text:
    Carroll v. Upton.

    Where the notary, to whom a bill is intrusted for presentment, on protesting the bill, makes diligent inquiry to ascertain the residence of the drawer, and sends-notice to him according to the information thereby obtained, it will be sufficient to charge the drawer, although it appear that he did not reside at the place to which the notice was sent, and in fact resided in the place where the bill was protested.
    Thus, where a bill was drawn at Washington, on a house in New Orleans, and the notary, (as he testified,) on its acceptance being refused in N. O., made diligent inquiry as to the drawer’s residence, learned that his reputed residence was at W., and to the best of the notary’s knowledge and belief, such was his residence, and thereupon notice was sent to the drawer at W.; it was held, that sufficient diligence had been used to charge the drawer; although the testimony on his part proved that he was, and long had been, a resident of N. O., and a counsellor at law there, and was temporarily at W. when the bill was drawn 5 and it was also proved, that the same notary had known him several years, and three months before, had entered of record an official act as notary, in which the drawer was described as residing in N. O.
    The law of the place where a bill is drawn, governs as to the mode and place of the notice of non-acceptance and of non-payment to be given to charge the drawer; and a different usage prevailing at the place where the drawee resides or the bill is presentable, will not be admitted to control the drawer’s liability.
    Sept. 29 ;
    Nov. 11, 1848.
    This was an action of assumpsit, brought by the payee of a bill of exchange, against the drawer. The bill was as follows:
    “ $295 32. “ Washington City, March 10th, 1845.

      “ At three days sight, please pay to the order of Mr. Thos. Carroll, the sum of two hundred and ninety-five dollars and thirty-two cents, and charge the same as advised to Clayton Tiffin. And oblige your ob’t. serv’t,

      “ Francis H. Upton.
    “ To 1. W. Arthur &f Co., Merchants, New Orleans.”
    The defendant having with his plea, denied the receipt of notice of non-acceptance or of non-payment of the bill, the plaintiff, at the trial, read the deposition of Greenbury R. Stringer, the notary in New Orleans who protested the bill, and gave the notices. The witness testified, that he is a notary public, residing in New Orleans; that he knows plaintiff by name only, and has known defendant for six or seven years past. That he presented the bill in question to I. W. Arthur & Co., for acceptance, March 20,1845, and for payment on the 26th of the same month ; on each of which occasions, said I. W. Arthur & Co., did decline and refuse to accept and pay said draft, for the reason, they said, they had had no funds of the drawer. That he has been a notary ever since about March, 1843, and is so still. That on the 26th of March, 1845, as such notary, he protested the bill. That at the time of such protest, the defendant resided at Washington, in the District of Columbia, to the best of witness’s knowledge and belief; and that was the defendant’s reputed place of residence, and witness believes he was there at that time. That as such notary, he did send, by mailing at New Orleans, a notice of non-acceptance of the bill, to Upton, directed to him at Washington City, in the District of Columbia, on the 20th of March, 1845, in time to go by the first mail after the protest for non-acceptance. (A sworn copy of the notice was annexed to the deposition.) And that at the time of that protest, he did make diligent inquiry as to where the drawer then resided, and as to where he was at that time, and as to where a letter would reach him. And that it is the custom, practice and law, of the state of Louisiana, to send notice of protest to the drawer or maker of a draft or bill at the place where the draft or bill is dated, when the drawer or maker is absent from his usual place of domicil or residence.
    On his cross-examination, he testified that the notarial copy protest, and copy of the notices annexed to the commission and depositions, are all correct, and were made by witness. That in his notarial records on 25th day of December, 1844, he finds an act of procuration passed before him as a notary public, from Clayton Tiffin to Francis H. Upton, the defendant in this suit, appointing Upton the agent and attorney in fact of Tiffin, and by which Upton is declared to be thereby placed in custody, possession and control, of the plantations and slaves of Clayton Tiffin on the Mississippi River, in the state of Louisiana ; and Upton is therein described as a counsellor at law, of the city of New Orleans. (A copy of the act of procuration was annexed.) He also finds in his records, an act passed before him as notary, by the defendant to I. W. Arthur, on the 7th of May, 1845, transferring defendant’s interest in a certain mortgage; and he is therein described as a counsellor at law of New Orleans. (A copy of the transfer was annexed.)
    In these notarial acts, the witness, in his capacity as notary public, described the defendant as a resident of New Orleans.
    The plaintiff read the deposition of Isaac W. Arthur, one of the drawees of the bill, to prove that he was not in funds of the drawer ; and claimed to prove by it, that the drawer did not, when it was drawn, believe the bill would be accepted or paid.
    The defendant read the deposition of Wheelock S. Upton, by which it appeared that the defendant went from New Orleans to Washington, to attend the supreme court of the United States to argue a cause of Clayton Tiffin’s, and that the bill in question was drawn for the fees of the plaintiff as clerk of that court, in Tiffin’s suit. And the witness stated, that the defendant was authorized to draw on Arthur & Co., for the funds requisite to defray the expenses of that suit.
    Both of these witnesses testified, that the defendant was a resident of New Orleans, at the date and protesting of the bill, for some years prior, and for a considerable period afterwards ; where he was a practising counsellor at law.
    The judge at the trial, reserving the points of law, submitted to the jury the question as to the good faith with which the bill was drawn, upon which the jury found against the defendant. A verdict for the plaintiff was taken, subject to the opinion of the court.

      W. Rutherford, for the plaintiff.

      E. W. Stoughton, for the defendant.

         The Chief Justice did not sit in this case. See the next case, Rawdon v. Redfield.

   By the Court. Sandford, J.

The defendant as the drawer of this bill, was entitled to notice of its non-acceptance, unless some cause existed which made it unnecessary for the holder to give him such notice. The plaintiff claimed, that the drawer had no reason to expect that the bill would be accepted or paid, and therefore he was not entitled to notice. This question was submitted to the jury on the testimony ; and it is contended by the defendant, that there was not sufficient testimony against him to warrant the judge in leaving it to the jury.

We have considered the point, and having regard to the circumstance that the burthen of proof was upon the plaintiff, we are satisfied that the evidence against his position was altogether too strong to warrant a finding in his favor. The verdict on the question is so clearly against evidence, that we must lay it aside in disposing of the case.

Independent of this ground, upon which the plaintiff sought to excuse the omission to give notice, he claims to recover on the sufficiency of the notice which was actually given. This notice was sufficient in form, and 'sent at the proper time; but it was sent to Washington City, and the defendant’s residence was in New Orleans.

We do not think the usage relied upon, can aid the plaintiff. The bill was drawn at Washington, as it disclosed on its face. Hence, the law of that place governs as to the mode and place of the notice to be given to the drawer. (Story on Bills, § 391, and the previous sections there referred to.)

