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

text:
    John Q. Jones, Plaintiff and Respondent, v. Solomon Hausmann et al., Defendants and Appellants.
    1. Where an assignee, under a voluntary general assignment for the benefit of creditors conveying, though without specifying it in terms, a lease of real property, enters immediately on all the demised property, excepting parts then in the occupation of sub-tenants of the assignors, and, as assignee, occupies the same until within a few days of the expiration of the lease, and collects the sub-tenants’ rents for the whole of the last quarter, and it is not shown that he entered merely to remove the goods, and that his occupation was no longer than was reasonably necessary for that purpose, nor that he gave notice to the lessor that he did not intend to accept the term as assignee, and there is no explanation of his having collected the rents, he is liable to the lessor, for rent, as assignee of the lease.
    2. In such case the burden of proof is upon him, to show that the lessees, his assignors, have paid the rent, if he relies on that fact.
    (Before Bosworth, Ch. J., and Robertson and Barbour, J. J.)
    Heard, December 3, 1862;
    decided, January 17, 1863.
    Motion by the defendants for a new trial on exceptions, ordered at the trial to be heard in the first instance at the General Term.
    The action was on a lease by indenture, dated February 10, 1859, executed by the plaintiff as lessor and party of the first part, and by Herman Gutman and William. Wedeles, composing the firm of Wedeles & Gutman, as lessees and parties of the second part; and the plaintiff sought to recover thereon of Solomon Hausmann. and Bernard Bernard, the defendants, as assignees of the lessees and of the lease, the quarter’s rent ($750) falling due May 1, 1861, (the last quarter of the term created by the lease.)
    The complaint stated the making, sealing and execution of the lease, set forth its terms, described the premises thereby demised, alleged entry upon, and enjoyment of the premises by the lessees up to the 15th of March, 1861, an assignment on that day of their individual and joint property, and “the unexpired term in the said “demised premises” to the defendants, in trust to pay the debts of such assignors, and alleges that “ thereupon “ the said defendants, as such assignees, entered into the “possession and enjoyment of said demised premises, and “ continued in the possession and enjoyment thereof until “the said term had fully expired and ended;” that the quarter’s rent ($750) falling due May 1, 1861, was unpaid, and prayed judgment therefor, with interest from said May 1st.
    The defendants, in their answer, “ admitted entering “into possession of the premises, * * * on the 15th of “ March, 1861, and continuing therein until on or about the “ 23d day of April, 1861, for the purpose of disposing of “the property of the said Wedeles & Gutman, under the “ trusts of the said assignment, and they allege and say, “ that on or about the last mentioned day they vacated “ said premises, and tendered possession of the same to “ the plaintiff.” * * * *
    They denied that the unexpired term was vested in them by said assignment, and “they denied that they “ entered into the possession of the said premises, under and by virtue of said lease, and they denied that they “continued in the possession and enjoyment of said “premises until the 1st day of Maj^, 1861,” and also denied that they were indebted to the plaintiffs in any sum whatever.
    On the trial before Mr. Justice Robertsox and a Jury, on the 14th of January, 1862, the plaintiffs gave the lease in evidence. It was of the store and lot of land, No. 168 Fulton street, New York City, for the term of two years from the 1st of May, 1859, at an annual rent of $3,000, in equal quarterly payments, payable on the first days of August, November, February and May, in each year. In it the lessees covenanted “ not to sell, underlet or assign over the whole or any part of said premises hereby (thereby) demised to any person or persons whomsoever, or for any term or time whatever, * * * without the written consent of the party of the first part first had and obtained, under penalty of forfeiture of this lease.” The defendants “ objected to the admission of the lease,” when it was offered in evidence, “ on the ground that it contained a clause that it should not be assigned.” The objection was overruled, and they excepted to the decision.
    The plaintiff next gave the assignment in evidence. It was dated March 15,1859, and assigned to the defendants “ all the estate, property and effects, both real and personal, of every name, nature, kind and description whatsoever,” of said lessees. It concluded with a clause which stated that the assignees (the defendants) “ do hereby take upon themselves the execution and performance of the several trusts herein contained, and do promise and agree that they will perform and execute the same faithfully and according to law.” It was signed by each of the assignors and assignees, and its execution was acknowledged by each of them, on the said 15th of March, before a notary public.
    The plaintiff then proved by Richard Richards, that he (Richards) occupied the rear of the second story of said premises, between February 1 and May 1, 1861, that he rented the place from"the assignors, and paid the rent for that quarter to their assignees, the defendants. He also proved by Schulein Ostenberg, that he (Ostenberg) occupied all the lofts of said premises, (except the part of the second story occupied by Richards,) under a hiring from the lessees, from May 1,1860, to May 1,1861, and paid the rent for the last quarter to the assignees, the defendants.
    When the plaintiff rested, the defendants moved to dismiss the complaint, on the grounds —
    1. That no privity of action was shown between the plaintiff and defendants; that all the defendants did was as assignees for the benefit of creditors, and that no personal liability accrued against them :
    2. That their occupation was through Wedeles & Gut-man, and not through or from the plaintiff:
    3. That no cause of action was shown. against them, and, for aught that appeared, the assignors have paid the rent.
    The motion was denied, and they excepted.

      They then, moved to amend their answer by striking out the words “took possession,” and inserting “occupied the premises for the purpose of winding up the affairs of Wedeles & Gutman, as their assignees.
    This motion was denied, and they excepted.
    The defendant “ Solomon Hausmann” was then sworn, and, inter alia, said: “The goods (the assigned goods) “ were in the store, on the ground floor and the basement “ below. * * * * I had nothing to do with any other “ part of the building, except to collect the rent. At the “ time I went in there as assignee, * * * I did not know “ anything about any lease. I did not know how I was “ in there. I was there winding up the business of Wede- “ les & Gutman. * * * * All that 1 did on the premi- “ ses was under and by virtue of the authority contained “ in the assignment.”
    Q. Have you ever had any other power or authority, except what is in that assignment, in what you did on these premises ?
    A. I had no other authority, except what the assignment allows me to do. We packed up the goods and made them ready for auction. We were there between four and five weeks. * * * We used the premises for no purpose whatever, except to sell these goods.
    * * * The goods were for sale, but I think we did not sell any at all; we packed them up for auction. If any one come in to buy, we would sell them. The auction was held on the 17th of April; it was not held on the premises.”

      Sehulein Osteiiberg, called by defendants, testified, that he “ received a note from Mr. Jones, or his attorney, not “to pay rent to the assignees. Mr. Jones afterward took “ the notice back. I do not recollect how long after he “ took it. It might be a day or so, or four days; I cannot “ recollect.”
    The defendants having rested, renewed their motion to dismiss the complaint, “ and to amend the answer as “ above, and conform it to the proof;” which motions were denied, and they excepted.
    They requested the Judge to instruct the Jury:
    1. That to charge the defendants personally, “it must appear that the defendants have assumed the, original position, in that lease, of Wedeles & Gutman:”
    2. “That there is no evidence the defendants ever became possessed of the premises by any assignment, or otherwise, of the original lease:”
    3. That plaintiff could not recover of defendants “ for “ back rent accruing long before they could have received “ any benefit from the premises:”
    4. That defendants’ possession “ was as agents or trustees of Wedeles & Gutman, and not as the lessees of the . plaintiff:”
    5. That the notice of the plaintiff to the other tenants not to pay rent to defendants, shows that he did “ not intend to place the defendants in the same position as Wedeles & Gutman, because Wedeles & Gutman had a right to collect the rent:”
    6. That the plaintiff could not put the lessees out of the premises, while “ defendants were in, there being no covenant of the original lease broken during that time:”
    7. That there is no evidence but that the lessees “were ■ able, and had paid the rent due, on the original lease, from them to plaintiff:”
    8. That the plaintiff, “ if he recover at all, must recover in this action on the original lease :”
    9. “That the rents collected by the defendants were assets, which the assignees might collect without assuming the original lease itself.”
    The Judge charged [inter alia) that “ the law presumes “ that parties in possession, after the lease is established, “ áre assignees, and it is their business to show (because “ they have the evidence more immediately in their pos- “ session) that they hold it .by some other authority than “ as assignees of the premises.”
    “ In this case, the defendants are admitted in the pleadings to have been in possession of these premises after the execution of the original lease, and during the quarter for which the rent here sued for fell due. This is prima facie or presumptive evidence that they were assignees; that is, if there were no other evidence in the case but that, you would be bound to find they were assignees of the premises for the whole of the time for which the lease was granted.” # * * “ This lease was not mentioned in terms ” in the assignment.
    “ Where there is a general assignment, the parties are not held liable as holders of the'lease, unless there is evidence to show they act under it by virtue of the assignment itself.” * * * “ The responsibility, as assignees of the lease, is not thrown upon them, unless they have done some act showing they meant to become assignees or owner's of the leaser It is for you to say whether they were in possession of the premises, merely as holding by sufferance or license of Wedeles & Gutman, or whether they took an assignment of the premises. * * * If it be true that they had no other authority except that which they could exercise as assignees under the assignment, they took upon themselves the burden or responsibility of paying the rent. * * *
    “ So, too, if they never had possession of the lease, they had a perfect right to receive the rents of the premises.” * *
    “ The notice to the tenants not to pay rent was immaterial. * * • * There is no claim that' there was a surrender of the premises to him,” (the landlord.)
    The case states, that “ defendants’ counsel excepted to that part of the charge, which states that possession of the premises is prima facie evidence of the assignment of the lease, and to all those parts which hold that if they took possession under the assignment, as assignees, they were liable to pay the rent.” •
    “ Also to the refusal of the Court to charge the requests further than embraced in the charge delivered.”
    The Jury rendered a verdict for the plaintiff for $744.90.
    The Court then ordered that the exceptions taken on the trial, be heard in the first instance at General Term, and that the entry of judgment in the meantime be suspended.
    A. J. Dittenhoefer, for defendants:
    Cited, Bagley v. Freeman, (1 Hilt., 196;) Journeay v Brackley, (Id., 447;) Quackenboss v. Clarke, (12 Wend., 555;) Taylor’s Landl. & Ten., [2 ed.] p. 300, § 458, and cases cited; How v. Kennett, (3 Ad. & El., 659;) Briggs v. Sowry, (8 Mees. & W., 729;) 1 B. & Ald., 593; 1 Espinasse, 233; Bailey v. Delaplaine, (1 Sandf., 5;) Holsman v. De Gray, (6 Abbotts’ Pr., 79;) Acker v. Witherell, (4 Hill, 112.)

