author: Henry H. Anderson, Referee. By the Court.—Gildersleeve, J.

text:
    THE CENTRAL NATIONAL BANK OF THE CITY OF NEW YORK, Appellant v. LEONARD D. WHITE, et. al., Respondents.

      Liability of defendants to repay the bank, plaintiff, moneys received by them,from one Sanford, a former cashier of the bank, in the shape of cashier’s checks, on account of Sanford’s personal stock speculations.
    Between June, 1SGG, and July, 1869, plaintiff made pinchases and sales of stocks, securities and gold, through the defendants, as brokers, and these dealings were managed and directed by Sanford, who gave all orders to defendants that were brought to their office by plaintiff’s clerks or messengers, and defendants were constantly receiving cashier checks, drawn by W. H. Sanford, cashier, upon the plaintiff, which were paid by plaintiff in the usual course of business through the clearing house. The defendants received in such dealings upwards of one hundred such checks, aggregating half a million of dollars, and no question or objection to the payment of these checks was ever made until July 1, 1809, when Sanford absconded after appropriating to his own use stocks, securities and moneys, of plaintiff and its customers. This action seeks to recover from defendants the amount of fourteen of the checks, selected out of the one hundred checks by plaintiff’s counsel, on the ground that the money represented by these checks, and so paid to defendants, "were for use in Sanford’s private stock speculations, and that defendants knew actually or constructively what Sanford was doing. After Sanford’s defalcation the plaintiff called upon defendants and was permitted to see Sanford’s accounts, as kept by defendants, and then informed the latter that Sanford had been speculating on his own account. After receiving this information, defendants discovering certain balances in favor of Sanford with other brokers, they brought an action against him and recovered about $2,000, by default, upon the theory that the transactions in question were with Sanford individually, and that he was their customer and not the plaintiff. Plaintiff’s counsel claimed that this action by defendants against Sanford, and the judgment entered and enforced against Sanford’s individual property, constituted an election by defendants to consider Sanford as their customer in these transactions, and precludes the defendants from insisting that the plaintiff and not Sanford was their customer in these transactions in question, and that such act precludes them from contesting that question in this action.

      Held, that this legal proposition of the plaintiff’s counsel cannot be sustained either by principle or by authority. The doctrine invoked is “ the election of remedies.” This doctrine cannot be invoked and made available beyond the point of precluding the defendants, after suing Sanford on the account, from proceeding against the plaintiff to recover any balance not realized in judgment against Sanford. Such action on the part of the defendants cannot create a remedy in favor of the plaintiff that did not exist before the action. The relations between the bank and defendants existed and were fixed before Sanford absconded, and if the dealings before that time were with the hank, nothing that plaintiff’s president said to defendants, and no action taken by the defendants in consequence thereof, could change the previous existing relations. The cases cited by counsel do not sustain the proposition he seeks to establish in this case. They do not go further than to hold that where the plaintiff has two inconsistent remedies and adopts one of them he cannot afterwards resort to the other. The referee’s conclusion upon the whole case, and the judgment entered in pursuance thereof, are correct.
    Before Freedman, P. J., Dugro and Gildersleeve, JJ.

      Decided July 5, 1892.
    Appeal from a judgment entered upon the report of a referee dismissing’ the complaint.
    The facts and points in the case appear fully from the opinion of the court and the following opinion of the referee before whom the case was tried.
   Henry H. Anderson, Referee.

“ Theplaintiff, a bank organized in the city of New York, had a large number of customers who bought and sold gold, stocks, bonds and other securities, through the agency of the bank, the securities being kept by the bank to be used subject to the order of the customer. The entire charge of this business, the custody of the securities, purchase and sale of the stocks, and the correspondence with the customers in relation to the same, were entrusted to the cashier of the bank. Neither the directors nor any superior officer exercised any supervision over him ; he was left with unlimited authority to buy and sell, and with power to do whatever he pleased with the securities. He made his purchases and sales through the agency of the defendants, who were brokers in Wall street. The purchases were made by him through the agency of the runners of the bank, those messengers who were in the habit of collecting and paying out whatever moneys were not collected or paid out over the bank counter, and the orders were transmitted through these runners, or stocks purchased or sold, as the case might be, and, when purchased, the same were paid for by the cashier’s check, that is to say, the check of the cashier drawn upon the bank itself.

“ The entries upon the books of the defendants were originally in the name of W. H. Sanford, cashier. After a while the word cashier was dropped in the ledger, although numerous purchases were entered in the blotter, the book of original entry, in the name of Sanford, as cashier, and carried forward to the ledger without the addition of,cashier. This circumstance, rather peculiar in itself, is not explained, the absence of explanation being accounted for by the death of the bookkeeper. Each one of the partners who is living denies that he had any knowledge of the books being kept in that way, and also swears that he knew of no transaction had with Sanford which was not believed by him at the time to have been on account of the bank.

“ In the summer of 1869, Sanford, the cashier, absconded, and it was found that he had absorbed or made way with, in some manner, the greater part of the securities which the bank was supposed to have on account of the various customers dealing with it in that behalf.

The president called upon the defendants, who showed him their books and accounts which they called the accounts of the bank with them, and he thereupon said that the cashier had no authority to act in respect of such matters as he had done.

The defendants, relying upon this statement, or upon the spur of this statement, immediately attached certain property of Sanford’s, found in New York, for the bal-. anee of accounts then standing, upon their books, and recovered a portion of their claim by default out of the attached property. This suit was brought to recover the amount of certain of the cashier’s checks delivered to the defendants in payment for securities purchased, as money had and received to the use of the bank, and the plaintiff insists that the defendants are estopped to deny that this was the private account of Sanford, the cashier, by reason of their election to pursue Sanford in the attachment suit, and the plaintiff’s counsel has urged, with great ability and earnestness, numerous decisions bearing upon the subject of election, claiming that they establish the legal proposition maintained by him.

“I have made a very careful examination of these decisions, but cannot bring myself to agree with the plaintiff’s counsel that the proposition urged by him can be sustained, either upon principle or by precedent. The defendants, acting upon representations made by the plaintiff, balanced the account as it stood, and sued the cashier. It may very well be that having made this election to follow tlie cashier, the defendants could not maintain a suit against the bank for the same balance, but an election between two existing rights of action or remedies can hardly be construed as also establishing in favor of the other party a right of action which did not exist at the time the election was made, and which could only exist by reason of such election. At the time that the defendants brought this suit against Sanford the bank had no cause of action against them. Bringing such suit certainly did not create a cause of action. The case is an extraordinary one, and it seems strange that such large transactions could have been conducted so loosely, both on the part of the bank and on the part of the brokers ; but I think it is one of those cases where the plaintiff, by its own neglect, has justified the defendants in treating all the transactions with Sanford as conducted in behalf of the bank, and has relieved them from any responsibility by reason of the misconduct of the plaintiff’s officer. The cashier’s checks were all honored. The defendants had no notice of the misappropriation of the securities belonging to the customers, and which were, perhaps, sold through their agency. The long course of recognition of the cashier’s checks on the part of the bank justified the defendants in believing that the drawing of such checks was known to, and authorized by, the plaintiff. I have, therefore, dismissed the complaint.”