It is said, however, that the notary used due diligence to discover the defendant’s residence, and he sent the notice to the latter according to the best of his knowledge. The notary testifies, that at the time of the protest, he made diligent inquiry as to where the drawer then resided, and to the best of his knowledge and belief, the defendant then resided at Washington, and was there at the time ; and that, the notary says, was his reputed place of residence. On the other hand, he says he has known the defendant six or seven years, and in December before this occurrence, entered a notarial act describing him as residing in New Orleans. The subsequent notarial act in May, has no bearing upon the question of his diligence in March. The defendant, for some years had been a counsellor at law in New Orleans, but had been absent over two months at Washington on professional business.

The point is undoubtedly, whether the notary made diligent inquiry; because if he did, his miscarriage is not to deprive the holder of the bill of his claim against the drawer. We do not consider the notarial act in December, 1845, as of much weight in the case. The frequency of those official duties in a large city where the laws are of French origin, must in general, preclude the recollection of individual instances. Our officers who certify the acknowledgment of conveyances, necessarily read the residence of the grantor in ascertaining the identity to which they certify. Yet it would be contrary to reason and experience, to presume that after the lapse of two months, they would recollect the description of such residence, in any given instance.

The fact of the defendant’s residence in New Orleans, and his professional standing, are met by his actual absence at the time, and by the notary’s inquiry and its results. It is not proved that the defendant’s name was in the directory, or that he had an office or place of business, or any other fact, which is inconsistent with the testimony of the notary, as to his knowledge and belief respecting the defendant’s residence, after diligent inquiry.

After a full consideration of the subject, we have no doubt that the proof shows reasonable diligence in the notary, to make the notice effectual.

The established principle is, that if the notary inquire of persons likely to know the residence, and having no interest to state it erroneously, and acts on the information thus acquired; it suffices, although it be wrong. A reference to a few of the decisions in this state, will illustrate the law as now established.

In Chapman v. Lipscomb, (1 Johns. R. 294,) a bill was drawn and dated in New York, on a firm residing there, by the defendants, residing in Petersburgh, Virginia. On payment being refused, the clerk of the notary made diligent inquiry after the defendants, at the banks in New York and elsewhere, and the information was, that they resided at Norfolk, and he sent notices addressed to them at that place. It was held, that due diligence had been used, and that the notice was sufficient.

In Reid v. Payne, (16 Johns. 218,) the notary, after demanding payment of a note, on inquiry as to the residence of the indorser, was informed that he lived in Greenbush, and notice was sent to him at that place. In fact, he lived in an adjoining town, five miles distant from the post-office in G. It was held, that sufficient diligence was proved.

In the Bank of Utica v. Davidson, (5 Wend. 587,) the note protested was dated at South Bainbridge. When it was' presented for discount, by the agent of the maker, he informed a clerk in the bank that the indorser resided in Bainbridge, of which the clerk made a memorandum. The notice of protest was sent by mail, directed to the indorser at Bainbridge. The indorser resided in Masonville, twelve or fourteen miles distant. He had resided in Bainbridge until a short time before the note was made. The court held, that due diligence was shown, and that the notice was sufficient.

The Bank of Utica v. Bender, (21 Wend. 643,) was like the case.last cited, except that the information was given by the drawer of the bill for whose benefit it was discounted, and the indorser had never resided at the place to which notice was sent. The notice was adjudged to be sufficient, and the decision was affirmed in June, 1841, by the court for the correction of errors.

In Ransom v. Mack, (2 Hill, 587,) the notary being ignorant of the residence of the defendant, the first indorser, applied for information to the second indorser, and was told to send the notice for the former to North Adams. The defendant did not reside at that place, or in the town, but received his letters at another post-office in the town of Adams. The court held, that the notary was well warranted in acting on the information thus obtained, and that there was due diligence.

Many other cases are referred to in Story on Bills, § 351, note 4, and the law appears to be uniform in almost every state in the Union. The cases of Preston v. Daysson, (7 Louis. R. 7, by Curry,) and Vigers v. Carlon, (14 ibid. 89,) show that the rule prevails in Louisiana. On the authority of the latter, which in its circumstances is quite similar to the one before us, the diligence proved here would.be held sufficient in that state. The rule of law thus established is founded in good sense, and a due regard to the rights of all parties, and applied to the testimony before us, entitles the plaintiff to recover.

Judgment for the plaintiff.

       Affirmed in the Court of Appeals, April 17th, 1850.


source: Caselaw Access Project

author: By the Court. Oakley, Ch. J.

license: Public Domain

text:
    Rawdon v. Redfield.

    A notary charged with giving notice to an indorser of the non-payment of a bill of exchange, must make reasonable efforts to ascertain his residence if it do not appear on the face of the bill; and it is sufficient if he give the notice in good faith according to the information thus obtained.
    If he inquire of persons who are likely to know his residence from their connection with the transaction, and are not interested to mislead ; it will be a reasonable degree of diligence.
    So where the indorser of a bill, residing at its date in Troy, before its maturity removed to and commenced business in New York, but his name was not in the directory, and a notary protesting the bill in New York, inquired of the acceptor and holder, and being informed by them that the indorser lived in Troy, sent a notice to him by mail at that place, it was held sufficient to charge the indorser.
    March 21;
    March 31, 1849.
    Case subject to the opinion of the court. " The cause was by consent argued before the Chief Justice alone, in whose opinion the facts are sufficiently stated.

      A. W. Clason, Jr., for the plaintiff.

      P. T. Woodbury, for the defendant.

       See the preceding case.

   By the Court. Oakley, Ch. J.

This is an action on a-bill of exchange, drawn by a party in the city of Troy on a firm in this city, payable to and indorsed by the defendant, then residing at Troy, and which was subsequently indorsed to .the'plaintiff. The bill was accepted, and at its maturity was not paid. Issue was taken on the presentment of the bill for payment, and on the service of notice of protest and non-payment on the defendant.

There is no question as to the presentment of the bill for payment. The difficulty, if any, arises on the proof of the service of the notice of protest; it being claimed that it was not served at or sent to the place of the defendant’s residence. It appears that he is a single man, and for several years up to the first of May, 1847, was in business at Troy. He then closed his business at Troy, and concluded to remove to this city, and about the first of July entered into copartnership for the transaction of business here, notice of which was published in one or more of the city papers, on the 15th day of July. The defendant’s name had not, however, appeared in the firm at its place of business, when the bill of exchange matured; and it was not to be found in the city directory.

The notary on protesting the bill, looked into the directory, and not finding the defendant’s name there, inquired of the acceptor and the holder of the bill as to the residence of the defendant. Both of them informed the notary that he lived at Troy, and the notary sent a notice of protest by mail, addressed to him at that place.

