text:
    Porter and others v. Lord & Dougherty.
    In all actions, of which the Superior Court has jurisdiction by sub. 1 of § 33 of the Code, and in an action against several persons jointly liable on contract, when one of them resides in the city of New York, the summons may be served in any county of the state, and the service will be valid.
    It is only in those actions, of which jurisdiction is acquired by the fact of personal service of the summons on all the defendants within the city of New York, that service of the summons out of the county of New York is unauthorized and invalid.
    Special Term; Dec., 1856.
    The defendants are sued as joint debtors. The defendant Lord resides, and was served with a copy of the summons and complaint; in the city and county of New York. The defendant Dougherty resides, and was subsequently served, in Brooklyn with the summons and complaint. Dougherty now moves to set aside such, service, on the ground that this court has no jurisdiction as to him, and can acquire none, except by a service of the summons within the city and county of New York, or by his voluntary appearance in the action.

      James 8. 8andford for plaintiffs.

      Philip Hamilton for defendant Dougherty.
   Bosworth, J.

This court has jurisdiction of the actions mentioned in §§ 123 and 124 of the Code, without reference to the residence of the parties. (Code, § 33, sub. 1.)

Its jurisdiction of certain other actions depends upon the fact of the residence of all the defendants, or of the service of the summons upon all of them personally within the city of New York. If one of several defendants jointly liable on contract resides, or is personally served with the summons, in that city, this court has jurisdiction of the action.

When it has jurisdiction of the action by reason of the residence of one of such defendants, or the service of a summons upon him personally within the city, can it acquire jurisdiction of the person of the other defendants by a service of the summons upon them personally, in any county of the state other than the city and county of New York?

The Code is divided into two parts. (§ 8.) The second part is distributed into fifteen titles. The last eleven relate to actions in the Superior Court, as well as to those in the Supreme Court, The fifth title of the second part contains the provisions which prescribe the manner of commencing civil actions. They shall be commenced by the service of a summons. (§ 127.) The summons may be served by the sheriff of the county where the defendant may be found, or by any person not a party to the action. (§ 133.) These sections are made to relate to the Superior Court by the express provisions of § 8.

These sections, and subdivision 2 of § 33, are in harmony with each other.

If the action be one which, by §§ 123 and 124, must be tried in this city, then the legislature has enacted that the plaintiff may commence it in the Supreme Court, or in the Superior Court, or in the Common Pleas. In such a case, the summons from either court may be served in any part of the state.

If all the defendants reside in this city, the same course may be' pursued.

If one of several persons jointly liable on contract resides in the city, that fact alone is made the ground of jurisdiction. If no one of the defendants resides in this city, then service "within the city is made indispensable to the acquisition of jurisdiction. If the action be such that a plaintiff may proceed in it after service has been made upon one, such service is sufficient to give full jurisdiction of'the action. In other cases, the service must be made on all the defendants within the city.

The rule, then, briefly expressed, is this: When the action must be tried in this city, because it is one of those mentioned in §§ 123 and 124, or when all the defendants reside in this city, or when one of several defendants jointly liable on contract resides in the city, this court has jurisdiction of the action, and the defendants may be served with the summons in any county of the state.

Any other construction would lead to an absurdity. Actions for the partition of real property, and for the foreclosure of a mortgage of real property situated in this city, must be tried within it — -being actions which are enumerated in § 123. This court has jurisdiction of them. The mortgagor and incumbrancers, who are necessary parties, may reside in Kings or Westchester, or in other counties of this state. ' If this court cannot proceed in the action until all the necessary parties have been served with the summons within this city, the fact that it has jurisdiction, would, in many, if not in most of such cases, be a matter of no practical utility.

Of actions of which this court and the Common Pleas have jurisdiction, either for the reason that the cause of action has arisen, or the subject of the action is situated within this city, such jurisdiction was conferred to enable them to aid the Supreme Court in transacting business which the latter, nor either of these courts could alone perform. The law which provides by what means the Supreme Court shall acquire jurisdiction of the parties to such actions, declares that this court may employ the sainé means to effect the same end. The only law which provides that a summons may "be served, and Row, and where, and by whom it may be served, expressly declares, that § 127 shall apply to this court with the same force, in all respects, as to the Supreme Court. The Code, when it gave jurisdiction to this court, to be exercised concurrently with that possessed by the Supreme Court in the same cases, enacted, by provisions which, in terms, are as applicable to the one court as to the other, that the summons might be served on the defendants in any eounty of the state, except in a few enumerated cases.

If a valid service of the summons, when the action is in this court, can in no case be made in any county other than the county of Hew York, then the provision which makes, in certain cases, service within the city essential to acquiring jurisdiction, is simply absurd. In some actions, all the defendants must be so served, or the court will have no jurisdiction. In others, it is enough that one of several defendants is so served. In other cases, it is enough that one of several defendants resides within the city. In others, it is essential that all of the defendants reside within the city— but that is only essential when jurisdiction depends on residence alone. In- others, it is of no consequence where any of the defendants reside.

