text:
    ANDREW H. H. DAWSON, Respondent, v. GEORGE SLOAN, Appellant.
    On an action to recover damages suffered by plaintiff in falling down the well of an elevator provided by defendant for the use of his tenants, of whom plaintiff was one, if appeared that plaintiff walked from the street door towards the elevator, and saw that the (-levator door was open, as he had often before seen it. and that the boy who ran it was seated beside the elevator; that it. was so dark that plaintiff could not see the boy’s face, though plaintiff saw he was in a nodding position; that plaintiff, supposing the platform to be there, stepped inside, and fell to the bottom.

      Held, that the question of plaintiff’s negligence was properly left to the jury; that it was for them to decide whether or not the acts of the boy, defendant’s agent, were not such as to throw defendant off his guard; that the plaintiff was bound to make only such effort to ascertain the condition of Ihe elevator as would be made by ordinary prudence, or the ordinary use of the senses by a prudent man.
    Also Held, that the city ordinance relating to the protection of elevators, etc., was admissible as a fact, upon which, with the others, it might be determined whether defendant was negligent in leaving the door in question open.
    Before Sedgwick, Ch. J., Truax and Ingraham, JJ.

      Decided June 2, 1883.
    Appeal by defendant, from judgment entered on verdict by jury.
    The action was for damages for personal injury caused by defendant’s negligence.
    The facts and exceptions appear in the opinion.

      Moses B. Maclay and Anthony B. Dyell, for appellant.

      A. H. H. Dawson, Luther R. Marsh, and Ira Shafer, for respondent.
   Per Curiam.

—The injury occurred from the plaintiff stepping into and falling down the well of an elevator, when the elevator carriage was at an upper story. The elevator had been made for the defendant, who had provided it.for the use of his tenants of the building, of whom plaintiff was one. The elevator faced the street, and was a short distance from the street door. The plaintiff walked from the street, through the door, towards the elevator. He saw that the elevator door was open, as he had seen it often before, and. that the boy who ran the elevator was sitting by the elevator.' There was no gas burning at the place. It was so dark that the plaintiff could not see the boy’s face, although he perceived him to be in a nodding position. The plaintiff supposing the platform to be there, stepped inside, and fell to the bottom.

The counsel for appellant argues on these facts, that the judge should not have submitted to the jury to find whether the plaintiff was negligent, but should have held that as matter of law the plaintiff hdd not shown that he was free from contributory negligence. It is claimed that under the -circumstances it was apparent that there was danger, and the plaintiff should have taken precaution, such as feeling whether the carnage was there, or waking the boy to ask him as to that fact, or getting in some other way information upon which he could safely proceed. The position is not valid. It was a question for the jury whether the acts of the boy, defendant’s agent, were not such that the plaintiff was thrown off his guard as to there being any danger which called for caution. The jury was the proper jndge of' whether the defendant was or was not responsible for the announcement to the plaintiff that the elevator was in a condition tit for use. It was for the jury to say to what extend the plaintiff might rely on the appearances presented, in consideration that the elevator was intended for the use of persons coming frpm the street, who were to judge, from an open or closed door, whether they might use the elevator. If the jury should find that defendant was responsible for the plaintiff thinking there was no danger, the latter was. not required to use caution as to the consequences of going through the door-way.

The defendant’s counsel asked the judge to charge “that if the jury believe that the plaintiff, with proper care, such as a prudent man would exercise in like circumstances, could have ascertained whether the elevator was-there or not, before entering it, he was guilty of contributory negligence. ■ The judge modified this by changing “could have ascertained ” to “ would have ascertained.” It would seem that the judge w*as correct. If the plaintiff, by the use of ordinary care, called for by the circumstances, as a matter of possibility could have, but as matter of fact would not have ascertained the danger, there was not contributory negligence.

There was the same kind of defect in the request to charge “ that if it was light enough at the time to have enabled the plaintiff to have seen that the elevator was not there if he had made the effort to do so, he was bound to look, and if he did not (and he says he did not), he was guilty of contributory negligence.” The judge had made the proper charge as to the degree of caution or prudence the plaintiff was bound to use. The jury, if charged as requested, might have found that there was just light enough to have made it j>ossible for the plaintiff to see the danger if he had made an extraordinary effort to see the condition of the elevator, continued through an indefinite time. The plaintiff was, however, bound to make such effort as would be made by ordinary prudence, or the ordi- , nary use of the senses, by prudent men.

The court allowed, against defendant’s objection, the plaintiff to put in evidence a part of section 16, chapter 625 of the Laws of 1871, which declared that in any building in the city of New York in which there shall be placed any elevator, the opening thereof shall be provided with a railing, and such good and sufficient trap door as may be directed and approved by the superintendent of buildings, and such trap door shall be closed except when in actual use, etc. The only ground stated for the objection was that there was no allegation in the complaint of any negligence founded upon that section. The action was not upon the statute. The statute was used, as it might be, as a fact, upon which, with the other facts, it might be determined whether the defendant was negligent in leaving the door in question open.

The question as to the statute is not material, for the «¡her facts proved that the defendant was negligent. Judgment affirmed with costs.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    ELIZA RALLINGS, Appellant, v. THOMAS W. PITMAN, Respondent.

      Supplementary proceedings—second order—jurisdiction. An affidavit for an order in supplementary proceedings for the examination of a judgment debtor, which, in addition to the usual allegations, states “ that the defendant hath been, at divers times heretofore, examined under orders supplementary, previously granted, and no property discovered, but that since the last examination the defendant hath become possessed of certain personal property ”—while it states enough to give jurisdiction to the judge to whom the application is made, does not show sufficient reason for the granting of the order for further examination.
    Before Sedgwick, Ch. J., Truax and Ingraham, JJ.

      Decided June 2, 1883.
    Appeal by plaintiff from order vacating an order for examination of defendant supplementary to execution. The facts appear in the opinion.

      Henry H. Morange, for appellant.

      Richard M. Bruno, for respondent.
    —The affidavits upon which the second application is based should show grounds for the examination, such as subsequently acquired property, or the like (Canavan v. McAndrew, 20 Hun, 46). The affidavit must disclose the previous examination, and show some reason for the second examination, upon which the court may exercise its discretion with respect to granting the order (Grocer’s Bank v. Bayand, 10 Week. Dig. 124). After one examination, no further order should be made, unless the affidavits show that the debtor has subsequently acquired property, etc. (Carter v. Clarke, 7 Rob. 43; Jurgensen v. Hamilton, 5 Abb. N. C. 149; Hamilton v. Morange, 2 Law Bul. 58; Irwin v. Chambers, 40 Super. Ct. 432.

      Unless the facts necessary to bring the - case within the section are proved, the judge has no jurisdiction ; the mere appearance, etc., does not confer jurisdiction (Sackett v. Newton, 10 Hun, 560; Carter v. Clarke, 7 Rob. 490; De Comeau v. People, Id. 498).
   Per Curiam.

—The judge below had jurisdiction of the matter, and it was probably by inadvertence that the order contained the clause that it was granted because the affidavit on which the order for examination was made was insufficient to confer jurisdiction. It is clear that the affidavit did not, under the precedents, state sufficient to give the plaintiff a right to an order of examination. It showed that the plaintiff, had divers times used the right of examination,, under the Code, in averring “that the defendant has been divers times heretofore examined under orders supplementary previously granted.” It was therefore necessary to show, under the cases, a special reason for another examination. On this point no more was averred than “ that since last examination the defendant hath become possessed of certain personal property.” It does not state what the property referred to is; whether it remains in possession of defendant, or whether it may be applied to the payment of the judgment. Nor does it state anything that would make an examination into the existence of such * facts proper or useful for plaintiff. What is said must be true of any judgment debtor who has been examined, under any circumstances, and within a very brief time after the examination.

As the statement in the order appealed from was incorrect as to the jurisdiction, and it is now sustained on the merits, it is affirmed without costs to either party.


text:
    FERDINAND TRAUD, as Executor, etc., Appellant, v. CHARLES A. MAGNES et al., Respondents.

      Seal property—when liable for devisor's debts.

