignees.
    In April, 1847, the plaintiffs shipped, through Dodge, at Apalachicola, eight hundred and ten bales of cotton to Gower & Co., and Dodge drew upon defendants’ firm for the usual advance, forwarding to them the invoices and bills of lading of the consignment; the defendants’ firm accepted and paid the drafts, and reimbursed themselves by drafts upon Gower & Co.; the latter accepted all the drafts, and paid the first maturing, but failed before the maturity of others, which remained unpaid by Gower & Co., and have been taken up by defendants.
    Gower & Co. failed September 11,1847, part of the plaintiffs’ cotton then being unsold in their hands. After sales were completed, the net proceeds of these cottons above the amount of all the acceptances of Gower & Co. (representing their advances upon them) amounted to ¿61,265 3s. lid., and were in the hands of Gower & Co.
    The unpaid acceptances of Gower & Co., taken up by the defendants, exceed this sum, and they claimed in London that this surplus of sales over advances should be paid to them towards the dishonored acceptances they had been obliged to pay; the plaintiffs claimed it as their fund, being the proceeds of their cotton over and above the charges and the advances received by them. By agreement, the fund and the controversy were transferred from London to New-York. The sum of $6,267.09, the equivalent of the above amount sterling, was deposited with the New-York Life Insurance and Trust Company, subject to their respective claims, to determine which this suit was brought in the superior court of the city of. New-York. That court held that the plaintiffs were entitled to the fund, and directed that it be paid over to them. (See 5 Sandf. S. C. R., 397.) From that judgment, the plaintiffs appealed to this court.

      H. W. Taylor, for the appellants.

      W. M. Evarts, for the respondents.
   Edwards, J.

In order to decide upon the rights of the respective parties, to this suit in reference to the fund in controversy, it will be necessary, first, to ascertain what was the character of the arrangement between Gower & Co., and the defendants, and the plaintiff Dodge, as to the shipments of cotton to be made by him; and I do not consider it necessary for that purpose.to refer to any of the correspondence of an earlier date than the létter of the 14th August, 1846. That letter contains the basis of the arrangement between Dodge and Gower &’Co., and whether taken by itself, or in connection with the subsequent correspondence, it seems to me that it clearly shows that the understanding of the parties was that Dodge should act under the authority and pursuant to the directions of Gower & Co. They say that they are willing to receive consignments through his instrumentality ; that they authorize him to make advances on their account; that such advances may be made either by his drawing upon them, or upon some persons in New-York who shall value upon them; and they refer him to the defendants, who, they say, will be advised of the arrangement, and be requested to co-operate in carrying it into execution. On the 18th August, 1846, Gower & Co. wrote a letter to the defendants informing them of the arrangement which had been made with Dodge, and requesting them to give their assistance in carrying it out. The particular manner in which the defendants were to render their aid is not stated in this letter, but it is alleged in the bill of complaint, and admitted in the answer, that the course of business was for Dodge to consign the cotton shipped by him under his agency arrangement to Gower & Co., and to forward the bill of lading, and invoice of shipment, made out in the name of Gower & Co. to the defendants, and to draw upon them for the amount of the advance which they, acting under the arrangement, were to make upon the same, and that' they, upon satisfying themselves that such drafts were in accordance with the instructions of Gower & Co., were to accept and pay the drafts, and were to reimburse themselves by drawing upon the latter firm for the amount thereof, and their commission. This arrangement, which is clearly proved, or admitted, shows what were the relations between the different parties.