Martin & Smith, attorneys, and George A. Strong of counsel, for appellant, argued:—

I. There is absolutely nothing in the alleged defences in this action. The defences attempted were three in number—estoppel, negligence, and payment. The latter may be summarily dismissed. Defendants sought to make out that Sanford had repaid to the bank all moneys which he abstracted by means of cashier’s checks. The referee found against that contention. In spite of his refusal, defendants insisted on inserting in the printed case the evidence upon this issue. Of course, they cannot retry it now. A respondent cannot urge on the appeal a point ruled against him on the trial. Hickey v. Taafe, 99 N. Y., 204, 210; Wangler v. Swift, 90 Ib., 44. A disposition as summary may be made of the defence of negligence. If defendants believed, and had reason to believe, that Sanford in all these transactions was acting for the bank, this, of itself, is a sufficient defence, and a further defence of negligence, if there be one, would be unnecessary. If, on the other hand, they knew that Sanford was really stealing bank moneys, then all the negligence in the world would not entitle them to collude with him in the operation and receive some of the moneys. It has never yet been held by any court that if A discovers that B’s employer is careless in the matter of supervision, he may co-operate with B in robbing him. Indeed there is no hint of any such proposition in the referee’s findings. He limits himself to the fact of absence of supervision, but nowhere intimates that this constitutes a defence, and no such defence is pleaded. The defence, and the only defence which the referee sustains, is that of estoppel. In various forms he presents this proposition. As already suggested, it involves two entirely distinct propositions, both of which must be found for defendants or the defence fails, (a). Defendants believed that Sanford was acting for the bank. (b). This belief was justified by the bank itself. There was a complete failure to establish the other element of the estoppel, that the bank was responsible for this alleged belief that Sanford was speculating for it. Of course, this question is immaterial, if the evidence establishes that defendants, or their employes, knew that Sanford was speculating on his own. account. For in that case there is no effect, whatever the conduct of the bank might have justified them in believing. But this additional finding is indispensable to a successful defence. If defendants could convince the court that, in truth, neither they nor their agents knew or suspected what Sanford was really doing, but, on the contrary, honestly believed that he was speculating for the bank, it would avail them nothing, unless they could also show that they were justified by the bank in so believr ing. It is not pretended that the bank made any representations to defendants to this effect. On the contrary, it is expressly found that none of its officers ever met any of the defendants until after Sanford absconded. Defendants had only Sanford’s own acts and declarations as to his authority, which are, of course, wholly insufficient. Devens v. Mech’s, etc., Co., 83 N. Y., 171; Eaton v. Delaware, etc., R. R. Co., 57 N. Y., 390. But they say, as a last resort, these cashier’s checks were always paid by the bank. In other words, the success of Sanford’s scheme to defraud and rob the bank constitutes a reason why the moneys cannot be reclaimed. Let us see just what the situation was. The bank was accustomed to buy and sell securities for its correspondents. Such transactions were always for cash. It was the cashier’s duty to pay for the purchases, and that was the extent of his authority. It is evident that in the execution of this duty he would have frequent occasion to draw these cashier’s checks, and when they returned to the bank for payment they would, of course, be paid. They would then come into his possession, or that of clerks under him. This being so, he took advantage of his opportunity to draw and deliver to defendants the checks used in his speculations through them. They deposited these checks in their own bank, which sent them in through the Clearing House to plaintiff, and they were thus paid. This is all on which it has been held that plaintiff is estopped to complain of the robbery. It is, we submit, entirely insufficient. It is apparent that nothing about the check would show whether it was paid out in a legitimate or illegitimate transaction. The bank was constantly buying securities for its correspondents, and paying for them in these checks. Its cashier was the one who had charge of this business.- When one of these checks came in, if any of his superiors had seen it, instead of merely clerks under him, the natural presumption would be that it had been paid out in a proper transaction. There was absolutely nothing to show the contrary. The payment, therefore, of the checks was no ratification of his act in issuing them in such transactions. Ratification involves full knowledge of all material facts. King v. Mackellar, 109 N. Y., 223. Nor can the payment be claimed to have been a voluntary one, not to be recalled. That also requires full knowledge. Duncan v. Berlin, 60 N. Y., 154; Lake v. Artisans’ Bk., 3 Abb. Ct. App. Dec., 15. This defence also involves the claim, that the payment of these checks by the bank, which, in point of fact, did not know that Sanford had used them in his own speculations, estops it from complaint as against defendants, who did know this fact. In other words, when it is defendants, who had the fullest knowledge, and plaintiff, who in its ignorance was being deceived and robbed, the latter must be held to be estopped, as against the former. Such an application of this doctrine of equity has not often been suggested.

II. Under the circumstances of this case the only possible defence would be to show that Sanford had actual authority from the bank for the transactions carried on in his name. We have tried, at some length, to show that even upon defendants’ theory the defence failed. We will now briefly indicate our contrary theory of the burden necessarily resting upon them. Sanford’s operations were speculations “ pure and simple,” as defendant Morris expressly admitted. The bank itself having no power to engage in such speculations, there could be no implied authority to Sanford to engage in them on its behalf. There can be no presumption that a corporate agent has a power not possessed by the corporation itself. Alexander v. Cauldwell, 83 N. Y., 485-6. Whoever seeks to hold one person for the acts of another must show the latter’s authority. Freedman, J., Dabney v. Stevens, 10 Abb. N. S., 44 ; affirmed, 46 N. Y., 631. That was an action stoutly litigated in this court, and which has since been often cited. No one will dispute the rule there laid down. Our present proposition, however, is that in the case at bar nothing will do hut proof of actual authority. It rests upon the uncontradicted fact that every entry relating to the checks in controversy represented the transaction to be for Sanford personally. Although on their face, therefore, they were Sanford’s transactions, defendants claim that the bank is to he responsible for them. In the nature of things there is but one way to make this out—to prove that in fact and in truth Sanford was acting for the bank. No p.la.im of ostensible or apparent authority can be sustained. Every case of apparent authority involves: (1.) A false but deceptive appearance given to the act by the alleged agent. (2.) A reliance by the other party upon this outward appearance. Now in the case at bar there is no evidence that even Sanford ever professed to be speculating for the bank. And there is no appearance to that effect. The entries on their face constitute an appearance that the transactions were for Sanford. The defendants could not have relied upon any contrary appearance, for the good reason that there is no contrary appearance to rely upon. That left nothing, therefore, but the necessity of proving that Sanford had actual authority to speculate for the bank.