    When the devisee of real property aliens the same before her death, her personal representative is liable, in a proper case, under-Art. 3, tit. 3, cli. 8, part 3, R. S., for the debts of her devisor to the same extent that said devisee was in her lifetime; viz., to the extent of the value of the real property so aliened.
    Under said statute, real property which has been devised, and has descended on the death of the devisee to her heirs, may be subjected to the payment of the devisor’s debts in like manner as before the death of said devisee.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided June 22, 1883.
    Appeal from a judgment entered on the report of a referee.
    One James Moore was surety on a bond in which he bound himself, his heirs, executors, and administrators. He died, leaving a will, which was duly proven. By this will he devised a portion of his real estate to three of the defendants, and all the residue of his real estate to Ellen Fagan and Mary J. Magnes. Mary J. Magnes died in August, 1877, intestate; leaving her surviving her husband, the defendant Charles A. Magnes, and the defendants Mary E. Magnes and Charles S. Magnes, her children and heirs-at-law. Letters of administration on the estate of Mary J. Magnes were issued to the defendant, Algernon S. Sullivan, as public administrator, August 7, 1879. Judgment was entered against the executor of James Moore on this bond, March 27, 1879, for $9,326.92. Proceedings were taken in the proper surrogate’s court to enforce this judgment, but nothing was obtained on such proceedings. This action was then (August 19, 1874) commenced, for the purpose, in part, of enforcing the liability of said James Moore, as surety, against so much of her real estate devised by him to Mary J. Magnes as descended to her heirs, and for the further purpose of obtaining a judgment against her administrator for the sum which she became personally liable to pay, as provided by statute, by reason of the alienation of certain lands so devised to her by said James Moore.
    The action was begun against all the devisees of said James Moore under art. 2, tit. 3, chap. 8 of part 3 of the Revised Statutes (see 3 Rev. Btat. 6th ed. 734). It was referred, and the referee dismissed the complaint against the administrator, on the ground that “ the statute does not provide a remedy by action against the personal representative of a devisee in a case like the present.” The referee dismissed the complaint against the heirs-at-law of Mrs. Magnes, on the ground that the statute in question does not make the heirs of a deceased devisee liable for the debt of the devisor. To each of these conclusions the plain till duly excepted. The referee also found that after due proceedings before the surrogate, and at law, as required by statute, the plaintiff was unable to recover any part of the judgment from the personal representatives of James Moore, or from his next of kin, legatees, or heirs.

      Elial F. Hall, for appellant.

      William J. Curtis, for respondent, Sullivan.
   Per Curiam.

—It was the intent of the makers of the statute (3 Rev. Stat. 6th ed. 736) that those who take a debtor’s real property, either as heirs or devisees, should be compelled to pay such debtor’s debts, if the property was sufficient in value ; and if it were not, that they should be compelled to pay his debts to the extent of the property which shall have descended, or shall have been devised, to them. If the heir or devisee shall have aliened (that is, transferred) any of the - said debtor’s property which descended, or was devised, to him before the commencement of the action against them to compel payment of the debt, he shall be personally liable for the value of the estate so aliened. Mrs. Magnes (one of the devisees) in her lifetime aliened a portion of the debtor’s real estate which had been devised to her. By so doing she made herself personally liable to the value of the real estate sold. Her administrator, as such, is liable for the value of the estate so aliened. Certain other portions of the real estate devised to Mrs. Magnes descended on her death to the defendants, Charles A. Magnes, Mary E. Magnes, and Charles S. Magnes. They stand in the same position to the plaintiff that Mrs. Magnes stood. They have succeeded as well to her liabilities as to her rights. They are liable for the debts of Jacob Moore, whose real estate they hold, to the value of the real estate which has descended to them.

The report of the referee should be modified as above pointed out. It will be remitted to him to make a further report in accordance with the foregoing suggestions, with •costs to the appellant, to be paid out of the real estate.


text:
    JACOB FLEISCHAUER, Respondent, v. ABRAM J. DITTENHOEFER, as Receiver, &c., Appellant.

      Receiver—Action against temporary receiver of corporation.

    A cause of action against a corporation for a breach of contract accruing prior to the appointment of a receiver pendente lite, in an action to dissolve said corporation, cannot be enforced against the receiver until the corporation is adjudged dissolved, and the order permitting such a receiver so to be sued is not an adjudication as to bis liability.
    Before Sedgwick, Ch. J., Truax and Ingraham, JJ.

      Decided June 2, 1883.
    This is an appeal from a judgment in favor of plaintiff, entered upon the report of a referee, and also from the order of reference.
    The action was brought to recover damages for breach of a contract entered into, February 12, 1881, between the plaintiffs and the Economy Packing Company, a corporation organized under the act of February 17,1848. Subsequent to the breach of the contract, in an action brought to dissolve said corporation, the defendant was duly appointed receiver of the property and effects of said corporation. It does not appear that the corporation has ever been dissolved.
    A motion to dismiss the complaint on the following ground, among others, was made and denied : ‘ ‘ That the receiver is not liable, being only temporary receiver; and. the company not being dissolved, action must be commenced against it.”

      A. A. Cauldwell, for appellant.

      Albertus Perry, for respondent.
   Per Curiam.

—The plaintiffs have no cause of action against the defendant as receiver of the property and effects of the corporation. The corporation was not dissolved, and a suit, against it could proceed to judgment (Knauer v. Globe Mutual Life Ins. Co., 46 Super. Ct. 370).

The plaintiffs were authorized by the court that appointed the defendant receiver to commence this action. This was’not a determination that the plaintiffs had a good cause of action against the defendant as receiver. The court, in granting leave to sue, was not called to, and did not pass upon the question of the receiver’s liability.

The judgment and order are reversed, with costs, and the complaint dismissed, with costs. The order appealed from is affirmed, with $10 costs.


author: By the Court.—Truax, J. Sedgwick, Ch. J.—[Concurring.]

text:
    BARBARA POPFINGER, Respondent, v. HENRY YUTTE, et al., Appellants.

      Meal estate.—Mesulting trust for benefit of creditors.— Conveyances in fraud of creditors.—Profits on trust property.

    Y. being indebted to R. conveyed to him certain real property as security, and thereafter R. conveyed said property to a third person, receiving as-consideration, a mortgage thereon, which he retained in payment of his claim, and a deed of certain other premises, which, at the request of Y., was allowed to go to Y.’s wife, who thereafter exchanged the same for .other real property which she sold for $155. With this money, and $300 of her own, she purchased premises which she subsequently sold at an advance of $5,000 on the purchase price, and with $5,500 of the amount so received, purchased certain other premises. Plaintiff holding a judgment against Y. for $404.76, founded on a claim existing at the time of the above occurrences, upon which an execution had been returned unsatisfied, brought this action against Y. and his wife, to have his judgment satisfied out of said property last referred to, etc. The trial judge found that the wife paid no consideration for the property originally conveyed to her, and that she knew of Y.’s indebtedness to plaintiff, and held the property to place it beyond the reach of Y.’s creditors.

      Held, that the conveyances to and from the wife were void as to Y.’s creditors, and that said wife took and held and subsequently dealt with the premises originally conveyed to her, as trustee, subject to a resulting trust, under the statute, in favor of said creditors; and further that plaintiff was entitled to an accounting regarding the rents, etc., of the several parcels of land so held by said wife, and to judgment appointing a receiver and directing a conveyance to and a sale by such receiver of said premises, held by the wife at the time of the commencement of the action, and that plaintiff’s said judgment be paid from the proceeds, in full, and not merely to the extent of said $155.
    This action was tried before the court without a jury. The plaintiff and the defendants appeal from the judgment rendered. The facts are stated in the findings made by the trial .court, substantially, as follows :
    Plaintiff recovered a judgment against defendant Henry Tutte, for $494.76, June 19, 1882. Execution was issued upon said judgment and returned unsatisfied. She thereupon commenced this action to have certain conveyances which transferred the property of Henry Tutte to Ms wife, the defendant Christine Tutte, declared null and void, and, on the ground of fraud, that the said judgment be declared a lien upon the property held by defendant Christine Tutte, ■and that a resulting trust in favor of plaintiff be declared upon the real estate held by defendant Christine Tutte. The indebtedness upon which the judgment was recovered existed at the time of the following occurrences: The defendant Henry Tutte in 1877 being indebted to one Reinig conveyed to him, as security for said indebtedness, certain real property upon Long Island, which said Reinig thereafter, at the request of said Tutte, conveyed to Eliza •Gfierke, receiving therefor a mortgage on the premises, which he retained in payment of the said indebtedness to him, and a deed of a house in Jackson street, New York, which he allowed to go to Christine Yutte, the wife of said Henry Yutte, she paying no consideration therefor, and being cognizant of all the facts, including the indebtedness of her husband to the plaintiff, and holding the property for the benefit of her said husband to place it beyond the reach of his creditors. Thereafter, she exchanged said premises for a house in Avenue C, New York, which she subsequently sold for $155 in cash and certain real property in New .Jersey. With this $155, and $200 in addition which she borrowed from her son, she afterwards purchased premises in Sixth street, New York, which she sold for $5,000 more than the purchase price thereof. Thereafter, on July 19, 1882, Christine Yutte, with $5,500 of the proceeds of the sale of the premises in Sixth street, purchased the land and premises in Chrystie street described in the complaint, and took a deed thereof to herself, which she held at the time of the commencement of the action.
    The court found, as conclusions of law : I. That the several conveyances to and by Christine Yutte were void as to creditors of Henry Yutte. II. That the defendant Christine Yutte took and held the premises in Jackson street as trustee, under a resulting trust in favor of the creditors of Henry Yutte. III. That in dealing with said premises and in the several transfers above set forth, the defendant Christine Yutte acted as such trustee to the extent of the interest of said Henry Yutte therein. IV. That the plaintiff has a lien upon the land in Mew Jersey to the extent of her judgment. V. That the plaintiff is entitled to an accounting for the rents, issues, and profits of the several pieces of land and premises heretofore held by the defenddant Christine Yutte in trust for plaintiff. VI. That the plaintiff is entitled to judgment appointing a receiver and directing a conveyance to him by Christine Yutte of the premises in Chrystie street described in the complaint, and directing a sale by said receiver of said premises and lands, and directing such receiver out of the proceeds of the sale of the premises in Chrystie street to pay the sum of $155, with interest from the 13t,h day of January, 1881, on the plaintiff’s judgment besides the costs of this action, with five per cent, allowance, and the costs of such receivership and sale.
    The defendants duly excepted to divers of the findings of fact and to all of the conclusions of law of the court. Plaintiff duly excepted to the last conclusion of law, contending in said exception and her proposed findings of law that she was entitled to have all of her judgment paid out of the proceeds of the sale of the Chrystie street property, to be made by the receiver.