The question is whether due diligence was used by the notary, and whether the notice of protest was sufficient. The leading cases to which I was referred, were Ransom v. Mack, 2 Hill, 587; and Spencer v. The Bank of Salina, 3 ibid. 520, with several others there cited.

The principle to be extracted from the authorities is, that if the notary inquire of persons who, from their connection with the transaction, are likely to know the residence of the indorser, and are not interested to mislead the notary, and he acts on the information thus obtained, it is due diligence on his part. That was done here, there was no interest to mislead either in the acceptor or the holder. The notary must make reasonable efforts to ascertain the residence of the parties entitled to notice, when it does not appear on the face of the instrument. If that be done in good faith, and he act accordingly in giving the notice, it is enough, and the party will be charged.

Judgment for plaintiff.


author: By the Court. Vanderpoel, J.

text:
    Aspinwall and others v. Meyer.

    A promissory note, given to a mutual insurance company as a subscription or premium note, in advance, for the security of dealers, as provided by its charter, is to be regarded as a valid promissory note, liable to be used to pay the losses of the company.
    Such a note may be transferred by the president of the company alone, in payment of a loss, in the usual way and according to the common practice of the company, without his being authorized to do so by a previous resolution of the board of trustees.
    It was the design of the statute “ to prevent the insolvency of monied corporations” to guard against collusive transfers of the effects of such corporations. It was not meant to interfere with honest transfers, made in order to pay their just debts.
    A person taking from the officers of an insurance company, the note of a third person, in payment of a loss sustained by him, will be held to be a bona fide purchaser thereof for a valuable consideration and without notice, under the provision of the revised statutes prohibiting certain transfers of corporate effects except upon a previous resolution of the board of directors.
    And the maker of such note, in a suit brought thereon by the holder, cannot be permitted to allege that the plaintiff did not pay value for it, or that the trustees of the company did not authorize its officers to transfer the same'; unless he can show that he was defrauded, or lost some defence he might have had against the payees, had they retained it.
    It is not enough for the maker of a note, when sued thereon, to say that it was transferred to the plaintiff without a valuable consideration ; but, to defeat a recovery upon it, he must show that it was transferred in fraud, or to the prejudice of. his rights. Per Vanderpoel, J.
    It is no defence to an action on a promissory note, that the property of the note is in a third person, and not in the plaintiff. Unless the possession of the note by the plaintiff is mala fide, and may work some prejudice to the defendant, the latter is not entitled to be heard on the subject. Per Vanderpoel, J.
    Sept. 29 ;
    Nov. 11, 1848.
    . This was an action of assumpsit, brought to recover the amount of a promissory note for $3698 40, dated May 1st, 1846, payable twelve months after date, made by the defendant to the order of The Alliance Mutual Insurance Company, and alleged to have been indorsed by the company to Howland & Aspinwall, the plaintiffs. The cause was tried before Judge Sandford, without a jury, on the 6th day of June, 1848, and by consent of the respective parties, a verdict was taken for the plaintiffs for the sum of $3973 81, subject to the opinion of the court. The defendants counsel admitted the signature of defendant and the endorsement of the company by James D. P Ogden, as president of The Alliance Mutual Insurance Company, and the fact of his being president at the time of such indorsement ; and also that the firm of Howland & Aspinwall was composed of William H. Aspinwall, William A. Howland, and John L. Aspinwall, the plaintiffs. The plaintiffs then rested.
    The act incorporating The Alliance Mutual Insurance Company, passed April 10th, 1843, and the act incorporating The Atlantic Mutual Insurance Company of the city of New York, passed April 11th, 1842, were read in evidence by the defendant.
    The defendant proved by Lewis Benton, formerly secretary of the company, that the note in question was originally a a note for $5000, dated May 1, 1845 ; that it was not one of the original subscription notes of the company, but was given to be taken out in premiums; that on the 1st of May, 1846, there had been charged against the note $671 74, for insurances, whereupon the defendant gave a note for these premiums, $671 74. He then gave, for the balance, a new note for $4398 40, and the $5000 note was given up to him. That on the 30th of Nov. 1846, a new note was given, dated back, May 1, 1846, the note in controversy for $3698 40, and another note for $700, in lieu of the note of $4398 40.
    James D. P. Ogden testified that he was the president of The Alliance Mutual Insurance Company in 1847; that it was the duty of the president and the secretary to adjust losses and to pay them ; that he settled with the plaintiff in respect to the policy upon the Mary Ann ; that in case a vessel insured was not heard from, it was the custom of the company to take a year to pay the loss; that the Mary Ann was not heard from for six months, but a vessel arrived at New Orleans, reported to have passed a week, on which the name of the Mary Ann was seen, after which the company could not claim a year’s credit; that the witness then gave to the plaintiffs the note in suit, in payment of the loss, and turned out other notes as collateral security ; that he hoped the note would come back to the company, and that they could pay the loss in cash ; that he considered the company solvent at the time the note was transferred ; and that he considered the claim a valid one, it being a total loss. The other facts established on the trial, sufficiently appear from the opinion of the court.

      J. Brice Smith, and D. Lord, for the plaintiffs.
    I. The note was given under the charter, as the real capital of the company, in renewal of one for $5000. This was one of $150,000 subscribed for by the defendant with others as additional capital, and the notes delivered to the company. It was not without consideration in the hands of the company. If it remained in the company’s hands after its failure, the com pany could sue for it, to pay creditors.
    II. The note was passed to the plaintiffs before due, by the authorized agent of the company, for valuable consideration. The policy was cancelled, and the note was applied by the company for one of the purposes for which the company was created, and without notice. Aspinwall resigned on the 19th of December, 1846. No equities or offsets between the company and the defendant could affect the plaintiffs.
    III. The company was not insolvent in May, 1846, or February, 1847. Nor was the note passed by way of preference, or in contemplation of insolvency.
    IY. The transfer to the plaintiffs by the company, was not void. The plaintiffs were bona fide purchasers for a valuable consideration. No notice is charged or proved against them of any want of a previous vote of the board. They dealt with the authorized officer of the company in the usual mode, without notice. Again, the defendant cannot set up this defence. The act does not make the transfer void. If the note is a valid note in the hands of the company, he must pay it. He has received no notice from the company not to pay. If the transfer is void, the plaintiffs are trustees of the company, and will hold the fund for their benefit. The suit can be brought in the • name of any person.

