author: By the Court. Slosson, J. Hoffman, J.

text:
    Luke B. Packard v. Joseph Lyon and William H. McLean.
    A note was lodged at a bank for collection, and demand for payment was made there, with inquiry of the officers as to the residence of the maker. The directories were at once consulted, and her name not found. No inquiry was made of the actual holder of the note; and it appeared, that the maker, being a married woman, kept a boarding-house in the city. .

      Held, that due diligence had not been used in presenting the note for payment.
    Complaint, as to endorsers, dismissed, with costs.
    (Before Hoffman and Slosson, J.J.)
    November term, 1855.

      A verdict in. this cause was taken at the trial for the plaintiff, subject to the opinion of the court at General Term, on the single question, whether the presentment for payment of a note, on which the action was brought, was sufficient to charge the endorsers.
    The facts sufficiently appear, in the opinion of Mr. Justice Slosson.

      Niles, for the plaintiff.

      Hays, for the defendants.
   By the Court. Slosson, J.

This is an action against Emeline Deacon, as maker, and Lyon & McLane, as endorsers, of a note for $225, dated 26th Sept., 1854, payable, to the order of the maker, sixty days after the date thereof.

Mrs. Deacon does not defend. The endorsers, Lyon & McLean, alone defend; and the only question is, whether a sufficient presentment of the note and demand of payment had been made of the maker.

Subjoined to Lyon’s endorsement, were the words “ White Plains, Westchester Co.”

The note was deposited for collection, in the Island City Bank of this city.

The certificate of the notary of the bank showed that the note was presented on the 28th of March, 1854, (the day it fell due,) at the Island City Bank, and payment demanded: and a clerk of the notary proved that he demanded payment of the teller of the bank, and it was refused; that he asked the teller where Mrs. Deacon, the maker, resided, who told him he did not know, but thought she resided in Westchester county; that he asked all the bank officers who were present, and none of them could tell bim any thing about her. He did not ask any of the officers of the bank, nor did he inquire of any one else, who was the owner of the note. He did not ask either of the endorsers where Mrs. Deacon resided, nor did he make this inquiry of any one except the bank officers. He examined the city directories, and did not find the name of the maker in them.

Two of the city directories were put in evidence, and in neither was to be found the name of Mrs. Deacon, or of her husband, Edward Deacon.

It appeared, in evidence, that Mrs. Deacon resided in Astoria, until about three weeks before the first of May, 1854; that she then removed to this city, and, on the 1st of May, moved to No. 70 Union Place, which premises she hired of Mrs. Lucius Com-stock, and which she occupied, as a boarding-house, until the 8th Nov. following, when she removed to No. 251Eourth avenue, where she remained for six weeks, keeping a boarding-house also at the latter place. She was consequently residing at this latter place when the note fell due.

The note was given for rent of the premises No. 70 Union Place, and was made by Mrs. Deacon, at the house No. 70 Union Place, and was handed to Mr. Comstock, the husband of the landlady, by McLean, one of the endorsers, who is the son-in-law of Mrs. Deacon, in Mrs. Deacon’s room at No. 70 Union Place. Comstock sold the note to the plaintiff.

A motion was made at the trial to dismiss the complaint, on the ground that the plaintiff had not proved due presentment and demand of payment of the note of the maker, or that the maker could not have been found upon due and diligent inquiry.

The motion was overruled, and a verdict was taken for the plaintiff, subj ect to the opinion of the court on the single question as to the sufficiency of the presentment and demand.

No question arises as to the sufficiency of the notice to the endorsers. If the demand was sufficient the defence fails.

The note is not payable at any particular place, and the general rule which the courts have always adhered to is, that in such a case, if the maker has a known residence in the state, a demand, in order to fix the endorser, must be made of him at such residence. (14 J. R. 114.) If he has no known residence or place of business at which the note can be presented, presentment is excused. So if after the making of the note the maker absconds, or removes from the state to reside elsewhere, a presentment need not be made.

If the residence be known to the holder, and has not been changed since the making of the note, a demand must be made, though the residence.be in another state. (Taylor v. Snyder, 3 Denio, 145; Spies v. Gilman, 1 Comst. 321.)

In the case at bar, the maker actually resided in the city of New York, both at the time the note was made and when it fell due, though in a different street at the latter period. She was, at both periods, keeping a boarding-house. The holder was bound to use all reasonable and proper diligence to find the maker and demand payment. “Whoever,” says Judge Thompson, in Anderson v. Drake, 14 J. R. 114, “takes a note (not payable at any particular place) is presumed to have made inquiry for the residence of the maker, in order to know where to demand payment, and to assume upon himself all the inconvenience of making such 'demand.”

Was that diligence used in the present instance?

The notary received the note at three o’clock; he goes to the bank and asks the officers in attendance where the maker lived, and, as might have been anticipated, they could give him no information ; he makes no inquiry of any person, not even of the officers of the bank, who the owner of the note was, nor did he ask either of the endorsers where the maker lived, though one of them (McLane) had an office in the city, and was served, the next day, with notice of protest, at his office. Finding that he could get no information at the bank, and that the maker’s name did not appear in the city directories, the notary formally demands payment at the counter of the bank, and forthwith gives notice to the endorsers. It is impossible to say that this was due diligence.

It may be exceedingly inconvenient at times to find the place of residence of the maker of a note, but that forms no excuse for the want of the knowledge if it can be obtained.

It was gross carelessness in the holder (the plaintiff) to send the note to the bank for collection, without a memorandum endorsed on it, or accompanying it, to show where the maker was to be found. This was a duty which he owed both to the bank and its notary, and he is without excuse in throwing upon the latter officer the trouble, annoyance, and possible risk of finding out a fact for his benefit, with which he is presumed to be himself acquainted, and with which he ought to be acquainted in fact.

The complaint must be dismissed, as to the endorsers.

Hoffman, J.

We do not consider the second point of the plaintiff’s, nor the case cited, applicable to the present question. Miller v. Gaston (2 Hill, 188) refers to the rule as stated in Hough v. Gray, (19 Wendell, 202,) and the rule so declared is, that if a party, at the time of making the note, endorses upon it an absolute guaranty to pay it, he may be treated as a joint and several maker and promiser. Demand and notice would then be" unnecessary. In Dean v. Hall, (17 Wendell, 214,) the point is more elaborately examined.

But in this case, McLean stands in the character of an endorser, probably an accommodation endorser merely.

The third and fourth points of the plaintiff are, that when the maker is without a fixed place of residence, or absconds after the note is given, no demand is necessary; and again, that if he cannot be found, want of demand will be excused. But in the present instance the maker was, at the maturity of the note, keeping a boarding-house at 251 Fourth avenue.

On the complaint in this case, the plaintiff must be considered as the owner of the note at its maturity. The bank had, it may be assumed, received it for collection. There is nothing to show they had discounted it.

In Taylor v. Snyder, (3 Denio, 145,) Justice Beardsley stated the rules, and went through the cases, with great care. He examined the exceptions to the rule requiring a personal ■ demand of the maker, or at his dwelling house, or place of abode, or at his counting house or place of business. “It is,” he remarks, “a question of diligence; and if a demand is found to be impracticable, proper effort&for that purpose having been made, the endorser will be held liable, due notice having been given to him.”

He states one of the exceptional cases thus: “In every case where the maker has no known residence, or place at which the note can be presented for payment, a demand will be excused.”

He cites Story on Pr. notes, 237; Whittier v. Graffam, 3 Greenleaf, 82; Putnam v. Sullivan, 3 Mass. 53; Duncan v. McCullough, 4 S. & R. 480.

Not one of these authorities approaches to the support of the proposition, that where the maker’s residence is in a particular place, known to the endorsers, probably and presumptively known to the owner, an inquiry and demand of the bankers with whom the note is lodged for collection,. and search in a directory is enough.

It is attempted to bring the case within that class of authorities which, hold that an endorser is not discharged, when it clearly appears that he could suffer no injury from the want of presentment.

To this proposition, the language of Mr. Justice Nelson, in The Mechanics' Bank v. Griswold, (7 Wendell, 168,) and of Justice Cowen, in The Commercial Bank v. Hughes, (17 Wendell, 98,) may be cited. The rule is best stated in the example given by Judge Nelson. “ Where the endorser is himself the debtor, as where the note is discounted for his accommodation, and the money raised upon it is received by him, and, therefore, he is ultimately holden to pay it, the reason of the rule cannot apply."

The only ground of excuse here, is, that the endorser got notice of a presentment and dishonor, and that the maker was insolvent. In other words, he could not, and would not, have paid, had he been personally required to do so.

" This is not a legal excuse for omitting a regular presentment.