      Wehle & Jordan, for plaintiff.
    — I. The defendant Christine Yutte is liable as trustee to plaintiff for the property now held by her. The primary consideration for the Jackson street house moved from the judgment debtor, and by force' of the statute of uses and trusts a resulting trust in favor of plaintiff, who was “ at that time” a creditor of Henry Yutte, ensued, which a court of equity can enforce (2 R. S. ch. I. tit. II. § 52; McCartney v. Bostwick, 32 N. Y. 53; Kamp v. Kamp, 46 How. 143; Garfield v. Hatmaker, 15 N. Y. 475). This is not merely a creditor’s bill. It is also an action to enforce a trust. A distinction exists between creditors’ bills and actions by virtue, of the statute of uses and trusts. In the former the creditor is merely remitted to the lien of his execution, while in the latter he is entitled to invoke the interposition of a court of equity to the same extent as other cestui que trusts, as of the date when the fraudulent transfer occurred (McCartney v. Bostwick, supra). The trust estate, or any of its proceeds, may be followed by the cestui que trust through the several transmutations, so long as any part of it is distinguishable (Stephens v. Sinclair, 1 Hill, 143).
    II. The plaintiff is entitled to the satisfaction of her entire judgment out of the property now in the hands of the defendant Christine Yutte, upon the ground that Christine Yutte, as trustee, is bound to account for the gains which she secured with the judgment debtor’s property (Story's Eq. Jur. §§ 1,210-1,212; Penman v. Slocum, 41 N. Y. 59).
    III. A trustee who intermingles trust property with his own must distinctly point out his own or lose all, and if he deals with the trust estate, the cestui que trust may claim the gains (Tiffany Trusts, 34; Seaman v. Cook, 14 Ill. 505; Russell v. Jackson, 10 Hare, 209).

      Conlan & McCrea, for defendants.
   By the Court.—Truax, J.

—We see no reason for disturbing the findings of fact made by the court at trial term. The only question for us to determine is, were the conclusions of law warranted by those findings?

The trial court has found that the transfer made by the defendant Henry Yutte to Beinig was made for the benefit of, and in trust, for the defendant Henry Yutte; and that the Jackson street house was conveyed to the defendant Christine Yutte by Mrs. Gierke as part of the consideration for the transfer to her of the property conveyed by Henry Yutte to Beinig. This being the case the consideration for the Jackson street property was, in fact and in law, paid by the defendant Henry Yutte, and therefore came within the statute of uses and trusts above cited.

The trial court also found that the defendant Christine Yutte exchanged the Jackson street property for a house and lot in Avenue C ; that she sold the house and lot in Avenue C for $155 in cash, and other property ; that with this cash and the further sum of $200, she purchased certain premises in Sixth street, that she sold the Sixth street property and made a profit of $5,000, over and above the purchase price thereof, and that with the proceeds of this sale she purchased the property in Chrystie street now held by her. The trial court held, as a conclusion of law, that all the money that plaintiff was entitled to obtain from the Chrystie street property, was the sum of $155, with interest thereon from the date of the sale of the Avenue C property. It is of this conclusion that the plaintiff complains.

We are of the opinion that the trial court erred in this respect, and that it should have found that the plaintiff was entitled to be paid the full amount of her judgment, §494.78, and the interest thereon from the entry of the judgment. The defendant Christine Yutte is bound to account to the plaintiff for the gains she has made from the judgment debtor’s property. It is well settled that she was a trustee for the creditors of Henry Yutte, one of whom was the plaintiff, and that she held the property, part of the consideration for which had been paid by Henry Yutte, for the benefit of his creditors, and whatever profit she made by dealing with the property that she held as such trustee inured to the benefit of the creditors of Henry Yutte (Van Epps v. Van Epps, 9 Paige, 237; Ten Eyck v. Craig, 62 N. Y. 420; Flagg v. Mann, 1 Sumner, 486, cited in Penman v. Slocum, 41 N. Y. 59; see also Davis v. Leopold, 87 N. Y. 620).

One • of the findings of fact to which the defendants object is the finding that the conveyances to the defendant ■Christine Yutte were made with the intent on the part of the defendants to defraud the creditors of the said Henry Yutte.

The evidence shows that at the time these conveyances were made the said Henry Yutte was indebted in a considerable amount to the plaintiff; that the only property that he had was the property conveyed by him to Beinig, and that the consideration for the transfer to Christine Yutte was paid by the defendant Henry Yutte. The evidence put the burden of proving that the conveyance to Christine Yutte was made in good faith, and without, any such intent to defraud, upon the defendants. But they offered no evidence to rebut the presumption created by the statute (2 R. S. 1105, 51, 52, Banks’ 6th ed.) The finding was therefore right (Dunlap v. Hawkins, 59 N. Y. 342).

This view we have taken of the law disposes of the appeal taken by the defendants.

The judgment is modified so as to direct the receiver to pay to the plaintiff or her attorneys, said sum of $494.76, with interest thereon from June 19, 1882. The plaintiff is entitled to one bill of costs on this appeal.

Sedgwick, Ch. J.—[Concurring.]

—I agree in the result of the opinion of Judge Truax. It does not seem to me that the so-called profits upon the sale of the Sixth street property are to be attributed to the money she borrowed from her son more than to the money she obtained by the sale of the Avenue 0 property. These profits were the consequence of the use of the latter as much as of the former (Grillett v. Bate, 86 N. Y. 87).

Ingraham, J., concurred.


author: By the Court.—Ingraham, J.

text:
    JONAS PHILLIPS, Appellant v. JOHN R. TAYLOR, Respondent.

      Contract for delivery of merchandise within specified time. — Waiver.—“Prompt shipment.”
    Plaintiff sued to recover the contract price of certain bales of rags sold and delivered by him to defendant, who pleaded a counter-claim for damages for failure to deliver within the specified time, the remainder of said merchandise due under the contracts of sale, by which plaintiff agreed to deliver to defendant a certain number of bales by prompt steamer shipment,” which the evidence showed meant shipment within two weeks from receiving the-order,—and also a certain number by “prompt sail shipment,” which it appeared meant shipment within thirty days from the order.

      Held, that to meet the evidence establishing the counter-claim, plaintiff should have alleged and proved any condition of affairs which would have excused his performance -of the agreement to deliver, and that defendant was not bound in order to establish his counter-claim, to show that there were opportunities of shipment of which plaintiff did not avail himself.

      It seems, it is not error, in such a case, to charge that when plaintiff made the sale, he must be presumed to have the goods which he sold in hand, and to. have provided facilities to comply with the contract as to shipment. •

      Further held, that in order to establish a waiver of the obligation to deliver at the time specified, there must be shown either such acts of defendant before the expiration of the time, as amount to an estoppel, or after the expiration of the time, an agreement founded on a new consideration.
    Before Sedgwick, Ch. J., Truax and Ingraham, JJ.

      Decided November 5, 1883.
    Appeal by plaintiff from a judgment in favor of defendant entered on verdict of a jury.
    The facts and exceptions are stated in the opinion.

      Man & Parsons, for appellant.

      John A. Mapes, for respondent.
   By the Court.—Ingraham, J.

—This action was brought to recover the sum of $1,006.44, the contract price of fifty-six bales of rags delivered to defendant under two contracts for the sale of four hundred and fifty bales at an agreed price per pound, of which one hundred and ten bales were delivered and paid for, and fifty-six bales were delivered and not paid for, and this action was brought to recover the contract price of the said fifty-six bales, so delivered.

From the verdict of the jury, they must have found that the time at which the rags were due here under the contract, was the middle of January or the first of February, 1880. Plaintiff offered to deliver the balance of the four hundred and fifty bales contracted for, but defendant refused to receive them, and claimed damages for the nondelivery of the said balance by way of counter-claim. The jury found in favor of the defendant for $3,465.18, damages, and after deducting the amount due plaintiff for the fifty-six bales delivered, rendered a verdict in favor of defendant against plaintiff for $2,863.74.