      R. Gosman, for the plaintiffs, in addition to the authorities cited by him in support of his first and second points in the preceding case of Dennistoun v. Hubbell, ante, 155, argued that: —
    III. The doctrine of the charge, that .the lease having been established, subsequent possession of the premises by the defendants, is prima facie evidence of an assignment of the lease, is incontrovertibly settled by the cases, and the defendants’ exception in this respect is untenable. (Durando v. Wyman, 2 Sandf., 597; Williams v. Woodard, 2 Wend., 487; Acker v. Witherell, 4 Hill, 112; Armstrong v. Wheeler, 9 Cow., 88.)
    There is no case deciding that simple possession and use by the assignees of the demised premises, for the purpose of closing the assigned estate, however short, does not bind the assignees for the payment of the rent, unless, perhaps, the case of Journeay v. Brackley, above referred to. (Citing and commenting on the cases of Bourdillon v. Dalton, 1 Espinasse, 233; Turner v. Richardson, 7 East, 335; Copeland v. Stephens, 1 Barn. & Ald., 593; Hastings v. Wilson, Holt, 290; Page v. Godden, 2 Starkie, 309; Hill v. Dobie, 8 Taunt., 325; Thomas v. Pemberton, 7 Id., 206; Carter v. Warne, 4 Car. & P., 191; Lindsey v. Limbert, 2 Id., 526; Wheeler v. Bramah, 3 Campb., 340; Clark v. Hume, Ry. & Moo., 207 ; Hanson v. Stevenson, 1 Barn. & Ald., 303; How v. Kennett, 3 Ad. & El., 659.)
   By the Court — Bosworth, Ch. J.

The defendants were not entitled to a dismissal of the complaint. In their answer, they admitted “ entering into possession of the premises mentioned in the complaint (the demised premises) on the said 15th of March, 1861, (the day of the assignment,) and continuing therein until on or about the 23d day of April, 1861, for the purpose of disposing of the property of said Wedeles & Gutman, under the trusts of the said assignment.

The assignment was sufficient to transfer to them the lease and the unexpired part of the term thereby created, and to enable them to claim and appropriate it as a part of the assigned property. (Ringer v. Carn, 3 Mees. & Wels., 343.) They, in fact, had actual possession of all the demised premises, except the upper stories, until within about seven days of the day on which the term expired.

They collected from the under-tenants of the residue of the premises, the rent falling due May first, 1861, for the whole quarter ending on that day.

No explanation of the fact of receiving the rents, is attempted to be made. No evidence was given, as to the length of time reasonably necessary, to enable the assignees to remove the assigned goods from the demised premises. No notice was given to the plaintiff by the defendants, either at the time they entered or during their occupation, that they did not intend to accept the term, as assignees, or that their entry was merely for the purpose of removing the assigned property.

The only one of the assignees who was sworn, testified, that all he “ did on the premises was under and by virtue of the authority contained in the assignment.”

If their entry into and occupation of the premises themselves, “was under and by virtue of the authority contained in the assignment,” there can be no doubt, that such an entry and occupation, and the reception of the rents for the whole of that quarter, for the residue of the premises not occupied by them personally, constitute such conclusive evidence of an election to accept the term, as made them liable for the rent of that quarter. (Astor v. Lent, 6 Bosw., 612; Journeay v. Brackley, 1 Hilt., 447; Ringer v. Carn, 3 Mees. & Wels., 343 ; Williams v. Bousanquet, 1 Brod. & B., 238; Wollaston v. Hakewell, 3 Mann. & Gr., 297; Paull v. Simpson, 9 Ad. & Ellis, N. S., 365; Astor v. Hoyt, 5 Wend., 603, 613-617.)

There may well be a distinction between the nature and extent of the liability "of an assignee in bankruptcy, under the act of 6 Geo. 4, § 75, which defines his liability, and that of the voluntary assignee of all the property of an assignor, in trust for the payment of debts, in respect to whom no similar statutory immunities exist. (How v. Kennett, 3 Ad. & Ellis, 659; Briggs v. Sowry, 8 Mees. & Wels., 729.)

The position of such an assignee resembles more closely that of an executor of a lessee. The latter is liable for all the debts of a lessee, so far as he has assets. Such an assignee is liable for the due conversion and application of the assigned estate to the payment of the debts, according to the provisions of the assignment. But as assignee he is not personally liable for the payment of any of the assignor’s debts; his liability is for the due execution of the trusts committed to him.

An executor of a lessee, whether he enters on the premises or not, is chargeable as executor in the detinet, because he cannot so waive the term as not to be liable for the rent so far as he has assets. (2 Williams on Ex’rs, 5th Am. from last Lond, edit., 1558, 1559 ; 2 Rob. Pr., pp. 99, 100.) If he accept” the executorship and enter on the demised premises, he is chargeable as assignee, in an action of debt or covenant, for the arrears of rent due after his entry, de bonis propriis. (Rubery v. Stevens, 4 Barn. & Ad., 241.) An executor, when thus sued, if the premises yield no rent, and he has no assets aliunde, or if he has assets of some value, but less than the rent, may protect himself by a proper plea, from liability beyond the rents which the lands yield. (Id.)

It seems illogical to hold then that an assignee, under an assignment conveying all of the assignor’s property, and among other property a lease, (though not specified as part of the assigned property,) may accept of the assignment ; enter on the day of its date on all of the demised premises, excepting portions then in the occupation of sub-tenants of the assignors ; occupy as assignee the parts thus taken possession of by him until within seven days of the expiration of the lease, and collect from the subtenants rents for the whole of the last quarter, and yet not be liable as assignee of the lease. (1 R. S., 747, § 24.)

There are cases which hold that he is not liable where he enters merely to remove the assigned goods, and his conduct and acts show clearly that he did not intend to accept the term, or to enter upon the demised premises as being part of the assigned estate. (Martin v. Black, 9 Paige, 641; Carter v. Hammett, 12 Barb., 253.)

In Journeay v. Brackley, (1 Hilt., 447,) shortly after the assignment, the defendants [the assignees] notified the plaintiffs that they did not intend to take the building, and would have nothing to do with the lease, and should get the goods out as soon as possible.” (Id., 449.) The assignees were held not to be liable. In Lewis v. Burr, (8 Bosw., 140,) the assignee was held not to be°liable.

In Hanson v. Stevenson, (1 Barn. & Aid., 304,) which was against an assignee in bankruptcy, and arose prior to the act of 6 Geo., 4, (supra,) Lord Ellenborough, C. J., said: “ I know of no instance in which a deliberate act of taking possession has been curtailed of its full legal effect. If the assignees had wished so to curtail it, they should have entered upon the premises with a protest that their entry was not for the purpose of possessing- themselves of the premises as assignees, but not having done so, they have subjected themselves to the payment of rent.”

The opinions of Bayley and Abbott, J. J., are equally pertinent.

In the present case no such notice was given, nor is there any evidence tending to show that the assignees did not enter for the purpose of possessing themselves of the premises.

Hausmann, in his testimony, does indeed say that At the time I went in there as assignee, I knew nothing about this lease, or the extent of the lease to Wedeles & Gut man.” But he does not say how soon he informed himself on this point. He must have soon ascertained that his assignors did not own the premises, and when informed • of that, had notice that they hired them of some one. The defendants continued in possession until just as the lease was expiring, and subsequently collected from the under-tenants, rent which fell due after the assignment was made. He does not pretend that they entered merely to remove the goods, and not to occupy, as assignees, the demised premises. They in fact occupied, as the answer admits, until the lease had only seven more days to run.

On such evidence I think the plaintiff has a right to a peremptory instruction, that he was entitled to recover. If he had a right to such an instruction, then the defendants cannot complain of any instructions to the Jury. Giving them the chance of a verdict, on any question of fact, was a chance to which they had no right.

But assuming that the case was a proper one for a Jury to determine, the exceptions to the charge are untenable.

The part of the charge first excepted to, is in accordancwith Williams v. Woodard, (2 Wend., 492,) and Acker v. Witherell, (4 Hill, 112.) The exception “ to all those parts (of the charge) which hold that if they took possession under the assignment, as assignees, they were liable for the rent,” need not be specially considered. That an assignee, thus taking possession, is liable, is affirmed by all the cases, and declared by statute. (1 R. S., 747, § 24.)

The only other exception in connection with the charge, is stated in the case to be “ to the refusal of the Court to charge the requests further than is embraced in the charge.”

The answer to this exception is, first, that the case does not state that the Judge refused to charge further, in regard to the requests, than he did charge. After the charge was, apparently, concluded, the defendants’ counsel requested the Judge to charge further on two points. He did so ; no exception was taken to the charge on either of these two points, and no request was made to charge farther on any other points. This should have been done if greater particularity was desired. (Zabriskie v. Smith, 3 Kern., 322, 338.) Second. This exception embraces and covers all the requests, and excepts to an actual or supposed refusal to charge further on some or all, but does not call attention to any particular request, or indicate the propositions which the counsel supposed were not met by the charge.

The first request is not very intelligible, as a legal proposition. If by it was meant that it must appear, in order to charge the defendants personally, that they entered upon the premises, as assignees thereof, and that if they did not so enter, but were there, merely holding by sufferance or license of the assignors, they were not liable; then it may be answered that the Judge did so charge.

There was nothing in the case to which the third request could apply. The rent sought to be recovered, accrued after the assignment to the defendants was made, and after they had entered into possession.

The defendants had no right to the instruction contained in the fourth request. This is apparent from the reasons stated, why the complaint could not be dismissed.

The 5th and 6th requests need not be considered, further than to refer to what has been said in reference to the first request, as answer to the matter of the 5th; and that the case does not present any such question as is attempted to be raised by the 6th request.

Whether the lessees were able to pay the rent or not, was immaterial, and if it had been paid by them, it was for the defendants to show it, if they relied on that ground. This observation disposes of the 7th request.

As to the 8th request, it may be answered that the plaintiff has recovered on the original lease and an assignment of it to the defendants, which they accepted and under which they entered.

The 9th instruction requested, was given, as asked, whether correctly or not it is no't important to inquire, as the verdict was against the defendants; who had the benefit of the instruction.

We have, in the foregoing views, considered every exception referred to in the defendants’ points, or called to our attention op the argument.