Edwards & Odell, attorneys, and Walter Edwards of counsel, for respondents argued :—

I. This action was originally brought for money had and received. The amended complaint charges further that the defendants have knowingly received plaintiff’s money from their cashier for and on account of his private and individual transactions. This contention is denied in the answer, and is completely controverted by the evidence. The referee has found the contrary as a fact. There is no question but the transactions, as first commenced, were for plaintiff’s account. The first transactions were in 1866. These were purchases and sales made over defendants’ counter, and no separate entry of them appeared on defendants’ books. Also let it be noted here that while the dealings began in 1866, the two earlier ledger accounts began November, 1867, and were ended by February, 1868, yet the checks upon which this action was originally predicated were drawn, two in May, 1868, and all the others in 1869. The accounts rendered by-the plaintiff under the order for discovery show that in the years 1867, 1868 and 1869, defendants received cashier’s checks drawn upon the plaintiff to the number of one hundred, and aggregating about $500,000. This action seeks to recover upon fourteen of these checks which have been selected by plaintiff’s counsel after a careful and painstaking examination of all defendants’ books which he has been allowed to have in his own office for weeks for this purpose. It seems pertinent to ask by what possible means could defendants have been led to suspect that these fourteen checks were improperly issued -and the others rightfully. Where is the difference between these and the other eighty-six which is relied upon to charge these defendants with gross fraud in regard to these specified checks ? The general term of this court has held in this case that: The defendants dealing with the plaintiff had a right to assume that the cashier was acting under the plaintiff’s authority.” 37 N. Y. Superior Ct., 297.

II. The claim made in the seventh cause of action set forth in the complaint, in effect charges the defendants with gross frauds; no less a charge, indeed, than that they were conspirators with Mr. Sanford to defraud the bank. Such a charge should be proved beyond a peradventure. Fraud is never presumed. On the contrary, the legal presumption is, that every man, and particularly every official, does that which it is his duty to do. Rex v. Hawkins, 10 East, 211; Powell v. Millbourne, 3 Wilson, 355 : Hartwell v. Root, 19 Johns., 345 ; Bank of W. S. v. Dandridge, 12 Wheat., 69; Continental National Bank v. Koehler, 17 State Rep., 23 ; Spicer v. Spicer, 54 N. Y. Superior Ct., 280; Shultz v. Hoagland, 85 N. Y., 464; Bernheimer v. Rindskopf, 116 Ib., 428. The manner in which these dealings were conducted by the defendants repudiates all notion of fraud, conspiracy or knowledge of any wrong whatever, on the part of the defendants. All transactions were through the recognized messenger or runner of the Central National Bank, the plaintiff. All testimony agrees here, on behalf of defendants’ and plaintiff’s witnesses, of two such runners, both well known in Wall street, or among banks and bankers, as being employed by plaintiff. All messages, orders and communications were through these persons. The checks received were immediately deposited and sent to the plaintiff in the usual, regular and best way. When Mr. Wheelock called on defendants every book was freely opened before him. There is no element indicative of fraud. No attempt at concealment of any kind. Only a dealing with a bank official, through the bank’s well-known clerks and in the exact line of the officers’ duty. Indeed, most of the dealings are confessedly for account of and acknowledged by the plaintiff—only fourteen out of a hundred checks are at all questioned.

III. Mr. Sanford was plaintiff’s agent. The charge of all securities left with the plaintiff,' selling such securities and purchases and sales of stocks, bonds, gold or securities for or on behalf of the bank or its customers, were confided to him and formed part of. his official duty. Defendants dealt with him as representing the plaintiff and had a right to do so. It is well settled that where one of two innocent parties must suffer by reason of the acts of a third person, the loss must fall upon the one who has enabled such third party to occasion the loss. Rawl v. Deshler, 4 Abb. Ct. of App. Dec., 12, and same case, 3 Keyes, 572; Armour v. Mich. Cent. R. R. Co., 65 N. Y., 111; Bank v. N. Y., L. E. & W. R. R., 106 Ib., 195. Plaintiff by placing Sanford in control of this part of its business put it in his power to do all he did. The defendants had all the dealings and received all the checks and paid out the money, relying upon the authority plaintiff had conferred upon Sanford. Plaintiff, whose agent Sanford was, and not defendants’, must bear the loss caused by his Avrong conduct. Such dealings on the part of a corporation have been repeatedly held as holding out their agents as fully authorized; and in such cases the corporation is bound on the ground of implied authority. Hoyt v. Thompson, 1 Seld., 320; Lohman v. Erie R. R., 2 Sand., 39; Gillet v. Campbell, 2 Den., 520.

IV. This action, in form, is to recover for the plaintiff money had and received by defendants. In other words, to recover the amount of certain cashier’s checks drawn by Sanford and paid to the defendants. We allege that plaintiff has sustained no loss or damage by reason of said checks. Plaintiff’s contention is that Sanford misappropriated these checks, paid them to defendants for his own purposes, and that defendants, knowing that the checks represented the bank’s money, received them upon Sanford’s private account, and thereby plaintiff has suffered damage in their amount, which they ask to recover herein. Coles, plaintiff’s cashier, who succeeded Sanford, testified that all these checks were actually repaid to the plaintiff in money. Mr. Coles gives a detailed account of just how Sanford conducted his operations. He had charge of all bonds, stocks and securities left with plaintiff by its out-of-town customers. He sold these securities, and with the proceeds he made good his cashier accounts for all the cheeks he is alleged to have drawn improperly. The bank never sustained any loss until it met and paid the claim of these out-of-town correspondents for the securities so stolen by Sanford.

By the Court.—Gildersleeve, J.

The plaintiff, at the times hereinafter mentioned, was, and now is, a national bank, doing business in the city of New York. In June, 1866, William H. Sanford was its cashier, and continued as such until July, 1869. The defendants were, and now are, bankers and brokers in stocks and securities in this city. Between the dates above mentioned, plaintiff made purchases and sales of stocks securities and gold through the defendants. These dealings began prior to 1867 and continued until June, 1869; they were managed and directed by Sanford, plaintiff’s cashier, who gave all orders or directions to the defendants which were brought to defendants’ office by the clerks or messengers of the plaintiff. In the course of said dealings, defendants were constantly receiving cashier’s checks, being checks drawn by W. H. Sanford, Cashier, upon the plaintiff. The defendants received in such dealings upwards of one hundred of such checks, aggregating half a million of dollars. Those checks were immediately deposited by the defendants in their bank, and in the usual course of business presented to and paid by the plaintiff, through the clearing house. No question or objection to any of these checks was ever made until the commencement of this action. The plaintiff was in the habit of receiving from its customers stocks, bonds and securities, which were to be kept subject to their order. Such securities were in the custody and care of the cashier. On July 1, 1869, Sanford absconded. He had taken and appropriated to his own use all the stocks and securities. Subsequently the plaintiff was obliged to and did make good to its customers the value of such securities. All the cashier’s checks paid to the defendants were entered on the cashier’s account on the ledger of the plaintiff and on said account there were credits against each indicating that the same had been repaid to the plaintiff. These checks were all actually repaid to the bank, and Sanford’s cashier account was kept good. The account of these dealings on the books of the defendants was headed “ W. H. Sanford, Cashier,” at first; subsequently on the ledger the word “ Cashier” was omitted; one account was headed W. H. Sanford, stock account; ” one W. H. Sanford, gold account; ” and one account was headed “ Central National Bank.” All of the cashier’s checks paid to defendants were re-paid to plaintiff, either by those made against other parties or by moneys paid to plaintiff by Sanford. This action seeks to recover upon fourteen of the checks out of the one hundred paid to defendants, as aforesaid, which have been selected by plaintiff’s counsel after an examination of defendant’s books. It is claimed by the plaintiff that the moneys represented by these cashier’s checks, so paid to the defendants, were for use in Sanford’s private stock speculations, and that defendants knew actually or constructively what Sanford was doing.