In the month of April, 1847, the plaintiffs made * three shipments of cotton to Gower & Co., and transmitted to the defendants the invoices and bills of lading made out to the consignees, and drew upon the defendants as usual. These drafts were accepted and paid. The defendants then drew upon Gower & Co., in London, to reimburse themselves. Two of the bills thus drawn were accepted and paid, and the rest were accepted but not paid; Gower & Co. having become bankrupt. At the time of their failure there was a portion of the cotton shipped to them remaining unsold. This was afterwards sold, and an account was made up between all the parties, by which it appeared that after debiting the whole of the bills drawn upon and accepted by Gower & Co., as if they had all been paid there remained a surplus of ¿£1,285 3s, lid, which forms the subject of controversy in this suit. It is clear that the defendants have no claim against this surplus as consignees who have made advances, for the cotton was never either actually or constructively consigned to them. On the contrary it was shipped directly to Gower & Co., and the bills of lading and invoices were made out to them. It is true that they were transmitted to the defendants in the first place, but this was merely for the purpose of enabling them to comply with the instructions of the consignees as to the amount of advances which they should make.

It is contended, however, that although the defendants may have no lien on the shipments as consignees, still that they have an equitable right to them, on the ground that, by the nature of the arrangement existing between the parties, they were appropriated to pay all the bills of. the defendants which were accepted by Gower & Co. It is not pretended that there was any express agreement to that effect, and it seems to me that no such agreement can be implied from the nature of the arrangement, or from the correspondence between the parties. The defendants never intimated, either to Dodge or to Gower & Co., that they relied upon or looked to the proceeds of^the shipments as the fund out of which they expected that their bills would be paid; and none of the parties ever intimated to the defendants that such proceeds should be appropriated for that purpose. The bills of lading and invoices were transmitted to the defendants, not for the purpose of showing them that there would be a fund sufficient to meet the drafts which they .should draw to reimburse themselves for advances made to Dodge, but to enable them to see that Dodge did not draw beyond the amount which Gower & Co. had by their arrangement with him agreed to advance. In the letter of the defendants of the 8th October, 1846, to Gower & Co., they say that their charge of a commission of one per cent is justified by their care and anxiety in seeing that the drafts drawn upon them are in conformity with the letters 'of instructions given by Gower & Co. to their agents in this country ; and the defendants suggest that they may make a different arrangement as to commissions, if Gower & Co. will authorize them to accept and pay all drafts drawn by their agents, and value upon Gower & Co. free from any other responsibility. The only testimony which is offered to show that the defendants, in drawing upon their London correspondents, relied upon the shipments of cotton made by the plaintiffs, is, that the bills of exchange drawn upon Gower & Co. have a direction to charge the amount thereof to account of Dodge. But it appears from the letter last all uded to that Gower & Co. had other agents in this country besides Dodge, to whom they were in the habit of making advances through the defendants; and it was necessary, for the purpose of keeping these accounts distinct from each other, that Gower & Co. should know to which account the bills drawn upon them by the defendants should be charged. The case of Thomas v. Da Costa (8 Taunt., 345), which was relied upon by the defendants, shows that there may be an appropriation of the proceeds of consignments for the payment of bills drawn upon a person other than the consignee, where there is an express agreement to that effect; but neither that, nor any other case cited by the defendants, shows that either a court of law or of equity will make such an appropriation where there is no such agreement, express or implied, as is the case here.

Suppose, however, that we should come to the conclusion that, by the arrangement between the parties, there was an appropriation of the proceeds of the shipments to pay the bills drawn by the defendants, does it follow that the defendants would be entitled to the fend in question? I think not. It will be remarked that this fund is the surplus which remains after debiting the whole of the bills drawn by the defendants, whether paid or unpaid. If Gower & Co., instead of applying the proceeds of the shipments to the payment of the bills of the defendants, have misappropriated such proceeds, surely the plaintiffs ought not to be made the sufferers. They never became insurers, either for the integrity or business punctuality of the consignees in their dealings with the defendants; and there is no principle of law, equity or justice upon which consignments of the plaintiffs can be made subject to a lien or claim beyond the advances which have been made to them. As to the fund in controversy, no advances have ever been made either by the consignees or the defendants; and, as it is admitted that the plaintiffs were the consignors, they are entitled to it.

Judgment should be affirmed, with costs.