Judgment must be entered for the defendants, Lyon & McLean, dismissing the complaint with costs.


source: Caselaw Access Project

author: By the Court. Slosson, J.

license: Public Domain

text:
    Alrick Zellweger and Otto F. Kraus v. Philibert Caffe, Smith Cutter, Jr., and Daniel T. Youngs. The same v. The same and Esther Ann Catlett, Executrix of Henry Laverty, deceased.
    Where promissory notes, endorsed for the accommodation of the maker, are used as collateral security for a credit granted to the maker, although the endorsers may justly be considered as sureties, still the legal character of their contract, as that of endorsers, is not changed, and no objection can, therefore, be taken to it under the statute of frauds.
    Where, by the agreement between the makers of the notes, and the persons by whom the credit was granted, the credit is to be made available by bills drawn by the former, and accepted by the latter, the fact that subsequent bills on account of the credit, were drawn by an agent of the makers, and the proceeds applied by him to their benefit, and according to their instructions, is not such a departure from the terms of the agreement, as can operate to discharge the endorsers, as sureties.
    If, by the terms of the agreement, the persons granting the credit are to be placed in funds to meet their acceptances, by approved bills, to be remitted to them within a certain time before their acceptances fall due, the failure to make the stipulated remittances in due season, is a breach of the agreement, which gives to the person granting the credit an immediate right of action upon the promissory notes held by them as collateral security for the performance of the agreement.
    In such an action, they are entitled to recover the whole amount of their acceptances, that were not covered by remittances, when the action was brought.
    Upon these grounds, judgment rendered for the plaintiffs, for the whole amount of the endorsed notes upon which these actions were founded.
    (Before Dueb, Boswortii and Slosson, J.J.)
    Heard, October term;
    decided, December term, 1855.
    Case, upon a verdict taken, subject to the opinion of the court at General Term, with liberty to turn the same into a bill of exceptions. The plaintiffs now move for judgment.
    The actions were upon four several promissory notes, against .the makers and endorsers. In one, the executrix of Henry Laverty is a party; in the other, she is not. A severance was made, as to the executrix, and the actions tried together, as against the other defendants, by consent.
    In the first action, the complaint set out two notes, drawn by Caffe & Cutter, a mercantile firm, in favor of Youngs: one, for $2,000, dated 30th of April, 1853, at six months; the other, by the same makers, also in favor of Youngs, for $3,000, dated July 8th, 1853, at four months. It alleged an endorsement, by Youngs, of each note, and delivery to the plaintiffs, for valuable consideration. Presentment and protest were also duly stated.
    The defence was, in both actions, that the notes were made and endorsed by Youngs and Laverty, without consideration, and as accommodation paper, to enable Caffe & Cutter to deposit the same with Felix Collomb, agent of the plaintiffs, as collateral security for certain drafts, authorized by him to be drawn by Caffe & Cutter, or by Cutter alone, and agreed to be accepted by the plaintiffs, a firm established at Paris. Such drafts were to be made from time to time, as the defendants required, and to the extent of about seventy thousand francs. It was then averred, in the answers, that the defendants Caffe & Cutter never made such drafts, nor did the plaintiff’s firm ever make such acceptances, which are outstanding against said Caffe & Cutter.
    The defendants, in their answer, also state, that Caffe & Cutter, instead of using the credit as agreed upon, transferred the same, through Cutter, to a certain firm of S. Allain & Co., in Paris, to be drawn for and used by such firm for its own use and benefit, which was accordingly done.

      On these grounds, it was insisted that the contract of Youngs and Laverty, became null and void, and they were discharged from all liability. The following is a history of the transactions between the plaintiffs and Caffe & Cutter, according to the evidence given upon the trial:—
    The plaintiffs are bankers, in Paris, under the firm of U. Zellweger & Co. Felix Collomb was their agent in New York, and authorized to grant credits upon them. Caffe & Cutter were importers of millinery goods, in New York. In 1849, Collomb commenced granting to Caffe & Cutter credits on U. Zellweger & Co. The credit was originally for £rs. 25,000, and the nature of the transaction was expressed in a letter of 4th June, 1849, addressed to Caffe & Cutter; no subsequent letters passed between Mr. Collomb and Caffe & Cutter, but such variations as were made in the manner of transacting their business were arranged verbally, either between Mr. Collomb and Caffe & Cutter, in New York, or between U. Zellweger & Co. and Mr. Cutter, one of the members of that firm, in Paris. Collomb never saw either Mr. Youngs or Mr. Laverty in reference to the transactions.
    The original credit, for 25,000 francs, was secured by Caffe & Cutter’s notes: one,for $3,000, endorsed by Mr.Youngs alone; and the other, for $2,000, endorsed by Mr. Youngs and Mr. Laverty.
    This credit for 25,000 francs was first increased, June 20th, 1851, by 10,000 francs additional; the increase being only temporary, at first, on account of the scarcity of bills, but afterwards made permanent, by a verbal arrangement.
    Upon this increase, of 10,000 francs, a note of Caffe & Cutter, endorsed by Mr. Youngs alone, was taken as collateral security. On the 12th October, 1852, these credits were increased by an additional amount of40,000 francs, making atotal of 75,000 francs, at which amount they continued permanent after that time. Upon this last increase, of 40,000 francs, Caffe & Cutter’s note for $8,000, endorsed by both Youngs and Laverty, was deposited as collateral. The arrangement was made verbally between Caffe & Cutter and Mr. Collomb. No formal letter of credit was issued. The communications in reference to it passed between Mr. Collomb and U. Zellweger & Co., in their general correspondence, and the arrangement was finally ratified and completed between U. Zellweger & Co. and Mr. Cutter, personally, in Paris.

      After these several increases of the credits, thus reaching their maximum, 12th October, 1852, no discrimination was made, by specific notes being deposited to secure specific credits, or by specific drafts being drawn against specific credits, but all the notes were deposited as security for all the credits, indiscriminately, and the drafts were drawn against the credits indiscriminately.
    By the course of business between Mr. Collomb and Caffe & Cutter, Mr. Collomb returned their notes, endorsed by Mr. Youngs and Mr. Laverty, to them, always a few days before they became due, and received from them similar notes in renewal.
    Mr. Cutter, being in Paris, employed S. Allain & Co., a commission house there, to make his purchases of goods for his firm, and instructed U. Zellweger & Co. to accept the drafts of S. Allain &■ Co., drawn under the credits accordingly, in payment of goods so purchased for his house, which they did, to the full amount of the 75,000 francs; and as fast as the acceptances were paid and covered by remittances, U. Zellweger & Co. again accepted drafts, drawn under the credits, in the same manner. U. Zellweger & Co. accordingly accepted the drafts of S. Allain & Co., drawn, in pursuance of these credits, for the full amount of the 75,000 francs, before the maturity of the notes in suit; and all these drafts were paid, by U. Zellweger & Co., at their maturity. These acceptances were regularly advised, by U. Zellweger & Co., to Caffe & Cutter. Caffe & Cutter have never made any remittances or payments to U. Zellweger & Co., on account of their acceptances and payments, for their account.
    All other material facts and portions of the evidence, necessary to a full understanding of the points decided, are stated in the opinion of the cour'"
    Larocque, for the plaintiffs.

      Bryan and Thompson, for defendant Youngs.

      W. Bliss, for the executrix of Laverty.
   By the Court. Slosson, J.

I shall consider the case principally in its connection with the endorsers, and the conclusions to which we have come will be equally applicable to all the defendants.

The form of the contract upon which Youngs and Laverty are sought to be charged, is that of the endorsement of promissory notes, and the notes being negotiable, it is only as endorsers that they can be made liable. The character of their engagement cannot be changed into that of a special guaranty, and had the plaintiffs failed in their proof of presentment and notice, these defendants would have been entitled to a verdict on that ground alone. (Scarbury v. Hungerford, 2 Hill, 80; Hall v. Newcomb, 3 Hill, 233; Purser v. Luqueer, 4 Hill, 420.)

It makes no difference, in this respect, that the endorsements were for the accommodation of the makers, nor that they were intended as a security for the performance, by the latter, of certain conditions in favor of the plaintiffs. The legal character of the contract remains the same, and no objection can be taken to it under the statute of frauds. (Parks v. Brinkerhoff, 2 Hill, 663.)

If the endorsements are to be treated as having been made for the general accommodation of Caffe & Cutter, without restriction, they could be available in the hands of any party who should receive the notes from Caffe & Cutter, for value, and on this theory, of the case, the plaintiffs became holders, for value, when they gave the credits and accepted the drafts in question, and would be entitled to recover as such holders for value, irrespective of any rights they might have against the parties, under the arrangement with Caffe & Cutter. This theory would by no means be an unreasonable one. There is no evidence to connect the endorsers as parties to the arrangment between Collomb, the plaintiff’s agent, and Caffe & Cutter, and it is only as matter of inference from the testimony, that this court can hold that they even knew to what purpose the notes were to be applied, and it would not be straining the case to treat it as the ordinary one of general accommodation paper, without restriction as to its use, in the hands of a bond fide holder for value.

It would, however, be more consistent, I think, with the real character of the transaction, to consider the endorsements on the defendant’s own theory, as accommodation endorsements for a special purpose, and the' defendants as cognizant of the general purpose to which the paper was to be applied, and I think their knowledge is to this extent fairly to be inferred from the evidence. This does not alter their legal position, so far as the form of the contract is concerned; their liability would still be that of endorsers merely, but whether this liability could be enforced against them, would not depend upon the mere fact of a default on the part of the makers in paying the notes at maturity. The question would involve an inquiry into the nature and character of the entire transaction. If the notes were deposited for a special purpose, under an arrangement, the particulars of which had been left by the endorsers to Collomb, Caffe & Cutter to adjust, between themselves, then their liability would depend upon the fulfilment of the stipulations which might have been agreed upon between those parties.

It becomes necessary, therefore, to inquire into the circumstances under which, and the conditions, if any, upon which the notes came into the plaintiffs’ hands.

That the notes were deposited by Caffe & Cutter with Collomb for a special purpose (the security of the credits) is undeniable, and I shall assume it as equally undeniable, because the evidence warrants it, that the endorsers knew the general purpose for which they were deposited, and made their endorsements in order to enable Caffe & Cutter to effectuate that purpose. There is not a particle of evidence, however, to show that either of them ever prescribed the mode in which the credits were to be availed of by Caffe & Cutter, or that they imposed any restrictions upon the use of the credits, or of their endorsements as a security therefor, or that they were ever informed of the particulars of the arrangement with Collomb after it had been made, in June, 1849, or at any subsequent period. Their object appears to have been, to give to Caffe & Cutter, in the particular transaction, the benefit of their endorsements as a security for the credits in question, in the way of a general accommodation, leaving the entire arrangement of the particulars to those gentlemen and the plaintiffs with whom they dealt.