The action was brought in August, 1869, for money had and received by defendants for the use of the plaintiff. It was first moved for trial in 1887. When the trial was nearly completed, and in April, 1890, plaintiff by consent of the defendants, amended its complaint and added a seventh cause of action. In this it alleges that the defendants had transactions as stock-brokers, in which they received from one W. H. Sanford, various sums of money as security for services to be rendered or responsibilities to be incurred, or for stocks to be bought or sold by them; that said Sanford paid moneys to defendants in the course of such transactions by his own individual checks, and at other times by means of checks drawn by him upon the plaintiff as its cashier. The plaintiff further alleges that such cashier’s checks could not be rightfully drawn or issued or used by Sanford save in the business of the plaintiff. But notwithstanding this, the defendants received certain cashier’s checks, from Sanford in his individual transactions, and passed the same to his credit. It then sets forth several checks, aggregating $62,521.88, that were received by the defendants. The complaint further alleges that the defendants well knew that Sanford was wrongfully abusing his authority, and was misappropriating moneys of the plaintiff by means of his power and authority as its cashier; and it demands judgment for the said several sums in the various causes of action set forth, aggregating upwards of $139,000, and for interest thereon for upwards of twenty-one years. The answer of the defendants admits the receipts by them of each of the checks stated and set forth in the complaint, and alleges that each check was so received by them in the transactions had for and on account of, and at the request of the plaintiff. They further allege that they never knew or suspected that Sanford was dealing on his individual account until after his defalcation had been discovered, and the president of the plaintiff called upon defendants and so informed them.

It appears from the evidence that when plaintiff’s president called upon defendants he was permitted to see Sanford’s accounts, and informed defendants that Sanford had been speculating on his own account. Shortly after receiving this information from plaintiff’s president, the defendants, discovering a certain balance in favor of Sanford, individually, with other brokers, brought an action against him and recovered about $2,000 by default, upon the theory that the transactions in question were with Sanford individually, and that he was their customer, and not the bank, the plaintiff herein.

The first position taken by the learned counsel for the plaintiff, in support of his claim herein, is that this action by defendants against Sanford, the judgment therein entered, and the enforcement of that judgment against Sanford’s individual property, constituted an election by defendants to consider Sanford as their customer in these transactions; that this election was final and conclusive, and precludes the defendants from insisting in this action that the plaintiff, and not Sanford, was the customer in these transactions in question. The learned counsel claims that this act of defendants established unalterably the important fact in respect of the identity of the party with whom the defendants were dealing; that by such act the defendants proclaimed Sanford to he their customer, the sole, party with whom they were deahng ; and that such act precludes them from contesting that question in this case. We are of opinion that this legal proposition of the learned counsel for the plaintiff cannot be sustained either by principle or by authority The doctrine invoked is the election of remedies.” Are the defendants by claiming in this action that the transactions in question were with the plaintiff, violating any of the well-established principles common to questions of election? We think not, for the reason that there has been no election in this controversy. When the plaintiff’s president gave the defendants information that induced .them to proceed against Sanford, there was a debit balance of some two thousand dollars; for this the defendants certainly had a claim either against Sanford or the bank. Plaintiff’s president told defendants Sanford was the man; therefore they sued him, and re-gained a portion of the money. No two inconsistent courses were then opened to the defendants, one of which they took, and the other of which is the course they now seek to take in this action. The doctrine of the election of remedies is not so elastic as to be stretched and made available beyond the point of precluding the defendants, having sued Sanford, from proceeding for the remainder of the balance against the plaintiff. Thus far we think it might be utilized. But it cannot be said to create a remedy in favor of the plaintiff, which did not before exist. The relation between the bank and the defendants was fixed before Sanford ran away, and plaintiff’s president called upon the defendants. If the dealings had been with the bank, nothing that the plaintiff’s president said to the defendants, and no action taken by the defendants in consequence, could change the existing relations. We cannot give our approval to the proposition that the defendants, By their election, not only waived a claim for $2,000, which they might have urged against the bank, but also created a claim in the bank’s favor for the amount of fourteen of these cashier’s checks, selected from the hundred checks that the defendants had received during these transactions. We do not think that any of the numerous cases cited by the learned counsel for the plaintiff satisfactorily support the proposition. They do not go further than to hold that where a plaintiff has two inconsistent remedies and adopts one of them, the same plaintiff cannot have recourse afterwards to the other.

In Fowler v. Bowery Savings Bank, 113 JST. 27, 450, the bank paid money to which plaintiff was entitled to one Finch; on learning this, plaintiff sued Finch for money had and received. Held, by so doing, he ratified the act of the bank in paying Finch, and so could not afterwards disaffirm it and sue the bank. In Tuthill v. Wilson, 90 N. Y., 423, which does not bear on the election of remedies, the court having decided the case on other grounds, it was held that the vendor could not enforce his claim against both the principal when discovered, and the agent who contracted in his behalf. In Conrow v. Little, 115 N. Y., 387, plaintiff finding the vendee had acted fraudulently, sued him as for a debt and seized on attachment the very paper he had sold. Held, that this affirmed the contract of sale, and the defendant, the printer with whom the paper had been left to be printed upon, had and could hold his lien upon it as the vendee’s property. In Powers v. Benedict, 88 N. Y., 605, it was simply held that although an action to re-claim goods sold disaffirmed the contract of sale, yet still, if plaintiff only regains a portion, he may still follow the vendee for the balance of their value. In Moller v. Tuska, 87 N. Y., 166, which was another case where plaintiff sued to regain possession of property rescinding the sale, it was Held that this was an election and prevented their making any claim against the vendee as such ; in this case they followed the property in the hands of a fraudulent transferee from the vendee. In Fields v. Bland, 81 N. Y., 239, it was Held, that the plaintiff, having taken a confession of judgment for goods sold and delivered, the judgment being confessed for the value of such goods, could not thereafter allege that the property, the same goods, belonged to him. In Hughes v. Vermont Copper Mining Co., 72 N. Y., 207, plaintiff brought an action in Vermont claiming damages as for a conversion of his alleged stock, the company having refused to recognize him as a stockholder. Subsequently he brought this action, claiming dividends on the same stock. Held, he had elected his remedy and treated the stock as converted, and he could not now sue, alleging ownership. In Wright v. Wright, 72 N. Y.,149, plaintiff ahd defendant were heirs and next-of-kin of J. of whose estate defendant was administrator. Plaintiff drew two drafts on defendant which defendant paid, and on an accounting as administrator he credited himself with their amount as payments to plaintiff on account of his distributive share. Plaintiff brought this action for an account of the rent of real estate collected by the defendant. Defendant set up the sum paid on these two drafts as a counter-claim. Held, he had elected to consider them as paid out of the personalty and he could not apply them now to the realty. In Dinsmore v. Duncan, 57 N. Y., 573, an action by Express Go. for conversion of a U. S. Treasury note, it was Held, that an indorsement by the owner to the secretary of the treasury for redemption destroyed its negotiability. That is all there is in this case—the doctrine of election is discussed by Dwight, Commissioner, and holds that the endorsement was an election to convert the note into bonds so that its negotiability was destroyed. In the case of Morris v. Rexford, 18 N. Y., 552, an action for goods sold and delivered, plaintiff had before this suit brought an action of replevin and retaken the goods. Held, this was an election of his remedy and the present action could not be maintained. In Thompson v. Fry, 51 Hun, 296, a case submitted under section 1279 of the Code, the controversy was whether plaintiff, as assignee under a voluntary assignment in Ohio, was entitled to certain goods which had subsequently been attached by the defendant. Defendant had proved his claim under the assignment. Held, that he, at least, had accepted and was bound by the assignment.