There were two contracts between the parties, both dated October 29, 1879. One was for two hundred bales, for prompt sail shipment, and one for two hundred and fifty bales, prompt steamer shipment; terms cash in thirty days from delivery. There was evidence tending to show that prompt shipment by sailing vessel meant shipment-within thirty days from receiving order; and by steamer within two weeks irom receiving order.

The two hundred and eighty-four bales were not shipped until after March I, 1880, and did not arrive in New York until on or after March 25, 1880, when defendant declined to take them on the ground of the long delay in shipment. It further appears that defendant, between the date of contract and the first part of March, sent messages to plaintiff by the broker through whom the sale was made, hurrying the fulfillment of the contract, and that on March 2, plaintiff, to comply with defendants repeated demands, and with his knowledge and without objection from him, telegraphed to his correspondent at Leghorn to ship one hundred and forty-four bales by steamer (that being the balance of the rags unshipped), and in accordance with that telegram, the balance was shipped.

The first intimation that defendant gave that he would decline to receive the balance of the rags was on March 25, 1880.

The plaintiff requested the court to charge that “the burden of proof is upon the defendant to show that there were opportunities for shipping the rags from Leghorn, of which plaintiff did not avail.” The court refused to charge as requested, and plaintiff excepted. There can be no doubt but that the burden of proof of the counter-claim was on the defendant. He took the affirmative on the trial and was bound to prove his cause of action, by a fair preponderance of evidence,; but the court was not requested to charge that defendant was bound to prove his cause of action, but that he was bound to prove that there were opportunities of shipping from Leghorn of which the plaintiff did not avail himself. The plaintiff had sold to defendant the rags, and had agreed that they should be promptly shipped, and the payment was to be cash in thirty days from delivery; and he was bound, under his contract, to ship them promptly and deliver them to the defendant; and if he had been prevented from shipping promptly, by any ■condition of things which would have excused his perform-■anee of his agreement, he should have alleged and proved, such excuse upon the trial. There was no such allegation in the reply, nor was there any evidence tending to show such an excuse, on the trial (New Haven & Northampton Co. v. Quintard, 31 Super. Ct. 89). We do not think, therefore, it was error to refuse to charge that the burden was on defendant, to prove that plaintiff should not be excused from the performance of his contract.

The judge also charged that, when plaintiff made the sale, he must be presumed to have the goods in hand which he sold, and to have provided facilities to comply with his contract, and to this charge plaintiff excepted. The general term of this court in the case of the New Haven & N. Co. v. Quintard (supra), held this to be the rule. It appears, however, from what follows the portion of the charge excepted to, that what the court meant to say was, that when a man sells goods and agrees to deliver them at a certain time he cannot excuse himself by saying that he sold the goods expecting to purchase them, but could not purchase them ; and the. judge then left it to the jury to say from the evidence what the words “prompt shipment” required the plaintiff to do, and whether plaintiff did or did not comply with his contract by the shipments that her* made. Taking the whole charge together, we think that there was no error in this respect of which plaintiff can complain. The same remark applies to the charge that the obligation was on plaintiff to provide means of shipment. What was meant was, that when plaintiff undertook and agreed to “ship promptly” and deliver to defendant, it was part of the agreement that he would provide facilities for such shipment, and we think that if for any reason he should have been excused from such shipment, he must allege the facts justifying such excuse and prove them on the trial.

The only remaining question that requires examination is the contention of the plaintiff that the defendant, in requesting plaintiff to deliver the rags, waived the breach, in the contract, or extended the time for the fulfillment off the contract. After a careful examination of the whole charge, we are of the opinion that there was no error which requires a reversal of the judgment. The judge charged;■ “In order for you to find a waiver in this cas.e, you must find that Mr. Taylor, by his conduct, before the time when Mr. Phillips should have performed, misled Mr. Phillips so-that he shall be estopped from saying I claim damages, because the contract was not performed in time ; or, that after the time when the contract should have been performed, a new consideration flowed from one to the other amounting to a consideration for-a waiver ; ” and, after the charge, on the attention of the court being called to the point, said, “I leave it to the jury to say whether the evidence in reference to the importunity of the defendant misled Mr. Phillips and therefore created an estoppel; ” and again, the court, in response to a request by plaintiff, said, “If the jury find that the party is misled, and he does acts which he would not otherwise do, and which he would not be bound in law to do if he chose to take advantage of the -waiver, then it is sufficient consideration for the waiver.”

The general term of this court held in the case of Hill v. Blake (48 Super. Ct. 253), that after the time of performance was past, an arrangement made between the parties for the performance of the contract at a different time is not binding unless supplemented by a new consideration. That a new contract with a new consideration is necessary to waive the obligation.

We think that the direction of the court in this case was in accordance with the rule as laid down in Hill v. Blake (See Brown v. Bowen, 30 N. Y. 541; Underwood v. F. J. S. I. Co., 57 Id. 506).

We do not think that there was any error in the admission or rejection of evidence, that requires a reversal of the judgment.

The judgment should be affirmed with-costs.

Sedgwick, Ch. J., and Truax, J., concurred.


text:
    ERASTUS T. TIFFT, et al., Respondents v. AARON T. BLOOMBERG, Appellant.

      Supplemental answer, when allowed.

    Where the sufficiency of a proposed supplemental answer setting up newly discovered facts, is a matter of doubt, the court will not prejudge the validity of the defense on a motion, but will permit the defense to be set up if defendant be free from laches.
    Before Sedgwick, Ch. J., and Ingraham, J.

      Decided November 5, 1883.
    Appeal from order of special term denying defendant’s motion for leave to serve supplemental answer.
    This is an action for alleged false representations by defendant of the credit of third parties, viz., the firm of D. W. Bloomberg & Co,, through which plaintiff sustained damage. After issue joined, defendant, at special term, moved for leave to interpose a supplemental answer, setting out facts, which he claimed transpired after the filing of the original answer, and constituted a defense to the action. The motion was denied on the ground that the new matter did not constitute a defense.

      Hall & Jenks, for appellant.

      Adolph Ascher & John J. Adams, for respondents.
   Per Curiam.

—The supplemental answer sought to be interposed in this action sets up the fact that since the filing of the original answer, the assignees of D. W. Bloom-berg & Co., mentioned in the complaint, have paid to the plaintiff six hundred and thirty-four dollars and thirty-four cents, on account of plaintiff’s demand, and that plaintiff consented to the assignment, and agreed to accept their proportion of the estate of their debtor, tmd would relieve and discharge him-from their claim. The affidavit on which the application was made, disclosed that on March 1, 1883, the defendant first heard of the facts sought to be set up in the supplemental answer. On March 22, 1883, the order to show cause was obtained, and it does not appear that there was any laches in making the application. ■

• Without passing on the validity of the defense set up in the proposed supplemental answer, we think that defendant should have been allowed to present on the trial the facts, and that the validity of the defense should not be disposed of on a motion. It was held by the general term of this court in the case of Lyon v. Isen (42 Sow. 155), that “If the sufficiency of the proposed answer is a matter of doubt, the court will not prejudge the matter on such a motion, but permit the defense to be made.’ ’

Without expressing an opinion on the validity of the defense sought.to be interposed, we think substantial justice will be better obtained if defendant is allowed to present his defense on the trial, and have ic passed on at that time.

Order appealed from reversed, and motion for leave to serve supplemental answer granted. Ten dollars costs, and disbursements of this appeal, to abide the event of 'the action.


author: By the Court.-—Ingraham, J. Sedgwick, Ch. J. [Concurring.]

text:
    HENRY HESS, et al., Respondents v. ROSALIE RAU, as Ex’r’x. &c., Appellant.

      StocTcbrohers—“Short sales," nature of—Death of principal, when revocation i . of authority.

    The plaintiffs, as stockbrokers, were employed by defendant’s testator to - - effect for him a “ short sale ” of certain stocks, the agreements, as construed by the court, being that said brokers should also procure for said testator such stocks, by borrowing the same, or in some other way, to deliver to the purchasers. On. October 29, 1880, said testator died, at which time the said stocks, so sold, for his account, were not purchased by his said brokers, and the transaction was not closed. The defendant' became executrix, etc., December 29,1880. On January 5, 1881, plaintiffs duly served oh defendant a notice demanding a deposit of margin, or a delivery to■ them of the shares- of stock then short; on or before January 7, 1881, or in default thereof, that plaintiffs would purchase the same, etc.j Defendant failed to comply with such demand, and plaintiffs accordingly purchased such stocks, incurring a loss upon the transaction, to recover which, this action was brought.