If such was the object of the endorsements, it would practically be a matter of indifference to the endorsers, how the bills were in fact drawn, or how they were agreed to be drawn, since the general object of accommodation would be equally secured to Caffe & Cutter, whether the drafts were drawn in their own names, or in the name of Smith Cutter, jr., or in that of Allain & Co.; the mode of drawing would be a matter in which they could have no interest, so long as the notes, to which they were parties, were applied to the purpose for which they had endorsed them.

But the defendants contend that the object of the endorsement was not of the general character above supposed, but that they were made not only for a special purpose, which is conceded, but on conditions and limitations to which they, the endorsers, were, in legal contemplation at least, parties, and that by the failure of these conditions their liability has ceased. They claim for themselves the position of strict guarantors, or sureties for Caffe & Cutter in the transaction in question, and their theory is, that under the arrangement between Caffe & Cutter and Collomb their engagement was limited to such drafts as should be drawn by Caffe & Cutter themselves, or by Smith Cutter, jr., and that the transfer of the credits to Allain & Co., and the drawing of the bills in the name of the latter firm, was an entire departure from, and breach of the conditions of this their engagement.

This raises the question whether, by the terms of this arrangement, any such restriction existed on the use of the credit as should have prevented the drafts from being drawn in the way in which they actually were drawn, that is, in the name of Allain & Co.

The terms of the arrangement are all embodied in Collomb’s letter of the 4th of June, 1849, (the date of the original credit,) taken in connection with the letter of credit itself of that date.

By these it appears that the credit was opened in favor of Smith Cutter, jr., one of the firm of Caffe & Cutter, then in Paris, on the business of the house, and that it was to be availed of by his bills on the plaintiffs at 90 days’ date or sight.

Evidence of usage was offered by the plaintiffs, and rejected in the first case (that of Mrs. Catlett) and received in the other, to show that where a credit is granted to a house in New York, on a foreign house, it is customary for the parties receiving the credit to avail themselves of it by either drawing against it themselves, or by transferring it to other parties, in part or in whole. Whether this evidence was properly admitted or not, may be doubtful, but it is unnecessary to consider the question, as the proof falls short of what is necessary to establish such a custom, and the case does not require a resort to evidence of this nature.. The whole case shows that the credit was really in favor of the firm of Caffe & Cutter, of which Smith Cutter, jr., was a member. Drafts by Caffe & Cutter would have been equally within the scope and meaning of the arrangement, as drafts by Smith Cutter, jr., himself, and we find the plaintiffs putting the same interpretation on the agreement, for in the second letter of credit, the credit is expressly made in favor of Caffe & Cutter. By the terms of the letter they are to dispose of the credit according to custom, (their own of course,) at 90 days’ sight or date. Moreover, the transfer of credits to Allain & Co. was made in the name of Caffe & Cutter, and all that company’s drafts are charged to the latter’s account.

The agreement must be reasonably interpreted. If it was allowable within the meaning of the arrangement, for drafts to be drawn in the name of Caffe & Cutter, then they might properly be drawn in the name, and through the medium of an agent of that firm, which relation Allain & Co. clearly sustained. It was an agreement of convenience, and evidently so intended. I admit that had a special guaranty been subjoined to the letter of credit of the 4th of June, 1849, the surety would have had a right to a literal performance of the terms of the letter, whether material or not. (Dobbin v. Bradley, 17 Wend. 422; Birkhead v. Brown, 6 Hill, 634.) But that is not this case, and it is needless to speculate upon the supposed cases.

It would be an unwarrantable stretch of the evidence to say that it was an understood condition of these defendants’ liability that the credit was to be availed of only in bills drawn by Smith Cutter, jr., or in the name of' Caffe & Cutter.

It is conceded that they occupy the position of sureties to Caffe and Cutter, but not in the sense of strict guarantors of an agreement containing restrictions and limitations and to which they were parties. They are sureties, as all accommodation endorsers are, who entrust their names to parties for the purpose of a general accommodation, without restriction, though in a particular transaction, and the cases of Powell v. Waters, (17 J. R. 176;) Bank of Chenango v. Hyde, (4 Cowen, 567;) and Bank of Rutland v. Buck, (5 Wend. 66,) show, that where general accommodation is the object, even if it be understood by all the parties that the accommodation is to be secured in a particular way, a strict adherence to that mode is not essential, nor a departure from it a misapplication of the paper. We conclude, then, that even if these defendants had been cognizant of, or in any sense, parties to the arrangement' between the plaintiffs and Caffe and Cutter, the evidence does not warrant them in saying that the mode in which the drafts were actually drawn, was a violation of the conditions of that arrangement.

But it is objected, that by the transfer of the credits to Allain and Co., Caffe and Cutter not only departed from the terms upon which the credit was created, but that they thereby relinquished all control over the credits themselves. This view is not supported by the evidence. This transfer was not a sale or negotiation of the credits—Allain and Co. were merely the agents of Caffe and Cutter, for the purchase of their goods in Paris—every one of their drafts is expressed to be for value received in merchandise, and was directed to be placed to the debit of Caffe and Cutter’s account with the plaintiffs, and was so debited. Caffe and Cutter are throughout recognized as the debtors in the account, and the drafts were, to all intents and purposes, the drafts of that firm. If, then, the objection to the mode in which the drafts were drawn fails, the inquiry remains, what were the conditions upon which these endorsements were to become available in the hands of the plaintiffs, in other words, in what event were these endorsers to become liable? and has this event occurred?

By the arrangement between Collomb and Caffe and Cutter, the latter were to remit by the English steamer, in good bills on London or Paris, to be approved of by Collomb, to cover the plaintiffs, for such acceptances as they should make under the credits, and such remittances were to be made, so as to reach the plaintiffs at least fifteen days before their acceptances should become due. The credits were to be renewed so long as Collomb held the security of Youngs and Laverty, provided the remittances were made.

"When the second credit was given, (June, 1851,) a new note, endorsed by Youngs and Laverty, or by one of them, was deposited with Collomb for the amount of the credit, and when the final credit of 40,000 francs was granted, their endorsement for that amount was also deposited as security, and no change or variation had occurred in the original terms or conditions of the credit, but they remained precisely as they had been agreed upon when the first credit was opened.

The contingency then upon which these endorsements were to become available to the plaintiffs, was the failure of Caffe and Cutter to remit bills on London or Paris, to be first approved of by Collomb, in Hew York, in such time as to reach the plaintiffs at least fifteen days before the maturity of the acceptances.

The bills were to be approved of by Collomb, before being remitted, so that the default would, in fact, occur whenever Caffe and Cutter failed to present bills to Collomb, in Hew York, for his approval, in time to allow them to be remitted so as to reach Paris fifteen days before the maturity of the plaintiff’s acceptances. Has the contingency happened, and to what extent have the defendants become liable ?

Caffe and Cutter appear to have drawn under the first and second credits, from time to time, up to the period when the last credit was given, (12th of October, 1852,) and to have renewed their notes, with the defendants’ endorsements, to cover the amount of their drafts, so that at this last period, Collomb held such renewal notes for the full amount of the then existing credit for 85,000 francs.

This covered a period of nearly three years, and considering that the period between the second and last credits exceeded a year, there can be no pretence for saying' that the two original credits were not both, of them of a permanent character, or that the defendants did not know and assent to their being so.

We are not informed what was the state of the aocounts between the plaintiffs and Caffe and Cutter, on the 12th of October, 1852, when the last credit was given, but at that time Collomb held the defendants’ endorsements (in renewal notes) to the full amount of the two previous credits. A new arrangement was then proposed by Caffe and Cutter, and assented to by the plaintiffs, by which all the credits were to be consolidated into one, and made an aggregate credit of 75,000 francs, to continue for at least one year, and upon the same terms upon which the original credit had been granted, and although no notice appears to have been given to the defendants of this new arrangement, they were undoubtedly aware of it, for we find their endorsement for the increased amount (40,000 francs) immediately furnished, upon the completion of the arrangement.

We know nothing of the state of the accounts between the parties after this final consolidation of the credits, until June, 1853, when a balance of over 46,000 francs was dne from Caffe & Cutter to the plaintiffs.

This balance was entirely extinguished by remittances of Caffe & Cutter in July and August following. At this period, neither of the notes in suit was due, though outstanding, and had the transaction terminated here, the defendants’ liability would have been at an end; but about this period, commenced a new mode of using the credits, and a new series of drafts and acceptances, which has given rise to the present litigation.

In June, July, and August, 1853, Caffe & Cutter direct the plaintiffs to transfer the whole of the credits to Messrs. S. Allain & Co., who, thereupon, drew in five different drafts, commencing August 1st, and terminating October 12th, 1853, for the full, amount of the 75,000 francs, all which drafts were accepted by the plaintiffs before the maturity of the notes in suit.

Caffe & Cutter have made no remittances to cover these acceptances, or either of them.

The first of them (20,000 francs) fell due, and was paid by the plaintiffs just after the maturity of the $8,000 note, and the second of them (for 15,000 francs) shortly after the maturity of the two notes for $2,000 each, and these were the only two drafts which had either fallen due, or been paid, at the time these suits were commenced.

The suits were commenced on the 3d and 7th of December, 1853.

The two first drafts (35,000 francs) were actually paid, as already stated, before the commencement of the suits. The third draft (15,000 francs) fell due, and was paid, on the 19th of December ; approved remittances to meet this acceptance should have reached the plaintiffs at least as early as the 4th of December, which was before the commencement of the suits. In respect to this draft, therefore, there had been a clear default at the time of the commencement of the suits; the two last, each dated 11th Oct., 1853, payable at ninety days, one for 15,000 francs, and the other for 10,000 francs, each fell due and was paid by the plaintiffs on the 9th of January, 1854. In respect to these, if approved remittances had been sent at all, they would have been in time, if they had reached Paris on the 25th of December. The default, in fact, occurred when Gaffe & Cutter failed to exhibit bills to Collomb, in Hew York, for Ms approval in time to be transmitted, so as to reach Paris on that date. What period tMs would have required, at that time, we are not informed, and do not know. In respect, therefore, to these two drafts, it cannot be said that at the commencement of the smt, Caffe & Cutter were in default. They were, however, paid before the time. It is clear that there had been a default on the part of Caffe and Cutter, under their agreement with the plaintiffs, in respect to all the drafts except the two last, at the time these suits were commenced.