It will be seen that none of the cases above referred to, cited by the counsel for the appellant, sustains the proposition which he seeks to establish in this case.

This question being disposed of adversely to the plaintiff, it remains to be seen whether or not the plaintiff established by the original facts that defendants had been dealing with Sanford as an individual. We think the findings of fact by the learned referee are amply supported by the evidence and fully warrant the decision he made. There are no exceptions to the admission or exclusion of evidence. The referee’s conclusions upon the whole case, and the judgment entered in pursuance thereof, are correct.

The judgment appealed from is affirmed, with costs.

Freedman, P. J., and Dugro, J., concurred.


source: Caselaw Access Project

author: By the Court.—Gildersleeve, J.

license: Public Domain

text:
    FREDERICK MICHEL, et al., Appellants v. JAMES B. COLEGROVE, Respondent.

      Option for the purchase of mining property claimed by defendant as owner and sold. Plaintiffs claim ajoint interest with defendant in said option and the proceeds of sale thereof, and demand an accounting, etc.

    This appeal is from a judgment entered upon the order of the court at special term, after an exhaustive trial, dismissing the complaint.

      Held, that the complaint sets forth a good cause of action, and the right of the plaintiffs to recover depended entirely upon the evidence, and the most that can be said on behalf of plaintiffs is that there was a conflict of evidence. The trial court, on the questions of fact, found adversely to plaintiffs, and its conclusions are fully sustained by a preponderance of evidence, and the judgment appealed from is affirmed.
    Before Freedman, P. J., Dugro and Gildersleeve, JJ.

      Decided July 5, 1892.
    Appeal from a judgment of the special term dismissing the complaint. The facts in the case appear from the opinion of the court.

      Henry Daily, Jr., attorney for appellants.

      Thornall, Squires & Pierce, attorneys, and Franklin Pierce of counsel, for respondent.
   By the Court.—Gildersleeve, J.

In May, 1886, the defendant had and controlled an option for the purchase of a certain mining property, in Colorado, known as the Caledonia,” at a stipulated sum. It was the purpose of the defendant to find a purchaser for the property before the expiration of the option, at a price that would yield him a profit. Before the option expired, the property was sold to the “ Caledonia Gold Syndicate, Limited,” a corporation organized under the laws of Great Britain, having its place of business in the city of London, England. The plaintiffs bring this action upon an alleged agreement, which, they claim, was entered into between them and the defendant, by which the three became jointly interested in the sale of said mining property. The complaint alleges that it was understood and agreed that each one of them should give his time and attention and best efforts to accomplishing the sale of said mining property, and that all profits and gains, over and above actual and necessary disbursements, should be divided into three equal parts, and that the plaintiffs and defendant should each receive one of said parts. The complaint further alleges that the gains and profits, over and above all necessary and actual expenses attending said sale, amounted to the sum of sixty thousand dollars, which sum the defendant received on behalf of plaintiffs and himself, and it demands judgment that the defendant account to the plaintiffs for said sixty thousand dollars, and be directed to turn over to the plaintiffs such portions of said profits as they are entitled to receive under the conditions of the aforesaid agreement. The answer denies all the material allegations of the complaint, and sets up a counter-claim for moneys loaned to plaintiffs and services rendered to them. The counter-claim does not appear from the record to have been litigated.

The case was tried at special term, and, after an exhaustive trial, at which a large amount of evidence was introduced by both sides, the court below ordered judgment in favor of the defendant, dismissing the complaint upon the merits. From this judgment the plaintiffs appeal.

The complaint sets forth a good cause of action, and the right of the plaintiffs to recover depended entirely upon the evidence. After a careful examination of the record, the most that can be said on behalf of the plaintiffs is that there was a conflict of evidence.

The trial court, on the questions of fact, found adversely to the plaintiffs ; and we are of opinion, that the conclusions are fully sustained by a strong preponderance of evidence. The learned counsel for the appellants urges several exceptions to the admission or exclusion of evidence as valid; but an • examination of the questions raised by these exceptions fails to disclose any error prejudicial to plaintiffs.

The judgment appealed from should be affirmed, with costs.

Freedman, P. J., and Dugro, J., concurred.


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    FREDERICK MICHEL, et al., Appellants v. JAMES B. COLEGROVE, Respondent.

      Judgment, motion to vacate, and to suppress the deposition of a witness improperly obtained.

    The motion was founded upon affidavits. The court below held that such a motion should he made upon a case and exceptions, as well as the affidavits, and therefore denied the motion with leave to renew upon such case. Held, that the court below correctly indicated the practice to he followed in such a case, and that the order was properly granted.
    Before Dugro and Gildersleeve, JJ.

      Decided July 5, 1892.
    Appeal from an order of the special term, dated November 12, 1891, denying plaintiffs’ motion to set aside a judgment of the special term and suppress the deposition of a witness, with leave to renew on case and exceptions, in addition to affidavits.

      Henry Daily, Jr., attorney for appellants.

      Thornall, Squires & Pierce, attorneys, and Franklin Pierce of counsel, for respondent.
   By the Court.—Gildersleeve, J.

This order denied the motion of plaintiffs to set aside the judgment of the special term herein, and to suppress the deposition of one George Battelson, with leave to renew the motion; so made, upon a case and exceptions, in addition to the affidavits, upon which alone the motion was made.

Plaintiffs’ motion was founded on affidavits setting forth the fact that since the entry of the judgment herein plaintiffs had learned that defendant, who had caused the testimony of one Battelson to be taken by commission in London, had, previous to the execution of the commission, written said Battelson a letter, enclosing a copy of the interrogatories, and indicating the answers that said witness should give, which instructions were duly followed by said witness; and plaintiffs asked to have said deposition suppressed and the judgment set aside on this newly-discovered evidence. The court held that such a motion should be made on a case and exceptions, as well as the affidavits setting forth the nature of the newly-discovered evidence, and denied the motion, with leave to renew on such case.

We are of opinion that the court below correctly indicated the practice to be followed in such a case, and that the order was properly granted. Holmes v. Evans, 13 N. Y. Supp., 610; Anonymous, 7 Wend., 331; Warner v. Western Transportation Co., 5 Robt., 499; see also, Russell v. Randall, 123 N. Y., 436.

The order appealed from should be affirmed, with ten dollars costs and disbursements.

Dugro, J., concurred.


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    FREDERICK MICHEL, et al., Appellants v. JAMES B. COLEGROVE, Respondent.

      Motion to vacate a judgment and to suppress the deposition of a witness taken by commission made upon a case and exceptions and affidavits.

    This is the ease reported ante, page 278, the motion being renewed on a case and exceptions, as well as affidavits, at the special term, as suggested in the decision of the former motion.