The fact that service within the city is required in certain cases, of course implies that in other cases it may be made out of the city. Section 138, gives the general rule. That authorizes service of the summons in any county in which the defendant may be found. That general rule is, by section 33, so modified, as to certain local courts, as to require that in certain actions the summons must be served within the cities in which these courts respectively sit. That is the only modification of the general right to serve it in any county. I think it is quite clear that the service made on Dougherty is regular and valid.

Persons residing out of the city are not, by this -construction of the Code, subjected to inconveniences, which they would not suffer if sued in the Supreme Court in the first district.

That court may remove into it, by order, any action commenced, in this court, and may change the plaee of trial, unless the action be one which, by sections 123 and 124, is required to be tried in the city and eounty of Hew York.

If it must be tried in this city — or if all the defendants reside Rere — or if, in an action like the present, one of the defendants -resides in the city — the legislature has authorized suitors to 'bring their actions in the Supreme Court, in this court, or in the Common Pleas, at their election. It has given to each court the same power and means, in such actions, to acquire jurisdiction of the parties. And inasmuch as this court has jurisdiction of this action, merely by reason of the residence of Mr. Lord within the city, the service of the summons made on Mr. Dougherty in Kings county, was regular and valid.

The motion must be denied.

This decision was approved, on consultation, by all the Justices.

       This case was deemed of special importance, and is therefore published out of its order in time. The practice which it sanctions, has not been generally followed, and it seems desirable that it should be.


source: Caselaw Access Project

author: By the Court. Duer, J.

license: Public Domain

text:
    Joseph Kernochan v. New York Bowery Fire Insurance Company.
    The insurable interest of a mortgagee in the property mortgaged corresponds in its amount with that of the debt, which the mortgage secures.
    Hence, in the event of a total loss, he is entitled to recover the whole sum insured, provided it does not exceed that which at the time of the loss was due upon the mortgage. Evidence cannot be admitted to defeat or diminish his recovery by showing that the mortgaged premises, notwithstanding the loss, continued to be a full security for the debt.
    Nor by this construction, does an insurance by a mortgagee lose its character as a contract of indemnity, since he can never recover from the mortgager for his own benefit the sum paid to him by the insurers. The insurers will either be subrogated to his rights and remedies under the mortgage, or the sum received from them will be applied to the satisfaction of the mortgage debt.
    When an insurance is made by a mortgagee as such, it is reasonable to believe that the insurers, looking to a transfer to themselves of the mortgage securities in the event of a loss, will charge a lower premium than would be charged to an absolute owner. Hence, if the assured has placed it out of his power to make this transfer, the fact, as material to a proper estimate of the risk, as a general rule, ought to be disclosed when the insurance is effected. No such disclosure appearing to have been made in this case, and the question of a material concealment, not having been submitted to the jury, held, that the defendants were entitled to a new trial.
    (Before Oaklet, Ch. J., Duer and Campbell, J.J.)
    Heard, March term;
    decided, June term, 1855.
    Appeal by defendants from a judgment in favor of the plaintiff.

      The action was on a policy of insurance against fire, made by the defendants to the plaintiff, as mortgagee, and bearing date on the first of May, 1848. The insurance was for one year, and was renewed annually, and the last renewal was on the first of May, 1858. The insurance was for $8,000, on a building No. 80 Cliff street, in the city of New York, and the like sum on a building No. 123 Pearl street. The complaint averred that on the 10th of December, 1853, and during the continuance of the insurance, the last-mentioned building was damaged by fire to the extent of $4,000 ánd upwards, and that in Cliff street to the amount of $492, and demanded judgment for the sum of $3,492, with interest and costs.
    The defence was that the plaintiff had never given notice of the loss to the defendants, nor delivered to them proof of the loss, according to the conditions of the policy, and also that as mortgagee he had sustained no damage, inasmuch as the mortgaged premises, after the fire, were worth more than the whole sum due to him upon the mortgage.
    The cause was tried before the Chief Justice, by the consent of the parties, without a jury, on the 17th November, 1854. The policy, renewals, and the damage by fire to the buildings insured were proved as alleged in the complaint. • It was also proved that notice of the loss was given to the defendants on the 19th of December, 1853, in a letter signed “ Geo. F. Cooledge & Bro.,” and describing them as owners of the •buildings insured. It also appeared that the preliminary proof of loss delivered to the defendants was in the name of George F. Cooledge and William P. Cooledge, composing the firm of George F. Cooledge & Brother, and averred that they were at the time of the fire, and had been for several years previous, the owners of the buildings insured upon which the loss was claimed. The counsel for the defendants moved for a nonsuit, upon the grounds that no legal proof had been given of the service of notice of the loss and of the preliminary proof, as required by the conditions of the policy, and that the plaintiff had failed to show that, as mortgagee, he had sustained any loss from the fire.
    The motion was denied, and the counsel excepted to the decision.
    The defendants then gave in evidence a bond and mortgage, dated in May, 1848, from George E. Cooledge and William P. Cooledge to the plaintiff, to secure the payment of the sum of $21,500, with interest from the first of May, 1848. The mortgage covered the buildings and the lots on which they were erected, described in the policy, and it appeared by endorsements on the bond, that $15,000 was the whole sum remaining unpaid at the time of the fire. It was then proved that the value of the buildings and lots after the fire, and notwithstanding the loss by the fire, was at least $19,400.
    The plaintiff then called as a witness William P. Cooledge, who testified that when he and his brother purchased the mortgaged premises from the plaintiff, he agreed to keep the buildings insured, for their benefit, with the defendants, and to hold the policy as a further security for the payment of the mortgage—■ that in compliance with this agreement he had kept the property insured for their benefit, and that they had repaid to him the premiums which he had advanced.
    To the introduction of this evidence the counsel for the defendants objected. The objection was overruled by the court, and the counsel excepted.
    Some other evidence was given, which it is not deemed material to state.
    The Chief Justice rendered a judgment in favor of the plaintiff for the whole sum, with interest and costs, demanded in the complaint.