Gardiner, Ch. J.

The only question presented is, as to the relation sustained by the plaintiffs, or rathei» Dodge, one of the plaintiffs, to the defendants, in the business, of which the making of the drafts stated in the pleadings, constituted a part. This fact has assumed an importance since the failure of Gower, Nephews & Co., which no one, before that event ever thought of attaching to it. It may be true, as the defendants insist, that they supposed that Dodge was ultimately responsible to them, for the payment of the money advanced on the drafts in question. But as the London house was primarily liable, and its credit undoubted, and as advances had been authorized by them, upon the actual consignment of- property, supposed to furnish a full indemnity, a failure to meet its engagements, was not probably among the contingencies entering into the calculation' of either of the parties. That house, however, did«fail on the 11th of September, 1847, leaving a part of the bills drawn by the defendants, by way of reimbursing themselves, for advances made upon the lot of eight hundred bales of cotton, unpaid ; and the question arises, in what capacity were advances upon this parcel made by the defendants; which involves the others above suggested, in what relation did Dodge stand to the defendants, when the original drafts made byhim, were accepted and paid by the former. Was he the principal and was the acceptance of the defendants for his accommodation, or were both drawer and acceptor, the agents of a common principal, the firm of Gower, Nephews & Co., in London. The latter hypothesis is the only one consistent with the facts proved or admitted. That Dodge was the agent of the Gowers with authority to bind his principals, for an advance within prescribed limits for all cotton purchased at the south, or which he could influence to be consigned to them, according to the stipulations in the agreement of the 14th of August, 1846, while the defendants were also the agents of the same principals, acting under their instructions, in accepting all drafts drawn by Dodge upon them, on account of such advances, with the right to reimburse themselves by drafts on the consignees, which the latter were bound by their agreement to accept, and pay at maturity. .

This is obvious from the correspondence. Thus the letter from Gower, Nephews & Co., to Dodge, of the date above mentioned, and upon which the defendants’ counsel placed great reliance, declares, “ that these advances are in the usual manner to be made either by draft directly, on us, at from sixty to ninety days’ sight, or by your drawing on New-York at as long a usance as is practicable, the acceptors and payers there of these drafts reimbursing themselves at maturity, by valuing on us in time for the sterling equivalent, at the customary sight, and specifying in these drafts the payments against which they are issued.” They then add, “ that your own friends in New-York, Messrs. Markoe, Wilbur & Scott, will be advised of this arrangement and requested to co-op-crate in carrying it into execution.” Accordingly, on the eighteenth of the same month, they enclose a copy of the arrangement with Mr. Dodge to those gentlemen, and in their letter remark, “ we have, in forwarding it to you, to confirm its contents as far as they apply to you, and beg that you will give your best assistance in carrying the plans traced out, into execution.” On the 11th December, 1846, the defendants wrote Dodge, as follows: “We refer to the various letters you have received from our friends, Messrs. Gower, Nephews & Co., in relation to advances on consignments to their address, the present season. We confirm their views and instructions as far as we have to do with them, and authorize your drafts upon us as usual to the extent of the authority granted yoü by them.”

If the evidence stopped here, which is by no means the case, I do not preceive that there could be any doubt as to the character in which the New-York house accepted and paid the drafts in question. They were drawn in pursuance of the authority conferred on Dodge by the agreement of the fourteenth of August, according to which Gower, Nephews & Co. were to make all the advances on cotton consigned to them, by means of bills drawn upon them directly, or circuitously on the defendants in the city of New-York. A copy of this agreement was placed in the hands of the defendants, with a request that -they would co-operate in its execution. To this they assented, not only by acting under it, as the evidence will prove, but by expressly ratifying it in a communication to the drawer.