The question then arises, to what extent are the plaintiffs entitled to recover in those actions ?

The defendants contend that, in any event, they are liable only to the extent of two drafts, (35,000 francs,) which had matured and been paid at the time of the commencement of the actions; and it is further contended on the part of Mrs. Catlett, that the $8,000 note was applicable exclusively to the credit of 40,000 francs, and that, therefore, the plaintiffs can only recover, as against her, the amount of the $2,000 note, the only one, as she claims, on wMch Lavertyhas been sued, wMch is applicable to the drafts for the 35,000 francs.

The plaintiffs, on the other hand, claim that they are entitled to judgment for the full amount of the notes against the parties to them, that is, as against the executrix of Laverty, the amount of the two notes, one for $8,000 and the other for $2,000, (50,000 francs,) and as against the other defendants, the amount of all the four notes, $15,000, (75,000 francs.)

When the credit was finally raised to 75,000 francs, all discrimination in the amounts of the several credits which constituted the aggregate sum appears to have been dropped, and though the $8,000 note is expressed in Collomb’s letter to plaintiffs of 12th of October, 1852, to be the guarantee upon the 40,000 francs augmentation of the previous credits, the meaning of the expression must be gathered from the whole of the facts then existing. It was a final arrangement for a permanent credit for the larger amount; and the notes then held, as well as the $8,000 note then received, were to be considered as the guarantee for the fulfilment of the conditions originally agreed upon, when the first credit was opened.

It would be unreasonable to suppose that the parties intended that each note should remain as a security for the particular credit only, on which it had been originally given, which would necessarily lead to endless confusion, unless care was taken that each draft was drawn upon a particular credit. On the contrary, the evidence of Collomb is express, that the notes were deposited as security for all the credits, and that the drafts were drawn against the credits generally, without discrimination.

I conclude, therefore, that such was the understanding of the parties, and that the notes must all be treated as on the same footing, and as constituting together a common security for the entire amount of credits. In legal effect, the case is the same as though the notes had all been consolidated into one, or as if, instead of endorsed notes, the form of the security had been a bond for the entire amount, withLaverty & Youngs as sureties, and conditioned for the performance, by Caffe & Cutter, of the stipulations of their agreement with Collomb.

It is like the case of a suit on a bond payable in instalments, in which, on default in payment of one instalment, the plaintiff takes judgment for the whole penalty, and issues execution for the amount actually due, and so from time to time, under leave of the court, as subsequent instalments become due.

It follows that, on default of Caffe & Cutter, in making remittances to meet any one draft, the plaintiffs became entitled to sue upon all the notes, and to take judgment for the aggregate amount of all, as they would have been entitled to do, had the security been in the form of a bond, and, as all the drafts had been taken up and paid by the plaintiffs before the verdict was obtained, and it is conceded that Caffe & Cutter never made a remittance to meet either, there can be no objection to the plaintiffs taking their judgment for the full amount of the notes in each suit, and issuing execution accordingly, provided that the whole amount to be levied under the two judgments do not exceed, exclusive of costs, interest and charges, the sum of the said acceptances and commissions, with interest thereon; and provided further, that the judgment against Mrs. Catlett is to be levied of property in her hands, or to come into her hands as executrix, and out of her individual property.

An objection was taken, at the trial, that the plaintiff’s firm was changed, in July, 1852, by the withdrawal of Respinger, one of partners, and the accession of Krauss, a new member. Whatever force this objection might have had, under other circumstances, I do not think it well taken here. The change took place before either of the notes in suit was made, and the firm continued the same.

An objection was also taken, on the trial, to the sufficiency of the proof of the endorsement, by Le Roy de Chabrol & Co., of the drafts, of the 1st of August and 11th of October. We think this objection was properly overruled.

The acceptance of the draft is not denied, nor is the omission to make remittances, to meet the acceptances, denied. It was that default, on the part of Caffe & Cutter, which was to render the defendants liable, on their endorsements. Whether the holders could have recovered, against the drawees, in a suit upon the drafts, on this proof of the endorsements, may be questionable. But that cannot affect the question of the liability of Caffe & Cutter, by reason of their failure to make remittances.

An objection was also taken, at the trial, by the counsel for Mrs. Catlett, to the reading of the depositions, under the commission, on the ground, that the cross-interrogatories were not sufficiently answered. We think the objection was properly overruled, as it is very clear that all the cross-questions are, in fact, answered; and, so far as the objection points, fully answered. The special question, omitted to be fully answered, should have been pointed out. But, apart from this, the defendant's counsel was aware of the defect, some months before the trial. If the objection had been deemed sufficiently serious, a motion should then have been made to quash the return of the commission. If that motion had then been made, and prevailed, the plaintiff would have had time to remedy the defect, by a second commission, before the trial. It would be unfair, to prejudice him by a surprise, on the trial, under such circumstances. (19 Wend. 487.)

For the like reason, we think the objections, on the'part of the other defendants, though more serious in character, should not prevail. Good faith and fair practice required, under the circumstances, that they should have been taken before the trial.

Judgment must be for the plaintiffs, in each action, in conformity with the views expressed in this opinion.


author: By the Court. Duer, J.

text:
    William H. Mellen v. The Hamilton Fire Insurance Company.
    An assignee, for the benefit of creditors, to whom, among other property, a policy of insurance was assigned, after a fire had occurred, may sue in his own name, without those provided for by the assignment being made parties, to recover the loss.
    An assignment of this character is not within the meaning of the clause in policies, requiring the written consent of the assurers, to an assignment. It is merely the transfer of a debt.
    An insurance was effected, by the plaintiff’s assignor, with the defendants, on the 12th of April, 1854. On the 23d of June, 1854, he effected another insurance, with another company. The fire took place on the 13th of July, 1854, and the preliminary proofs were furnished on the 26th of that month. No notice of such further insurance was given to the company, until that time, and accompanying such proofs.

      Sold, that this was not a compliance with the provision of the policy, requiring the assured to give notice to the company, with all reasonable diligence, of any further insurance that might be effected by him; and the policy was made void by such neglect.
    The knowledge of such other policy by an insurance broker, who procured the policy, for the plaintiff’s assignor, with the defendants, is not the knowledge of the company, to bind them. There was no proof of his being such a general agent as would make the company responsible for his acts or knowledge.
    (Before Dues, Bosworth and Slossok, J.J.)
    Heard, October term;
    decided, December term, 1855.
    Motion for judgment, on a verdict taken, subject to the opinion of the court on the whole case, to be heard, in the first instance, at General Term, with liberty to direct a dismissal of the complaint, and with liberty to either party to turn the case into a bill of exceptions.
    The action was brought upon a policy of insurance, dated the 12th of April, 1854, for $2,000, executed by the defendants, in favor of Mark O’Brien, upon a stock of goods, in a store Ho. 216 Bowery. The policy was assigned, by O’Brien, to the plaintiff, after the fire, for the benefit of creditors. The fire occurred on the 13th of July, 1854.
    The policy is set forth in the complaint, and is in the usual form. It contains the clause, “that if the said insured, or his assigns, shall thereafter make any other insurance on the same property, and shall not, with all reasonable diligence, give notice thereof to these defendants, and have the same endorsed on the said policy, or otherwise acknowledged by them, in writing, the policy shall cease, and be of no further effect.”
    The defence was, that, since the making of the policy, and before the fire, the said O’Brien, without the knowledge or assent of the defendants, procured a further and other insurance, upon the same property covered by this policy, in the St. Nicholas Eire Insurance Company, of the city of New York, to the extent of $1,000; that such policy was made, and issued, on the 23d of 'June, 1854; and that no notice was given to the defendants of such further or other insurance.
    Another ground of defence was, that, by the terms of the policy, it could not be assigned, without the assent of the defendants, manifested in writing; and that no assent had been given, to the assignment to the plaintiff.
    The assignment, which was produced in evidence, was of this and certain other policies of insurance, in trust, to pay certain scheduled creditors, fully or pro rata.

    The policy, and the loss and value, having been proven at the trial, as well as the subsequent policy, effected at the St. Nicholas Insurance Company, and no evidence of the assent of the defendant to such subsequent insurance being given, a motion was made foranonsuit,whichwasdenied,andsuohrefusalwasduly excepted to.

      W. A. Butler and J. T. Brady, for the plaintiffs.
    They cited 8 Hill, 101; 9 John. 191; 14 John. 20; 6 Cow. 645 ; 23 Wend. 18.

      A. Wakeman, for the defendants.
    He cited 16 Peters, 495; 4 Howard, 185 ; 5 Hill, 147.
   By the Court. Duer, J.

The objections taken on the trial to the sufficiency of the preliminary proofs, and to the right of the plaintiff to maintain the action in his own name, were properly abandoned on the argument before us. Where an action is brought by a trustee, in whom the legal title is vested, it is certainly not necessary that the cestui que. trust should be made parties, either as plaintiffs or defendants, unless where the action is brought for the purpose of determining, or involves the determination of, their respective rights and interests under the instrument creating the trust.