      W. Kent, for the defendant.
    I. The transfer of the note in suit, being for the payment of $3698 40 to the plaintiffs, on the 19th of February, 1847, not authorized by a previous resolution of its board of directors, was illegal and void, and passed no right or title therein or thereto, to the plaintiffs. It was made by the president alone, without the concurrence of any other officer of the company. The by-law does not authorize this transfer. But the by-law must conform to the statute, (2 R. S. 599,) or it is void.
    II. The plaintiffs having taken the note in question as collateral security for a pre-existing debt, without surrendering any valuable consideration, and Wm. H. Aspinwall having been one of the directors of the Alliance Company when the note was taken, and for a long time subsequent, they, the plaintiffs, are not bona fide purchasers without notice, and took the note subject to all existing equities.
    Nothing was surrendered by the plaintiffs ; no receipt given. (Stalker v. McDonald, 6 Hill, 93.)
    III. The transfer of the note to the plaintiffs was fraudulent and void. s
    (1.) At common, law the transfer of a note to a person who had just ceased to be a director, by a company then about to fail, would be fraudulent; or the question whether fraudulent or not, should be decided as a question of fact. (1 R. S. 592, § 12.)
    (2.) The transfer is void under the revised statutes. (1 R. S. 591 and 601, § 64.) Or at least, the question should be distinctly decided. The testimony shows the company was then insolvent.
    (3.) This presumption is made positive by § 14 of 1 R. S. p. 591 and 592. And see sections 12, 13, 14, 15, 16, 17, pages 594, 595.
    That the defendant may take advantage of the illegality of the transfer, see Gage v. Kendall, (15 Wend. 640.) He shows the plaintiff’s possession is mala fides. (Olcott v. Rathbone, 5 Wend. 494.) A judgment against us here, would be no defence in a suit against us by the receiver on this note.

      D. Lord, in reply.
    I. Does the statute relied upon, apply to this kind of corporations? Banking associations are clearly within the letter of the statute ; yet it has been held, because these bodies have no boards of directors, that they are not within its provisions. (Gillett v. Campbell, 1 Denio, 520.) So here, these corporations have no stockholders, as those mentioned in the Revised Statutes must have ; and other circumstances show they do not apply. Here the creditors and the managers, or those in place of stockholders, are the same persons. The sections of the statute from 19 to 25, are excluded from application. But sections 14 to 18, and many others, are also totally inapplicable, because there are no stockholders, no surplus profits, and the like.
    II. If the revised statutes be applicable, this act is not prohibited by the 8th section. The first clause provides only for absolute transfers. The proviso shows the protection is not limited to one who pays money or property on the faith of it. It means one who takes the transfer in ignorance that it is not authorized; being intended to prevent collusive transfers and dispositions. The conveyance in the hands of the purchaser, not the property, is to be affected. The notice refers only to misbehavior of the officers or directors. So here, we took this by an ordinary corporate transfer, regular on its face, for a valuable consideration, and in ignorance of any wrong or want of authority of the officers. A contrary rule would cripple all active business corporations.
    III. This defendant cannot take advantage of it, if invalid. The statute does not make it void, but makes the directors liable. And if illegal, the transfer being executed, a third person cannot take advantage of the defect. (Hall v. Gird, 7 Hill, 586 ; Guernsey v. Burns, 25 Wend. 411.) The security of the plaintiffs was given up and cancelled. The policy was brought to the company, and their receiver produces it.

         Oakley, Ch. J. absent by reason of ill health.

   By the Court. Vanderpoel, J.

The note in suit was transferred to the plaintiffs on the 19th day of February, 1847, by Mr. Ogden, the president of the Alliance Mutual Insurance Company, under the following circumstances. On the 28th day of August, 1846, the plaintiffs took from the company a policy on the brig Mary Ann for $9600 ; the voyage to be from Baltimore to Port Maria, Falmouth, and Jamaica, to either first. On the day of the transfer of this note, the vessel had not been heard from for six months; but a vessel arrived at New Orleans, reported to have passed a wreck, and the name “ Mary Ann” was reported to have been seen on it. Mr. Ogden says, that he then gave to the plaintiffs for their los.s, the note in suit, with other notes as collateral security. He says his hope was, that the note would come back to the company, and that they would be able to pay the loss in cash; but in May, 1847, the company failed, and all its assets were passed over to a receiver. Aspinwall, one of the plaintiffs, had been a trustee of the company, and resigned on the 19th day of December, 1846.

The first question is, for what purpose was the note given 1 We consider it as having been given as a subscription note, or a premium note in advance, under the twelfth section of the charter of that company. Under the decisions we have made in a number of cases, affirmed by the court of appeals, this note must be regarded as a note liable to be used to pay the losses of the company. We so informed the counsel on the argument, and under this intimation, the discussion of that point was waived.

It is contended, that the transfer of the note was made by the president alone; and was not authorized by a previous resolution of the board of directors ; that it is therefore void, and passed no right or title therein to the plaintiffs. Without here considering the point, whether it lies in the mouth of the defendant to question the validity of the transfer, for the reasons assigned by him, we will inquire, whether the president had a right to make the transfer; and this involves the inquiry, whether this case comes within the provisions and prohibitions of the portions of the revised statutes relied upon by the defendant.

The revised statutes, (vol. 1, 591, § 8,) provide that “ no conveyance, assignment or transfer, not authorized by a previous resolution of its board of directors, shall be made by any such corporation of any of its real estate, or of any of its effects, exceeding the value of one thousand, dollars ; but that this section shall not apply to the issuing of promissory notes or other evidence of debt, by the officers of the company, in the transaction of its ordinary business; nor shall it be construed to render void any conveyance, assignment, or transfer in the hands of a purchaser for a valuable consideration, and without notice.” This provision is found in the statute “ to prevent the insolvency of monied corporations and it may well be doubted whether it extends to mutual insurance companies of this description. (Gillett v. Campbell, 1 Denio, 520.)

At all events, we are quite clear, that this act of transfer does not come within the mischief against which it was the object of the statute to guard. The act or charter creating the company, provides that all the corporate powers of the company shall be exercised by a board of trustees, and such clerks and agents and other persons, as said trustees may appoint from time to time.” The trustees appointed a president, and by a by-law, which it was competent for them to make, they provided, that the president and vice-president should have authority to pay claims upon the company, in full, or by compromise. It is in evidence that this loss was paid by the president, in the usual way, and that it was common for him to pay losses with notes. There is nothing in the case, to warrant the suspicion, that the claim was not fair, or that there was any collusion between the president and the claimant, to whom the note was transferred. It is, to be sure, alleged, that Aspinwall had been a trustee, and hence, it is argued he must have known that the company was insolvent, when he took a transfer of notes, in payment of his claim. The contrary, however, satisfactorily appears. The transfer was made on the 19th of February, 1847. Aspinwall resigned as trustee on the 19th of December, 1846, and the company continued to take risks and do business till it failed, in May, 1847. We are not, on the evidence in the case, authorized to conclude that the company was in point of fact, insolvent when the note was transferred; nor can we yield to the idea, that Aspinwall’s previous connection with the company, as trustee, can in any manner invalidate the transaction.