They accepted these drafts, because they were authorized by the London house, and because they were requested by them to make'advances in this way, not for the accommodation of Dodge, but to enable the consignees to comply with their engagement. The consideration of their acceptance and payment was the agreement of Gower, Nephews & Co. to reimburse them, and a commission of one per cent, for supervising the business, so far as to keep the agents within the authorized limits, and for advising their principals, from time to time, of the extent, and particular character of the responsibility incurred by them, in their behalf. When the securities were paid by the defendants, therefore, they discharged, pro tanto, an obligation of their principals to another agent, to advance upon consignments of property to them. The consignees became liable immediately to the defendants for the money thus advanced and their commission, and failing to accept and pay the bills drawn by way of reimbursement, they could have been sued as for money paid, and services rendered on their account and at their special request. Of this assumpsit the agreement and letters to which reference has been made, would furnish undoubted evidence.

No action could be maintained against Dodge upon the bills, as the defendants were the acceptors. Nor for money paid, because the defendants, knowing the precise relation in which he stood to the Glowers, that he drew by their instruction, with a view to raise money for their benefit, had recognized his agency and authorized his drafts upon them, “ to the extent ” of the authority granted. It is true that consigned property was made to pay ultimately all expenses, commissions of the defendants inclusive.

But the consignees were primarily liable for them and would be obliged to pay them, whether they succeeded in reimbursing themselves from the property or not. The defendants had no interest in or lien upon the cotton during . its transit, or on its arrival at its place of destination. The bills of lading were made to the consignees, who were to insure it and make disposition of it on account of the shippers. The communications and instructions of Dodge to the defendants, and through them to the house in London, are all reconcilable with the view above suggested. He was not only the agent of the Glowers in procuring consignments, but he sometimes acted as the agent of the shippers and was occasionally interested as owner of the property. In the latter capacity he was interested in the rate of exchange, the time which the bills drawn against it had to run, commission, expenses and indeed every circumstance that might affect the price in the foreign market, and prevent or lessen the probability that it might afford a remuneration to the consignors. The correspondence of Mr. Dodge, to which reference has been principally made by the counsel of the defendants upon the argument,' is upon these topics, and as his relations to their common principal, to the shippers and to themselves, were perfectly understood by the defendants, there can be no pretence that they were misled to their prejudice.

They assume no such ground. But insist that they were entitled to the ultimate responsibility of Dodge, in addition to that of the English house, as to all moneys advanced on his drafts. I think there is nothing in the form in which the business was ■ uniformly transacted, or in the substantial relations of the parties to. each other, legally to justify this claim and that it was properly disallowed by the superior court.

There is no force in the suggestion, that a co-partnership was created between Gower, Nephews & Co., and Dodge by the contract of the fourteenth of August.

The latter was not to receive any part of the profits of the business of the English house arising from this or any other part of it. • He was to. receive one-third of the commissions as a compensation for his services. That this will not constitute a copartnership contrary to the expectation's of the parties has been too frequently held to be now an open question. (Burclclev. Eclchart, 3 Comst., 132.)

The judgment of the superior court should be affirmed.

All the judges concurring,

Judgment affirmed.


author: Edmonds, J.

text:
    Nicholson against Leavitt.
   Edmonds, J.

The question is presented in this case, simply and nakedly; whether a voluntary assignment by a debtor in failing circumstances is void -by reason of its containing a clause authorizing the assignee to sell the assigned property on credit.

I should be inclined to consider the decision of the supreme court in Burdick v. Hunting (MS.), and the ruling of this court in Barney v. Griffen (2 Comst., 371), as decisive of the question. I have no means of going behind the report of these cases, to inquire into the private opinion of the members of the court, and if I had, I should be reluctant to do so, lest I might be regarded as sanctioning a course that may tend to unsettle and weaken the authority of the court of last resort. So far as the record of the case, made by the authorized officers of the state, may, in its language give rise to doubts or criticism, it becomes a perfectly legitimate subject of inquiry. But when that record is sufficiently explicit on its face, I cannot feel myself at liberty to impair its just force, by any private cross-examination of the members of the court, or b y any private and irresponsible statement of theirs in conflict with the plain import of their official language.