      Held, that the nature of the agreement was such that the death of defend- . ant’s testator did not wholly revoke plaintiffs’ authority in the premises, and that a judgment in their favor should be sustained.
    Before Sedgwick, Ch. J., and Ingraham, J.

      Decided November 16, 1883.
    Appeal from judgment in favor of the plaintiff for the sum of $11,042.49, entered on the verdict of a jury.
    The action was brought by Hess Bros. & Go., stock brokers, to recover from the defendant, as executrix, an indebtedness .of $9,437.98, with interest from January 8, 1881, arising oiit of transactions had with defendant’s testator. Various exceptions to refusals of the court to charge the jury as requested were taken, which, together with the facts, are set forth in the opinion.

      Leopold Wallach, for appellant.
    —It was error to refuse defendant’s requests to charge “that the plaintiffs had no authority after Mr. Rau’s death to borrow stocks for account of him or his" estate ; that the plaintiffs had no authority to purchase stocks for account of Rau or his estate to cover short sales, after a reasonable interval from Rau’s death. If the plaintiffs had an interest which continued their authority, the law required them to exercise it within a reasonable time after Rau’s death.”
    I. (a) Whatever liabilities, responsibilities, obligations and duties were respectively assumed by plaintiffs and defendant’s testator toward each other must be sought for ■ in the laws relating to principal and agent (Story Agency 31, § 23, 9th ed.; Pott v. Turner, 6 Bing. 702). Their relationship was not changed by their transactions, in effecting their so-called short sales. In the ordinary case ,of a speculative purchase of stock on margin, the relation between the parties is that of pledgor and pledgee (Baker v. Drake, 66 N. Y. 518). In making the purchase, the broker acts as an agent, which is the primary relation. In advancing part of the money to the customer to effect a payment of the stock another relation is created by operation of law, viz. : that of pledgor and pledgee, which is the second relation (Markham v. Jaudon, 41 N. Y. 235). If no advances are made by the broker for account of the principal, the second relation is not entered into, and the broker remains only agent. In a short sale, the broker sells the stock, borrows it and delivers it to the purchaser, and receives the purchase price, which he applies by giving it to the lender of the stock, the relation here cannot be that of a pledgor or pledgee, as the broker has no property of his client in his hands over which he can exercise the right of a pledge. If advances are made, they are made like other moneys which one pays at request, of - another, only he cannot be compelled to make these advances except by special agreement, and then for a reasonable time only (White v. Smith, 54 N. Y. 522).

    Plaintiffs being only agents, their authority ceased on the death of their principal (Story's Agency, § 462, 9th ed.). It has been held that even insanity of the principal, effected a revocation of the agent’s authority (Motley v. Head, 43 Vt. 633; Davis v. Lane, 10 N. Y. 156, 159). Death of the principal is a revocation of the agent’s authority (Oppenheim v. Leowolf, 3 Edw. Ch. 571). In Helmer v. St. John (8 Hun, 166), it was held that agency ceased at death, even to do something that was agreed should be done. In Watt v. Watt (2 Barb. Ch. 371), it was held that death of principal was a revocation of a power of attorney held under him. So held by the supreme court of the United States in Hunt 0. Rousmanier (8 Wheat. 174-217). It was so held in various-states (Saltmarsh v. Smith, 32 Ala. 407; Yale v. Tappan, 12 N. H. 146-148; Coney, &c. v. Saunders, 28 Geo. 511; Lincoln v. Emerson, 108 Mass. 87); and is the law in England (Lepard v. Vernon, 2 Ves. & B. 51; Houstown v. Robertson, 6 Taunt. 448; Story's Agency, § 488, where numerous other authorities are cited). And we have a direct authority in point in a stock case where the broker was held justified in selling the securities immediately upon notice of the death of the principal: Lacy v. Hill (L. R. 8 Ch. App. 921). This case was approved in Thacker v. Hardy (L. R. 4 Q. B. Div. 689; see L. R. 18 Eq. Cas. 182). Their functions, as agents having terminated, it was plaintiff’s duty to have closed the account.
    II. Under White v. Smith (54 N. Y. 522), plaintiffs were only bound to carry on these short transactions for a reasonable time ; one of these transactions had commenced in June, and none later than August 20 ; the shortest was in progress seventy days at the time of Ban’s death. It cannot be maintained that plaintiffs could not sell without giving notice. Gruman v. Smith (81 N. Y. 25) distinctly holds, it is at the most a question of possible damages (see Lacy v. Hill, supra). It would be a dangerous doctrine to require a notice in stock cases, in case of the death of a principal. There may be a contest as to the validity of a will, and before an executor could qualify, a solvent estate might become insolvent through losses by fluctuations in the market price of stocks. There are instances where new .and unexpected emergencies and necessities will justify the agent in assuming extraordinary powers, which, if done in good faith and with sound discretion, will bind the principal (Lawlor v. Keaquick, 1 Johns. Cas. 175-179; Judson v. Sturges, 5 Day, 556, 560; Forester v. Boardman, 1 Story, 43; Leotard v. Graves, 3 Caines, 226; Williams v. Shackelford, 16 Ala. 318; Greenleaf v. Moody, 13 Allen, 363; Story's Agency, § 885). The death of Henry Ban, and the •dangerous fluctuating character of the stocks dealt in, were a sufficient authority to plaintiffs to sell the stocks without notice, and they should so have done.
    III. If these plaintiffs had an interest in the subject-matter, on the authority of the cases, they could have exercised it, and the question, whether they had, or were not bound to exercise that authority within a reasonable time ■after Mr. Ban’s death, was a question of fact which should. have been submitted to the iury (Greenleaf v. Moody, 95 Mass. 363).

      D. M. Porter, for respondents.
    —I. Short sales are legal (White v. Smith, 54 N. Y. 522; Knowlton v. Fitch, 52 lb. 288; Cameron v. Durkheim, 55 lb. 425).
    II. The authority with which plaintiffs were vested by Henry Ran at the time-he sold said stocks, was to borrow the necessary stocks to deliver to the purchaser, and to continue borrowing such stocks until they received directions from a properly authorized party to close the transaction by a purchase of stocks to cover his former short sale. Plaintiffs, until so notified, had not the slightest authority to purchase the stocks to cover such short sale and close-said transaction. Plaintiffs could not close the account at their own will at an earlier day, because if they did so and the price of the ‘ stocks went down, they would • render themselves liable to the extent of such decline to the estate, as the executrix could step in after her appointment, and notify them that she repudiated such purchase, and direct them to buy in the necessary stocks to cover such loans, or, as they were termed, short sales, and in such case it would not protect the plaintiffs that they had already done so (White v. Smith, 52 N. Y. 522; Lacy v. Hill, Scrimgeour's appeal, 8 Law R. 921; S. C., 7 Eng. R. Moak's Ed. 473; Dos Passos on Stock Brokers, 182).
   By the Court.-—Ingraham, J.

—This action is brought ¡ to recover the balance due plaintiffs for loss on.certain stock ; transactions conducted by- the plaintiffs, a firm of stockbrokers, for the defendant’s testator. In the examination , of the questions involved, it will not be necessary to say anything about the purchase of the Missouri, Kansas, and Texas stock, and the Atlantic and Pacific Telegraph stock. It appears that there was a profit on the transactions in i those stocks, and defendant makes no claim against the : plaintiffs in relation thereto. The loss for which plaintiffs ' claim to recover arose out of the following transactions i Plaintiffs claim that in June, July, and August, 1880, they sold by the direction oí defendant’s testator, 600 shares of the stock of the Delaware, Lackawanna, and Western Railroad Company, and 400 shares of the Central Railroad Company of New Jersey ; that these sales were short sales of stock, and plaintiffs were to procure for him such stocks so sold, by borrowing the same, or in some other way to deliver to the purchasers; that the said stocks so sold were not purchased, or the transaction closed, at the time of defendant’s testator’s death, which occurred October 29, 1880 ; that letters testamentary on the estate of said Henry Rau were duly issued to the defendant December 29,1880 ; that on November 19, 1880, defendant caused to be purchased 200 shares of the stock of the Central Railroad Company for $16,225; that on January 5, 1881, plaintiffs demanded of the defendant a deposit of margins or a delivery to them of the shares of stock then short, on or before January 7, 1881, or on default thereof, plaintiff would purchase the same at the New York Stock Exchange; that defendant failed to comply with such demand, and plaintiffs purchased said stock at that time, and that there was a loss on the transaction, and a balance due plaintiffs of $9,437.98, to recover which this action was brought. The jury found a verdict for the plaintiffs. Defendant, at the close of the case, asked the court to direct a verdict for the defendant on the ground that there was no competent testimony to hold the testator liable for the short sales, which motion was denied, and defendant excepted.