      A. Thompson, for the defendants,
    moved for a reversal of the judgment and a new trial. He relied strongly upon the objections taken on the trial to the sufficiency of the notice and proof of loss, that had been received in evidence; and also insisted that in no case can a mortgager claim any benefit from a policy effected by a mortgagee in his own name, and that this is especially true when it appears that no notice or intimation was given to the insurers that any other interest than that of the mortgagee was meant to be covered. He also contended, that, considering the insurance as made for the sole benefit of the plaintiff, it was certain that he had sustained no lóss for which he could claim an indemnity, since it was proved and was not denied, that the mortgaged premises, notwithstanding the fire, were more than a sufficient security for his debt. Among other cases, the learned counsel cited—Turley v. N. Amer. Fire Ins. Co. 25 Wend. 374; McMasters v. West. Ins. Co. id. 379; McLaughlin v. Wash. Co. Ins. Co. 23 Wend. 525; Colum. Ins. Co. v. Lawrence, 10 Peters, 507; Curry v. Commer, Ins. Co. 10 Pick. 536; O'Neil v. Buffalo Fire Ins. Co. 3 Comst. 132; Inman v. West. Fire Ins. Co. 12 Wend. 465; Packard v. Hill, 7 Cow. 454.

      D. Lord, for the plaintiff,
    argued that it was plain, from the terms of the policy, that the insurance was meant to be on the buildings themselves, and not on the sufficiency of the plaintiff’s security for his debt; and that his agreement to insure the property, for the benefit of the mortgager, created an insurable interest in him to the whole value of the buildings. It was no answer, to say that this agreement was not disclosed. There was no inquiry on the subject, and no representation or concealment, that could vary the risk of fire, the only risk that the defendants assumed. The fact, that on the face of the policy the plaintiff was described as mortgagee, was, moreover, constructive notice, making it the duty of the defendants to ascertain by inquiry the extent and terms of the mortgage security. As to the formal objections to the preliminary proofs and notice, if the plaintiff, for the reasons stated, was entitled to recover, they were evidently groundless. The counsel cited Oliver v. Greene, 3 Mass. R. 123; Bartlett v. Walter, 13 Mass. 267; De Forrest v. Fulton Ins. Co. 1 Hall R. 110; King v. State Mut. Ins. Co. 7 Cushing R. 3; Roberts v. Traders' Ins. Co. 17 Wend. 631.
   By the Court. Duer, J.

It is needless to cite authorities to prove that, by our law, a mortgagee has an insurable interest, corresponding in its amount with that of the debt which the mortgage was intended to secure; and we apprehend it to be equally certain, that, in the event of a total loss, he is entitled to recover the whole amount insured, provided it does not exceed that which at the time of the loss was due upon the mortgage. We do not believe, and certainly have not been able to discover, that there is any adjudged case, in which evidence has been admitted to show that the mortgaged premises, notwithstanding the loss, were still an ample security for the debt; and we think ourselves warranted to affirm, that in no text-writer, foreign or domestic, is any intimation to be found that such evidence can be received, to defeat or diminish the recovery of the assured. Hence, were there no other defence in this case than that the plaintiff has not been damnified, we should have no difficulty in holding that he is entitled to retain the judgment that has been rendered.

It is indeed true, as was insisted by the counsel for the defendants, that, in this state, since wager policies have been abolished, the assured, whether in a marine or fire policy, can never be permitted to recover more than a full indemnity for the loss which it is proved that he sustained; but it is a mistake to suppose that this salutary rule is violated by permitting the assured, when a mortgagee, to recover the sum insured, when it is proved that such was the amount of his debt and of the loss upon the property insured. Although his recovery, under these conditions, is allowed, there is no case in which he will recover more than an indemnity, for his actual loss,, since, according to the nature of the contract and the intention of the parties, the sum, which he receives under the policy, must either be applied to the satisfaction of the mortgage, or its payment by the insurers will operate as a transfer to them of his .own interest in the debt and its securities. There is no case in which, after the payment of a loss, he will be allowed to enforce for his own benefit the payment of the debt. He can never recover from the mortgager for his own benefit the sum which has been paid to him by his insurers.