      Held, that the action of defendant in regard to the execution of the commission, taking the testimony of one Battelson in the case, indicates a disregard of the proprieties that all honorable men observe in the conduct of any litigation, however bitter, and is a trespass upon the code of ethics, which should control under such circumstances, and calls for severe condemnation by this court. The conduct of the defendant in this respect is inexcusable. But from a careful examination of all the evidence it does not appear that such action was a wrong from which defendant derived any benefit, and, therefore, his conduct does not afford sufficient ground or reason to entitle the motion to prevail.

      Held, that the plaintiffs are estopped from the relief sought, by reason of their negligence and laches. The testimony of the witness was not controlling, it was only cumulative, and there is enough in the case, without the testimony of this witness, to sustain the judgment. A new trial cannot be obtained either for the purpose of furnishing new and additional cumulative evidence, nor for the purpose of destroying the cumulative evidence of the successful party. This rule is well settled, that if a witness examined on commission is instructed by the party in interest how to testify, the commission will be suppressed at the instance of the adverse party, on the ground that such conduct is xuejudicial to him, corrupting to the witness, an abuse of process and a fraud on the court, interfering with pure administration of justice. But suppressing a commission in advance of the trial and granting a new trial after judgment, are quite different things. A judgment is intended to terminate a litigation and to conclude the parties as to every question raised or which might have been raised before the final result was reached, and rights so lost may never be regained.
    Before Freedman, P. J., Dugro and Gildersleeve, JJ.

      Decided July 5, 1892.

      Appeal from an order of the special term, denying plaintiffs’ motion to set aside a judgment of the special term and to suppress the deposition of a witness, which order hears date March 24, 1892.

      Henry Daily, Jr., attorney for appellants.

      Thornall, Squires & Pierce, attorneys, and Franklin Pierce of counsel, for respondent.
   By the Court.—Gildersleeve, J.

This is an appeal from an order of the special term, by Judge McAdam, dated March 24, 1892, denying plaintiffs’ motion to suppress the deposition of one George Battelson, taken under a commission, and to set aside a judgment of the special term, entered herein, and for a new trial. This motion was made upon a case and exceptions, and upon affidavits setting forth the fact that since the entry of the judgment herein plaintiffs had learned that defendant, who had caused the testimony of one Battelson to he taken by a commission in London, had, previous to the execution of the commission, written said Battelson a letter, enclosing a copy of the interrogatories, and indicating the answers that said witness should give, which instructions were duly followed by said witness. In an affidavit, one' of the plaintiffs stated that said Battelson informed him, when in London, subsequent to the trial herein, that before the execution of said commission he, said Battelson, received said letter from defendant, and answered the interrogatories as directed by defendant. The defendant, in his affidavit, used in opposition to the motion, admits the writing of the letter to Battelson, hut disclaims any intention to direct Battelson in the answers he was to make to the interrogatories, or in any way to influence him. He further says, by way of explanation, that he had personal knowledge of all the facts stated in his letter, and that he also knew that Battelson knew the same facts ; and he positively swears that each and every one of the answers of Battelson to the interrogatories in question was true; and that the occasion of writing the letter arose from a letter written to him by Battelson, in which Battelson set forth the facts as to which he subsequently testified, under the commission, and asked him, defendant, to suggest the form of answers to be used by him, said Battelson; and that said letter was written by defendant without any consciousness, at the time, that it was improper or indelicate for him to suggest the forms of the answers, and without any intent whatever of, in any way, influencing the evidence of said Battelson.

This letter of the defendant certainly indicates a disregard of the proprieties that all honorable men observe in the conduct of any litigation, however bitter, and is a trespass upon the code of ethics, which should control under such circumstances, that calls for severe condemnation by this court. In re Eldridge, 82 N. Y., 161; Butler v. Flanders, 44 N. Y. Super. Ct. R., 531; Graham v. Carlton, 9 N. Y. Supp., 392. We deem the conduct of the defendant in this respect inexcusable. But, from a careful examination of all the evidence, we are not satisfied that it was' a wrong from which the defendant derived any benefit. This conduct of the defendant, therefore, does not afford sufficient reason to entitle the motion to prevail.

The plaintiffs knew two years before the trial that a commission had been issued for the examination of Battelson, and they knew what answers he had made to the several interrogatories. Yet no motion was made to suppress. The excuse is that the facts were not known until after the trial; but could they not, by the exercise of proper diligence, have been ‘ discovered before ? It is reasonable to suppose they could have been; and, therefore, the plaintiffs are estopped from the relief sought, by reason of their negligence and laches. Bay- lies’ New Trials and Appeals, pp. 524, 525, and cases there collected; Quinn v. Lloyd, 31 N. Y. Super. Ct., 255; Smith v. Nelson, 62 N. Y., 288. If the least fault be imputable to the plaintiffs, they will ask for relief in vain. 3 Graham & Watterman, 1026; Weston v. N. Y. El. Ry. Co., 42 N. Y. Super Ct., 162.

Again, the testimony was not controlling, but cumulative ; and there is enough in the ease, without the testimony of said Battelson, to sustain the judgment rendered. There is no reason to believe that Battelson would testify differently, if re-examined; nor is there any reasonable certainty that a new trial would produce a different result.

The disclosures made by the evidence, upon which the plaintiffs rested their motion, would be of no value upon a new trial, except by way of affecting the credibility of Colegrove, and Battelson. A judgment will not be vacated for the purpose of allowing the defeated party to attack the credibility of the witnesses of the successful party, or to contradict them, or to show that they have testified falsely. Smith v. Lowrey, 1 Johns., Ch., 320; McIntire v. Young, 39 Am. Dec., 447; Starin v. Kelly, 47 N. Y. Super. Ct., 291; Emmerich v. Hefferan, 53 Ib., 98. The plaintiffs now seek to destroy the judgment by removing or destroying the cumulative, corroborative evidence in Battelson’s deposition. But a new trial cannot be obtained either for the purpose of furnishing new cumulative evidence, or for the purpose of destroying the cumulative evidence, of the successful party. See Baylies’ New Trials and Appeals, 525, and cases there collected.

We quote, with entire approval, from the decision of Judge Me Adam, in disposing of this motion : This rule is settled that if a witness examined on commission is instructed by the party in interest how to testify, the * commission will be suppressed, at the instance of the adverse party, on the ground that such conduct is prejudicial to him, corrupting to the witness, an abuse of process, and a fraud on the court, interfering with pure administration of justice. But suppressing a commission, in advance of the trial, and granting a new trial after an adverse judgment, is quite a different thing. A judgment is intended to terminate a litigation and to conclude the parties as to every question raised or which might have been raised before the final result was reached, and rights so lost may never he regained.”

For the reasons above stated, it follows that the order appealed from must be affirmed, with ten dollars costs, and disbursements.

Freedman, P. J., and Dugro, J., concurred..


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    THE PEOPLE, ex rel. RICHARD BURNS, Relator, Appellant v. HENRY D. PURROY, et al., Fire Commissioners, etc., Respondents.

      Certiorari, writ of, reviewing the proceedings of fire department on trial of relator.