The court charged the jury, that if they believed the testimony of the plaintiffs’ witnesses, that plaintiffs had made out a case and were entitled to a verdict, to which defendant excepted. Appellant claims that this was error, as there was no competent testimony of the sale of the stock ; or that it was sold by the direction of defendant’s testator. I think that the evidence introduced by plaintiffs was, if believed by the jury, sufficient to sustain a verdict for the plaintiff. It appeared by the testimony of Frankenbach, plaintiffs’ book-keeper, that he made out notices for each of the sales ; that he either delivered such notices to Mr. Rau or to his (witness’s) assistant, Mr. Pox ; that Mr. Rau came to the office nearly every day-; that witness heard Mr. Rau frequently give orders to sell the stock in question ; that he had several conversations with Mr. Rau about his being short of these stocks ; that one day Mr. Rau asked him to make out a statement of the stocks he was short, and figure out how an average would come if he sold more; and that witness then stated to him he was short 600 shares of Lackawanna, and 300 shares of New Jersey Central, to which Mr. Rau made no objection : and that on or about September 28, 1880, an account was delivered to Mr. Rau by witness, that showed he was short the stocks in question, which Mr. Rau looked at. and said he supposed it was all right. Pox testified that all the notices delivered to him by Prankenbach, directed to Mr'. Rau, he delivered personally to him, specifying notices of several of the sales in question, of which he had distinct recollection. Mr. Hess testified that the stock in question was actually sold by him for Mr. Rau’s account. John Rau testified that some time before testator’s death, witness spoke to him about a statement from plaintiffs, and he said, “Never mind it now, they (plaintiffs) will not close me out,” and there was a written order for the sale of 100 shares of New Jersey Central stock. Plaintiffs were prohibited from giving evidence of any transactions with the deceased, and •such evidence uncontradicted and unexplained was sufficient to show, .at any rate, a ratification of the sales claimed to have been made for his account. The evidence -was not, as appellant seems to assume, offered to sustain an account stated, but simply to prove that the plaintiffs had made the sales in question for him as his brokers, and'an acquiescence in such sales.. It was an admission by defendant’s testator that such sales were made for him under his orders, or a ratification of such sales, and I think the trial judge was right in holding that if the jury believed such testimony, it was sufficient to establish that the stock in question had been sold for the account of the defendant’s testator, and with his authority. This brings us to the main question in the case.

Mr. Rau died October 27, 1880, and the stock in quesstion was not purchased and the account closed until January 7, 1881; and defendant now claims that the plaintiffs were bound to cover the short sales at the time Mr. Rau ■died or within a reasonable period thereafter. The rights of, and the duties of the plaintiffs to, defendant’s testator, rest on the relation that existed between the parties; and the ingenious argument of defendant’s counsel, rests on the assumption that such relationship was one of principal and agent only; that the plaintiffs were simply the agents of the defendant’s testator, to sell the stock, and borrow it for Mm to make good his contract of sale until such time as he should give further directions in regard to it; and that on testators death such authority ceased. It will be necessary therefore to determine the exact relation that existed between the parties. If no other duty devolved on plaintiffs, then of course the relation between them would be one of principal and agent only, and on the death of the principal, the agency is dissolved and all authority to act for the principal is revoked. Here, however, there was a duty devolved on the plaintiffs in addition to the mere sale of the stock, and it is necessary to determine just what that duty was in order to determine what, if any, change, such a duty would make in the relations between the parties.

There have been many litigations respecting short sales of stock before the courts, and the nature of the transactions have been adjudicated upon by the court of appeals. Knowlton v. Fitch (52 N. Y. 288), was a case where the broker, after his customer’s margin had been exhausted, notified him that unless he furnished more margin they would buy in the stock. The customer failed to respond and after waiting ten days the broker closed out the transaction without further notice. The supreme court held that such purchase was unauthorized, and gave judgment against the broker. The court of appeals, in reversing the judgment says, “ It is evident that to carry on such a speculation, the stock sold must be temporarily procured by the seller for delivery to the purchaser.....the plaintiff did not furnish the stock to deliver but only the margin ; the defendant furnished the stock.....until bought in, the broker remained bound to the persons from whom they had obtained the stock to return to them an equal number of shares, whatever might be the market price at the time it was demanded.” In White v. Smith (54 N. Y. 522), Judge Earle, in delivering the opinion of the 'court, says, “ I am of the opinion that when a broker agrees, for a commission to be paid tQ him and upon a deposit with him of a margin agreed on, to make a short sale for a customer, it is part of the bargain that the broker shall carry the stock for a reasonable time, for in no other way can the object of the parlies be effectual.....The broker has nob the right, unless it be specially conferred upon him, to buy in the stock, cover the sale and thus close the transaction without some notice to or direction from his customer.” He is the agent of his customer and must obev his orders both in making the sale and covering it. “If he acts without orders or against the order of his principal he commits a breach of duty and becomes liable like any agent for any loss he may thus occasion his principal.” The court further held that although the margin was reduced below the amount agreed upon, a purchase without notice to the principal was unauthorized and a breach of duty for which the broker was liable. It would appear therefore that- the relation of the broker to his customer was something different from that of a mere agent. He was bound, under his agreement with the customer, to furnish the stock for delivery to the purchaser. As Judge Earle says in White v. Smith, “It is part of the bargain thab the broker shall carry the stock for reasonable time, for in no other way can the object of the parties be effectual.” And if that duty is thrown on him by the terms of his contract or agreement, if the broker is bound to provide the stock for a reasonable time and until after notice to his principal, then the converse of the positions must also be true. The principal must be liable to the broker for all loss on the transaction until the broker receives directions from the principal to close the transaction.

The case of Markham v. Jaudon (41 N. Y. 235), is cited as an authority to show that the plaintiff was simply the agent of the defendant’s testator, but it can be said here, as it was in that case, that so far as the sale was concerned plaintiff was the agent of the testator, but when the sale was made a new relation arose under the obligation of the broker to procure the stock to be delivered under the contract. It was not the relation of pledgor and pledgee, but the parties entered into a new agreement (the agency having ceased with the sale .of the stock), and that agreement could only be terminated by the order of the testator, or those having authority to represent him, or by the broker, after a reasonable time, and on notice to testator or his representatives (White v. Smith, supra). The principle relied on by the counsel for appellant, that the authority of the agent was revoked on the death of the principal, does not therefore apply. Appellant claims that the broker’s authority to borrow the stock was revoked by the death of the principal, and the acts of the broker in borrowing the stock after that time were unauthorized. That argument might apply if the stock were borrowed by the broker as the agent of the testator, but as I think, I have shown the borrowing of the stock, was by the plaintiffs, under their agreement, and not as agent for the testator.

The evidence in the case shows that the plaintiffs did not, when they borrowed the stock, assume to act as the agents of the testator, or of the estate ; but they borrowed sufficient stock to complete all the short sales that they had made for their customers. Plaintiffs, and not the estate, were liable to the parties from whom they had borrowed the stock to return an equal number of shares. It did not appear but that the testator was the owner of the stock sold, or had purchased it to be delivered at a future day. He had sold the stock, and had not delivered it.to the broker to deliver. He was bound to deliver it to his broker to close the transactions when notified by the broker to so deliver;. and knowing this obligation, it cannot be assumed that he-had not in some way made arrangements to obtain the stock to make such delivery. To hold that the broker would be bound immediately on the death of his principal to purchase the stock, and close out the transaction without the direction of, or notice to, any representative of the principal, would, it seems to me, be much more liable to result in loss to principal than to hold, that on the death of the-principal the contract should continue until the appointment of a representative of the deceased, to whom notice-could be given, and from whom directions pould be received.

The fact that in this case the delay in closing out the contract resulted in a loss to the estate, should not influence the determination of the question involved, but would only show how necessary it is to have a rule established that would enable both of the parties to such an agreement to-make such arrangements as would' protect them both.

Although the question is not free from doubt, I am of the opinion that the judgment appealed from was right,, and should be affirmed, with costs.

Sedgwick, Ch. J. [Concurring.]

—I agree that the judgment is to be affirmed.


text:
    PHILIP HAYES, Appellant, v. BERNARD REILLY, Sheriff, etc., Respondent.

      Assignment in fraud, of creditors.—Judge's charge.—Evidence.—Burden of proof.

    In an action against the sheriff to recover the possession of certain chattels alleged to have been wrongfully taken under an execution against a third party from whom plaintiff claimed title, where the evidence showed that the transfer to plaintiff was made by said judgment debtor in fraud of creditors and was not followed by change of possession, etc., the judge-charged the jury, in the language of the statute, that the transfer was presumptively fraudulent and void as against creditors, and that the presumption was conclusive unless it be made to appear on the part of the person claiming under the transfer, that it was in good faith, etc., to which plaintiff excepted. Plaintiff testified that the consideration was §1,000, and that he paid §600 in cash, and the rest by satisfaction of an antecedent debt. There was no request to charge that if the jury believed the assignment to have been made for a valuable consideration » the burden was on defendants to show knowledge of fraudulent intent on plaintiff’s part.