The whole scope of the statute “ to prevent the insolvency of monied corporations,” shows that its design, by the eighth section was, to prevent collusive transfers of the effects of such corporations. It surely could not have meant to interfere with honest transfers, made to pay their just debts. The ninth section, p. 591, clearly shows the penal effect which is to flow from the acts there prohibited. It provides, that “ no conveyance, assignment, or transfer by any such corporation when insolvent, or in contemplation of insolvency, shall be valid in law.” In the section next preceding, which prohibits a transfer without a previous resolution of the board of directors, the transfer is not declared void, if made without such authority. According to the familiar rule, 11inclusio unius est exclusio alterius,” there is a strong implication, that the legislature did not intend to declare all transfers void, if not authorized by a resolution of the directors. The implication is stronger, when the clause omitted is, as here, somewhat penal. The object of the eighth section was to guard against fraudulent transfers. The section employed to effect this object, seems to be rather directory in its character, than otherwise. But, if we are wrong in this view, we think another clause of the section shows that the transfer of the note in suit is not one of the transfers or assignments intended to be guarded against.

The concluding part of the eighth section provides, “ that the section shall not be construed to render void any conveyveyance, assignment, or transfer, in the hands of a purchaser for a valuable consideration, and without notice.” We consider the plaintiffs such purchasers. If a previous vote of the board of trustees were necessary, there is no evidence that they knew that such vote had been dispensed with. Though the president says, the notes were transferred to the plaintiff's as collateral security, yet they were transferred and applied as the twelfth section of the charter intended they should be applied. They were taken “ for the better security of dealers,” and were “ negotiated for the purpose of paying a claim ;” the very end which the charter intended they should serve. The consideration was not only valuable, but derives additional strength from the fact, that it is regarded by the charter as the principal one to warrant a transfer. Though the president says, his hope was, that the note would come hack to the company, and that they would be able to pay the loss in cash, yet it does not appear that the policy of insurance was retained by the plaintiff, or that the original claim continued alive. The most that the president can be understood to mean is, that he hoped to be able to pay the claim in money before the note matured ; a proposition to which the plaintiffs would, no doubt, have very readily acceded. We think it fairly inferrible that the policy was given up to the company, and that the plaintiffs parted with enough, within the case of Stalker v. M’Donald, (6 Hill, 93,) to make them purchasers for value, if the defendant were in a position to object that he came by it otherwise.

But, does it lie in the mouth of the defendant to urge the objection here urged to the manner in which the plaintiffs came by the note ? Can he ask protection as the maker of the note, on the ground that it was transferred to the plaintiffs, in fraud of the legal or equitatile rights of the defendant % How has he been defrauded 1 His note has served the very purpose for which he gave it to the company. It has served to pay a just claim of the company. It is not enough for the maker of a note to say, that it was transferred to the plaintiff who prosecutes it, without a valuable consideration; but to defeat a recovery on it, he must show that it was transferred in fraud, or to the prejudice of his rights. It is no defence to an action on a promissory note, that the property of the note is in a third person, and not in the plaintiffs. Unless the possession of the note by the plaintiffs, is mala fide, and may work some prejudice to the defendant, the latter is not entitled to be heard on the subject. (Guernsey v. Burns, 25 Wend. 411. Hall v. Gird, 7 Hill, 587.)

In the latter case, it was held, that it was no defence to a suit in chancery, instituted for the foreclosure of a mortgage, that the complainants solicitor, by an agreement between him and his client was to have part of the demand when collected, by way of compensation for his services ; and that even at law, the fact that the demand has thus been illegally bought or sold, constitutes no defence to the debtor, in the appropriate sense of the term. If the payees of the note here have authorized the plaintiffs to collect it, (which authority is involved in the transfer,) we cannot perceive on what sound principle the maker can be permitted to allege (the plaintiffs being in possession of the note,) that the plaintiffs did not pay value for it, or that a board of trustees did not vote for its transfer, unless he can show that he was defrauded, or lost some defence he might have had against the payees, had they retained it. Here, the defendant had no defence whatever against the insurance company, as the note was given for the purpose of enabling the company to pay claims. How were the defendants rights, in any respect, prejudiced by the transfer? It was not transferred in fraud of any of his rights ; and it does not lie with him to object to the manner in which the plaintiffs came by the note. We think the plaintiffs are entitled to judgment.

Judgment for the plaintiffs.

         Affirmed in the Court of Appeals, April 17, 1850.


author: By the Court. Sandford, J.

text:
    Mottram and others v. Mills.
    As between the drawer and acceptor of bills of exchange, the presumption of law that the acceptor is primarily liable for their payment, is not overthrown by evidence that they were accepted in respect of consignments of property ; it not being shown that the proceeds were insufficient ultimately to meet the bills.
    Such bills are not in any sense accommodation paper; and the drawer stands in the place of a surety for the acceptor.
    Where the holders of such bills, over due, agreed with the acceptors, that if they would transfer to a trustee all the consigned property, the holders wonld not hold the acceptors liable upon such bills beyond a specified sum, less than the entire amount, and the acceptors transferred the property accordingly ; it was held, that the drawer was thereby discharged.
    In general, the holder’s giving time to the acceptor or discharging him, will be a discharge to the drawer.
    Sept 14;
    Nov. 11, 1848.