Judgment should be entered in favor of the plaintiff on the verdict.


source: Caselaw Access Project

author: Bosworth, Ch. J. Robertson, J.

license: Public Domain

text:
    The Exchange Fire Insurance Company of the City of New York, Plaintiffs and Appellants, v. The President &c. of the Delaware and Hudson Canal Company, Defendants and Respondents.
    1. A company, maintaining for their own profit a canal, open to the public for navigation on payment of tolls, are bound only .to take reasonable care that it may be navigated without danger, and are not responsible for accidents which do not arise from the want of this reasonable care. They are not, like common carriers, subjected to the responsibility of insurers.
    2. Neither the nature of their duty nor the degree of care imposed upon them is affected by the fact that their regulations prescribe the length and management of the boats, or the depth to which they may be loaded, where damage is not caused by conforming to such regulations.
    3. A canal boat in all respects suitable for navigating the defendants’ canal, and projtsrly managed, while making a trip, struck against a stone in the bottom of the canal, and, with its cargo, was injured and sunk; and it appeared that the same boat had made previous trips in safety during the same season, one of which was about a week before the injury. It was testified that the stone did not look as if it had been long in the water; but it was not visible to persons on the boat or on shore; and there was no evidence how it came to be in the canal, or of the probable cause of its being there, or that ¡the defendants or their officers knew it was there.

      Held, that the company were not liable,- in the absence of proof that they had failed to use reasonable care and caution to keep the canal in a suitable condition for safe navigation; -and that,' the facts of the case did not raise a presumption of negligence.
    (Before Bosworth Oh. J,, and Robertson and Barbour, J. J.)
    Heard, December 10, 1862;
    decided, January 24, 1863.
    Appeal from :a judgment in favor of the defendants, entered on the report of Stephen P. Fash, Esq., Referee, to whom the issues in .this cause were referred for trial.

      This action was brought by the plaintiffs as assignees of the Ogden Bosendale Cement Company, to recover from the defendants the sum of $588.61, the value of a quantity of cement shipped on a boat navigating the canal of the defendants, and damaged by the sinking of the boat caused by an obstruction on the bottom of the canal.
    The defendants were incorporated for the purpose of constructing and maintaining a canal from the Delaware to the Hudson river, to be used- by the public on payment of tolls, and by their charter were authorized to establish such by-laws, rules and regulations as should be necessary for the due management of their property, interest and affairs. One of their regulations for all persons navigating the canal required, in effect, that all boats should be of a pattern approved by them.
    The Cement Company were the owners of the boat C. O. David, and of a cargo of eément with which she was loaded. The plaintiffs had insured the cargo against the risk of transportation. The boat was of the pattern prescribed by the defendants, and had been for several years on the canal. She drew five feet of water on this trip ; and, according to the testimony of the master, was loaded to that depth by the direction or with the assent of the defendants’ servants. On the trip she struck a large stone, filled and sunk, and the Cement Company claimed and received the amount of loss from the plaintiffs and assigned to them their claim against the defendants. On the trial the defendants moved for a nonsuit on the grounds that no negligence had been shown on- the part.of the defendants, and that, without such negligence, the plaintiffs could not' recover.
    The Beferee granted the motion, and judgment having been entered for the defendants, the plaintiffs appealed.

      John M. Mason, for plaintiffs, appellants:
    As to the duty of the defendants, cited Lancaster Canal Co. v. Parnaby, (11 Ad. & El., 223;) The King v. The Severn and Wye Railway Co., (2 B. & Ald., 646;) Wilkes v.
      Hungerford Market Co., (2 Bing. N. C., 281;) Merritt v. Earle, (31 Barb., 38;) Harmony v. Bingham, (2 Kern., 108 ; 1 Duer, 210;) Townsend v. Susquehannah Turnpike Co., (6 Johns., 90.)
    As to the burden of proof of negligence, cited Bowen v. N. Y. Cent. R. R. Co., (18 N. Y. R., 409 ;) Lancaster Canal Co. v. Parnaby, (11 Ad. & El., 223 ;) Daniels v. Potter, (4 Carr. & Payne, 262;) Hutson v. The Mayor of N. Y., (5 Seld., 163.)

      E. H. Owen, for defendants, respondents:
    As to the duty of the defendants, cited the following authorities: Lancaster Canal Co. v. Parnaby, (11 Ad. & El., 223;) Townsend v. Susquehannah Turnpike Co., (6 Johns., 90;) Wilson v. The Same, (21 Barb., 68, 78;) Adsit v. Brady, (4 Hill, 630;) Harris v. Baker, (4 Maule & S., 27;) Chapman v. Rothwell, (1 Ell., B. & E., 168. [96 E. C. L. R. 168;]) Seymour v. Maddox, (16 Ad. & El., N. S., 326. [71 E. C. L. R., 326;]) Freer v. Cameron, (4 Rich. R., 228;) Garrison v. The Mayor, (5 Bosw., 497;) McGinity v. Same, (5 Duer, 674;) The Mayor &c. v. Bailey, (2 Denio, 433;) Johnson v. Town of Haverhill, (35 N. H. R., 74;) Curtis v. Rochester &c. R. R. Co., (18 N. Y. R., 534;) Burckle v. N. Y. Dry Dock Co., (2 Hall, 151.)
    As to the burden of proof, cited and commented on Withers v. North Kent Railway Co., (3 Hurl. & Nor., 969;) Bird v. Great Northern R. R. Co., (4 Id., 842;) Lehman v. City of Brooklyn, (29 Barb., 236;) Robinson v. Fitchburg & Worcester R. R. Co., (7 Gray, [Mass. R.,] 92.)
   Bosworth, Ch. J.

The canal boat, “ C. O. David,” on the 6th of October, 1860, while being navigated on the defendants’ canal, “struck against a rock or stone lying under water,” whereby the boat was sunk in the canal, and the cement in the boat was damaged to the amount of $558.61.

. The only question is whether, on the facts found by the Referee, or the evidence given, the loss is presumptively imputable to the negligence of the defendants ?”

The boat was not in the custody of the defendants, or any servant of theirs, at the time it was injured. The boat and the cement in it were owned, at the time, by the Ogden Rosendale Cement Company; and JohnErink, the master of the boat, was in the employ of the latter, company.

The boat was in all respects a suitable one for navigating said canal, and was injured without any fault or carelessness of the master of the boat. The rock or stone on which it struck was on the bottom of the canal, hidden from- sight. The boat had previously made two trips under the same master, the last one being about a week prior to the injury in question. The master testified that the stone did “not look as if it had been long in the water.” Kb evidence was given tending to show by what means the stone was placed in the canal.

The defendants are not insurers that their canal shall not at any time, or under any circumstances, be in such condition as to render the navigation, temporarily dangerous.

The Company made the canal for their own profit, and opened it to the public on payment of tolls to the Company. The Company thereby and thereupon were subjected to the duty to take reasonable care, that those who are allowed to navigate it, may navigate it without danger to their lives or property. (Lancaster Canal Co. v. Parnaby, 11 Ad. & E., 223.) The defendants are bound to use reasonable care to prevent accidents.

They are not responsible for accidents if they do not arise from a want of this reasonable care. (Townsend v. The President, &c., of the Susquehannah Turnpike Co., 6 Johns., 90; Wilson v. The Same, 21 Barb., 68. See, also, The Mayor, &c., v. Bailey, 2 Denio, 433 ; and Ireland v. The Oswego, &c., Plank Road Co., 3 Kern., 526.)

Keither the nature of the defendants’ duty, nor the degree of care imposed upon them, is affected by the fact that they, by established regulations, prescribed the length and management of the boats, or the depth to ■which they might load, where damage is not in any manner caused by conforming to such regulations. The accident was caused by the stone being in the canal, and there is no pretense that there was not water enough for safe navigation, if the stone had not been there.

The only other question is whether a presumption of negligence arises from the fact that the stone was in the canal ?

The burden of proof is on the plaintiffs to show facts, which tend to establish a breach of duty by the defendants. Such an allegation is essential to a cause of action, and it being put at issue by the defendants’ answer, the plaintiff must establish it by proof. (1 Cow., Hill, & Edw. Notes, 809.)

It was proved that the,boat in question, about a week prior to the accident, passed through this part of the canal, loaded, and without accident, and that the stone “ did not look as if it had been long in the water.” So far, therefore, as the evidence throws any light upon the question, it tends to show, that the stone had been there only a short time. There is no evidence that any of defendants’ agents knew it was there. Fo one testifies to having seen it previously, in the neighborhood of the place where it was sunk. Fegligence is not to be presumed, in the absence of facts proved which tend to establish its existence.

On the one hand it is urged, that the care and oversight of the canal are within the control of the defendants, and it is their duty to use reasonable care to keep it in a condition suitable for navigation: that at the time in question it was not in such a condition, and this is enough to raise a presumption of negligence, and shift the burden of proof.

On the other hand, it is argued that the canal was properly constructed, and furnished with a sufficient supply of water, and had been long in existence; that it had been put in safe condition for the business of the season, and no accident had occurred prior to the 6th of October, when the injury in question was sustained ; that the boat then injured had made prior trips that season, and one pnly about a week previously,- without accident; that the stone which caused the injury complained of was at the bottom of the canal, hidden from sight, and that such facts, instead of tending to prove negligence of the defendants, tend to show the contrary.

In Withers v. The North Kent R. Co., (3 H. & N., 969,) Bramwell, B., said: negligence must be shown by the plaintiff. It is not enough to show that an accident arose from certain extrinsic or external causes; where is the evidence of negligence ? * * The very existence of the line for five years, notwithstanding the district was subject to floods, tended to negative the only negligence that was set up.”

In Cotton v. Wood, (8 J. Scott, N. S., 568,) it was laid down as a correct rule that-, “ where the evidence is equally consistent * * with the existence or non-existence of negligence, it is not competent to the Judge to leave the matter to the Jury. The party who affirms negligence has altogether failed to establish it. That is a rule which ought never to be lost sight of.”

In this case, the evidence is, clearly, as consistent with the theory, that the stone was in the canal without the knowledge of the defendants’ agents, and without fault on their part, as that they had knowledge of its being there, or of its having previously been in a position rendering it probable or possible that it might fall or be placed there.

In Toomey v. London, Brighton, &c., Railway Co., (3 J. Scott, N. S., 146,) Welles J., said, that, “ In order to establish a case of negligence against the defendants, it was incumbent on the plaintiff to prove some fact which was more consistent with negligence than with the absence of it.”