We pass to the consideration of that which we deem to be the only serious question in the case, namely, whether it appears from the evidence that there has been such a virtual misrepresentation, or concealment, of material facts, as may have the'effect of avoiding the policy.

We consider the law as fully settled, that where an insurance is" made by a mortgagee, eo nomine, or with the sole view of protecting his own interest as such, the payment of a loss has not the effect of discharging in whole or in part the mortgage debt, but on the contrary operates in equity, and in this state, since the Code at law, as a transfer of the debt and all its securities to the insurer, who, in°the language of the Eoman law, is subrogated to all the rights and remedies of the assured; nor is this doctrine limited in its application to an insurance by a mortgagee. The rule is universal, that, where a total loss'is paid, the underwriter succeeds to all the collateral remedies to which the assured might have resorted for obtaining its compensation. (Kendall v. Cochran, 1 Ves. 98; Gracie v. N.Y. Ins. Co. 8 John. R. 245; Mason v. Sainsbury, 2 Park on Ins. by Hildyard, 959; Clark v. Inhabitants of Blything, 2 B. & C. Rep. 254; Yates v. White, 5 Scott, 640; Atlantic Ins. Co. v. Storrow, 5 Paige, 286; Tyler v. Ætna Ins. Co. 12 Wend. Opinion Nelson, J. 516 S. C.; Opinion Chan. Walworth, 16 Wend. 397, 398; Carpenter v. Providence Washington Ins. Co, 16 Peters, 495; Marsh on Ins. 242; 2 Phillips, 419; 3 Kent’s Com. 371 n.) We are aware that in the case of King v. State Mut. Ins. Co., (7 Cushing 3,) opposite views of the law were taken by the Supreme Court of Massachusetts, and were explained and defended by the Ch. J. (Shaw) in an elaborate opinion; but the conclusions at which the learned Judge arrived are not only irreconcileable with the authorities to which I have referred, but, it seems to us, are inconsistent with the nature of an insurance as a contract of indemnity. Hence, whatever may be the rule that would now be followed in Massachusetts, we retain the conviction, that the general law of insurance relative to the construction of a policy upon the interest of a mortgagee, as declared in our own courts and in those of the United States, is such as has been stated. Such being, in this state, the ^"known law, it is reasonable to believe, that when the interest of the assured is described in the policy, or is represented to the insurers as that of a mortgagee, a much lower premium will be charged than when the insurance is made for an absolute owner. It is reasonable to believe, that the insurers will rely upon a transfer of the debt and its securities, as furnishing the means, if not of wholly reimbursing, yet of greatly reducing the amount of any loss they may be required to pay; and that the premium charged will, therefore, bear no more than a just proportion to the probable reduction of their eventual liability. Hence, if the assured has by his own act placed it out of his power to make to the insurers the transfer, upon which they were justified in relying, and the fact was not disclosed to them when the policy was effected, it would seem, upon principle, that the concealment, as having deprived them of the premium they would otherwise have demanded, must be regarded as material and fatal.

To apply these observations to the case before us; it appears that, before the-policy in suit was effected; it was agreed between the mortgagers and the plaintiff that he should insure, as mortgagee, and keep insured, the building covered by the mortgage, for their benefit, and at their expense, he holding the policy for his security; and it is also proved that they have repaid to him the premiums which he advanced. It is not denied that, as between the parties, this agreement is valid; and its effect manifestly is, that if the loss that is claimed shall be recovered from the defendants, the amount must be applied pro tanto in satisfaction of the mortgage debt, since it is only by such an application that the insurance can be made to enure to the benefit of the mortgagers. The defendants will therefore be prevented from acquiring a beneficial interest in the debt and its securities, in proportion to the sum which, in satisfaction of the loss, they will be compelled to pay, although to this interest, with all proper remedies at law and in equity for its protection, but for the agreement, they would certainly have been entitled. The effect of the agreement was, therefore, to change the nature of the contract, by making that which on the face of the policy is an insurance for the benefit of the plaintiff, as mortgagee, an insurance for the benefit of the mortgagers, as owners. We are not disposed, however, to deny that if the existence and terms of the agreement had been made known to the defendants when the insurance was effected, the policy, in its actual form, might still be regarded as a valid contract, and the plaintiff be entitled to recover for the benefit of the mortgagers, and as their trustee, the full amount of the loss which is claimed; but there is no evidence to show that this disclosure was made, nor has it been asserted that such was the fact. We are therefore driven to the consideration of the question whether the omission to make this disclosure, taking into consideration? the terms of the policy, was a virtual misrepresentation or concealment of a fact which, as material to the risk which the defendants consented to assume, the plaintiff was bound to communicate.