      Assumpsit on a bill of exchange for £1000, drawn by the defendant on Major & Wallace, of London, in favor of the plaintiffs, dated November 6th, 1845, and payable sixty days after sight. The bill was accepted by Major & Wallace, November 26th, 1845; and when due was protested for non-payment, and notice thereof regularly given to the defendant. At the trial, the latter read in evidence in his defence, a composition deed or indenture, executed by and between Major & Wallace of the first part, their creditors, holders of certain bills drawn by the defendant and accepted by M. & W., of the second part, and certain persons as trustees of the third and fourth parts; bearing date December 23, 1846. Some of the principal .recitals and provisions of this instrument, so far as they bore on the point decided, will be found in the opinion of the court. It commenced with setting forth the failure of Major & Wallace in January, 1846, at which time they were under outstanding acceptances of the defendant’s bills of exchange, to the amount of about £22,000. After reciting the dealings between M. & W. and the defendant, as set forth in the opinion of the court; the indenture recited that after their suspension, M. & W. placed in the hands of the trustees, the property consigned and receivable from the defendant, to have the proceeds applied towards the payment of such acceptances. That this was done on the condition that Major & Wallace were not to be held liable upon those acceptances to a greater extent than the clear balance of the proceeds of the defendant’s consignments which they had converted and applied to their own use, (exclusive of his acceptances theretofore paid by them.) That such clear balance on taking an account thereof, was £11,074 15s., up to the time when M. & W. stopped payment. That they being unable to pay their creditors in full, had proposed a composition of five shillings in the pound on the £11,074 15s., to be accepted in their notes at three, six and nine months, to be accepted in full of their debts, including the foregoing balance of £11,074 15s. That a dividend of four shillings in the pound was to be paid to the hill holders, out of the assets which had been so placed with the trustees, upon receiving which with the composition notes, the holders of the bills were pursuant to the arrangement on which the property was delivered to the trustees, to execute covenants not to sue M. & W. That the dividend of four shillings had been paid, and the composition notes had been delivered accordingly. The instrument, after various provisions as to the property still held by the trustees, then contained covenants on the part of the holders of the bills with Major & Wallace, that they would not sue, arrest, attach or take in execution, or otherwise molest them or either of them, or their property or effects, upon or in respect of those bills, unless they should make default in paying the composition notes or some of them, and a violation of this covenant was to operate as an absolute discharge to M. & W. of the violating creditors’ bills of exchange. That upon payment of the composition notes at maturity, the bill holders would, at the request and expense of M. & W., deliver to them a valid and effectual release, discharging them from the bills of exchange, and actions, suits, claims and demands, on account thereof; provided, however, and it was expressly agreed, that it should be lawful for such bill holders to execute those presents without prejudice to their rights and remedies upon the bills against any persons other than M. & W., and against any collateral securities; and that notwithstanding the indenture, they should be at liberty to enforce the bills against such other persons in the same manner as if it had not been executed.
    The indenture was executed by the bill holders under their hands and seals, and amongst others, by the plaintiffs, Thomas Mottram & Sons.
    It was admitted, that the dividend of four shillings in the pound was paid to the plaintiffs, and the composition notes of Major & Wallace were delivered to the trustees as expressed in the indenture, before the indenture was executed by the plaintiffs.
    The cause was tried June 5th, 1848, and a verdict was taken for the plaintiffs by consent, subject to the opinion of the court.
    J. Anthon, for the plaintiffs.

      E. W. Stoughton, for the defendant.
   By the Court. Sandford, J.

The acceptors of the bill in suit, (Major & Wallace,) are, presumptively, the parties primarily liable for its payment. The burthen of proving a different relation between the drawer and the acceptors, rests upon the latter. The plaintiffs rely upon the recitals in the composition deed, produced in evidence by the defendant, as testimony sufficient to prove that for nearly the whole amount of the bill, the drawer was primarily liable. The deed states, that Major & Wallace had various dealings, in their business as merchants, with the defendant, in the course of which he was in the habit of consigning goods to them, both on his and their joint account, and on his individual account, and of drawing bills upon them generally against such consignments. That when Major &> Wallace suspended payments, they had in their possession goods which the defendant had consigned to them on joint account, and bills of lading of other goods on the way consigned in the same manner; that other consignments from him were expected, and they expected a surplus from two consignments which had been deposited with a London house to secure bills accepted and advances made for him by that house. That when they suspended, they had received from the proceeds of the defendant’s previous consignments, £11,074 los. more than they had paid on account of bills drawn by him ; but the bills which they had accepted for him, and which were still outstanding, amounted to £22,044 10s.

Leaving out of view for the present, the assets in the hands of Major & Wallace, including the admitted balance in respect of previous payments; this statement falls entirely short of proving as to the residue of the amount of the outstanding bills, that the defendant was primarily liable to pay such residue, as between himself and Major <fc Wallace. It does not appear that the bills were in any sense, accomipodation paper; and as to the state of the accounts between the parties, the deficiency, if there were one, may have been caused by losses on the joint adventures. There is no statement to the contrary, and it was incumbent on the plaintiffs to prove that it belonged to the defendant to pay the deficiency.

But we are bound to take into consideration the assets in hand, including bills of lading, and the balance due from Major Wallace on- the previous consignments. It does not appear that these were insufficient to- meet all the outstanding acceptances ; and the whole statement in the deed is consistent with the fact, that on applying all they had received from the defendant, and were certain to receive by the bills of lading in their possession, and charging him with all payments and with the bills then outstanding, the balance would be in his favor.

The evidence derived from the recitals in the deed, is not sufficient to establish affirmatively, that as between the defendant and Major & Wallace, he ought to pay this bill, or any of it; and it is entirely insufficient to overthrow the contrary presumption arising from the acceptance of the bill.

The ordinary relation of drawer and acceptor thus existed between the defendant and Major & Wallace the latter were the primary debtors to the plaintiffs, the holders-of the bill,-and the defendant was their surety for its payment.

The defendant contends that the plaintiffs, by giving time to the acceptors,, and agreeing to exonerate them, without his assent,, discharged his liability. The deed is dated December 23d, 1846, and it recites an agreement made and carried into execution in January preceding, between Major & Wallace of the one part, and the plaintiffs and other holders of their acceptances, of the other part. It does not appear whether this agreement was by parol, or in writing, nor is it material. Its terms were, that Major <fc Wallace should transfer and deliver to a trustee for the bill holders, all the goods consigned by the defendant, and all the bills of lading which M. & W. then had in hand, together with the right to the surplus of the property lodged as security with the London house; the proceeds of all of which were to be applied to the discharge of the bills, pro rata. This transfer was to be upon the express condition, that Major & Wallace were not to be held liable upon or in respect of such outstanding bills, to a greater extent than the admitted balance of £11,074 15s., which they had received from the defendant beyond their payments for him, and which balance they had applied to their own use. There was no reservation of the rights of the holders of the bills against other parties, as is attempted in the composition deed. It was an agreement made upon a valuable and sufficient consideration, and it was fully performed on the part of Major & Wallace, as is shown by the subsequent deed. The plaintiffs were therefore obligated, according to its terms, never to sue for or demand from the acceptors, more than the plaintiffs’ proportion of the £11,074 15s.

As to the residue of the plaintiffs’ bills, they were not only precluded from suing the acceptors, but they had in effect discharged them from its obligation.

It is a general rule, that the holder’s giving time to, or discharging the acceptor of a bill of exchange, will be a discharge of the drawer. (Story on Bills, § 425.) The agreement of January, 1846, operated in both modes in favor of the acceptor, and being an entire acquittance as to a part of the bill, prevented the holders from suing the acceptors upon the bill at large, for an indefinite period. We can perceive no reason why the general rule does not apply to this case, and we must hold that the defendant was discharged by the arrangement made by the plaintiffs with the acceptors in January, 1846.