The Referee found correctly, on the evidence, that the defendants had no knowledge that the stone was in their canal, and that the striking of the boat on the stone was not owing to any fault or negligence of the defendants, and that they were not liable for the damage to the cement.

The judgment should be affirmed.

Robertson, J.

The action in this case is brought for damages for a breach, not of duty but of contract by the defendants with the assignors of the plaintiffs, (The Ogden Rosendale Oement Company.) The contract alleged in the complaint is, that the defendants agreed with the cement company that they would float a canal boat, with a certain cargo on board, on their canal from a point thereon to the Hudson river, in consideration of the payment of tolls fixed by them, and “ would furnish sufficient water to float such boat” between those points, “without “ obstruction or delay of any kind,” except such as should arise from enforcing their regulations. The breach alleged is that such canal boat, with such cargo, started on her voyage on such canal, and while on such voyage, was “ struck against a rock or stone, which had been carelessly “ or negligently placed or allowed to be placed or laid by “ the defendants on the bottom of such canal, so as to “ obstruct the proper navigation thereof,” by which she sunk and damaged her cargo. The complaint alleges that the boat was of a “ pattern approved by the defendants as “ suitable to navigate such canal, and was allowed by “them to navigate it.” . The defense in the answer sub stantially is that if any such rock or stone was in such canal “it was wrongfully placed there by others without “ the knowledge or consent of” the defendants, and “its “ existence in the canal was not known to the defendants “ before or at the time of the ” supposed injury.

The only question of law in this case seems to be the extent of the obligation of the defendants to keep their canal free from obstructions. If, like common carriers, they are bound to insure the navigators on such canal against all accidents from unforeseen causes, and which human foresight could not reasonably have guarded against, the defendants would be responsible. If they are only obliged to use reasonable diligence, and take reasonable precautions to prevent accidents, it then becomes a question of fact whether they did so in this case. The canal, like a highway or railroad, if used by others, is a mere instrument of use and profit belonging to the defendants, which they are bound to keep in proper order for use. If they tempt the public to use it, and neglect proper precautions to make it navigable and safe, they are undoubtedly liable for damages for such neglect. (Lancaster Canal Co. v. Parnaby, 11 Ad. & El., 223; Townsend v. Susquehannah Turnpike Co., 6 Johns., 90; Wilson v. Same, 21 Barb., 68, 78; Adsit v. Brady, 4 Hill, 630; Harris v. Baker, 4 Maule & S., 27.) And the rule is of universal applicability to individuals as well as public bodies, that they who induce others to make use of an instrument or article belonging to them, for a particular purpose, they retaining its possession, are bound to be innocent of all negligence in keeping it in a proper condition to be used, (Chapman v. Rothwell, 1 El. B. & E., 168; Seymour v. Maddox, 16 Ad. & El., N. S., 326; Freer v. Cameron, 4 Rich., 228,) at the peril of being responsible for damages.

But there is no consideration of public policy to enlarge the liability of the owners of a canal beyond the employment of reasonable diligence. Unless they owned the canal boats, they could reap no benefit from either the simulated or real destruction of them or their cargoes, and therefore there is no reason for putting them on a footing with common carriers, so as to render them insurers. Ho case has been cited which goes this length.

It is therefore a mere question of the fact whether the evidence shows neglect. The compliance by the cement company with the regulations of the defendants as to the character of the boat, was necessary in any case to give them a right of action at all; it does not make the liability of the defendants greater.

It is claimed that the presence at all of the stone in the canal, by which the injury was done, was prima facie evidence of negligence. This perhaps is a nice question to decide, upon any principle of law; it must depend upon the frequency and consequent possibility of such an obstruction getting there, notwithstanding due diligence. It would be'impossible for a court to say, without evidence of the character of the neighboring banks, or the nature of cargoes transported, that the presence of a stone was to be attributed to negligence rather than unforeseen accident.

One thing is very clear, that the stone being Covered by Water, there was no notice of its presence until something came in contact with it. It would be unreasonable to require the defendants to sound and drag the whole length of their canal perpetually, to ascertain what obstructions might lie at the bottom, or to keep guards along the banks to prevent the commission of injuries by designing persons.

But if there be any such presumption, there was evidence enough in the case to repel it. The stone which was the cause of the injury was, as appeared in evidence, over a foot and a-half thick, of irregular shape, split or sledged off on one side. During that year, cobble stones had been lying on the banks of the canal, although none were so large. It did not appear to have been long in the water. The same vessel had passed down loaded a week previous, and up a day or two before unloaded. A witness testified that the level of the water was lowered by the drawing of the lock below, and the vessel could have got over if the level had been kept up. Under these circumstances there was room for the inference, in the absence of evidence to the contrary, that the stone had been where it was but a short time; that the defendants had no notice of its being there, and that it was placed there either by accidentally falling from a vessel, or by design of some unknown persons; and that, as found by the Referee, its presence was not owing to the fault or negligence of the defendant. (Toomey v. London, Brighton, &c., Railway Co., 3 J. Scott, N. S., 146.)

The report and judgment, therefore, were correct; and the latter should be affirmed with costs,

Barbour, J., concurred in these opinions.


author: By the Court—Moncrief, J.

text:
    The Mayor, Aldermen and Commonalty of the City of New York, Plaintiffs and Appellants, v. Henry Erben et al., Defendants and Respondents.
    1. Exceptions to findings of fact, on an appeal from a judgment on the report of a Referee, are not required. And where exceptions to the conclusions of law, found by the Referee, are not taken by the making of a case, or by the filing of written exceptions, within ten days after judgment, none can be entertained upon an appeal, but the case is to be heard solely upon the exceptions taken at the trial.
    2. A person in whose favor an award was made for the value of land taken by a Municipal Corporation for a public improvement, received payment from the officers of the Corporation, of a sum much larger than the amount actually awarded him, but no more than he was advised he was justly entitled to, he being informed by the officers of the Corporation, and in good faith believing, that the sum paid was the amount awarded, and thereby being induced not to file exceptions to the award; and the Corporation took the property and for more than two years made no attempt to recover the over-payment.

      Held, That the Corporation could not after that recover it back. The rule with respect to voluntary payments is, that if a party has actually paid what the law would not have compelled him to pay, but what in equity and good conscience he ought, he cannot recover it-back again in an action for money had and received.
    3. Evidencie of these facts in defense to the action of the Corporation to recover back such alleged over-payment, is admissible under the defendant’s denial of the allegations of the complaint that the over-payment was money, “ not of right due and payable, and a payment made under a mistake of-fact on the part of the plaintiffs.”
    (Before Moncrief and Monell, J. J.)
    Heard, January 5,
    decided, January 31, 1863.
    This was an appeal from a judgment entered upon the report of George W. Stevens, Esq., Referee, in favor of each of the defendants against the plaintiffs'.
    The material facts of the case, as found by the Referee, were as follows:
    The defendant, Erben, up to the time of the award hereinafter mentioned, was the owner in fee of three lots of land in Center street, in the City of New York, which were worth about $12,500 each, and the defendants, The New York Life Insurance and Trust Company, held a mortgage thereon for the sum of $4,500. The plaintiffs took proceedings for the opening and extending of Canal street, in the course of which one of the lots and a part of each of the others were required to be taken for the public use.
    The defendant, Erben, attended before the commissioners of estimate and assessment who had been appointed at the instance of the plaintiffs, from time to time, upon their request, and was informed by the commissioners that the amount awarded to him for the land to be taken was about the sum of twenty thousand dollars, over and above the amount assessed against him for the benefit to the other property owned by him within the line of the proposed improvement.
    The commissioners afterward made and filed with the Street Commissioner of the city, their report, in and by which they, among other things, awarded to Erben, for the parts of lots, the sum of nine thousand and fifty dollars, out of which a sufficient sum was to be paid to the defendants, The Hew York Life Insurance and Trust Company, to satisfy their mortgage thereon, and also awarded to Erben, for the whole lot taken, the sum of six thousand seven hundred and fifty-five dollars, out of which a sufficient sum was to be paid to the defendants The Hew York' Life Insurance and Trust Company, to satisfy their mortgage thereon.
    At the time of the making of the report, or at any time previous thereto, there was but one mortgage, which was a lien upon the said lots or parts of lots, which mortgage was executed by Erben, to the Life Insurance and Trust Company, to secure a single sum of four thousand five hundred dollars, with interest thereon.
    After the report to the commissioners was so filed, Erben called at the office of the Street Commissioner of the city, and requested of the clerk there, permission to examine the report. The report was not shown to or examined by Erben, but in lieu thereof he was informed by the clerk, and believed, that the amount awarded to him for damage was about the sum of twenty thousand dollars, over and above the amount assessed against him for benefit to other property owned by him within the line of the improvements; which assessment amounted to the sum of four thousand dollars, or thereabouts, upon which information Erben relied, and he had no other knowledge or information upon the matter.
    Afterward, and on or about the tenth day of May, 1855, upon Erben’s demanding the same as due under the report, the plaintiffs made and delivered to the Life Insurance and Trust Company two warrants drawn upon a bank, both payable to the order of Erben, and to the order of the Life Insurance and Trust Company, one of which was for the sum of thirteen thousand five hundred and fifty dollars, and the other for the sum of eleven thousand two hundred and fifty-five dollars, both of which warrants were duly indorsed*by the defendants, and were afterward paid by the bank, to the Insurance and Trust Company, and for which warrants a receipt was signed by the defendants.
    The Insurance and Trust Company had no notice or knowledge of the amount awarded to the defendant Erben, other than that contained in the warrants and receipts, and they received the warrants, and the money paid thereon, for the purpose of making distribution of such money as between themselves and Erben, and not otherwise; and after the receipt of the money they made distribution thereof by retaining the sum of about $4,500, due on their mortgage, and by paying over to Erben the sum of twenty thousand six hundred and eighty dollars and fifty-seven cents, which was the residue of the fund.
    The Referee further found that the plaintiffs voluntarily made and delivered the warrants to the defendants, with full knowledge of the several matters stated in the report of the Commissioners. And as conclusions of law he stated that the plaintiff, having voluntarily paid the sum of money above mentioned, could not maintain this action for the recovery of any part thereof; and that each of the defendants were entitled to judgment, with costs.