The learned and experienced counsel for the plaintiff strenuously contended that as no inquiries were made by the defendant, the plaintiff was under no obligation to disclose the nature and extent of his own interest, or of the rights and interests of the mortgagers, and he rested his argument upon the ground that as the feet not disclosed had no tendency to increase or vary the risk of fire,—the only risk covered by the policy,—they were not material, or if in any point of view they could be regarded as material, the defendants had constructive notice of their existence. They knew that the plaintiff was a mortgagee, and if they wished to know the terms of the contract between him and the mortgagers, they were bound to inquire. By omitting to inquire they waived the information, and the policy must, therefore, receive the same construction as if the information had been given. The next inquiry, therefore, is, whether these positions can be sustained.

It is undoubtedly true, as a general rule, that the assured is not bound to communicate to the underwriters the particular nature of his interest in the property insured, but from this rule there are many exceptions. There are cases, as when the insurance is upon freight, bottomry, profits, &c., in which, in order to render the contract valid, the nature of the interest must be specified in the policy. And others, in which the nature of the interest, when special, although not necessary to be stated in the policy, must, even where no inquiry is made, be disclosed to the underwriters. It may be admitted that the interest of the assured has no connection with, or influence upon, the risks insured, considered in themselves. Whatever may be his interest, they remain the same, yet there still are cases in which the particular nature of the interest is essential to be known to enable the underwriter to form a proper estimate of the premium which he ought to require, and, we apprehend, that in all such cases, the effect of a misrepresentation. or concealment of the interest, is either to discharge the insurer from the loss, or to avoid the policy—nor do we doubt that these observations are just as applicable to an insurance against fire as against marine risks.

To illustrate and support them, we shall refer to a few decisions :■—■

In an early case which arose in the circuit of that eminent Judge, Mr. Justice Washington, the interest of the plaintiff, who was insured generally, and claimed a total loss, was of a very special "nature, arising from his having given security to be answerable for the value of the ship and cargo insured, in the event of their condemnation as prize of war. The Judges (Washington and Peters) were of opinion that it was not necessary that the nature of the interest as special should have been stated in the policy, but that it probably ought to have been communicated to the defendants, and they instructed the jury that should they be of opinion that a knowledge by the insurers of the special nature of the interest that was meant to be covered, would have altered the amount of the premium, and that the fact had not been sufficiently disclosed, the omission to make the disclosure vacated the policy. (Russell v. Union Ins. Co., 4 Dallas, 421.)

In a much more recent case, decided by Mr. Justice Story, (Ohl v. Eagle Insurance Co., 4 Mason, 397;) the doctrine as to the necessity of a disclosure where the interest is special, was carried still further. The plaintiff in this case claimed to recover a total loss upon the entire ship insured, although it appeared from the register and other papers that he had a legal title, as part owner, only to a moiety. He endeavored, however, to establish an equitable title to the other moiety by parol evidence, but the learned Judge held that as this equitable interest had not been disclosed to the underwriters, no evidence could be admitted to prove its existence, and that the recovery of the plaintiff must therefore be limited to one half of the amount which he claimed.

There is an important distinction between these cases to which it is necessary to advert. Mr. J. Story in effect decided that the omission to disclose the peculiar nature of the interest of the assured was of itself a bar to his recovery, by rendering the insurance void as to the interest concealed, while Mr. J. Washington, and his associate, held that the effect of the omission depended solely upon its materiality, which, as a question of fact, it belonged to the jury to determine, and it is this opinion which we hold ourselves bound to follow, not only as more consonant to the analogies of the law, but as fully sustained by other adjudged cases.

Thus in the case of Oliver v. Greene, which arose in the Supreme Court of Massachusetts, (3 Mass. 133,) the plaintiff, as in the case of Ohl v. The Eagle Insurance Co., was the legal owner of one half of the vessel insured, and had a special property in the other moiety, which was neither specified in the policy, nor made known to the defendants when the insurance was effected, and their counsel therefore contended that by its concealment they were discharged from the loss. But the court said that, although the concealment, if material, would avoid the policy, yet they had no right to presume that it was material; evidently meaning, that the question ought to have been submitted to the determination of the jury, but, at the same time, affirming the doctrine that such a concealment, when found to be material, is fatal to the contract.

The case which bears the nearest resemblance to the present, as the insurance was against fire on land, and which, as a decision of the Supreme Court of the United States, also carries with it the highest authority, is that of Lawrence v. The Columbian Ins. Co. (2 Peters’ S. C. R. 25, 26.), The plaintiffs in their application for ‘the insurance, stated that the buildings to be insured belonged to them, but it appeared upon the trial, that they were not the legal owners, but had only an equitable and contingent interest. The Judge, however, who presided on the trial, instructed the jury that the omission of the plaintiffs to disclose the peculiar nature of their interest, was not a concealment that could be regarded as material, and the counsel of the defendants, upon this and other grounds, excepted to his charge. The Supreme Court sustained the exception, and in their opinion laid down the general rule, that in all cases where the nature of the interest meant to be insured, may influence the mind of the underwriter in estimating the premium, it ought to be disclosed. When the case was again before the court, after a.second trial, all the Judges adhered to this opinion, holding this language, “ That a decisive test to ascertain whether a misrepresentation or concealment is material, is to ascertain whether, if the true state of the title had been known, it would have enhanced the premium. H it would, the misrepresentation or concealment is fatal to the contract.” In the case before us, the decisive test has not been applied; if it ought to be, there must be a new trial.