There would have been more difficulty in sustaining the defence, if it rested wholly upon the stipulations contained in the compromise deed of December, 1846; but we are spared the necessity of deciding the point. On the other ground, the defendant is entitled to judgment.


text:
    Warner v. Paine.
    Where, in an action for a libel, the defence set up is that the words were used in the course of a judicial proceeding, and were therefore privileged, the true question is whether they were relevant and pertinent to the matter before the court.
    As respects matter pertinent and material, the privilege of parties, attorneys, and counsel is complete, and malice cannot be predicated of what is said or written by them.
    If a fact be material and pertinent, a party is privileged and protected in setting it forth in an affidavit, though he may have employed stronger and coarser words than are consistent with the rules of good taste and proper decorum.
    Accordingly, where, in an affidavit to oppose a motion, the defendant alleged that the plaintiff had been guilty of perjury in his affidavit in support of the motion, it appearing that the falsity of the statements in the plaintiff’s affidavit was a material question; Held, that no action would lie against the defendant for a libel.
    Sept. 10;
    Nov. 11, 1848.
    This was an an action for a libel, in charging the plaintiff with having committed perjury. The facts of the case are as follows:
    In the month of May, 1846, a bill was filed in the court of chancery, by Frances L. Warner, against the defendant and two others, in relation to a certain judgment held by the defendants against the now plaintiff, in which bill it was alleged, upon information and belief, that the defendants Painea nd Clason, had purchased the judgment for the purpose of speculation and contrary to the statute, said defendants being attorneys at law. In order to obtain an injunction against Paine and Clason, the plaintiff in this suit made his affidavit, stating that the allegations in the bill, which were upon information and belief, were communicated to the complainant in the bill by himself, and that to the best of his knowledge and belief, such information was truly given, and such facts and matters stated in the bill, were truly stated. Upon this affidavit, an order was granted, that the defendants show cause why the injunction prayed for should not be granted. Upon the hearing of the order to show cause, an affidavit of the defendant Paine, was read in opposition to the motion, in which, after denying the facts set up in the affidavit of the plaintiff, he averred that the plaintiff, in swearing that he communicated such facts to Frances L. Warner, and knowing the same to be true, “ had been guilty of perjury.”
    The cause was tried on the 19th day of April, 1848.
    Upon the trial, the plaintiff proved by a clerk in the office of the clerk, that a certain bill in chancery in which Frances L. ■ Warner was plaintiff, and the defendant and others were defendants, together with affidavits of the plaintiff and of the defendant, were read on a motion for an injunction, on the 9th of June, 1846, and that such papers were found by the witness in the clerk’s office. The plaintiff’s counsel then offered to read the papers in evidence. The defendant’s counsel objected, on the ground that there was no evidence that such a bill in chancery had ever been filed, nor of the date of the filing of such bill, and that unless the bill was filed, there was no suit pending within the declaration. The judge overruled the objection, and the defendant’s counsel excepted. The plaintiff then read in evidence the bill of complaint, the affidavit of the plaintiff, and also the affidavit of the defendant. The witness, on his cross-examination, testified that there was no bill on file in the court of chancery, in the case of Frances L. Warner v. W. H. Paine and others. The plaintiff then called Clason, one of the defendants in the original suit, who testified that in November, 1847, he moved that the bill in the case of Frances L. Warner, be put on file nunc pro tunc, and that an order to this effect was entered. This witness also proved the handwriting of the defendant, to the affidavit. The plaintiff rested, and the defendant moved for a non-suit, on the ground that the words alleged to have been spoken, were a privileged communication, and that no actual malice had been proved; and that the papers read had not been proved as laid in the declaration.
    The court denied the motion. The jury found a verdict for the plaintiff of $250.

      J. Anthon, for the plaintiff.
    The colloquium need not be proved; for the charge of perjury is of itself actionable.

      The bill of complaint alleged, that the defendant “ had purchased a certain judgment contrary to the statute, &c.,” as complainant was informed, &c. The plaintiff, to fortify the bill, stated in his affidavit that he had communicated that information to the complainant, and that he had received it from one Griswold, who he believed was interested with Paine in such purchase. Paine, in his affidavit in reply, admitted the purchase, but denied that he had made it contrary to the statute, but on the contrary, stated that he had made it for the benefit of his client. Having thus answered, fully, all that was in issue, he went out of the way, to assail the plaintiff’s character, and his motives, by charging him with wilful and corrupt perjury. The court of chancery had cognizance of the main fact, “ the bare truth of the charge.” The motives of the parties, and whether wilful and corrupt perjury had been committed, was not in issue, and that court ha$ not power to try it. The attack was wanton and malicious, and made, not to advance the cause of justice, but to gratify passion. There is no reason, therefore, why it should be deemed privileged, or should be protected. (Thorne v. Blanchard, 5 John. 508. Hastings v. Lusk, 22 Wend. 410. Rinig v. Wheeler, 7 Cow. Rep. 725. Gilbert v. The People, 1 Denio, 41.)

      A. W. Clason, Jr., for the defendant.
    I. The declaration avers that the libel complained of was in answer to an affidavit made in a suit in chancery.- A suit in chancery must be proved. No bill was ever filed. A suit in chancery cannot be commenced without filing bill. (1 Barb. Ch. P. 1; 1 Dan. Ch. Prac. 454-89. 5 Paige, 80.)
    II. A false oath is not perjury, except in the course of judicial proceeding. Unless a suit in chancery was pending, perjury could not have been predicated on the affidavit of Warner. (Young v. Miller, 3 Hill, 22; Brooker v. Coffin, 5 Johns. 188.)
    III. The assertion was in a judicial proceeding, in reply to a judicial proceeding, and is privileged. (Hastings v. Lusk, 22 Wend. 410; Astley v. Young, 2 Burr. 807; Hodgson v. Scarlett, 1 B. & A. 232 ; Blanchard v. Thorne, 5 Johns. 508; Stark. on Slander, 219.)

      IV. Want of pertinency and materiality were not shown. This is indispensable ; even within the dicta in Hastings v. Lusk. It is averred in the declaration, and ought to have been proved.
    V. If not completely privileged, express malice should have been shown. (Washburn v. Cooke, 3 Denio, 110.)
   By the Court. Vanderpoel, J.

The plaintiff contends that the words in the defendant’s affidavit, imputing perjury to the plaintiff, were not relevant or pertinent to the matter before the chancellor. The defendant contends, that the words or clause in question were pertinent, and that it must be treated as a privileged communication or publication. The fate of the verdict depends upon the result of this inquiry.

There are two classes of privileged communications, recognized in law, in reference to the action of slander. In one, malice is not always to be inferred from the mere speaking or publishing of the words ; but the plaintiff will be able to sustain his action of slander, if he can satisfy the jury by other proof, that there was actual malice on the part of the defendant. (Hastings v. Lusk, 22 Wend. 410.) In the other class, Walworth, Chancellor, says, the privilege is an effectual shield to the defendant; so that no action of slander can be sustained against him, whatever his motive may have been, in using the slanderous words. It was also held by the Chancellor in the above case, that the privilege of counsel in advocating the causes of their clients, and of parties, who are conducting their own causes, belongs to the latter class, when they have confined themselves to what was relevant or pertinent to the question before the court; and that the motives with which they have spoken what was relevant or pertinent to the cause cannot be questioned in an action of slander.