    Relator was a member of the fire department of the city of New York. On charges preferred against him for assault on a superior officer, he was tried before the board of fire commissioners, found guilty and dismissed from the force.
    On the review on appeal, Held, that the respondents had jurisdiction to make the order. They complied with all the formalities required by the statute. The preponderance of evidence indicates that the relator was guilty of an act of insubordination and breach of discipline and “ conduct injurious to the public peace and welfare,” that sustains the con- * elusions of the commissioners as to his guilt, and for which, under section 440 of the Consolidation Act he could be dismissed from the force. Section 2141, of the Code of Civil Procedure, authorizing the court, upon a hearing on return to a writ of certiorari, “ to make a final order annulling

      or confirming wholly or partly, or modifying the determination reviewed ” do not authorize the review or modification of the determination of inferior jurisdiction, in matters within their jurisdiction, which are confided to their discretion.

    Before Freedman, P. J., Dugro and Gildersleeve, JJ.

      Decided July 5, 1892.

      Louis J. Grant, for relator, appellant.

      William L. Findley, for respondents.
   By the Court.—Gildersleeve, J.

The relator was a member of the fire department of the city of New York. Charges were preferred against him of committing two separate assaults on a superior officer, when called to duty by said superior officer, at the quarters of engine company 29, on August 4, 1891. He was tried before the board of fire commissioners, found guilty, and dismissed from the force.

If the relator was guilty of the misconduct charged against him, the respondents had jurisdiction to make the order dismissing him from the force. Consolidation Act, § 440. As far as the evidence shows, they complied with all the formalities required by the statute. The inquiry was before the board of commissioners ; the charges were in writing; the examination was public; the accused had due notice thereof, and was present, and took part in the investigation ; and the trial was conducted in a fair and impartial manner. § 440, supra. That the two men, relator and his said superior officer, fought at the quarters of engine company 29, when the former was ordered by the latter to duty, is not disputed; but each claims that the other was the aggressor. The relator was found guilty of a charge, which clearly amounted to a breach of discipline ” and ce conduct injurious to the public peace and welfare,” for which, under section 440 of the Consolidation Act, he could he dismissed from the force. The preponderance of evidence indicates that the relator was guilty of an act of insubordination and breach of discipline, that was not justified by the circumstances of the case, and sustains the conclusions of the commissioners as to his guilt.

If the board of commissioners were warranted in finding the relator guilty, as we think is the fact, they were authorized to determine the nature and extent of the punishment, within the limits of the statute, and that determination is not reviewable here. The provisions of section 2141 of the Code of Civil Procedure, authorizing the court, upon a hearing on return to a writ of certiorari, •“ to make a final order annulling or confirming wholly or partly, or modifying, the determination reviewed,” do not authorize the review or modification of the determination of inferior jurisdictions in matters, within their jurisdiction, which are confided to their discretion. People ex rel. Kent v. Board of Fire Commissioners, 100 N. Y., 82.

And if it were within our power to modify the mode of punishment, we should be very cautious in exercising that power. The government of the fire department assimilates to that required in the control of the police force, or in the control of a military body, and the interference of an extraneous power in its practical control and direction must, as a general rule, be mischievous and destructive of the discipline and habits of obedience which should govern its subordinate members. People ex rel. Masterson v. French, 18 N. Y. State R., 234.

We are of opinion that the writ must be dismissed, and the judgment of the board of fire commissioners affirmed, with fifty dollars costs and disbursements.

Freedman, P. J., and Dugro, J., concurred.


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    GEORGE H. STUDWELL, et al., Appellants v. THE MUTUAL BENEFIT LIFE ASSOCIATION OF AMERICA, Respondent.

      Life insurance, policy of—Application for insurance and statements therein and the by-laws referred to in the policy and ma.de a part thereof, must be considered as one instrument with the policy.

    This action was brought to recover from defendant the sum of $10,000, upon a policy of insurance upon the life of Charles H. Hyde, payable upon his death to the firm of Studwell, Sanger & Co., of which firm plaintiffs are the sole surviving partners.
    The application for insurance, and the statements therein, and the by-laws of respondent, by the terms of the policy were made a part of the contract of insurance between Hyde and the defendant. The defence was based upon alleged misrepresentations in the application for insurance or the suppression of facts therein which should have been stated. In the application Mr. Hyde made this declaration: “ That the foregoing application and this declaration, together with the answers and explanation given to the above various questions, and inclusive of those propounded by the medical examiner on the within pages hereof, shall form the exclusive and only basis of the agreement of the above-named applicant and the Mutual Benefit Life Association of America, and that if any misrepresentations or fraudulent or untrue ansvjers or statements have been made, or if any facts which should have been stated to the association have been suppressed therein, * * * or should the applicant fail to comply with any of the terms of this agreement, or with any of the conditions and agreements contained in the certificate of membership, * * * then this agreement shall become null and void, and all mdneys which shall have been paid shall be forfeited to the said Association for its sole benefit.” At the conclusion of the statement made to the medical examiner, Mr. Hyde further says: “I hereby further declare that I have read and understand all of the foregoing questions put to me by the medical examiner, and the answers thereto, and that the same are warranted by me to be true.” In the application for insurance this question was asked of Mr. Hyde : “ What amounts are now insured on your life, and in what companies ? A. $10,000 1 Family Fund.’ ” The plaintiffs’ proofs of death submitted to the defendant show that Mr. Hyde had $10,000 insurance in the “ Mutual Life Insurance Company of New York.” Defendant’s “Exhibits B, C, E and F” are conclusive evidence of the falsity of this statement. They show that on January 30, 1868, and several years prior to the application made to the defendant, Mr. Hyde took out two policies of insurance in the “Mutual Life Insurance Company of New York” for $5,000 each, and that the same were in full force right along up to the time Mr. Hyde died, and that the amounts insured by said policies were actually paid to Mr. George H. Studwell, one of the plaintiffs in this action, on the 24th day of January, 1890. These policies were offered and received in evidence, and the fact that, in addition to the insurance mentioned by Mr. Hyde in his application, he was also insured at the time of that application for the sum of $10,000 in the “ Mutual Life Insurance Company of New York” is not disputed. The answer upon its face appeared to be complete, and it does not, therefore, come within the rule of those cases which hold that where an answer is manifestly incomplete upon its face, the insurers will be deemed to have waived the right to a more complete answer if they make no further inquiry in relation thereto. This answer was complete and full upon its face, and there was nothing in it which could have possibly required, induced or provoked further inquiry in relation to the subject matter of this particular question.
    At the conclusion of the evidence defendant moved to dismiss the complaint upon the ground, among others, that Mr. Hyde, in his answers made and contained in the application, suppressed the fact that he was insured in the Mutual Life Insurance Company for $10,000, and the trial judge dismissed the complaint solely upon that ground.

      Held, on apiieal, that the policy in suit and the application therefor constituted the contract for insurance between Charles H. Hyde and defendant. The evidence disclosed, and it incontestably appeared, that a material fact had been suppressed which should have been stated to the association under the contract, and there could be no other reasonable conclusion than that he knew of the existence of the policies from the Mutual Life Insurance Company and intentionally suppressed the fact. It would be unreasonable to call upon defendant, years after these policies had been issued and the facts that had transpired leading to their issue had occurred, to give positive and direct proof of the intentional omission on the part of the insured of a fact which by the terms of the contract the insured had agreed to place in defendant’s possession, and it follows that plaintiffs were not entitled to recover, and the dismissal of the complaint did not constitute error.
    Before Freedman, P. J., Dugro and Gildersleeve, JJ.