It may be said, that the cases that have been cited, have no present application, since, in the case before us, the nature of the interest of the plaintiff or mortgagee was not merely disclosed to the defendants, but was specified in the policy. But in reality it was not his own peculiar interest, as mortgagee, that was meant to be covered by the policy, but substantially that of the mortgagers’, as owners, and hence, his omission to disclose the agreement which made it his duty to make the insurance for their benefit, and which is relied on as giving that construction to the policy, was, certainly and emphatically, a concealment of facts affecting the title or interest insured, and we have no right to say, that had these facts been known to the defendant, they would not have operated to enhance the premium. The present case is, in truth, stronger than any one of those that have been cited. It- is not the case of a mere concealment. The description of the plaintiff in the policy was calculated to mislead the defendants. It warranted them to believe that it was his own interest as mortgagee, that alone was meant to be insured, and consequently, that on the payment of a loss, should a loss happen, they would be entitled to the transfer of the debt. It operated, therefore, by a concealment of the fact, that no such transfer could be made, as a virtual misrepresentation :—as affirming by implication that which was known to be untrue.

It appears to have been held by the Supreme Court at Washington, in the case of Carpenter v. the Providence Washington Ins. Co., (16 Peters, 496,) that in no case can a mortgager take any benefit from an insurance made by the mortgagee as such, and in delivering his judgment, Mr. J. Story denied that “any court could be at liberty to construe a policy made by A, in his own name, to be not a policy in his own interest, but on the interest of B, who is a stranger to the contract.” The learned Judge evidently meant, that the explanatory words by which alone an insurance made by one person in his own name may be extended to protect the interest of another, must be found in the policy itself, but we do not think that the decisions in our own courts and in England require us to carry the doctrine to this extent. When the necessary explanation is in fact made, and the underwriters assume the risk, knowing that the insurance is made by a mortgagee for the benefit of the mortgager as well as his own, we do not doubt that the policy is binding, and a loss recoverable. To warrant a recovery, however, it must appear either that the proper disclosure was made, or that the concealment, in the particular case, was immaterial.

It follows, from the observations already made, that we do not assent to the position that the defendants are chargeable, in law, with a knowledge of the agreement between the plaintiffs and the mortgagers, and are bound by its terms, to the same extent that they would have been, had these terms been expressly communicated. . We do not think that the doctrine of constructive notice is applicable to the case. The defendants are, probably, bound by all the provisions and stipulations contained in the mortgage itself, but it would be most unreasonable to impute to them the knowledge of a distinct, collateral, and verbal agreement varying the usual construction of the policy, and the nature, as it would otherwise have been understood, of the interest insured. We apprehend that the doctrine of constructive notice, as excusing an express disclosure, is only applicable when from the facts already known to the insurer, he was bound to infer the existence of other facts, which, although material, were not communicated. It is in such cases only that, if he desires fuller information, he is bound to inquire, and that his silence is construed as a waiver of a more explicit disclosure. (Carter v. Boehm, 3 Burr, 1905; Caust v. Masterman, 3 Douglas, 161; Kneeland v. Glover, 7 East. 457; 1 Emerigon, 172.) The defendants in this case so fax from having any reason to believe or suspect that the insurance was made for the benefit of the mortgagers, were justified in believing, as we have already said, that it was made for the benefit of the plaintiff alone.

Our conclusion is, that for the purpose of applying the decisive test, which it has been shown is necessary to be applied in cases like the present, it is our duty to grant a new trial. We have no right to say, as a court, whether the omission of the plaintiff to make known to the defendants that the insurance was effected for the benefit of the mortgagers, as well as his own, was or was not a material concealment. We have no right to say, that had all the facts been known to them, they would not have demanded a larger premium than that which they actually received. These are questions of fact which it is the exclusive province of a jury to determine. They were not determined, nor meant to be determined, upon the trial already had. That they may be, a second must be allowed.

We deem it unnecessary to discuss the questions that have been raised as to the sufficiency of-the preliminary proofe. They depend entirely, in our opinion, upon the construction and effect that may ultimately be given to the policy. If, upon the questions of misrepresentation and concealment, a verdict shall be rendered in favor of the plaintiff, the objections to the preliminary proofe will be no bar to his recovery of a judgment.