      The plaintiffs took exceptions, both to the findings of fact and the conclusions of law, of the Referee; and appealed from the judgment entered thereon.

      George R. Thompson, for plaintiffs, appellants.
    I. The Referee erred in admitting the evidence as to th validity and correctness of the proceedings of the Commissioners of Estimate and Assessment, and as to the sufficiency of the award made by them to the defendants.

      (a.) The whole subject matter of the extension and the report was res adjudicata, and it was not competent in this action to inquire into it. (2 Rev. L. of 1813, 413, § 178; Matter of Canal and Walker streets, 2 Kern., 406.)
    (&.) If Erben had any objection to the award, the statute provided a remedy, and if he neglected to oppose the confirmation of the report, he cannot do so in. an action of this kind. ' The only way to review these proceedings is by certiorari. (The Trinity Church v. The Mayor, &c., 10 How. Pr., 138; Wilson v. The Mayor, &c., 4 E. D. Smith, 675, in which all the authorities are collected and cited by Woodruff, J.; see, also, 1 Seld., 376, and 7 Barb., 127, 133.)
    (c.) Erben had every means of ascertaining the true amount of the award, and neglected to do so. It was his duty to do something more than merely inquire.
    II. The Referee erred, in finding as matter of fact, that the plaintiffs gave the warrants with full knowledge of the true state of the case; and in concluding as matter of law, that the plaintiffs having voluntarily paid the excess cannot recover it back by action.

      (a.) The mere knowledge of an agent of the plaintiffs that the defendant Erben was not entitled to the money does not make this a voluntary payment on the part of the corporation within the decisions.
    As to the rule in relation to voluntary payments, see Utica Bank v. Van Gierson, (18 Johns., 485;) Waite v. Leggett, (8 Cow., 195, 198, note.)

      (b.) A voluntary payment by the city can only be made by a vote of the Common Council.

      William Betts, for defendants, The New York Life Insurance and Trust Company, respondents.

      Albert Mathews, for defendant Erben, respondent.
    I. The burden of proof was on the plaintiffs, (Wyman v. Farnsworth, 3 Barb., 369; Elting v. Scott and Seaman, 2 Johns., 157,) and the exceptions to the admission of irrelevant testimony cannot avail the plaintiff. (High v. Wilson, 2 Johns., 48; Hayden v. Palmer, 2 Hill, 209; Ledyard v. Jones, 3 Seld., 554; Lowery v. Steward, 3 Bosw., 515.)
    H. A demand before suit, was necessary. (Abbott v. Draper, 4 Denio, 51.)
    III. The defendants having claimed as matter of right, and the plantiffs having voluntarily made the payment to the defendants, with full knowledge of all the matters stated in the report of the Commissioners, they cannot maintain this action. (High v. Wilson, 2 Johns., 48; Brisbane v. Dacres, 5 Taunt., 143; Abell v. Douglass, 4 Denio, 305; Wyman v. Farnsworth, 3 Barb., 369; Wilson v. Ray, 10 Ad. & El., 82; Bilbie v. Lumley, 2 East, 469 ; Mowatt v. Wright, 1 Wend., 355 ; Supervisors of Onondaga v. Briggs, 2 Denio, 26; Sandford v. The Mayor, &c., of New York, 33 Barb., 147 ; Morris v. Tarin, 1 Dall., 148; Irvine v. Hanlon, 10 Serg. & R., 219.)
    IV. This is of necessity an action “ for money had and received,” and is an equitable action. The question is not whether the defendant could have recovered the money eitherat law or in equity; but conceding he could not, whether in equity and good conscience, under a full view of all the facts and circumstances, he can be permitted to retain it. (Denby v. Moore, 1 Barn. & Ald., 123 ; Farmer v. Arundel, 2 Black, 824; Price v. Neal, 3 Burrows, 1354 ; Franklin Bank v. Raymond, 3 Wend., 69; Eddy v. Smith, 13 Wend., 488; Buel v. Boughton, 2 Denio, 91; Moses v. Macfarlan, 2 Burrows, 1012; Bize v. Dickason, 1 T. R., 286 ; Brisbane v. Dacres, 5 Taunt., 143.)

      Y. The defendants are not estopped from showing the truth.
    1. It is competent in a Court of equity, for the purposes of justice, to look behind the record of a judgment, to ascertain the legal relationship existing between the parties thereto- prior to the recovery. (Bangs v. Strong, 4 Comst., 315.)
    ' 2. A Court of equity will grant relief against a judgment to prevent injustice upon the ground of fraud, accident or mistake. (Foster v. Wood, 6 Johns. Ch. R., 87; Huggins v. King, 3 Barb., 616.)
    3. A Court of law, also, may sometimes, even collaterally, disregard the apparent estoppel of a judgment, to prevent injustice arising from fraud or mistake. (Cobb v. Curtis, 8 Johns., 470; Cameron v. Fowler, 5 Hill, 306.)
    4. This is a form of action in which the broad equity of the transaction is unfolded, and in which the technical rules'of law do not prevail. (Per Kent, Ch. J., in Coulon v. Green, 2 Caines, 154.)
    5. Moreover, it must be borne in mind that, although the report of the Commissioners, when confirmed, may be claimed to be final and conclusive, so far as to vest the title to the land taken in the Corporation, it is not clear that, as proved, it has the effect of a judgment as respects the amount of money to be paid therefor. (Davies’ Laws of New York City, sec. 178, p. 529.)

      (a.) The proceedings and the order confirming the report, being a -special proceeding, could not be deemed of the force and validity of a judgment record without proof of the preliminary proceedings showing jurisdiction. e
   By the Court—Moncrief, J.

This action was brought in the year 1858, to recover from the defendants the sum of nine thousand dollars and interest from May 10,1855, upon an allegation that said sum “was an excess of an amount awarded, and of right due and payable to the defendant Erben; that said payment was made under a mistake of facts'on the part of the plaintiffs,” &c. The action was referred by consent of parties to a referee who reported in favor of the defendants in November, 1861. Judgment was entered upon this report on the 18th day of November, 1861. Exceptions to the conclusions of fact and of law found by the Referee, appear to have been filed in the month of January, 1862. . Without attempting to give in detail the testimony sustaining each of the findings of fact as set forth in the case upon this appeal, it must suffice that in my opinion no error was committed by the Referee in that regard. Exceptions to findings of fact are not required. (Hunt v. Bloomer, 3 Kern., 341; Johnson v. Whitlock, Id., 346.) Where exceptions to the “ conclusions of law ” found by the Beferee are not taken by the making of a case or by the filing of written exceptions within ten days after judgment, none can be entertained upon an appeal, and the case is heard solely upon the exceptions taken at the trial. (3 Kern., supra; Magie v. Baker, 4 Id., 435.)

The appellants argued “as one of the principal questions on this appeal, the exceptions to the ruling of the Beferee in allowing evidence as to the validity and correctness of the proceedings of the Commissioners of Estimate and Assessments, and as to. the sufficiency of the award made by them to the defendants.” The complaint averred the payment of a certain sum of money “ not of right due and payable, and a payment made under a mistake of fact on the part of the plaintiffs.” There is no pretense that the defendant Erben was guilty of a wrong in accepting the amount actually paid to him, or that he believed or had reason to- suppose he was taking what was not of right due and payable to him. True it is, the Commissioners in their report awarded to him a sum, nine thousand dollars less than the sum he actually received, but it is also true that he had inquired and had been advised, and had no reason to doubt that he would be awarded the just and- fair, value of his property; that he would be entitled to receive the exact sum actually paid to him; the Commissioners so told him; the sum paid was the fair and actual value of the land taken from the defendant Erben; in fact the rule adopted by the Commissioners for measuring the valuation of property to be taken, entitled him to a .larger -sum than was paid to him; he was advised at the office of the Street Commissioner, when he called for the purpose of inspecting the report, and upon inquiry therefor, that the amount awarded to him was the sum paid to him; he was thereby induced to omit filing objections to the report, which as matter of fact is conceded to have awarded to 6 him only the sum of $15,805; and the plaintiffs have rested upon their claim to recover back a supposed over-payment for about a period of three years. The answer of the defendant Erben, apprised the plaintiffs that he should interpose these several matters as a defense to their claim; the defense was a just and reasonable one. To have sustained the objection and precluded the defendant Erben from showing this defense, would have been manifest injustice; ■ if the plaintiffs had paid more than was stated as the award to him, and did so having possession of the report under a mistaken notion that he was awarded the sum paid, yet they had not paid to him more than of right and injustice was due and payable to him, and they had misled him and lulled him into silence until long after the period when he could correct the only mistake which was made, the stating a clearly inadequate compensation for what was taken from him. Their proposition seems to be: The land we took from you was worth more than we have paid; the Commissioners and the Street Commissioner’s officers advised you of being entitled to the sum paid; you could have filed objections against the award actually inserted in the report and corrected it by inserting the amount we have paid; we have your land and although you innocently and without fault have accepted what we voluntarily paid, and less than as strict right you might have claimed, yet we claim that the report being confirmed, and it being manifest that in and by it you were awarded only $15,805, the excess over that amount should be refunded. The adoption of this rule works plain wrong and injustice. The least that the plaintiffs should be required to do would be to reinstate him in the position he was when the mistake was made by the Oommissioners in inserting an incorrect amount of award to him, or to enable him now to have the same advantage of showing error in the report that he would have had if the Commissioners and others had not misled him.

The evidence was properly received; it established an issue tendered by the defendant Erben. The rule with respect to voluntary payments is,that if a party has actually paid what the law would not have compelled him to pay, but what in equity and good conscience he ought, he cannot recover it back again in an action for money had and received. The objections taken at the trial were properly overruled, and the exceptions thereto untenable.

Upon the merits as presented by the case upon appeal we then have a payment made on behalf of the plaintiffs, voluntarily, without fraud or deceit or knowledge of the fact on the part of the defendant Erben, more than two years before reclamation is attempted or an assertion of error or mistake on their part; the fact that he was misled byothose acting on behalf of and for the plaintiffs and prevented from correcting the réal mistake that was made in not awarding the amount he received; and that the plaintiffs have received and have been in the enjoyment of his property of the value, if not greater than, of the amount that was paid to him; and applying the rule just given, the plaintiffs having voluntarily paid what the report in terms did not require them to pay, but an amount which in equity and good conscience they should have paid, the plaintiffs cannot recover it back again. It would be in the highest degree an injustice to permit the plaintiffs to assert their claims of payment under a so called mistake under the circumstances detailed in the evidence and found as matters of fact in the present case.