      Held, that a verdict for defendants should not be disturbed, and that the jury were not bound to believe plaintiff’s testimony as to the cash payment, he being an interested party.

      Further held, that the burden was upon plaintiff to show that goods acquired after the transfer which were levied on by the sheriff, were paid for by plaintiff.
    Before Sedgwick, Ch. J., Truax and Ingraham, JJ.

      Decided November 16, 1883.
    Appeal from judgment in favor of defendant entered on verdict of a jury, and from an order denying a motion for - a new trial, made on the minutes.
    The facts and exceptions appear in the opinion.

      James Flynn & E. H. Benn, for appellant.

      Vanderpoel, Green & Cuming, John Yard and Charles N. Gould, for respondent.
   By the Court.—Ingraham, J.

—The action was brought to recover the possession of certain personal property that had been taken by the defendant as sheriff of the city and county of New York, under an execution against the property of one John Dougherty.

Plaintiff claimed that he had purchased the property on the 17th day of December, 1878, for the sum of $1,000 ; of this consideration $600 was claimed to have been paid in cash, and $400 by a debt owed by Dougherty to plaintiff. Plaintiff asked the court to direct a verdict on the ground that there was no proof that plaintiff purchased the property with any fraudulent intent, and therefore there were no questions for the jury, which was denied ; and the court was requested to charge that there was no evidence of a fraudulent intent, which was refused.

The parties to the pretended assignment were brothers-in-law. The evidence to show the good faith of the assignment consisted of the testimony of the parties to stich assignment. "Dougherty continued in charge of the business, bought and sold goods, and, as plaintiff says, “ had power to sell, buy, and run the place.” Plaintiff kept no bank account; says he paid Dougherty $200 in gold and $400 in bills, and took no receipt. Plaintiff did not put his name -on the place, and did not inquire whether Dougherty owed any debts or not. The statute makes the questions of fraudulent intent a question of fact, and I think that there was sufficient evidence to go to the jury on the question of fraud, and sufficient to justify the jury in finding that the sale was made by Dougherty with the fraudulent intent to put the property and business out of the way of creditors, and that plaintiff joined with him, to assist him in such purpose, with knowledge of his intent.

The learned court charged the jury that the first point that they should determine, was whether there had been a visible, open and notorious change of possession from Dougherty to the plaintiff, and that if there was not, then plaintiff was bound to satisfy the jury by evidence that the purchase was bona fide, and if he had failed so to satisfy the jury, they should bring in a verdict for the defendant. And subsequently the court charged: “If, on the other hand there was no change of possession, then the whole burden of the case throughout is upon the plaintiff to satisfy you that the purchase was fair, and without any intent on his part to defraud the creditors of Dougherty.” To this plaintiff excepted. Section 5 of title 2 of the statute of frauds provides that every assignment of ; goods. and chattels, unless the same be accompanied by an immediate delivery; and be followed by an actual and' continued change of possession, shall be presumed to be fraudulent and void as against creditors, and shall be conclusive evidence of fraud, unless it be made to appear on the part of the person claiming under such sale or assignment that the same was made in good faith, and without any intent to defraud such creditors or purchaser. This section the judge repeated in substance to the jury, and then left it to them to say whether there had been such a delivery and. change of possession. If there had not been, then the statute, in express terms, throws on the plaintiff the burden of proving that the sale was made in good faith, and without the intent to defraud. It certainly was. not error to charge the exact language of the statute.

It is claimed by appellant that because there was evidence that the assignment was for a valuable consideration, that that removed the presumption of fraud, and throws on the defendant the burden of proof, to show that plaintiff purchased with a fraudulent intent. The only evidence of the payment of the $600 in cash was the testimony of the plaintiff, and he being interested, the jury were not obliged to believe his statement. The court was not requested to charge that if the jury believed that the assignment was for a valuable consideration, that the burden of proof was on defendant to prove that the plaintiff knew of defendant’s fraudulent intent. Nor is there any exception that raises that question (Distin v. Rose, 69 N. Y. 123). If the jury had believed that plaintiff had actually paid the $600 in cash at the time of the assignment, they would have found that the assignment was bona fide under the charge of the court, and the burden of proving that fact was on the plaintiff. He failed to satisfy the jury on that point, and on the evidence as it stands, I do not think that we would be justified in interfering with their verdict.

Starin v. Kelly (88 N. Y. 418), relied on by plaintiff, expressly holds that the burden was on plaintiff to show that he had purchased the property for a valuable consideration, and until that wás done it was only necessary to show fraudulent intent on the part of the vendor. The jury found that there had been no change in the possession, and the statute made such a finding conclusive evidence of fraud.

Plaintiff claims that as part of the property was purchased after the alleged assignment was made, the sheriff had no right to take such property. The jury have found by their verdict that the assignment was fraudulent and void. If so, the business and stock continued,- so far as the rights of creditors are concerned, to belong to Dougherty ; and if any portion of the goods taken by the defendant had been purchased with money other than that received from the business on their goods, it was the duty of plaintiff to have proved that such was the fact. At any rate, a portion of the goods included in the alleged assignment was included in the property taken by the sheriff, and for such portion the plaintiff was entitled to a verdict.

The only remaining error alleged is in respect to the charge of the court, that if by the arrangement between Hayes and Dougherty it was contemplated that Dougherty should receive one-half of the net profit, that plaintiff and Dougherty were partners, and the sheriff had a right to take the property. That a division of profits and loss is sufficient to constitute the parties partners is well settled, and we think that question was properly submitted to the jury.. If the jury had found that they were partners, the sheriff' had a right to levy on the partnership property (Smith v. Orser, 42 N. Y. 132).

W e think therefore that the judgment should be affirmed,, with costs.

Sedgwick, Ch. J., and Truax, J., concurred.


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    THE NORTHAMPTON NATIONAL BANK v. AMOS M. KIDDER, et al.

      Negotiable instruments—action to recover stolen railroad bonds—burden of ■proof.

    The ordinary bonds of a railroad company, secured by mortgage upon its. property, are negotiable instruments, having all. the attributes of such obligations, and the possession and production of them is prima facie evidence of title.

      Where in an action to recover possession of such bonds, it appears that plaintiff was robbed of them prior to their negotiation to defendant, the burden of proof is shifted, and to overcome plaintiff’s title defendant must show that he purchased such bonds in good faith, before maturity, and paid for them a valuable consideration.
    To do this defendant must show under what circumstances and for what value he became the holder, and it is not enough that he testify generally that he bought and paid for the bonds at a certain time.
    Where a verdict is ordered subject to the opinion of the court at general term, the whole case is before the general term on its merits and no new trial can be ordered.
    Before O’Gorman and Ingraham, JJ.

      Decided November 16, 1883.
    Application for judgment on a verdict of jury, under direction of the court, subject to the opinion of the court at general term.
    The facts appear in the opinion.

      Peckham & Tyler, for plaintiff.
    —The burden of proof is all on defendant after we prove loss by robbery, and the case can rest on this alone (Nat. Bk. of Courtlandt v. Green, 48 N. Y. 298; Kuhns v. Gettysburg Nat. Bk., 68 Pa. 445; Bk. of North Am. v. Kirby, 108 Mass. 497). Waiver of the defaults on our part is not proven, and cannot be presumed (Ragan v. Day, 46 Iowa, 239; Penn. Hosp. v. Gibson, (2 Mills, 326). The verdict is to be upheld on any theory sustainable on the facts (21 N. Y. 490). It is axiomatic that over-due paper is non-negoliable (Vermilye v. Adams Exp., 21 Wall. 138; People v. Superior Ct., 19 Wend. 109). This condition broken, the paper is is over-due (Daniels Neg. Ins. § 1506). The other taints on the paper entitle us to recover also (Nat. Bk. v. County Coms., 14 Minn. 78). Defendant’s claim as to the burden of proof shows that it was not by surprise that he neglected to prove values, etc. Failure of proof and defect of proof are questions of law.

      W. M. Safford, for defendants.
    —It is clear that the objection that defendants did not pay value for these bonds was not raised on the trial, but that the claim of plaintiff was based on the ground that the bonds were over due. There is some evidence tending to show that value was paid by defendants. From the whole case, it is evident that the objection was not even raised, much less relied on at the trial.
    Where a material fact is unproved, but objection is not taken at the trial, and some evidence in support of it is given, and the whole proceedings tend to show that it was understood at the trial that no such objection was relied on, the court at general term will disregard the objection (Porter v. Lobach, 2 Bosw. 188).
    In the case of Wilson v. Rocke, it was held that both court and counsel having assumed that plaintiff was a bona fide purchaser, upon this assumption, plaintiff’s title was paramount, and he was entitled to recover. “That the correctness of this assumption could not be diputed upon appeal, as no question in reference thereto was raised upon the trial, and no request made to submit it to the jury ” (Wilson v. Rocke, 58 N. Y. 642).
    The burden of proof in the case of negotiable instruments before maturity, does not shift on proof of theft. On the contrary, it has been repeatedly declared by the courts of this country, that the possession of such paper was presumptive evidence of title in the holder, and that the burden of proof was upon the person assailing the title of the holder, to show that he was not a bona fide holder for value (Goodman v. Simonds, 20 How. U. S. 343, 365; Murray v. Lardner, 2 Wall. 110, 121; Seybel v. Nat. Cur. Bank, 54 N. Y. 288, 301 and 302).
    The default of the coupons did not make the principal due (Cromwell v. Co. of Sac, 96 U. S. 51; Railway Co. v. Sprague, 103 U. S. 756). Receipt of interest on later coupons was a waiver of default (Sire v. Wrightman, 25 N. Y. 103; Conkling v. King, 10 N. Y. 440).
   By the Court.—Ingraham, J.