New trial granted. Costs to abide the event.


author: By the Court. Bosworth, J.

text:
    Cochean, Appellant, v. Sherman and others, Respondents.
    The defendants owned a vessel, which formed part of a line of E. D. Hurlhut & Co., running between New York and Mobile, and consigned by E. D. H. & Co. to W. & S. of Mobile. W. & S. collected the freight, paid the disbursements, and, by direction of the captain, procured freight for the vessel to Barcelona. They having advanced §264.36 over and above the freight collected, and he wishing more money, they advanced him the further sum of $235.64. The captain drew a bill to his own order on two of the defendants for $500, and endorsed it. The plaintiff discounted it, at the instance of W. & S., who did not endorse it. They received the money, and credited it in their account. The drawers refused to accept or pay the bill. Some months subsequently, W. & S. assigned to the plaintiff their account against the owners, and all claims by reasons of the advances they had made to the captain of the vessel.

      Held, that the mere drawing and negotiation of the bill, which the drawees refused to accept, gave to the plaintiff no right of action against either defendant.
    The claim of W. & S. not having been assigned to the plaintiff on his discounting the bill, but, on the contrary, having been paid with the proceeds of it, the subsequent assignment of it to the plaintiff was a nullity, and gave him no additional claim upon the defendants.
    (Before Duek, Boswouth and Hoffman, J.J.)
    Heard, May term;
    decided, June term, 1855.
    This action came before the court, on an appeal from a judgment entered on the report of John L. Mason, referee. The facts, as found by the referee, are as follows, viz.;
    The defendants were, in the months of July and August, one thousand eight hundred and forty-nine, and for some time previous and subsequent thereto, the owners of a bark or vessel called the Ophir, whereof one H. W. Ramsdell was the master. By some arrangement, (the particulars whereof did not appear,) made between the defendants and the firm of E. D. Hurlhut & Go. the said bark was placed in the line of packets owned by the latter firm, running between Hew York and Mobile, and arrived at Mobile in the month of June, one thousand eight hundred and forty-nine, with an assorted cargo of dry goods, consigned by the said E. D. Hurlbut & Co. to Whittaker & Sampson, the agents in Mobile of the said line.

      Whittaker & Sampson collected the freight and paid all the disbursements of the vessel, and by the directions of the' captain, procured a freight for her to Barcelona, and paid all the expenses of loading, manning and victualling her for her foreign voyage. They also paid the captain, from time to time, such moneys as he needed for his personal expenses.
    When Whittaker & Sampson’s account was made up, just before the vessel sailed on her voyage to Barcelona, it was found that the expenditures of Whittaker & Sampson, over and above the freight received by them, amounted to two hundred and sixty-four dollars and thirty-six cents, and thereupon they advanced to the said captain the further sum of two hundred and thirty-five dollars and sixty-four cents, making the balance claimed by them to be five hundred dollars; for this last mentioned sum, the captain drew an order on Messrs. Gr. & J. Sherman, two of the defendants, bearing date the thirtieth day of August, one thousand eight hundred and forty-nine, payable to his own order, and by him endorsed in blank.
    This order was negotiated to the plaintiff, who advanced the whole amount thereon, which was paid to Whittaker & Sampson. They did not endorse it. Afterwards, and in the month of September, one thousand eight hundred and forty-nine, it was presented for acceptance and also for payment to the drawees, and acceptance and payment refused. In the account of Whittaker & Sampson, they give credit for the five hundred dollars, as follows: “By Capt. Bamsdell’s draft at three d-s, on Gr. & J. Sherman, Hew York, taken at par, for balance of ac. $500,” but Mr. Whittaker, in his testimony, says, that the draft was negotiated by him for Capt. Bamsdell, without fee, at par, after Capt, Bamsdell had been unsuccessful in obtaining the amount, by valuing on his freight to Barcelona.
    Afterwards, and on the fifth day of July, one thousand eight hundred and fifty, Whittaker & Sampson assigned their account against the bark and owners, for the disbursements aforesaid, to the plaintiff, and it is upon this account, and for the balance of five hundred dollars, for which the captain gave the order, that the present suit is brought.
    The disbursements were sufficiently proved, except the last payment of two hundred and thirty-five dollars and sixty-four cents to the captain, as to the necessity of which further evidence would, in my judgment, be necessary to entitle the plaintiff to recover, if he can recover at all in this action.
    Upon these facts I am of opinion, that when Whittaker & Sampson received the proceeds of the draft, their claim upon the account was extinguished. It made no difference whether the draft was negotiated by them for Captain Ramsdell, or whether they took it from him in payment, and then negotiated it to the plaintiff as they did not endorse it or become responsible to the plaintiff in case the drawees should refuse acceptance. and payment. Their demand was paid in full, and could not be assigned ten months afterwards to the plaintiff.
    The complaint must be dismissed with costs.
    All which is respectfully submitted.
    Dated, New York, May 17, 1853.

      A. J. Willard, for appellant.

      Wm. Bliss, for respondent.
   By the Court. Bosworth, J.

The draft or bill, drawn by the master to his own order, on Gr. &. J. Sherman, two of the defendants, and which they refused to accept, by its own mere force never gave to any holder of it a right of action against either defendant.