As, however, the authority of the decision of this court has been questioned by the inferior tribunal, whose judg. meat we are now considering, and has been fully discussed on the argument before us, it will be as well to reiterate here, and on this occasion,‘and if practicable, in language too explicit for doubt, our entire concurrence with the ruling on this point, in both of the cases referred to.

For more than thirty years our courts have been struggling to keep within due bounds, voluntary assignments by failing debtors. No one can be engaged long in the administration of justice, without becoming sensible how much fraud and mischief are perpetrated under color of such machinery. To punish a vigilant creditor, to extort terms from him, to keep the property within the debtor’s control by means of a friendly assignee; or to make it as available to him as possible, are far more frequently the purposes of such assignments than a fair and equal distribution of the property among those to whom it equitably belongs. And the result at which courts are bound to aim, such distribution, namely, and-that as soon as practicable, is almost invariably thwarted by these assignments and the delay and hindrance which they interpose, under the pretence of equality and a full dedication of the debtor’s effects to the payment of his debts. Under the name of that equality which is equity, the means of the debtor are placed beyond the reach of his creditors, and frequently consumed in expenses and charges bv the assignee rather than in the liquidation of debts. Such is most generally the practical effect of tolerating these voluntary assignments, and no one can long occupy a seat on the bench without witnessing and lamenting it.

The only ground on which they have ever been allowed at all, is, that they do only that which every principle of honesty demands, and surrender all of the debtor’s property to the satisfaction of all his debts. Yet it most frequently is true, that they operate to withdraw that property from that legitimate purpose, at least for a while, if not permanently, and often appropriate it to other purposes.

The courts have been compelled to witness these frauds, thus perpetrated in the name of the law, until they have been constrained by a sense of duty, to aim at suppressing the evil as far as in them lies, and at attaining that equality which is shunned under the pretence of seeking it.

From the cases of Murray v. Riggs (2 J. Ch. R., 565), and Hyslop v. Clark (14 J. R., 458), both in 1817, until this day, our courts, both of law and equity, have struggled for the attainment of this object and have been engaged in striking down the various forms, devised by the ingenuity of debtors, to pervert a rule, sounding fairly, to purposes of evil.

I remember, well, the effort that was made in the court for the correction of errors, in the case of Grover v. Wakeman (11 Wend.), to relax the strict rule of the courts and sustain these voluntary assignments as a quasi necessary substitute for a bankrupt law. • I was myself engaged in that effort, and was unwilling to extend the rule any further than it had been extended in the case of Murray v. Riggs. But after-full and mature consideration, I was overruled by a very decided majority of the court, and the ruling of Grover v. Wakeman, has ever since, for now some twenty years, been the unwavering law of this state.

The principle established by that case, was happily and forcibly stated by Judge Sutherland, who delivered the prevailing opinion of the court in Grover v. Wakeman, and it ís manifest from the report of the latter case, that it was the intention of that, the court of last resort, after full consideration, so to establish it. “It is time,’’ he says, “that some plain, simple but comprehensive principle should be adopted and settled upon this subject. In the absence of a bankrupt law the right of giving preferences must probably be sustained. Let the- embarrassed debtor, therefore, assign his property for the benefit of whom he pleases; but let the assignment be absolute and unconditional; let it contain no reservations or conditions for the benefit of the assignor; let it not extort from the fears and apprehensions of the creditors, or any of them, an absolute discharge of their debts as the consideration for a partial dividend; let it not convert the debtor into a dispenser of alms to his own creditor, and above all, let it not put up his favor and bounty at auction under the cover of a trust to be bestowed upon the _ highest bidder. After the maturest reflection upon this subject, I have come to the conclusion that the interests, both of debtor and creditor, as well as the general purposes of justice, would be promoted, if the question is still an open one, by confining these assignments to the simple and direct appropriation of the property of the debtor to the payment of his debts. The remnants of many of these insolvent estates are now’ wasted in litigation, growing out of the complex or suspicious character of the provisions of these assignments. One device after another to cover up the property for the benefit of the assignor, or to secure to him, either directly or indirectly, some unconscientious advantage, has from time to time been brought before our courts and received condemnation. But new shifts and devices are still resorted to, and will continue to be so, until some principle is adopted upon the subject, so plain and simple that honest debtors cannot mistake it, and fraudulent ones will be deterred from its violation by the certainty of detection and defeat. The principle to which I have adverted, it appears to me, if adopted, will, to a very considerable extent, accomplish that object.”