The objection, that the assignment to the plaintiff was made without that consent in writing of the defendants which the policy requires, although not abandoned upon the argument, is, in our opinion, quite as untenable as those that have been mentioned. The restrictive clause in the policy, upon which the objection is founded, refers only to an assignment of the policy during the pendency of the risks, and accompanying the transfer of an interest in the property insured. Thus interpreted, there are evident reasons for its introduction; but when the assignment is made, as in the case before us, when the risks have ended, for the sole purpose of enabling the assignee to recover a loss, it is, in reality, no more than the assignment of a debt, which, as the company has no motive of interest for preventing, it would be unreasonable to suppose, was meant to be prohibited. This limited interpretation of the clause was adopted by this court many years since in the case of Britchta v. the Lafayette Ins. Co.; and as we see no reason to doubt the propriety of the decision, and are not aware that it has ever been departed from, we hold ourselves bound to follow it. (2 Hall’s S. C. Rep. 372, and also, Lazarus v. Commercial Ins. Co., 5 Pick. 79, and 2 Duer on Ins., pp. 64-66.)

The plaintiff would be entitled to judgment were there no other objection to his recovery; but an objection remains to be stated, to which no answer, that we can deem satisfactory, has been given. It is insisted, that before the happening of the loss, the insurance had been rendered void by the violation, on the part of the assured, of that provision in the policy which made it his duty to give notice to the company, with all reasonable diligence, of any further insurance that might be effected by him, and have the same endorsed -on the policy, or otherwise acknowledged by the company in writing. A further insurance was effected by him on the 23d June, 1854i No other notice of the fact was given to the company than that contained in the preliminary proofs, upon which payment of the loss was demanded; and those, the case shows, were not made up and served until the 26th of July following. The delay, it is contended, was unreasonable, and has not been justified or excused.

On the part of the plaintiff two replies have been made to the objection. First. That the witness Wales was the general agent of the defendants; and that, as the subsequent insurance was procured by him, his knowledge of the fact was equivalent to notice to the company; and several adjudged cases were referred to as sustaining this position. Second. That there was no want of reasonable diligence, even on the supposition that no other notice was given to the company than by the service of the preliminary proof.

Neither reply can we hold to be sufficient.

The allegation that Wales was the general agent of the defendants, to whom a notice, binding on the company, of a subsequent insurance, could properly be given, is not only not sustained, but in our opinion, is plainly contradicted by the evidence. He was an insurance broker, and from the nature of Ms business as such, was no more the general agent of the defendants than of any other company or individuals to whom Ms professional services had been rendered. In procuring the insurance he was the agent of the assured, and if, before the transaction was complete, he became, for any purpose, the agent of the defendants, that agency wholly ceased, when he had delivered the policy to the assured, and had paid over to the company the premium wMch he had received.

From this time, there was no such relation between him and the defendants, as could make it his duty to communicate to the company his personal knowledge of a subsequent insurance, or could justify third persons in believing that this duty was imposed on, and would be discharged by, Mm; and we think it would be extravagant to say, that the knowledge wMch, in a separate transaction, he acquired of a farther insurance, was alone sufficient to affect the company with notice of the fact. The cases, therefore, to wMch we were referred, bear no analogy to the present; and it is needless to consider whether we should have held them to be applicable or controlling, had the general agency of Wales, or the fact that he was held forth to the public by the defendants as such agent, been established on the trial. The question whether, had express and timely notice of the subsequent Msurance been given to the defendants, they might not, by refusing to endorse it on the policy, or otherwise to acknowledge it in writing, have discharged themselves from all further liability, we shall also leave undecided.

The sole question that remains is, whether there was such a want of reasonable diligence on the part of the assured, in giving the notice which the policy requires, as rendered the insurance void at the time of the fire; for if it was then in force, the defendants are certainly liable, and the notice given by the preliminary proofs may well be deemed sufficient. As the facts are undisputed, this question was treated by the counsel, and is regarded by us, as purely a question of law; and its proper determination as such, it seems to us, is not, at all, difficult or doubtful. If the only purpose for which notice of a subsequent insurance is required, were that of enabling the prior insurers to ascertain for what proportion of a loss they might eventually be liable, then, until the actual occurrence of a loss, no such notice would seem to be necessary ; since, if given then, it would fully answer the purpose for which alone it was intended, and a delay, working no prejudice to the insurers, could not justly be qualified as unreasonable. But this is not the only, or, as we apprehend, the principal reason for requiring that express notice of every further insurance upon the same property shall be given. By one of the conditions annexed to the policy, the company may elect at any time, and for any cause, to terminate the insurance by giving notice to the assured, and returning a due proportion of the premium; and to enable an insurance company to exercise properly this discretionary power, it is important, that it should have a timely knowledge of the facts upon which its exercise will usually depend. Of these facts, there is probably none more important to be known, than than that of the total amount of- the sums insured upon the same property, since it is by a comparison of this amount with the value of the property, that prudent insurers, in making the election which the policy gives to them, are certain to be governed. Hence it is, that the fact of a further insurance is required to be made known to them with all reasonable diligence,” instead of deferring its communication until the happening of a loss. We think, therefore, that the words “ reasonable diligence,” looking to the purpose for which they are inserted, demand promptitude of action, and ex-elude unnecessary delay; and, consequently, that an unexplained delay of nineteen days is conclusive proof of a want of that “reasonable diligence” which was necessary to be shown to continue the policy in force. We think that it was not in force when the fire happened, and that the loss claimed is, therefore, not recoverable.

The verdict must be set aside, and the complaint be dismissed with costs.


author: By the Court. Slossoh, J.

text:
    Arthur Lysaght v. Jonas Phillips.
    The defendant, at the request, and for the accommodation of L. P. & Sons, of London, drew a bill of exchange upon them, which they accepted, for £1,304 lis. 5d. But the acceptors placed the bill in the hands of another house, to be discounted for their benefit, and this house transferred the bill, before its maturity, to the plaintiff, as collateral security for the repayment of a loan of stock.

      Held, that the finding of the referee, that the bill had been transferred to the plaintiff for a valuable consideration, and without notice of its misapplication, was sustained by the evidence.
    The acceptors failed, and after their failure entered into a deed of composition with their creditors, to which both they and the plaintiff, as one of the creditors, were parties. The deed contained an absolute release of the acceptors, and also a covenant not to sue them, but it contained also a reservation of the rights and remedies of the creditors against third persons, not parties to the deed, who were or might become liable as drawers, endorsers, or otherwise.

      Held,, that the effect of this reservation was, not only to preserve the plaintiff’s right of action against the defendant, but to continue the liability of the acceptors to the defendant, in case he should be compelled, as drawer, to pay the bill, and that consequently the release and covenant in the deed, as they did not affect the rights of - the defendant, constituted no defence to the present action.
    Judgment for plaintiff affirmed, with costs.
    (Before Doer, Bosworth and Slosson, J.J.)
    Heard, October;
    decided, December, 1855.
    Motion for a new trial, upon a report of a referee, and an appeal from a judgment entered thereon, on the ground of its being contrary to evidence, and for error in matters of law, as to which exceptions were taken to the decision.
    The action was by the plaintiff, as holder and endorser of an accepted bill of exchange, against the drawer, upon protest of the same for non-payment, and notice to Mm.

      The bill was dated 30th August, 1847, at sixty-days’ sight, drawn by Jonas Phillips & Co., of New York, on Lawrence Phillips & Sons, of London, for £1,304 17s. 5d, to the order of the drawers, and endorsed by them and by Lysaght, Smithett & Co., of London. It was duly accepted, but protested for non-payment 17th November, 1847.
    The cause was tried before the Hon. William Kent, as referee.
    The referee found as facts, that the bill “was drawn by the defendant, at the request and for the accommodation of the firm of Lawrence Phillips & Sons, aforesaid, (the acceptors,) and that no value or consideration passed from the said last-mentioned firm to the said defendant, for or on account of the said bill of exchange.”
    The bill was delivered by the acceptors to Sargeant, Gordon & Co., to get discounted for the acceptors; and Lawrence Phillips & Sons never received any consideration or value for it, and never received it back. Sargeant, Gordon & Co. delivered it to Lysaght, Smithett & Co., without any consideration, to be discounted for them, Sargeant, Gordon & Co, and never received any value for it.
    The plaintiff, Arthur Lysaght, was a vice-admiral in the British navy, and was examined as a witness on the part of the defendant. There was no other evidence of his title to the bill than his own. He says, “The bill was handed to me by Messrs. Lysaght & Smithett, of London, in consideration of my having advanced £6,000 stock, 3í per cent. It was endorsed to me by Messrs. Lysaght & Smithett, and handed over with other bills. I produce a letter which covered the bills.”
    This letter is dated Londdn, November 6, 1847, addressed by Lysaght, Smithett & Co. to the plaintiff. Its language is, “In consideration of your having advanced to us the sum of £6,000 of 3t per cent, stock, we hereby lodge with you the undermentioned securities, which we authorize you to dispose of in any way you may think fit, on our failing to replace in your name the same amount of stock in the course of the present month.”
    The letter inclosed bills to the amount of £7,463 13s. 5d.

    The notice of the protest of the bill was served upon the defendant in New York, on the 10th December, the bill having matured the 17th November, twenty-three days before. There was no evidence of the time when the notice was transmitted from London, but the witness who served the notice stated that he had received the bill protested by the earliest conveyance.
    Lawrence Phillips & Sons; Sargeant, Gordon & Co.; and Lysaght, Smithett & Co., failed before the maturity of the bill, and their estates passed into the hands of inspectors. Dividends, amounting in the whole to 12s. and 2d., were declared by the various assignees, and some of the dividends have been received by the plaintiff.
    The deed of inspection on the estate of Lawrence Phillips & Sons, is set forth in the case, and is executed by the plaintiff, as a creditor for the bill in suit.
    By this deed the plaintiff agreed—
    1. To the assignment of the estate of Lawrence Phillips & Sons, to James Bonar, Edward Howley Palmer, and David Hoes, as inspectors.
    2. To grant them a letter of license during such inspectorship.
    3. To give the inspectors full power and discretion.

      (a.) To pay creditors -under £25 in full.
    (6.) To make compromises.
    (c.) To allow the partners for their services.