      Decided July 5, 1892.
    Appeal from judgment of the trial term dismissing the complaint.

      Kopper & Jenks, attorneys, and Daniel Clark Briggs and William W. Jenks of counsel, for appellants.

      E. T. Lovatt, attorney and of counsel, for respondent.
   By the Court.—Gildersleeve, J.

In February, 1876, the plaintiffs herein and one Charles H. Hyde were copartners. On the 10th day of January, 1890, said Hyde died, leaving the plaintiffs sole surviving partners of said firm. On the 6th day of January, 1887, Hyde was a debtor to said firm in a large sum of money, which indebtedness increased from time to time, and at his death amounted to upwards of $20,000. On said 6th day of January, 1887, the defendant-corporation issued a policy of insurance or certificate of membership to said Charles H. Hyde for $10,003, payable upon his death to the firm of Studwell, Sanger & Co., of which firm the plaintiffs herein are the sole surviving partners. This action was brought to recover the sum of $10,003 upon said policy of insurance, or certificate of membership, issued as aforesaid. The application, signed by Hyde, for the policy in question, contains the following statement : “ That the foregoing application and this declaration, together with the answers and explanations given to the above various questions, and inclusive of those propounded by the medical examiner on the within pages hereof, shall form the exclusive and only basis of the agreement of the above-named applicant and the Mutual Benefit Life Association of America, and that if any misrepresentations or fraudulent or untrue answers or statements have been made, or if any facts which should have been stated to the Association have been suppressed therein, * * * or should the applicant fail to comply with any of the terms of this agreement, or with any of the conditions and agreements contained in the certificate of membership, * * * then this agreement shall become null and void, and all moneys which shall have been paid shall be forfeited to the said association for its sole benefit.” At the conclusion of the statement made to the medical examiner, Mr. Hyde further says : “ I hereby further declare that I have read and understand all of the foregoing questions put to me by the medical examiners, and the answers therein, and that the same are warranted by me to be true.” The by-laws are also made a part of the policy. Section 21 of the by-laws state's “If any person secures membership by concealing or suppressing any material facts, or if the statements in the application for membership * * * are in any respect untrue, the membership shall cease and all payments shall be forfeited to the association.” The policy in suit and the application therefor constituted the contract of insurance between Charles H. Hyde and the defendant (May on Insurance, § 158), and must be construed as one instrument. Mutual Ben. L. Ins. Co. v. Miller, 2 Ins. L. J., 101 ; Lycoming Mut. F. Ins. Co. v. Sayler, 67 Pa., 108; Burritt v. Saratoga Co. Mut. F. Ins. Co., 5 Hill, 188; Pierce v. Empire Ins. Co., 62 Barb., 636 ; Vose v. M. Ins. Co., 6 Cush., 42; Chaffee v. Catt. Co. Mut. Ins. Co., 18 N. Y., 378; France v. Ætna L. Ins. Co., 2 Ins. L. J., 657; Angell on Ins., § 141.

In the application for insurance, this question was asked of Mr. Hyde: “Q. What amounts are now insured on your life, and in what companies ? A. $10,000, Family Fund.” The plaintiffs’ proofs of death submitted to the defendant show that Mr. Hyde had $10,000 insurance in the Mutual Life Insurance Company of New York ; they show that on January 30, 1888, many years prior to the application made to the defendant, Mr. Hyde took out two policies of insurance in the Mutual Life Insurance Company of New York, for $5,000 each, and that the same were in full force up to the time Mr. Hyde died, and that the amounts insured by said policies were actually paid to Mr. George H. Studwell, one of the plaintiffs in this action, on the 24th day of January, 1890. These policies were received in evidence upon the trial, and established the fact beyond dispute that in addition to the insurance mentioned by Mr. Hyde in his application, .namely, $10,000 in Family Fund, he was also insured, at the time of making said application, in the sum of $10,000 in the Mutual Life Insurance Company of New York. At the conclusion of the evidence the learned counsel for the defendant made a motion to dismiss the complaint upon the ground, among others, that Mr. Hyde in the answers to questions made to defendant and contained in the application for the insurance in question, suppressed the fact that he was insured in the Mutual Life Insurance Company for $10,000. The learned trial judge dismissed the complaint upon that ground, without passing upon the other grounds urged.

The evidence disclosed an undisputed suppression of fact. One of the stipulations contained in the agreement between Mr. Hyde and defendant, which constituted the contract of insurance upon which this action was brought, is as follows :—“ Or if any facts, which should have been stated to the association, have been suppressed therein, * * * then this agreement shall become null and void.” There was nothing to go to the jury upon this point. It incontestably appeared that a material fact had been suppressed.

The only remaining question was this :—Was the fact intentionally suppressed ? On this point the learned trial judge, in disposing of the motion to dismiss, said : “ The jury could not find to the contrary. If a man knows, is in possession of his senses, and his intellect is directed to a particular thing, he may not tell us an untruth, conscious that it is untrue, as matter of business.” This answer appeared on its face to be complete ; it did not, however, contain the whole truth, and in that respect it was false. Mr. Hyde’s omission to disclose the-existence of the policies in the Mutual Life Insurance Company was clearly a suppression of “ facts which should have been stated to the association.” A man is presumed to intend the natural consequences of his acts. Mr. Hyde’s act of omission in this respect deprived the defendant of material information. There could be no other reasonable conclusion from the act itself, from the existence of the policies at the time of his death, and other proof in the case, than that he knew of their existence and intentionally suppressed the fact. “Where an answer of the applicant to a direct question of the insurer purports to be a complete answer to the question, any substantial mis-statement or omission in the answer voids the policy issued upon the face of the application.” Phoenix Mut. Life Ins. Co. v. Raddin, 120 U. S., N. S., 183 ; 7 Sup. Ct. Rep., 500. “ Where the answer of an applicant to a direct question purports to be a complete answer, any material mis-statement or omission in the answer voids the contract.” Cook on Life Ins., p. 34, § 18. In the case of Towne v. Fitchburg Ins. Co., 7 Allen, 51, which was an action on a fire insurance policy, that provided that the application therefor should contain a full, fair and substantially true representation of all the facts and circumstances respecting the property, the insured having mentioned only one mortgage as being upon the property, when there were in fact two, it was Held, that this suppression of fact voided the policy, and that the fact that the insured did not then recollect the other mortgage was immaterial. Any other rule would be unnecessarily severe, and might often work great hardship to insurance corporations.

It would be unreasonable to call upon defendant, years after policies of insurance had been issued, and the facts that had transpired leading up to their issue had occurred, to give direct proof of the intentional omission on the part of the insured of a fact which, by the terms of the contract, the insured had agreed to place in defendant’s possession.

For the reasons above stated, it follows that plaintiffs were not entitled to recover, and that the dismissal of the complaint did not constitute error. It is unnecessary to discuss the question of warranty.

We are of opinion that the judgment appealed from should be affirmed, with costs.

Freedman, P. J., and Dugro, J., concurred.