—This action was brought to recover for the conversion of two consolidated second mortgage bonds of the Ohio and Missouri Railway Company.

It appears that prior to the ninth of January, 1876, the bonds in question were the property and in the possession of the plaintiffs, a national bank, doing business at Northampton in the state of Massachusetts, and that on the ninth of January, 1876, plaintiffs was robbed of a large amount of property, including the bonds in question; that at the time of the robbery the said bonds were not in default but interest had been regularly paid thereon ; that the coupons that became due October 1, 1877, were not paid, and had not been paid up to the time of the trial; that on April 28, 1881, defendant purchased the said bonds in the regular course of business at the New York Stock Exchange, from Lucian H. Niles, a member of the Exchange in good standing, and paid therefor. It does nor appear, however, what consideration was paid or whether or not any money was actually paid by defendants for the bonds. At the close of the testimony plaintiff requested the court to direct a verdict in favor of the plaintiff. The defendant also requested the court to direct a verdict for the defendant. Neither party requested the court to submit any questions to the jury, and the case must be treated as a question of law, on the facts proven.

That the bonds in question were negotiable instruments and possessed all the qualities and attributes of such obligations is well settled (Gillespie v. City of Dubuque, 1 Wall. 206; Murray v. Lardney, 2 lb. 113). litis also well settled that the possession and production of a negotiable instrument is prima facie evidence of title (Mechanics’ and Traders’ Bank v. Crow, 60 N. Y. 85; Murry v. Lardney, supra).

Plaintiff to rebut such presumptions, proved on the trial that the bonds were stolen from the bank in January, 1876. The burden of proof was then changed, and the defendants to sustain their title to the bonds were then required to show under what circumstances and for what value they became the holder (1 Dan. Neg. Instr. § 166); in other words, in order to overcome plaintiff’s title, it was necessary for defendants to prove that they purchased the bonds before maturity, and paid for them a valuable consideration. As a leading English case on this question says, “Where a note is proved to have been obtained by fraud, that affords a presumption that the person who is guilty will dispose of it, and would place it in the hands of another person to sue upon it.” Such presumption operates against the holder and it devolves upon him to show that he gave value for it (Bimby v. Bidwell, 13 Mees. & Wel. 73, cited and approved in First National Bank v. Green, 43 N. Y. 298; Porter v. Knapp, 6 Lansing, 125). If defendants failed to prove that they paid a valuable consideration for the bonds, plaintiff was entitled to a verdict.

After a careful examination of the evidence, I have been unable to discover any proof that defendants paid a valuable consideration for the bonds. The only evidence in relation to the purchase of the bonds by the defendants is that given by the defendant Morse. He was first called as a witness for the plaintiff, and on his redirect examination, he first speaks of the purchase of the bonds in question : “ That it was in 1881 that we (defendants) paid for the bonds ;” and then, “ We bought these bonds on April 28, 1881.” After plaintiffs rested, Morse was recalled. He again stated that he bought the bonds April 28, 1881. On cross-examination he said he could not swear that he in person bought the bonds, but he knew that the firm purchased them, and finally said, ‘ ‘ I would swear that we bought these bonds, paid such a price for them and received them on a given day.” In my opinion this was not evidence that the defendants paid a valuable consideration for the bonds. It would be true if the defendants had taken the bonds for an antecedent debt, they would then have “purchased” the bonds and paid for them. Yet it is well settled that such a payment of consideration would not overcome plaintiff’s title, and make defendants holders for1 value (Phœnix Ins. Co. v. Church, 81 N. Y. 218).

The court of appeals in the case of First National Bank v. Green (43 N. Y. 300) held that, “a plaintiff suing upon a t negotiable note or bill purchased before maturity is presumed | in the first instance to be a bona fide holder. But where the maker has shown that the note was obtained from, him under •duress or that be was defrauded of it, the plaintiff will then be required to show under what circumstances and for what value he became the holder.” In Ocean National Bank v. Carll (55 N. Y. 440), the point was, whether plaintiff had failed to prove he was a bona fide holder for value, of the note, upon which the action was brought, and the court of appeals reversed a judgment for plaintiff, on the ground that the witnesses who had testified that the note in suit was discounted and that a check produced was given for the avails, made the statement from books and papers and not from their personal knowledge. In this case the evidence was uncontradicted that the note was in possession of the' plaintiff before maturity, but the court held this was not sufficient. The consideration must' be shown. In Wylie v. Spencer (62 How. 110)., Judge Van Vorst, in an action to recover some coupons on bonds stolen from the vaults of the plaintiff, says, “ The plaintiff’s title is made out by showing the fact of original ownership and that the property had been stolen. If they reached the hands of bona fide purchasers before maturity through whom the defendants claim, they must show it.” We think upon principle and authority, this to be the true rule. In the case at bar, defendants did not show that they paid any valuable consideration for the bonds, and not having brought themselves within the rule, can not hold the bonds as against the plaintiffs. Many cases could be cited to sustain this proposition, but we think the foregoing are sufficient. Defendants claimed on the argument and cited many cases to sustain their contention that the production of the bonds threw the burden of proving that defendants did not pay a valuable consideration, on the plaintiff. We have examined the cases cited but do not think they are .authorities for the defendants. Defendants also insisted that the court should assume that plaintiff did not, on the trial, raise the point that defendants had not paid a valuable consideration for the bonds. It nowhere appears that "both court and counsel assumed that defendants were bona fide purchasers for value. But from all that appears, it may be assumed that defendants resisted their claim, at the trial, as they did on the argument on appeal, on the proposition that the possession of the bonds was presumptive evidence of title in the holder, and the burden of proof was upon the person asserting such title, to show he was not such a bona fide holder. This position, as before stated, we do not consider to be well taken. But in no case cited did the appellate court assume a fact to exist for the purpose of reversing a judgment; and in order to set aside a verdict and direct a verdict for the defendants, it would be necessary for the court to assume in this case, that plaintiff paid a valuable consideration for the bonds in question, of which as before stated there was no proof.

If defendants purchased the bonds in good faith, and paid value for them, there could have been no difficulty in their proving such payment, and having failed to give any evidence which would sustain a verdict in their favor, we think the court below was right in directing a verdict for the plaintiff.

When a verdict is ordered, subject to the opinion of the court at general term, the whole case is before the general term on its merits, and no new trial can be ordered (Durant v. Abendroth, 69 N. Y. 148).

It follows therefore that defendant have failed in their defense, and judgment must be ordered in favor of the plaintiff, on the verdict, with costs.

O’Gorman, J., concurred.


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    THE NORTHAMPTON NATIONAL BANK v. LUCIEN H. NILES.
    Before Ingraham and O’ Gorman, JJ.

      Decided November 16, 1883.
    Application by plaintiff for judgment on a verdict of a jury, subject to the opinion of the court at general term.

      The facts herein are the same as in the preceding case.

      Peckham & Tyler, for plaintiff.

      Dixon, Goodwin & Williams, for defendants.
   By the Court.—Ingraham, J.

—In the case of the Northampton National Bank v. Amos M. Kidder, argued and decided with this case, we held, that the bonds in question were negotiable instruments ; that the possession and production of such bonds were prima facie evidence of title ; but that on plaintiff proving that the bonds in question were stolen from the bank, the burden of proof was changed, and the defendants to sustain their title were then required to prove that they purchased the bonds before maturity, and paid for them valuable consideration, and and that defendants having failed to prove that they paid a valuable consideration for such bonds, failed in the defense, and plaintiff was entitled to judgment.

Holding the defendant to the same rule in this case, I am of the opinion that he has failed to prove that he paid for the said bonds a valuable consideration. There is no evidence that defendant paid for the bonds. The only evidence is that of the defendant, who says that he told another witness ‘ ‘ that Satterthwaite in London bought them for me.” There was no evidence that anything of value was paid for the bonds, or that defendant parted with any valuable consideration for them.

I am therefore of the opinion that judgment must be ordered for the plaintiffs on the verdict, with-costs.

O’GrORMAN, J., concurred.

        Ante, p. 238.