      (d.) To release the partners after a dividend.
    4. That the household property of each partner should be retained by him.
    5. To the retaining, by the partners, of a subsistence or allowance out of the estate.
    6. To be governed and controlled, as to his interest in the estate, from time to time, by the vote of a majority of the creditors.
    7. To the absolute control of his interests by the inspectors.
    8. That unless a fiat in bankruptcy should be issued by some creditor not signing, or the inspectors should certify to a wilful default by the debtors, he would not sue, seize, or attach.
    9. That if this latter agreement should be violated, it should operate and might be pleaded as a full and general release of the debt.
    10. That upon the certificate of the inspectors, of performance by the debtors, “ these presents shall operate and enure as a full and general release from all and every of the said creditors, * * * to the said parties hereto of the first part, * * * and may be pleaded in bar as a good and effectual release and discharge of all, and all manner of actions, suits, bills, claims and demands whatsoever, both at law and in equity.”
    The deed, then, contains the following clause:—“ Provided, always, and it is hereby agreed and declared by, and between the said parties to these presents, that nothing herein contained, shall extend, or be deemed or construed to extend, to prevent or hinder the said several parties hereto of the second and third parts, or any of them, or their or any of their partner or partners, heirs, successors, executors, administrators, or assigns, from enforcing or otherwise obtaining the full benefit and advantage of any charge or lien which they, or any of them, now have or hath upon any estate or effects whatsover, or from suing or prosecuting any person or persons other than the said parties hereto of the first part, or either of them, their respective heirs, executors or administrators, who is, or are, or shall, or may be liable or accountable to pay, or make good to the said several parties hereto of the second and third parts, or any of them, or their, or any of their partners or partner, executors, administrators, or assigns, all, or any. part of their said respective debts, either as drawers, endorsers, or acceptors of any bill or bills of exchange, or promissory note or notes, or as being jointly or severally bound in any bond or bonds, obligation or obligations, or other instrument or instruments, or as being liable or accountable for the payment of any such debt or debts, without having subscribed any bill, note, or other instrument whatsoever or otherwise, as if these presents had never been made.”
    The inspectors, in pursuance of the power given them in the deed on the 81st of December, 1849, certified that the acceptors ought to be released, on paying a dividend of Is. 2c?. in the pound, in addition to the dividend of 5s. previously paid.
    This further dividend was provided and ready for the plaintiff, but he avoided taking it. The referee reported as follows:—

      To the Justices of the Superior Court of the city of New York:—
    The undersigned, a referee in the above entitled action, appointed by the honorable court, respectfully reports:—
    That he has been attended by the attorneys of the respective parties, plaintiff and defendant, and has heard the proofs and allegations of the parties, and the arguments of the counsel thereon, and having duly considered the same, he finds as facts in this action—
    That the defendant, under the name of Jonas Phillips & Co., made and drew the certain bill of exchange in the complaint described, addressed to the persons doing business in the name of Lawrence Phillips and Sons; also, in the pleadings in this action mentioned, which bill of exchange was made payable to the order of the said Jonas Phillips & Co., and was endorsed by, and with the name of the said Jonas Phillips & Co.
    That the said bill of exchange was accepted by the said firm of Lawrence Phillips and Sons, as stated in the said complaint.
    That the said bill of exchange was drawn by the defendants at the request, and for the accommodation of the firm of Lawrence Phillips and Sons aforesaid, and that no value or consideration passed from the last-mentioned firm to the said defendant for, or on account of said bill of exchange.
    That the said bill of exchange, endorsed as aforesaid, was, before its maturity, transferred and delivered to the plaintiff for a good and valuable consideration, and that the said plaintiff became, and was the Iona fide holder thereof.
    That the said bill of exchange was duly presented for payment, as stated in the complaint, and payment thereof demanded and refused, as in the complaint stated; and the said bill of exchange was protested for non-payment, as in the complaint stated, and that notice of said presentment, demand, non-payment, and protest was given to the defendant, as in said complaint alleged.
    That some time thereafter, to wit, on or about the 7th day of April, 1848, a. certain indenture was made between the persons, comprising, as aforesaid, the said firm of Lawrence Phillips and Sons, of the first part, and James Bonar and Edward Hawley Palmer of the second part, and several other persons, of whom the plaintiff was one, being creditors of Lawrence Phillips and Sons, of the third part, such deed being known in the law as a deed of inspection, which said deed is set forth in the schedule hereto annexed, marked A, to which the referee refers, and makes part of this his report.
    And as matter of law, the said referee decides and adjudges that the said plaintiff did not, by said deed, nor in any other manner, so far as the said referee is advised, release or discharge the said defendant from Ms liaMlity, upon or by reason of said bill of exchange.
    And further, that the said plaintiff, upon the facts of this case, is entitled to recover against the defendant the amount of said bill, together with ten per cent, damages thereon, and interest on said amount of said bill and damages, less the credits allowed in the complaint as claimed in said complaint, besides the costs of suit to be taxed, which said amount of said bill, damages and Mterest, to' the date of this report, is the sum of $7,400.62.
    The referee decides that judgment be entered in this cause for the plaintiff agamst the defendant, for the sum of $7,400.62, with costs to be taxed. W. KENT, Referee.
    The deed of inspection referred to as annexed to the report, has been before stated, as far as it is material.

      J. Larocque, for the defendant,
    the appellant, contended that the judgment upon the report of the referee ought to be reversed, and a new trial be granted, upon several grounds.
    I. That there was no sufficient evidence that the notice of protest of the bill had been transmitted from London in due season. (5 Cowen, 363.)
    II. That the'finding of the referee, that the bill, before its maturity, had been transferred to the plaintiff for a valuable consideration, and that he was a bona fide holder thereof was against evidence. That the fair result of the evidence was, that the oMy consideration of the transfer was a precedent debt.
    r> III. That the necessary legal effect of the release of the acceptors in the deed of composition, was to discharge the defendant, as drawer, from all liability; and that the reservation of the plaintiff’s rights and remedies agamst the defendant, did not bar the case from the operation of the general rule of law.
    And, lastly, That the covenant in the deed, by wMch the plaintiff bound Mmself not to sue the acceptors for a defimte period, operated of itself, as a release of the debt, and of the defendant as the surety of the acceptors, and that this was not helped by the reservation. In support of this last point he cited the following cases. (Rathbone v. Warren, 10 John. 589; Manch. Iron Manufacturing Co. v. Sweeting, 10 Wend. 162; Hoffman v. Hulbert, 13 Wend. 375; Bonchard v. Dias, 3 Denio, 238; Fellows v. Prentiss, 3 Denio, 512.)

      W. M. Fvaris, for plaintiff,
    insisted that the evidence clearly established that the plaintiff the maturity, and without notice, and was therefore entitled to judgment for the balance due, unless he had so released the acceptors, as to discharge the defendant as drawer; and that the release of an acceptor is never available as a defence to the drawer, unless it has. the effect of depriving the drawer, in case of a payment by him, of any right of action over against the acceptor; and he contended that it was clear, upon the authorities, that the reservation in the deed, to which the acceptors were parties, operated as a valid agreement by them, that if the defendant should pay the bill, the release should not be interposed as a defence to any future action that he might bring against them for such payment. He cited, among other cases, the following: Stewart v. Eden, 2 Caines, 121; Kearsley v. Cole, 10 M. & W. 128; North v. Wakefield, 13 Queen’s B. 336; Nichols v. Norris, 3 B. & Adol. 41; Maltby v. Clairstairs, 1 Mann. & Ryl. 549; Owen v. Hiram, 13 Beav. 196.
   By the Court. Slossoh, J.

The two material questions in this case, are:

1 Whether the plaintiff is a Iona fide holder, for value, of the bill in question.

2 Whether, if he be such a holder for value, he has not, by executing the inspection deed of April 7th, 1848, released the defendant from his liability as drawer of the bill.

First. The referee has found that the bill was drawn by the defendant, for the accommodation of Lawrence Phillips & Sons, (the acceptors) without any consideration having passed from the latter to the former. The evidence shows that Lawrence Phillips & Sons, delivered the bill to Sargeant, Cordon & Co., to get discounted for them; who, instead of doing this, delivered it to Lysaght, Smithett & Co., to be discounted, and the proceeds to be paid to them, and that this latter firm, instead of procuring the bill to be discounted, transferred it to the' plaintiff as security for' a debt of their own.

The question then is, what was the consideration which the plaintiff paid or gave for the bill ?

The bill being confessedly a mere accommodation bill, as respects the defendant, the drawer, and no value having been given therefor by any of the intermediate parties, its validity as an obligation, on the part of the defendant, depends on the question whether the plaintiff received it for value, and without notice of its previous misapplication; and the burden of showing value is on him. It is not disputed that he received it before maturity. As it was an accommodation bill, without restriction as to the manner in' which it was to be used by Lawrence Phillips & Sons, had they transferred it to the plaintiff even as security for an antecedent debt, the defendant could not have objected the want of value in his hands. (Grandin v. Le Roy, 2d Paige, 509; Lathrop v. Morris, 5 Sandf. 7.)

But it was actually diverted from the purpose for which it was made by those to whom Lawrence Phillips & Sons, for whose accommodation it was made, delivered it; and that firm never received any benefit from it. In such a case, the taking of the paper as security for a pre-existing debt, is not such a parting with value, by the transferee, as to make it available in his hands against the accommodation party to the bill. (Stalker v. McDonald, 6 Hill, 93.)

The defendant contends that it is evident, both from the testimony of Lysaght, the plaintiff, and the letter of Lysaght, Smithett & Co., to him, of November 6th, 1847, that the plaintiff received the bill as a security for an advance previously made by him to that firm. The language both of the witness and the letter is ambiguous, and is certainly easily susceptible of the interpretation put upon it by the defendant’s counsel. They both speak of the plaintiff’s having advanced the £6,000 of stock as security, for the replacing of which the acceptance was deposited.