The plaintiff here saw fit to add to the bill in chancery, filed by Frances L. Warner, to enable her to procure an injunction, his own affidavit, that as to the facts stated in the bill to be on the information and belief of the complainant, he was her informant, and that such information was truly given. It appears from the affidavit, that he had also informed her that the defendant and his partner, Ciasen,' had purchased a claim or judgment with the declared intention of proceeding immediately to execution and a creditor’s bill. To this the defendant Paine, in an affidavit read to oppose the motion for an injunction, answered, that he purchased the said judgment and other securities, not for himself, but for his client, and that he had so repeatedly informed the said Warner, both by letter and in person ; and that Warner in his affidavit, or in swearing that he communicated such fact to Frances L. Warner, and knowing the same to be true, “ had been guilty of perjury.”

It is said, the defendant was not justifiable in imputing to the plaintiff, so directly, the crime of perjury. It was certainly competent for the defendant to say, that the allegation of the plaintiff in his affidavit was untrue or false. This was held in Ashley v. Younge, (2 Bur. 807.) The opinion of Lord Mansfield, in that case, goes far towards sustaining the defendant here. It was an action for a libel contained in an affidavit of the defendant in resisting a motion in the Court of King’s Bench, made by the plaintiff, in which the defendant stated that the plaintiff, in his affidavit, had “ falsely sworn against him.” Lord Mansfield says, “ there can be no scandal, if the allegation is material; that here was a charge against the defendant in a court of justice, made upon oath, and supported by the affidavit of the plaintiff, and in the affidavit of the defendant, in answer to this complaint, he mentions the charge upon him, and denies it, with this conclusion of calling it1 what Sir John Ashley has so falsely sworn against him’” It was held that the defendant had a right so to characterize the plaintiff’s affidavit. Lord Mansfield stopped the counsel for the defendant, remarking that it ought not to be made a matter of question, and that all the judges were clear in the same opinion, that if the matter of fact be justified, the epithets fall to the ground; that the affidavit was taken notice of by the court, at the time when the affidavit was read, and disapproved of as to the word “falsely,” which was thought too rough and coarse an expression, and yet, was not judged to require a formal censure from the court.

We cannot perceive why this rule and this reasoning are not applicable to the case under consideration. Had the defendant stated, that the plaintiff had sworn falsely, it would be equivalent to saying, he had committed perjury. The only difference between this case and Ashley v. Young is, that the affidavit here exceeds the one* in the other case in epithetical coarseness, the sense and meaning being the same in both cases. The matter of fact, the materiality of the fact, must only be looked to, in determining whether the matter be libellous. If the fact be material and pertinent, the party setting it forth in his affidavit is privileged and protected, though he may have employed stronger and coarser words than may consist with the rules of good taste and proper decorum. For a violation of the latter rules the court may censure, and perhaps expunge, as was intimated by Lord Mansfield in the case cited: but mere coarseness cannot divest the party of the shield which the fact gives him.

We find it quite difficult to come to the conclusion, that the charge of wilful false swearing here was not pertinent to the matter before the vice-chancellor. The plaintiff had given the complainant, as he alleges in his affidavit, all the information stated in her bill to be on information and belief. The veracity of the complainant, to the mind of the defendant,' may have been a material question, as it was on his alleged information that the principal statements in the bill rested. The defendant, after this, was not restricted to a mere denial of those facts; nor to the simple statement that the plaintiff was in an error, in respect to them. It was competent for him, if he had reason to think his interest in the suit would. be advanced thereby, not only to say that the affidavit of the plaintiff in whole or in part, was false, but wilfully false, which is tantamount to what he did state; Hodgson v. Scarlett, (1 B. & Ald. 232 ;) was an action for defamation, against the late Lord Abinger, for words spoken by hM as counsel in a cause, pertinent to the matter in issue. The language of the defendant there was very strong. It was, that “ Hodgson was a fraudulent and wicked attorney, and that the act done by him was one of the most profligate things he ever knew done by a professional man.” The plaintiff was nonsuited on hts opening; and the court, in full bench, sustained the nonsuit. Bayley, J. says, if the epithets were not warranted, the judge, in his summing up, might set it right; but that there were facts in the case that would nonsuit strong expressions on the part of the defendant. The court held, that an action for defamation will not lie against a barrister for words spoken by him as counsel in a cause, pertinent to the matter in issue. If the facts be pertinent or relevant, the party using the words comes within the protection of the law, and this protection will not be forfeited by the use of strong language. As Lord Ellenborough said, in the case last cited,1 there are hardly ever any expressions of discommendation, in which there is not some excess.” ’

The privilege of parties, attorneys, counsel and solicitors, is complete as to matter pertinent or material, and malice cannot be predicated of what is so said or written. (Gilbert v. The People, 1 Denio, 41.) There, the defendant commenced a declaration which he drew in a justice’s court, with matter palpably irrelevant and vituperous. No sane man could have believed it could have any legitimate connection with the suit; and the court justly held the author of it responsible. But where matter is put forth by a party, or his attorney or counsel, in the course of a judicial proceeding, which may possibly be pertinent, courts should not, and will not, feel disposed so to regard it as to deprive its author of his privilege and protection. I concur in the sentiment of our present Chief Justice arguendo, in Ring v. Wheeler, (7 Cow. 729,) that counsel should not be embarrassed by continually balancing in his mind whether the remark he is about to make be slanderous or not. The privilege to parties to a legal proceeding, or to their attorneys or counsel, is absolute and unqualified, if what they say or state be pertinent, and it is difficult, if not impossible, to find a case where either has been held liable, except where the matter spoken or published was grossly and palpably impertinent. Where it is fairly debateable whether the matter is relevant or not, we would incline to give the party or counsel using the words, the benefit of the doubt which may fairly exist as to its pertinency. In this case, we consider the matter alleged to be libellous, relevant.

There is another class of cases, which belong to privileged communications in the course of judicial proceedings. It is where words are used in good faith under a belief that they are relevant and proper. (Hastings v. Lusk, 22 Wend. 421.) In cases belonging to this class, malice in fact may be inferred from the language of the communication itself, as well as from extrinsic evidence. This we held in Suydam v. Moffat, (1 Sandf. R. 459.) The present case does not fall within this class. We regard the defendant here as privileged, so that no one can allege that he acted with malice. A nonsuit must be granted, under the stipulation to that effect in the case.