I acknowledge the binding force of this decision even in this, the court of last resort, and have ever felt myself constrained to obey it, when sitting in any inferior tribunal. And it is, perhaps, proper that I should admit that subsequent reflection and experience have tended to impress on my mind the conviction of its entire propriety. I am, therefore, disposed to reaffirm it, in the broad and explicit language in which it was then announced. I have already had occasion to do so at the special term of the supreme court, upon the same question now presented to us, and I am now persuaded that there. is no other rule that can he safely adopted, to prevent the innumerable frauds that are perpetrated under the sanction and in the name of these voluntary assignments.

The great consideration that is urged in support of the clause which is objected to in this assignment is, that the assignee must have some discretion as to the mode of selling the property, and that discretion may often warrant a sale on credit; that sales on credit are often expressly sanctioned by the statute, and that, therefore, it cannot be improper to confer in terms upon the assignee the'power which flows to him as a necessary incident of his position, or in the language used in this regard, “ if the law says that the authority, as necessary and beneficial, is given by implication, we shall not commit the absurdity of saying that it is illegal and fraudulent when given in terms.”

Now, it seems to me, that this argument overlooks this important consideration, that sanctioning this clause, “when given in terms,” strips the creditor of his control over the property and confers that control on the debtor.

When a debtor becomes insolvent, his property belongs in equity and justice to his creditors and not to him, and thenceforth, the object and aim of the law is, to give it to his creditors. He has an interest to see that it is not sacrificed or wasted, but is so managed as to pay as much of his debts as possible. This is the extent of his equitable interest, but it is subordinate to the rights of his creditors, which are to have the property applied to the satisfaction of the debts without fraud, hindrance or delay.

That subordination is an inflexible principle of the law, and is universal, save only where it is interfered with by the rule, which sustains these voluntary assignments. It is in obedience to that principle that the creditor has a right1 to resort to the courts, and to enforce the satisfaction of his claim even at the expense of a forced sale and sacrifice of the debtor’s property. It is that which lies at the foundation of all bankrupt laws, and is interwoven into our insolvent laws. It is founded in-justice, enacted into our statutes, and is necessary for the due protection of the immense mass of mercantile transactions which are accumulating around us. Yet it is invaded by the rule which sanctions voluntary assignments, a rule having its origin not in the statute, but in the decisions of our courts, and springing from the difficulties flowing from the absence of a general bankrupt law. A bankrupt law, that would take from the debtor the control of his property when he became insolvent, and transfer it to his creditors, and to them all, and not to such one only as would press the hardest, would obviate all the difficulty. But in the absence of such a law, there is nothing to stay the progress of the vigilant creditor, but a voluntary assignment. How far that assignment shall go, and what shall be its provisions, and what its office, beyond the invasion of the subordination already spoken of, has been the dispute. It is already too well settled for us now to shake, that it may also perform the office of preferring one creditor to another. Shall it go further ? Shall it also give the debtor power to say to his creditor, you shall wait my pleasure for your pay ? You shall abide my time and not select your own for the satisfaction of your just claim? Because, if it may, it necessarily takes from the creditor the control of the mode and manner in which he shall coerce payment, and confers it upon the debtor and the friendly assignee whom he may choose. And can any one say that this is not hindering and delaying creditors? Practically it is so, reason or refine upon it as we may. Anything that interrupts the creditor in the lawful pursuit of his remedy through the courts, for the purpose of enforcing payment, hinders and delays him.