The referee has found that the bill was transferred for a good and valuable consideration, which, under the circumstances and law of the case, can only mean a consideration at the time of the transfer, and the question is, whether this finding is against the evidence. The letter, taking all its expressions together, is certainly not inconsistent with this finding, however susceptible it may be of the opposite interpretation. It authorizes the plaintiff to dispose of the securities of which this draft was one, on the failure of Lysaght, Smithett & Co., who deposited them, to replace in the plaintiff’s name the same amount of stock in the course of the then present month, language which would naturally imply a loan of the stock, made at the time the securities were deposited. The language used by the plaintiff, in his testimony, is susceptible of the like interpretation. At all events, the finding of the referee is not so clearly against the evidence as to warrant us in disturbing it on this account.

Second. Does the inspection deed of April '7th, 1848, operate to discharge the liability of the defendant, as drawer of the bill in question. It is executed by Lawrence Phillips & Sons, the acceptors of the bill, of the first part, the inspectors, of the second part, and the creditors of that firm, of the third part, among whom is the plaintiff in this action, who appears to be a creditor in respect to this bill only.

It provides, among other things, that unless and until a fiat in bankruptcy shall be issued against the parties of the first part, or unless and until the inspectors should certify to a wilful default on the part of said parties of the first part, in the performance of some material covenant therein contained, &c., the creditors will not commence or prosecute any action, or suit at law or in equity, against them or either of them, or make any seizure or attachment, &c.; and that, in case any creditor should commence or prosecute such action or other proceeding, then the instrument was to operate, and might be pleaded, as a full and general release of all and every the debts, claims and demands of such creditor. The deed then provides, that, upon the inspectors’ certifying that the parties of the first part ought to be released from their partnership debts, either simply and absolutely, or upon their complying with certain conditions therein specified, then, upon their compliance with such conditions, if prescribed, or immediately upon the signature of such certificate, the deed was to operate and enure, and might be pleaded as a full and general release and discharge, by creditors signing it, from all actions, debts, claims and demands whatsoever, both at law and in equity, which such creditors had or might have, by reason of their several claims, or of any other matter, cause or thing whatsoever, in respect of said debts and liabilities, or any of them; and then follows a promise and agreement, between all the parties, that nothing therein contained should extend, or be construed to extend, to prevent the creditors “from suing or prosecuting any person or persons, other than the parties of the first part,” “who is or are, or shall or maybe, liable or accountable to pay, or make good to them, all or any part of their respective debts, either as drawees, endorsers, or acceptors of any bill of exchange, promissory note, &c., &c., or as being liable or "accountable for the payment of any such debt or debts, without having subscribed any bill, note, or other instrument whatsoever, or otherwise, as if those presents had never been made." The deed contains, furthermore, a recital, that the creditors “signed the agreement, under the express reservation of all the securities they held."

If the legal operation of this release, or covenant not to sue, whichever its construction, be to deprive the drawer (the defendant) of his resort to the principal debtor, (the acceptors of the bill,) then, unquestionably, he is discharged. No principle is better settled. But if the effect of the promise, by which the plaintiff reserves his right of action against the drawees of the. bill, be to continue the liabilityof the acceptors to the drawees, in case the latter aré sued, then the covenant constitutes no defence to this action; and upon this question my mind is very clear. Lawrence Phillips & Sons, the acceptors, are parties to this deed. The reservation of the rights of the plaintiffs, against the drawer of the bill, is, therefore, with their assent. Such a reservation would be ineffectual, unless the drawer, in case he is sued, might resort to the acceptors for indemnity. The relative position of the drawer and acceptors, as principal debtor and surety, is not changed by the agreement between the creditor and acceptors; and the drawer can only be sued as a party standing in the position of surety for the latter. When, therefore, the acceptor accepts a release from the creditor, with a reservation of the latter’s right to sue the drawer, he, in effect, assents to remain bound to the drawer, in the contingency of such a suit being'brought against the latter. Any other construction would render the proviso unmeaning. The covenant not to sue, must be limited to the acts of the creditor, and the proviso must be construed as limiting the discharge of the acceptors by the rights of the drawer, who, by agreement of the acceptors, is thus still to remain liable.

The test of the question is, whether the acceptors could set up this deed, in bar of an action against them by the defendant, in the present suit ? If they could, the defendant in this action is discharged; that they could not, is very clear, if the intention of the parties is to be regarded, in the construction of the instrument. The courts, in construing instruments of this kind, have adhered to this intention, when manifest, and not in conflict with some fixed and inflexible rule or policy of the law, as the standard, or test, by which it is to be interpreted—adopting the equity rule, which will not permit even an absolute release to operate, beyond the clear intention of the parties.

An unqualified release, or covenant not to sue the acceptor, would undoubtedly release the drawer; but a release of the acceptor, except from such liability as he may be under to the drawer, or, which is the same thing, with a reservation of the creditor’s rights against the drawer, is a qualified covenant or release only, and limited to the acts of the creditor himself, and is, consequently, no defence, as against an action on the part of the drawer.

The construction of these inspection or composition deeds, in their effect upon the rights of sureties, has undergone ranch discussion in England, where they appear to have become a favorite, as they certainly seem to be, a very wise and beneficent mode of administering the estates of insolvents; but the result has been, clearly to establish their validity as operative covenants not to sue the principal debtor, while, at the same time, the rights of the creditor against the surety, and of the surety against the principal, are, by virtue of the reservation contained in the deed, fully preserved. A very recent case, in the Queen’s Bench, Price et al. v. Barker et al. (30 L. Eq. R. 157,) has definitely settled the question, in that country, at least, for the present; and, on a similar deed to the one in question in the present action, the court held, as the result of the authorities, that a covenant not to sue, qualified by a reserve of the remedies against the sureties, is to allow the surety to retain all his remedies' over against the principal debtor; and that the covenant, not to sue, is to operate only so far as the rights of the surety may not be affected.”

On this whole subject, see also 1 Parsons’ Contr. 236; Kirby v. Taylor, 6 J. C. R. 242; Stewart v. Eden, 2 Caines, 121; Owen v. Hernan, 13 Beav. 196; Solly v. Forbes, 2 Brod. & Bing. 38; Clayell Salmon, 5 Gill & John. 314, where the general doctrine is fully sustained.

A case in our own court, Mottram v. Mills, (2 Sandford, 189,) is relied upon by the defendant, as establishing a different doctrine, and as holding, that a promise like the one in question in a composition deed of like nature, does not operate as a reservation of the rights of the creditor against the sureties, nor, consequently, of the rights of the latter against the principal debtor released. That case appears to have been decided upon a point, which the facts, in the present action, do not present. The acceptors of the bills, in that case, had, at the time of their failure, in their possession, large consignments from the drawer, against which the bills had been drawn, and also bills of lading of other goods, then on the way, consigned to them in the same manner, and in respect to which it does not appear they had, as yet, made any acceptances; and they had also actually received some £11,000 of the proceeds of previous consignments, in excess of what they had paid of the defendant’s bills, and which was a clear debt from them to him. And the case showed, that, on applying all they had thus received, and were yet to receive, under the bills of lading then in their possession, and charging the defendant with all the payments which the acceptors had already made for him, and with the amount of the outstanding bills, (£22,000,) there would still be a balance in his favor. By the terms of the agreement, the acceptors were to transfer to the trustees, who were parties to the instrument, all the goods thus consigned to them by the drawer, and the bills of lading then in their possession, with a certain surplus in the hands of another house, belonging also to the drawer; all which were to be applied in extinguishment of the bills, and this constituted the consideration to the creditors (the plaintiffs) of the release, or covenant not to sue the acceptors. In other words, the consideration consisted in a transfer, to the trustees, of the drawer’s own properly, as a fund with which to take up the bills; and the court seem to have considered this as decisive, in the construction of the instrument. “There was no reservation,” say the court, “of the rights of the holders of the bills against other parties, as is attempted in the composition deed. It was an agreement, upon a valuable and sufficient consideration, and was fully performed, on the part of Major & Wallace, (the acceptors.) The plaintiffs were, therefore, obligated, according to its terms, never to sue, &e. There would have been more difficulty in sustaining the defence, if it rested wholly upon the stipulations in the compromise deed, but we are spared the necessity of deciding the point. On the other ground, the defendant is entitled to judgment." .

We do not consider this case as at all decisive upon the effect of a reservation in a deed like the one at bar; but regard it as a case decided on in its own peculiar circumstances, and as leaving entirely open the question of the construction of a proviso in a composition deed, given under other and different circumstances.

We have not adverted to the point made, that notice of the protest for non-payment was not in time, as we consider the contrary too clear for argument.

The judgment on the report of the referee is affirmed with costs.


text:
    Robert P. Wiggin v. John Orser, Sheriff, &c.
    As a general rule, an action under the Code is not commenced until the actual service of the summons.
    The only exceptions are those created by §§ 99 and 136 of the Code. The first exception is confined to cases in which the statute of limitations is set up as a defence. The second, to actions against non-resident or absconding debtors, and foreign corporations.