The action as against the defendants The New York Life Insurance and Trust Company could not under any circumstances have been maintained; the company was a mortgagee having a lien for the sum awarded to it; the company received only the amount due to it; the fact-that the checks were payable to the joint order of the defendants perhaps might create the company a disbursing agent of the plaintiffs, to liquidate their-claim and transfer the residue of the amount to the defendant Erben, which the company did; there was no mistake made in the payment to it; nor in my opinion was> there paid to the defendant Erben any sum of money “ not of right due and paycible to him” I think the judgment is correct, and should be affirmed.-- -


author: By the Court—Monell, J.

text:
    Thomas Lewis, Plaintiff and Respondent, v. Charles Blake, et al., Defendants and Appellants.
    1. The rule is uniform, that the Court will not'set-aside the verdict of a Jury, unless it is clearly against the weight of evidence. Where the- evidence is merely conflicting, a verdict found either way will not be disturbed.
    2. In this action, which was to recover for merchandise sold and delivered, the defense being that the purchase was made of a third person, under a special contract, which had not been fulfilled; there being evidence' on both sides of the question; —Held, that upon the testimony there was sufficient conflict of evidence to-authorize the Jury to find against the defense, and to bring the case within the rule.
    3. In such an action it is not error to exclude, parol evidence to explain an ambiguity in the special contract in question, where there is no averment in the pleadings to which the "proof would apply, and the defendants have not, by proof, connected the plaintiff with such contract so as to affect him by notice of its existence.'
    (Before Moncrief and Monell, J. J.)
    Heard, January 8, 1863;
    decided, January 31, 1863.
    Appeal from a judgment and from an order denying a new trial.
    The action was to recover the price of three cases of blue kerseys, alleged to have been.sold and delivered by the plaintiff to the defendants Charles Blake and .Henry 0. Landon, in November 1861.
    The defense set up was, that the kerseys mentioned in the complaint, were a part of a quantity of merchandise contracted to be delivered to the defendants by one Charles W. Alleu, under a special contract with him, made in October, 1861, whereby he agreed to deliver to the defendants in the City of New York, in the month of October, 3,000 yards of blue kerseys, “and also the entire production, of the mill in the month of November, 1861, to be not less than 14,000 yards, nor more than 18,000 yards for the month.” The contract did not indicate what mill was intended. The defendants desired, but were not allowed, to prove that it was the mill of the plaintiff at Naugatuck, Connecticut, and they insisted that the plaintiff, by the authority of Allen, and at his request and on his account, supplied the merchandise to Alleq, to be delivered under that contract to the defendants. The defendants averred that they never purchased of the plaintiff, and they denied any sale or delivering of the kerseys to them, by the plaintiff.
    The action was tried before Mr. Justice Eobeetsoh, and a Jury, on the 28th of January, 1862. The Jury rendered a verdict for the plaintiff for $1,328.35. A motion for a ' new trial was denied at Special Term, and judgment having been entered, the defendants appealed.
    E. Patterson, for defendants, appellants.

      G. De Forest, for plaintiff, respondent.
   By the Court—Monell, J.

The principal ground upon which the appellants move for a new trial in this case, is, that the verdict is against the weight of evidence. No exception was taken to the. charge- of the Judge, and only one exception to the exclusion or admission of evidence.

The rule for many years has been uniform, that the Court will not interfere with, and set aside the verdict of a Jury, unless.it is clearly against the weight of evidence. (De Fonclear v. Shottenkirk, 3 Johns., 170; Keeler v. Fire man’s Ins. Co., 3 Hill, 251; Eaton v. Benton, 2 Hill, 578 ; Coen v. Dupont, 1 Sandf., 260; Fleming v. Hollenback, 7 Barb., 271; Hall v. Morrison, 3 Bosw., 520.)

The evidence in this case was conflicting, and a verdict found either way would not, I think, be disturbed by the Court.

The most direct evidence that the sale was by the plaintiff to the defendants, is furnished by the testimony of the plaintiff’s witness, Levi P. Hatch, who testified that he was preseit át a conversation between the plaintiff and Landon, one of the defendants, about the 21st or 23d of October. It occurred in plaintiff’s office at Naugatuck. Landon said he came there about some kerseys. Witness thought he brought a letter of introduction from Allen. He said there was considerable conversation about price and quality: That it was agreed that plaintiff should sell defendants kerseys at 86 cents, less 9 per cent for 30 days; plaintiff to draw a# sight, inclosing invoices with the draft.

Several invoices of kerseys were sent by the plaintiff to the defendants, between October 30, and November 13th. The bills were made out against the defendants and forwarded to them, and the amounts drawn for, at sight, or one day’s sight, by drafts upon the defendants.

On the 13th, 14th and 15th of November, the invoices were forwarded, for which this action was brought.

Letters were read in evidence, written by the defendants to the plaintiff, showing or tending to show, that they were dealing directly with the plaintiff. No allusion was made in these letters to their contract with Allen, or that they were receiving the goods from the plaintiff, as the agent or otherwise of Allen. While in other letters of the defendants, also read in evidence, they make remote allusion to their agreement with Allen and refer, in terms, to the quantity of kerseys to be furnished under his contract. Both the defendants, in their testimony, substantially, although not* directly, contradict the evidence of the witness Hatch, as to the sale to them ; and they also proved invoices of kerseys forwarded by the plaintiff to the defendants, and bills made out and rendered, in the name of Allen. There was evidence given by the defendants that the plaintiff knew of the contract between them and Allen ; and, by the plaintiff, that he had no knowledge of such contract. Other evidence was given on the one side and contradicted on the other. Among other, that the plaintiff’s first invoices were forwarded at the request and on behalf of Allen, and that subsequently, and before the invoices in suit were sent, the arrangement was modified by the parties, and thereafter the defendants dealt directly with the plaintiff.

The Judge, in charging the Jury, left it for them to determine, from the evidence, whether the goods were sold and delivered by the plaintiff to the defendants, or by Allen to the defendants, the plaintiff acting as Allen’s agent in their delivery. He also instructed them, that if they found there was a contract between the plaintiff and Allen, by which the plaintiff* was bound to deliver to Allen, or to the defendants, as the agents of Allen, then they might inquire whether or not that contract was subsequently modified by the parties, so as to ■ make a new contract between the plaintiff and the defendants. In short, the whole case, without comment by the Judge, was left to the Jury to determine from the evidence.

The Jury found a general verdict for the plaintiff, and we cannot say, that it is even, against the weight of evidence. It is not clearly so. There was sufficient conflict of evidence, to bring the case within the settled rule, and the Court will not disturb the verdict.

The contract between Allen and the defendants provided for furnishing the defendants with the entire production of “ the mill ” in the month of November. The defendants’ counsel asked of a witness what “ mill” was referred to in the contract. This question was objected to and excluded by the Court, to which the defendants excepted.

If any question had been involved in the case, rendering it important to ascertain what mill was intended by Allen and the defendants, it might become necessary to inquire whether there was such an anibiguitas patens, as needed parol evidence to explain. The plaintiff was not a party to the contract, :and .was only .to be affected by notice of its existence, as bearing upon the question of sale. It was quite immaterial what Allen and the defendants intended, so long as the plaintiff was not shown, to have been connected with the contract, either as principal or otherwise. The contract was not in issue. . It was not intended to recover upon it, nor was there .any averment in the pleadings to which the proof offered would apply.. It was not shown, nor attempted to.be shown, that the plaintiff knew that his “mill” was the one contemplated. The evidence was therefore not only immaterial, but would have been improper, in determining, .the only issue the Jury was to try, and was properly excluded by the Court. . .

The judgment and order appealed from, should be affirmed.


text:
    William Marsh, Plaintiff and Appellant, v. John Wyckoff, Defendant and Respondent.
    1. When a party to a contract which is void by the-statute of frauds for not being in writing, refuses to perform, placing his refusal solely upon the ground of- inability to do so, and the other party is not in default, the former cannot maintain an action against the latter to recover back money paid under the contract, without making a demand for its repayment before suit.
    2. The vendor in an executory contract for the sale of land suffered the land to be sold for non-payment of taxes. The purchaser delayed, and finally refused, to complete the purchase, but solely on the ground of his inability to pay; and he now sued to recover back what he had already paid.

      Held, That inasmuch as during all this time the vendor’s right to redeem from the tax sale was subsisting, and he was ready and willing to complete the contract, he was not to be deemed in default. -.
    (Before Moncrief and Monell, J. J.).
    Heard, January 9, 1863;
    decided, January 31, 1863.
    This was an appeal by the plaintiff from the judgment entered upon the report of Joseph Heilson, Esq., as Referee; in favor of the defendant.

      The complaint was for money had and received by the defendant to the plaintiff’s use. The proof showed that the plaintiff entered into a parol agreement with the defendant for the purchase of certain real estate, and that the money in question was paid toward the contract price. The details of the facts found by the Referee are stated in the opinion of the Court.
    The part of the opinion of the Referee before whom the cause was tried, which had reference to the effect of the tax sale, was as follows:
    “The defendant appears to have been able to carry out the contract on his part, unless the fact that the land had been sold for unpaid taxes rendered him incompetent. It was urged, on behalf of the defendant, that to give effect to such apparent sale, it should have been proved that all the statutory requirements in levying taxes had been observed, so that it should appear that the premises were really incumbered by taxes and liable to be sold This would be so, doubtless, in cases where a purchaser claims under such sale. But assuming that the sale was valid, the defendant was still in a condition to perform his agreement, as the term allowed for redemption had not expired.
    “It cannot be said that he could not make title.”

      Levi S. Chatfield, for plaintiff, appellant,
    I. The complaint is in proper form. (King v. Brown, 2 Hill, 485; 5 Johns., 49.)
    II. This contract being by parol was void. Money paid on a void contract may be recovered back in an action for money had and received. (Thayer v. Rock, 13 Wend., 53; King v. Brown, 2 Hill, 485; Dowdle v. Camp, 12 Johns., 451; Rice v. Peet, 15 Id., 503; Gillet v. Maynard, 5 Id., 85 ; 7 Cow., 92 ; 9 Id., 46.)
    III. But in this case the defendant could not perform the contract. (Caswell v. Black River Manuf. Co., 14 Johns., 453 ; 2 Comyn on Cont., 52.) When the contract was made the defendant did not own the land; he had an equity of redemption merely, like that of a judgment debtor after a sale on execution. Clearly the plaintiff was not bound to take such a title, nor was he bound to go on with payments, after he knew the situation of the title, trusting to the defendant afterward to perform a void contract. (Judson v. Wass, 11 Johns., 525; Tucker v. Woods, 12 Id., 190.)
    IV. The Referee also erred in admitting the testimony of the defendant, that if the plaintiff had paid in full, he would have been able to redeem the land.
    V. The plaintiff was entitled to recover back this money upon well settled principles:

      First. Because the contract was void and furnished no consideration for the payments.