It may be said, however, that this strikes at the principle of voluntary assignments at all, and especially at that which allows of preferences among creditors. Truly, it does seem so; yet those two principles, whether they are exceptions or qualifications to the general rule, are far too well settled for me now to intend to disturb them. The general rule is referred to, for the purpose of avowing the determination at once, of adhering to it and allowing no further exceptions or qualifications to it.

It is not difficult to see how the creditor may be delayed and hindered by the clause in question. When he has obtained his judgment, he has a right to his execution at once and to a sale of the debtor’s property, within such time as the law allows. But the assignment takes away from him that right and compels him to wait such time as the assignee may see fit, subject only to such control as the court may exercise over an unreasonable delay. If it be lawful to insert such a clause, then it will be lawful for the assignee to give a credit, and the only control the creditor can exercise through the courts will be over an unreasonable delay, while without the clause he may ask the courts to order a sale without any delay. In one case, the delay will be in the exercise of a sound discretion, with which the courts will not, for a slight cause, interfere. In the other, it will be an arbitrary act and readily controlled. In one case to give credit, and thereby cause delay, will be a part of his duty, written down for him, and in the other, it will not be-allowed without permission obtained. In one case, it will be at his option, and in the other only by direction of the court after notice to the parties in interest. In one case, he may consult the interest of the debtor who has selected him, and in the other, he must consult that of the creditor, whose trustee he is.

It will not be difficult then to see how the rights and remedies of the creditor may be in fact affected by legalizing this obnoxious clause; and practically we know, and have often seen, how it may be, and has been, used as a means to that end.

The suggestion that credit on official sales is sometimes authorized by statute does not strike me as having any application to the case in hand, for it seems to me there is some difference whether an act is authorized by statute or not. And if the fact that a principle is adopted in a particular statute is a ground for its universal application, .and that seems to be the argument, then the provision of the insolvent laws, forbidding preferences, would destroy all assignments of that character.

But it is unnecessary to dwell upon the other suggestions that were made on the argument. 1 have already stated the general principle on which I regard this clause as illegal, and that is in no wise affected by those suggestions, for I look upon the clause as evidence of an intention to hinder and delay creditors, because such is the inevitable result of it, and we must infer “ that a man intends to do what his deliberate conduct plainly, distinctly and inevitably tends to accomplish.” It may very well be, that where the hindrance and delay is the necessary consequence of an act otherwise lawful of itself, that will not vitiate the deed, but where the intent and object is to hinder and delay, though final payment is fully intended, such intent will render void the deed. The case of Van Nest v. Yoe (1 Sand. Ch. R., 4) is a striking illustration of the principle. (See also Ward v. Trotter, 3 Monroe R., 1; Vernon v. Morton, 8 Dana R., 247.)

In all of those cases the ultimate dedication of all the debtor’s property to the payment of his debts was provided for, but in the meantime the assignment was" intended to prevent a sacrifice of it, by forced legal sales, and because of that intent the instruments were held void. And rightly so, I think, and it was well said in one of those cases: “ It is no answer to say that the debtor provides an ample fund for the payment of the debt and that the creditor is ultimately to be paid in full. The law gives to the creditor the right to determine whether his debtor shall have further indulgence or whether he will pursue his remedy for the collection of his debt.” It is this right which the clause in question would interfere with, and that interference is no more lawful in one case than the other. It has always been considered objectionable for the legislature to pass laws to stop or delay parties in the collection of their debts. To allow a party to make a stop law of his own is still more obnoxious to sound principle.

I am, therefore, of opinion, that the assignment is void by reason of the clause which authorizes the assignee to sell the assigned property on- a credit, and the judgment of the superior court ought to be reversed.