      Hence, In an action against a sheriff for an escape, the voluntary return of the prisoner before the actual service of the summons, although after its delivery to the coroner, is a good defence.
    Judgment dismissing complaint, affirmed with costs.
    (Before Duek, Campbell and Hofeman, J.J.)
    December term, 1855.
    Appeal bytheplaintifffromajudgmentdismissingthecomplaint.
    The action was against the sheriff of the city and county of New York, for the escape of a judgment debtor, imprisoned under an execution upon a judgment in favor of the plaintiff. The complaint demanded judgment for $1,804.84, the amount of the execution.
    The defence was, the voluntary return of the debtor before the commencement of the action.
    The cause was tried before the Chief Justice and" a jury, in March, 1855.
    , It was proved on the part of the plaintiff, that early in the morning of the 25th of November, 1854, the debtor was seen out of the city and county, and the limits of the prison, and that during this time the summons against the defendant was in the hands of a coroner. It was also proved, however, that the summons was not served on the defendant until eleven o’clock, A. M., of that day, and it was admitted, that before that hour the debtor had returned, and was then within the limits.
    Upon this .evidence the counsel for the defendant moved for the dismissal of the complaint. The Chief Justice granted the motion, and the counsel for the plaintiff excepted to his decision.
    A motion for a new trial was made at Special Term, before Hoffman, J., who denied the motion, and delivered the following opinion:
    Hoffman, J.—The judgment debtor Cans was on the limits, under an execution against him, on the evening of the 24th of November; and between seven and eight o’clock on the morning of the 25th of November, he was found at Hoboken. During that day a summons was put into the hands of the coroner, with directions to serve it upon the sheriff. It was served at ten minutes before eleven in the forenoon of that day. It is conceded as part of the case, that the debtor had returned to the limits before the service of the summons on the sheriff, although after the delivery to the coroner.
    The defence of the sheriff is under the 82d section of the Revised Statutes, (vol. 2, p. 348 3 ed.,) that he may plead, before the commencement of the action, that the prisoner had voluntarily returned to the jail from which he had escaped, or had been retaken.
    It is not denied, that before the Revised Statutes, the delivery of a writ to the coroner would have been the commencement of a suit, to fix the sheriff for an escape. A clear intent to put the writ in motion to be delivered would have been sufficient; Boss v. Soubber, (4 Cow. 161,) and the cases cited settled this.
    It is, however, equally clear, that under the Revised Statutes, (2 R. S. 347, § 1,) a suit was not commenced so as to charge the sheriff, until service of the capias upon him, where the suit was thus instituted. {Carruth v. Church, 6 Barb. Sup. Ct. Rep. 504, and cases.)
    By the provisions of the Revised Statutes, (2 R. S. 299, § 38,) among those regulating the limitations of actions, it was enacted, that no action should be deemed to have been commenced, within the meaning of the chapter, unless it appeared, “ that the first process or proceedings, was duly served upon the defendant, or that a capias was issued within the time required by law to the sheriff of the county in which the defendant usually resided, or last resided, in good faith, and with intent actually to be served, and that such writ was duly returned.”
    It is obvious that this last clause formed an exception to the general rule prescribed by the statute, and was only in relation to the statute of limitation.
    The 99th section of the Code is framed upon the same principle as this provision of the statute, and in language quite similar.
    It .is part of the title of “ The time of commencing actions.”
    The 127th and 134th sections prescribe the manner of commencing such actions, and with certain exceptions require a personal service of the summons. The Code appears thus to coincide with the Revised Statutes.
    The case of Lee v. Averil, in this court, (1 Sand. S. Court Rep. 731,) goes far to recognize that this is the true construction of the Code.
    The motion to set aside the nonsuit must be denied, with ten dollars cost.

      J. M. Robertson, for the plaintiff,
    appellant, now insisted that the judgment dismissing the complaint was erroneous, and that it ought to be reversed, and a new trial be ordered, upon the ground that the action was sufficiently commenced within the meaning of the Code, so as to bind the sheriff, by the delivery of the summons to the coroner with directions to serve it. He argued, that the provision in section 99 of the Code is general, and that its effect is, that in all cases where the summons is actually served, the seryice relates back to the issuing of the summons, and makes that the commencement of the action. He cited Coles v. Kerr, 2 Sand. 660; and Gregory v. Weiner, 1 Code Reporter, 210.

      A. J. Yanderpoel, for the defendant,
    contended that section 99 of the Code only creates an exception from the general rule, that an action is not commenced until the service of the summons, and that “an attempt to commence an action” by the issuing of a sumtnons is only to be deemed equivalent to its actual commencement, when necessary to avoid the meaning of the Statute of Limitations.
   By the Court.

The 127th section of the Code, by declaring that civil actions shall be commenced by the service of a summons necessarily implies, that until such service the action cannot be held to be commenced. Actual service is, therefore, undoubtedly the general rule, and the only exceptions from this rule are those created by sections 99 and 135 ; that created by section 99 is applicable only where the commencement of the action is necessary to be shown in order to exclude a defence founded on the Statute of Limitations. It is for the sole purpose of repelling such a defence, that the attempt to commence an action by the delivery of a summons, with the intent that it shall be served, is deemed equivalent to a commencement by actual service. As to the exceptions created by section 135, it is not pretended, that they have any application to the case before us. They substitute publication for personal service, and are confined to actions against non-resident or absconding debtors and foreign corporations. Although prior to the adoption of the Revised Statutes, an action was held to be commenced by the mere issuing of process, it is certain that the Revised Statutes changed the law by substituting the rule of actual service, and we are clearly of opinion that it is this rule that the provisions of the Code adopt and confirm.

The complaint was therefore properly dismissed, and the judgment appealed from must be affirmed, with costs.


author: By the Court. Campbell, J.

text:
    John W. Sleight v. William Leavenworth and John D. McGregor.
    A mortgagee of chattels, having seized them for satisfaction of his demand, the parties in possession claiming under the mortgager, executed an instrument by which they agreed to return and deliver the goods to him, on demand, or to pay the sum of $671.38 claimed to be due. An assignee of the mortgagee recovered against the parties the sum of $500, and costs, in a suit upon this instrument. After execution against the property unsatisfied, an execution against the persons of the defendants was issued, under which one of them, the present plaintiff, was arrested, and gave bail for the limits. At the end of about nine days, he was discharged, and Ms bond cancelled, on the ground that the judgment did not warrant the arrest.

      Held, in an action of false imprisonment brought against the plaintiff in such former suit, and Ms attorney, that each was responsible to the plaintiff for damages.
    (Before Dube, Campbell and Hoffmah, J. J.)
    December term, 1855.
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, upon the ground of an erroneous refusal of the Judge to nonsuit the plaintiff when the testimony was closed, and for error in'his charge.
    One Augustus Hurd executed a mortgage to Henry S. Rosenkrantz, on the 17th of October, 1850, upon certain personal property, to secure payment of the sum of $671.88, the amount of his promissory note given to Rosenkrantz.
    This note, with the accompanying mortgage, was assigned to one James T. Lecte about the time of its date.
    The mortgage was duly filed on the day of its date.
    About the 21st of December, 1850, certain property came into the possession of J. Mills, and J. W. Sleight, (the present plaintiffs,) then partners in trade, under the name of Mills & Sleight, by a transfer of the mortgager, Hurd, to pay them a debt of five hundred dollars; and that sum appears to have been taken as the value of the goods.
    In January, 1851, Lecte, through an agent, seized property in the possession of Mills & Sleight, alleging it to be the property mortgaged, or part of it.

      Mills & Sleight then executed the following instrument. It was given to prevent the removal of the goods.
    “Whereas James T. Lecte, by his agent, B. D. Wisner, has seized on certain property mortgaged by Augustus Hurd to H. S. Rosenkrantz, and by said Rosenkrantz assigned to said Lecte, which property consists of (enumerating the articles)—and whereas said property is now in the possession of the undersigned. How, therefore, we, the undersigned, agree to safely keep and deliver to the said Lecte, or to his said agent, the said property, on demand, as they now exist, or to pay the said mortgagee six hundred and sixty-one dollars and thirty-eight cents, and all proper costs, charges, and interests, which have or may accrue thereto. Add, also, two puncheons of rum, &c., upon the terms above expressed. Dated January 9, 1851.”
    Before the 31st of January, 1851, the note and mortgage of Hurd, with this agreement, were assigned by Lecte to William Leavenworth, one of the present defendants. And on that day he commenced an action upon the agreement against Sleight & Mills, in the Court of Common Pleas. The result of that action was a judgment in his favor, on the 15th of January, 1852, for the sum of five hundred dollars damages, and eighty-six dollars and fifty cents, for costs. The present defendant, McGregor, was the attorney of Leavenworth in that action.
    Upon this judgment, an execution was first issued against the property of the defendants therein, and upon being returned unsatisfied, an execution against the persons was issued. Under this, the present plaintiff, J. W. Sleight,was arrested, and gave bonds for the jail limits. The arrest took place on the 21st of January, 1853, and the party was discharged by an order of a Judge of the Common Pleas, on the 1st of February of the same year. For this false imprisonment the present action is brought.
    The Judge charged the jury, at the trial, that the arrest of the plaintiff upon an execution against his person, upon the judgment which had been proved, was wholly unauthorized, and that the defendants were both liable in the action.
    An exception was duly taken; and upon this, and an exception to the refusal of the Judge to dismiss the complaint, the case came before the court.

      The jury found a verdict against both defendants for one hundred dollars damages.

      J. L>. McGregor, for appellants.

      H. iS. Lincoln, for respondent.
   By the Court. Campbell, J.

It cannot be disputed that the action in the Common Pleas, and the recovery, were exclusively upon the' instrument or bond executed by Mills & Sleight. The action was, therefore, upon a contract merely. The difference between the sum mentioned in the bond, and the recovery, viz., $500, arose, no doubt, from the referee’s finding the latter sum to be the value of the goods actually taken by Mills & Sleight. There is nothing apparent on the record, or otherwise, in the case, to show that the present plaintiff could have been arrested under the 179th section of the Code. (See § 288.) It was a plain case of false imprisonment.

The client is responsible for the acts of his attorney, affecting the rights of the parties to the record. Assuming that Leavenworth was wholly ignorant of the issuing of the execution, he is yet responsible for an arrest under an execution which was not warranted by any judgment. (Taylor v. Trask, 7 Cowen, 261.)

The liability of the attorney, who was the direct agent to authorize the arrest, is still more clear. (Deyo v. Van Valkenburgh, 5 Hill, 242.)

The judgment must be affirmed, with costs.