      Second. Because the plaintiff rescinded it, having the right to do so, and gave the defendant notice of such rescission; and

      Third. Because the defendant could not perform, having no such title, as the contract contemplated, to convey.

      George C. Blanke, for defendant, respondent.
    I. The plaintiff could not maintain this action upon his complaint. (Code, § 142, sub. 2; Cushingham v. Phillips, 1 E. D. Smith, 416; Thurman v. Stevens, 2 Duer, 609; 1 Chitty’s Pl., 355, and cases cited.) The variance between the plaintiff’s pleading and proof was total and fatal. (Walter v. Bennett, 16 N. Y. R., 250; cases cited under § 171 of Voorhies’ Code.)
    II. This action cannot be sustained on the merits. The plaintiff must show he has equity and conscience on his side. (Pease v. Barber, 3 Caines, 266.) But the equities are all with the defendant. Payments voluntarily made with a full knowledge of the facts on a parol contract for the purchase of land cannot be recovered back while the vendee is in default. (Dowdle v. Camp, 12 Johns., 451; Abbott v. Draper, 4 Denio, 51; Coughlin v. Knowles, 7 Met., [Mass.,] 59; Lewis v. Whitnell, 5 Monroe, [Ky.,] 190; Duncan v. Baird, 8 Dana, [Ky.,] 101; Dougherty v. Goggin, 1 J. J. Marsh., [Ky.,] 373; Gray v. Gray, 2 Id., 21; Shaw v. Shaw, 6 Vermont R., 69; Lane v. Shackford, 5 N. H. R., 130.) Money voluntarily paid when there has been no mistake in matters of fact, cannot be recovered back. (Notes to Mariott v. Hampton, 2 Smith’s Lead. Cas., 238; Broom’s Legal Maxims, 187; Supervisors of Onondaga v. Briggs, 2 Denio, 26, and cases cited; Clarke v. Dutcher, 9 Cow., 674; Abell v. Douglass, 4 Denio, 305.)
    III. Plaintiff must prove a demand before suit. (Abbott v. Draper, 4 Denio, 51.)
    IV. The evidence introduced by plaintiff, (under defendant’s objection.) tending to show sales for taxes of the land in question, with a view of impeaching defendant’s title, did not entitle plaintiff to a recovery.
    1. The evidence was not embraced in the issue; neither taxes nor sales were mentioned in the pleadings.
    2. The evidence did not establish the existence of any of the facts necessary to show a valid tax sale. There is no presumption of regularity in a tax sale. (Varick v. Tallman, 2 Barb., 113.)
    3. One of the alleged sales appears to have taken place since the commencement of this suit, and both sales were subject to redemption for two years, by any person interested in the property. (Charter of Brooklyn; Laws of 1854, p. 880, § 29.)
    4. These taxes and sales would have been redeemed by defendant if plaintiff had paid the $400 balance of his cash payment. Or the plaintiff could have retained the necessary amount out of the $400, and paid them himself.
    5. The defendant was not, by reason of a tax sale which could be redeemed, disabled from performing his agree-meat to convey. (Lane v. Shackford, 5 N. H. R., 130.)
    6. Assuming the land was incumbered, the same principle would apply to this case as to the case where an agreement in writing was made; and the vendee was bound to perform, it being presumed that the vendor would remove the incumbrance before the deed was to be given. (Greenby v. Cheevers, 9 Johns., 126; Ellis v. Hoskins, 14 Johns., 363; Robb v. Montgomery, 20 Johns., 15; Garlock v. Lane, 15 Barb., 359.)
    And that to put the vendor in default, a tender must be made by the vendee. (Hudson v. Swift, 20 Johns., 24 Green v. Green, 9 Cow., 46, and cases cited; Wells v. Smith 7 Paige, 22 ; Hackett v. Huson, 3 Wend., 249; Connelly v. Pierce, 7 Wend., 129.)
   By the Court—Moncrief, J.

The facts as found by. the Referee, are not disputed. It appears, therefore, as matters óf fact:

1. That on the'10th day of. August, 1860, a verbal agreement was made between the plaintiff and the defendant, whereby the plaintiff agreed to purchase, and the defendant agreed to sell and convey to the plaintiff the lands mentioned in' the defendant’s answer, for- the price and according- to the terms set forth therein. ^

•2. That the plaintiff not being ready to perform his part of the agreement, the time for such performance was, at his request, postponed from time to time, until the month of November,4860, when the plaintiff gave the defendant his two checks, amounting to $600, on account of the $1,000 cash payment, and on paying $350, a portion of said $600, proposed that the deed should be executed and the mortgage sent to him for execution, as stated in his letter of ¡November 17th, 1860. '

3. That the defendant afterward urged the plaintiff to complete the performance of said agreement, but the plaintiff declined so to do; for the alleged reason that times had changed, that he had lost money, and could not carry it out.

4. That on the 3d January, 1861, the defendant tendered to the plaintiff a deed, in pursuance of said agreement, and demanded that the plaintiff complete the performance of said agreement on his part, which he declined to do for want of means at that time.

5. That at the time said agreement was made, the land in question was subject to the taxes for the years 1858 and 1859, and that said lands were sold in the year 1860 for the non-payment of said tax of 1858; but said sale was subject to redemption by the defendant at any time within two years thereafter; and that the said taxes and interest and amount of such sale were less than the sum of $200.

6. That if the residue of the $1,000 had been paid by the plaintiff, the defendant would have been enabled to have paid said taxes, as testified by him.

7. That the money mentioned in the complaint was the sum of $600 so paid the defendant on account of said agreement; and that no demand was made by the plaintiff for the repayment of said money before the bringing of this action.

. The claim of the plaintiff, as made in his complaint, is, “ that the defendant is indebted to the plaintiff in the sum of six hundred dollars, and interest thereon, for so much money by the defendant had and received to and for. the use of the plaintiff, as follows, that is to say: On or about the 17th day of November, 1860, the defendant, at his special instance, had and received of and from the plaintiff, and to and for the use of the plaintiff, the sum of six hundred dollars, and the plaintiff is the lawful owner" and holder of the claim and demand therefor;, that the said defendant, although requested so to do, has not paid,” &e. Judgment was demanded for $600, and interest from November 17th, 1860, &c.

The contract between the parties was not illegal; at most it could only be claimed to be voidable at the election of a party to it, and of this there may be some question. (Dowdle v. Camp, 12 Johns., 451; Westervelt v. Matheson, Hoffm., 37; Spoor v. Newell, 3 Hill, 307; Boughton v. Bruce, 20 Wend., 234.) The plaintiff voluntarily, in part performance of this oral contract for the purchase of lands, has paid the sum of six hundred dollars; he has requested and been indulged in an extension of time for the completion of his purchase; his neglect to fully perform has been excused by saying “the times had changed, he had lost money and could not carry it out;” “ he could not complete the performance” of the agreement “ for want of means at í7¡.«f time.” He never claimed that he was not bound to perform by reason of the statute; and without requesting a return of the money thus voluntarily paid under an agreement of which good conscience demand ed of each party a full performance, this action is brought to recover it back. The defendant was not in default; he was ready and willing to perform the contract on his part; and it seems to me most plainly unjust, under such circumstances, to hold that the action can be maintained until the claimant, asserting a title under the statute making void his contract at his election, has also demanded the return of the money which he paid and the defendant received in good faith in part performance. (Fry on Specif. Perf., §§ 339, 340.) The authority in 4 Denio, 51, (Abbott v. Draper,) is decisive upon this point, and conclusive as to the rights of the plaintiff in this action.

As this view satisfactorily disposes of the whole case, it is unnecessary to examine the other points raised upon the argument; but as to the complaint being defective, see Eno v. Woodworth, (4 Comst., 249, 253; 1 E. D. Smith, 416; 2 Duer, 609.) I concur in the views so well expressed in the opinion of the Referee, and think the judgment should be affirmed.


text:
    William W. Wakeman et al., Plaintiffs and Respondents, v. Hill Gowdy, Defendant and Appellant.
    1. A creditor, receiving from his debtor, as collateral security, a promissory note made by a third person, past due, with the request to collect it and apply the proceeds to the payment of the debt, though without any express direction to sue upon it, incurs the obligation to use diligence in its collection, and to sue if necessary. In such case, the debtor stands in the relation of guarantor for the collection of the note, and is entitled to the exercise on the part of the holder, of such diligence as is required of a bailee for hire, or of a pledgee.
    2. The degree of diligence required must be determined from the facts and circumstances of the case, as a question of law.

      3. Where creditors received such a note as collateral security at a time when the makers were abundantly able to pay it, and on their demanding payment the latter intimated that they had a defense, but the creditors neither notified the debtor thereof, nor brought suit on the note until three months thereafter, and meanwhile the makers had become insolvent, whereby the amount of the note was lost; — Held, that negligence was imputable to the creditors, and that they were liable to the debtor for the amount of the note, and could not recover from him their costs of obtaining judgment against the makers.
    (Before Moncrief and Monell, J. J.)

    Heard, January 12, 1863 ;
    decided, January 31, 1863.
    Appeal by the defendant from a judgment entered in favor of the plaintiffs on the report of S. P. Hash, Esq., Referee, before whom the issues in the cause were tried.
    This action was brought by William W. Wakeman, Zalmon B. Wakeman, Jonathan Godfrey and Diedrick Lannerman, to recover for the freight and charges of a cargo of cotton brought for the defendant in the plaintiffs’ vessel, from Savannah to Hew York, and also for the costs and charges incurred by the plaintiffs in the prosecution of a promissory note which had been delivered by the defendant to the plaintiffs as security for his indebtedness for the freight.
    The complaint, after alleging the cause of action for the freight, further alleged, that afterward the defendant delivered to the plaintiffs, as security for his indebtedness, a promissory note made by Silvanus Holbrook & Co., and requested the plaintiffs to collect the same and apply the moneys, when collected, to the payment of his said indebtedness ; and to that end requested and directed the plaintiffs, for and on his account, to prosecute the said note, and to take all legal measures for the collection of the same, and agreeing, in effect, to pay all the costs and expenses which the plaintiffs might incur in endeavoring to collect the note. That the plaintiffs instituted an action against the makers of the note, and subsequently obtained judgment thereon, but failed to collect anything. And that in obtaining such judgment the plaintiffs paid the sum of $144.44 for the costs and expenses thereof.

      The defendant did not controvert the cause of action for the freight and charges, but denied that he was liable for the costs and expenses of the suit against Holbrook & Co.
    ■ He averred in his answer, that the note of Holbrook & Co., at the time of its delivery to the plaintiffs, was past due; that they promised the defendant to collect the same immediately, and with all reasonable diligence to bring an action thereon, and to apply the moneys collected thereon to the payment of the defendant’s indebtedness to them ; that at the time of the delivery of the note to the plaintiffs, the makers of the note were responsible, and the same could have been collected; but that the plaintiffs, neglecting their duty, did not prosecute the makers until after they had become insolvent; whereby, as the defendant claimed, the plaintiffs became liable to the defendant for the amount of the note.
    The plaintiffs replied to the answer, denying negligence.
    The case was tried by the Referee, who found the facts:
    That on the 18th of June, 1851, the note in question was delivered to the plaintiffs as collateral security for the defendant’s indebtedness, and that the plaintiffs were authorized and requested by the defendant to collect the note and to apply the proceeds to the payment of such indebtedness.
    That on the same day the plaintiffs wrote to the makers, demanding payment.
    That the next day the makers replied that the note was given for half a lot of cotton bought from the defendant, and that they would pay the note whenever the thing was made right for the whole cotton.
    That on the 20th September, 1851, the plaintiffs made á personal demand of payment, but it was refused; and on the same day they caused a suit to be brought and an attachment was issued against the property of the makers.
    That on the 30th August, 1851, the manufactory and a large amount of property of the makers,' Holbrook & Co., was destroyed by fire; by reason of which they suspended payment on the first of September; that on that day a suit was commenced against them, and an attachment levied upon their property for a large sum; and that, by reason of liens and incumbrances prior to the plaintiffs’, nothing was collected on their judgment.
    That if legal proceedings by suit and attachment, according to the laws of Massachusetts, had been instituted against Holbrook & Go. upon the note, at any time prior to the first of September, 1851, any judgment recovered in the action would have been collectible out of their property.
    That the defendant was in the City of New York during the summer of 1851; that he knew at the maturity of the note, that the makers refused to pay it, on the ground that the cotton, for which it was given, had sand in it; that neither party supposed that the Holbrooks were insolvent or in precarious circumstances, nor were any express instructions given to the plaintiffs to prosecute the note.
    That there was no negligence on the part of the plaintiffs in not having commenced suit upon the note before the time when they in fact commenced the suit.
    Upon these facts, the Referee adjudged that the defendant was not entitled to recover, or have deducted from the plaintiffs’ claim the amount of said note or any part of it, and he directed judgment for the plaintiffs for the amount of the freight and charges, and the costs and expenses of the suit with interest.
    The defendant, in due form, excepted to the findings of fact and conclusions of law.
    It was proved by the plaintiffs’ agent that the defendant handed him the note, saying if he could get anything on it well and good; that the note was then past due, and that there was no agreement or understanding between him and the defendant in regard to commencing any suit upon the note. This testimony was objected to; the objection was overruled, and the defendant excepted.

      E. Seeley, for defendant, appellant.

      Cited Gilbert v. Williams, (8 Mass. R., 51;) Hill v. Featherstonhaugh, (7 Bing., 569;) Gallagher v. White, (31 Barb. S. C. R., 94;) Walker v. Goodman, (21 Ala. R., 647.)

      E. H. Owen, for plaintiff, respondent,
    Cited Hoard v. Garner, (6 Seld., 262;) Buckingham v Payne, (36 Barb., 81;) Williams v. Price, (1 Sim. & Stu., 581;) Foot v. Wiswall, (14 Johns., 304;) Savage v. Birckhead, (20 Pick., 167;) Gallagher v. White, (31 Barb., 92.)
   By the Court—Monell, J.

The note in question was delivered to and received by the plaintiffs as collateral security for a prior indebtedness of the defendant to the plaintiffs. The fact is so found by the Referee, and the finding is warranted by the evidence. There was no express direction given to the plaintiffs to sue the makers, nor was there any express agreement or understanding that the defendant would pay the costs and expenses of a suit for the collection of the note. ,

The obligation which the law imposed upon the plaintiffs when they received the collateral security, was that they would use diligence in its collection. The defendant stood in the relation of guarantor for the collection of the note, and was entitled to all the rights and protection which the law furnishes to such persons, among which is the exercise, on the part of the holder, of such, diligence as is •required of a bailee for hire, or of a pledgee. (Story on Prom. Notes, § 284; Lawrence v. McCalmont, 2 How. U. S. R., 427; Swinyard v. Bowes, 5 Maule & Selw., 62; Chitty on Bills, [8th ed.] 467, 474; Bayley on Bills, 286, 290.) In Lawrence v. McCalmont the principle is fully recognized (p. 454) that a person receiving a note as collateral security, was bound to due diligence in its collection, and that the case fell under the general law of agency And Story (Story on Bills, § 372,) applies the law applicable to .guarantors, to holders of bills held as collateral security.

The amount of diligence which the law requires should be exercised, must, of course, be determined from the facts and circumstances of each case. Nevertheless, it is a question of law and not of fact, and must be determined by the Court upon settled principles governing such eases. (Burt v. Horner, 5 Barb., 504.)

In guarantees of collection, the attempt to collect must have been made, it being a condition precedent to calling on the guarantor; and the creditor is held to the exercise of diligence in prosecuting the maker. (Taylor v. Bullen, 6 Cow., 624; Cumpston v. McNair, 1 Wend., 457; Lamourieux v. Hewit, 5 Wend., 307; Eddy v. Stantons, 21 Wend., 255; Burt v. Horner, 5 Barb., 501; Hart v. Hudson, 6 Duer, 294, 303; Hoard v. Garner, 6 Seld., 261; Kemmerer v. Wilson, 31 Penn., 110.)

In determining the question of diligence, two things must be considered. First. Was there any impediment to bringing a suit ? and, Secondly. Has the omission to sue injured the guarantor ? If the creditor has been unable to prosecute the maker, he cannot be chargeable with negligence ; nor can the guarantor be said to have sustained damage if the maker continues responsible. In Chitty on Bills, supra, it is said, “ if the parties who ought to have paid the bill or note were solvent at the time when it became due,, and for some time afterward, and only subsequently became insolvent before notice, an inference of actual damage from want of notice to the party guaranteeing, or who is otherwise collaterally liable, will prevail, until rebutted by actual proof, that if notice had been given, payment could not have been obtained.”

A reference to some of the above cases will exhibit the stringency of the rule and the degree of diligence required in particular cases.

Taylor v. Bullen was a guarantee of collection, and the maker died before the maturity of the note: held no excuse for not prosecuting his representatives.

In Cumpston v. McNair, the excuse for not prosecuting the note was that a recovery could not be had against.the makers, a partnership being denied. A suit had been commenced and discontinued because a witness could not be found to prove the partnership. It was held not sufficient.

Hor is it any excuse that the maker resides in another State. The creditor must prosecute him there. (Burt v. Horner, 5 Barb., 501.)

The general principle is also distinctly recognized in Barrow v. Rhinelander, (3 Johns. Ch., 614.)

In Hart v. Hudson, Mr. Justice Duee says, “ if the debt “ so guaranteed is unpaid at its maturity, the creditor, if he “wishes to retain the liability of the guarantor, must, “ without delay, commence proceedings for its recovery, “ and it is only when he can show that all the remedies “ which the law gave him against the debtor had been “ exhausted, that he is in a condition to demand payment “ of the debt from the guarantor. If he delay, without “ necessity, to commence the necessary proceedings, * * * “ the delay is imputed to him as ‘laches,’, and the guar- “ antor is discharged.”

In Gallagher v. White, (31 Barb., 92,) the note was past due when it was transferred. . The maker was insolvent at the time of transfer and continued so. And it was intimated, but not decided, that negligence was not imputable to the holder. This was put expressly on the ground that the guarantor had sustained no loss.

In Lamourieux v. Hewit, the doctrine of laches was held not to apply where the original debtor was insolvent. There, the suit was commenced within three months after the maturity of the note, and, except for the insolvency excusing the laches, it would have been negligence. (Burt v. Horner, supra.)

The case of Hoard v. Garner, (6 Seld., 261,) is like this in principle. In that case there was an express covenant to take proper means to collect, and the covenantor was held to be chargeable with laches, and the law of guarantors was applied to such a covenant.. •

Applying the principles of these cases to the facts found by the Referee, it will be seen that the plaintiffs having failed .to discharge the obligation imposed upon them by law, must be held liable for the damage sustained by the defendant.

The note was transferred on the 18th June, 1851, when the makers were abundantly able to pay it, and when, if a suit had been commenced and a judgment recovered, it could have been collected. The only excuse offered for not prosecuting the makers, was that they refused to pay until it was made right concerning the whole purchase of cotton. This was regarded by the plaintiffs as a sufficient reason for not suing, and yet they retained the security, omitting to give any notice to the defendant, until the 20th of September following, when, without any directions from the defendant, they commenced a suit. In the meantime and on the first of September, the makers of the note, through misfortune, became insolvent.

Under these facts, it seems to me that, in judgment of law, negligence is to be imputable to the plaintiffs. There was no impediment to suing the makers; their intimated defense did not excuse it, and there was an implied, if not an express, agreement by the defendant to pay the costs and expenses of the suit. By the omission of the plaintiffs to sue with diligence, the defendant has lost the debt through the insolvency of the debtors, and the plaintiffs must-be held responsible for such loss.

Under this view of the case, the defendant was entitled to have deducted from the plaintiffs’ claim for freight, the amount due on the note at the time of the trial; and for the same reasons, the plaintiffs cannot recover the costs of the suit against the Holbrooks.

The conclusions of the Beferee are therefore erroneous, and the judgment must be set aside, and a new trial granted, with costs to abide the event.