When it was negotiated to the plaintiff, the account of Whittaker & Sampson was not transferred with it. The plaintiff cashed the draft for Ramsdell, and the money received was paid to Whit-taker & Sampson in satisfaction of the balance of their account. They did not endorse it, and were not parties to it. Payment to them extinguished all claims which they had either against Rams-dell, or the owners of the vessel. Any subsequent assignment by them of the account would transfer no right to the assignee.

The drawing of the bill by the master, and the negotiation of it by him, if it had been negotiated without the assistance of Whittaker & Sampson, could not transfer or affect their claim, if they had any, upon the owners of the vessel.

The claim, which the complaint alleges was subsequently assigned to the plaintiff, and which, the assignment shows, was made on the 5th of July, 1850, was a claim of Whittaker & Sampson against the bark Ophir and owners. This claim had been fully paid and satisfied to them as early as the 31st of August, 1849.

Even if they had a valid claim against the owners to the amount of the bill, and they had drawn a mere bill of exchange to the plaintiffs’ order on the defendants, for a sum equal to the balance of the account, and the plaintiff had bought the bill of them, the mere negotiation of the bill would not have operated as an assignment of the account. (Cowperthwaite v. Sheffield, 2 Coms. 243; Luff v. Pope, 5 Hill, 413; 7 id. 577.) But the bill in question was not drawn by them, but by Ramsdell.

Its proceeds satisfied their claim in full. Their subsequent assignment of it was a nullity. The plaintiffs’ only remedy, on the facts as they appear in the case before us, is against the drawer of the bill. The referee decided correctly, and the judgment entered upon Ms report must be affirmed.


author: By the Court. Hoffmart, J.

text:
    John B. Brahms and others v. James F. Joyce.
    This action was brought by a debtor and assignor, and some of his creditors, on behalf of all the creditors, against the assignee, charging him with fraud or gross negligence in the sale of the property assigned to him for the benefit of the creditors, and praying that he might be compelled to account for the full value of the property sold. On the trial the debtor was offered as a witness on behalf of his co-plaintiffs, and rejected.

      Held, that he was properly rejected, as he was jointly interested with the creditors who were plaintiffs, and could not have given any material evidence that would not have enured to his own benefit as well as that of his co-plaintiffs.
    A creditor, not a plaintiff on the record, was also offered as witness on behalf of the plaintiffs, and was rejected as incompetent.

      Held, that he ought not to have been excluded, for although the action was brought for all the creditors, he was not in any legal sense of the term a party to the action, nor was it prosecuted for his immediate benefit, according to the interpretation that, in other cases, has been given to those words.
    Judgment reversed and new trial ordered, with costs to abide the event.
    (Before Dunn, Boswokth and Hoffman, J.J.)
    Heard, May term;
    decided, June term, 1855.
    This was an appeal, by tbe plaintiff Brahms, from a judgment at special term in favor'of the defendant.

      The nature of the action, and the questions involved sufficiently appear in the opinion of the Court.

      J. D. McGregor, for the plaintiff, appellant.

      0. Jones, for the defendant.
   By the Court. Hoffmart, J.

The plaintiff, Brahms, unites with the other plaintiffs, members of a firm, and Ms creditors, in filing this complamt on behalf of themselves and all other creditors of said Brahms, who shall come m and contribute.

They set forth an assignment made by Brahms to the defendant on the 11th of June, 1852, of all the fixtures, furmture, liquors, &c., in the building, No. 8 Fulton street, with the lease of the premises and the good-will of the business, with all notes, book-accounts, &c., to sell the same upon such terms as may in Ms judgment appear best, and most for the interest of the parties concerned, and for cash only. The avails were to be applied in payment of a certain note, two judgments, and servants’ wages in full, and the residue to be distributed among all his creditors pro rata, if not sufficient to discharge their demands m full.

The case attempted to be made by the plaintiffs was, that the defendant took possession of property to the value of $10,000, and almost immediately sold the premises No. 8 Fulton street, with the stock and good-will, for a grossly inadequate price, and without giving reasonable or proper notice, by advertisement or otherwise, and that such sale was not for cash only.

The complaint prays that the defendant may be removed, and that he account for the full value of such leasehold premises, stock, &c., and also for an injunction and receiver.

It appears that at the time of the assignment, the stock, &c., were under seizure by the sheriff, upon an execution m favor of one Fox and others against Brahms. The sheriff had advertised the property for sale. There was also a mortgage upon the property, given upon the purchase, upon wMch was due about $540.

The property brought $2,750, and the purchaser sold it withm a few days for $5,700. But the force of tMs piece of testimony is much diminished by the purchaser’s statement, that after receiving $400, for damage done by a fire, he lost over $4,000, having expended about $1,000, and that he never was more sick of a place than of that. The other testimony upon the question of value is about balanced.

We do not see any reason to interfere with the finding of the Judge in this particular. *

The plaintiff’s counsel offered Brahms as a witness on behalf of the other plaintiffs besides himself, which offer was overruled by the Judge, and an exception taken. The first offer was to examine him generally.

The 897th section of the Code is, that a party may be examined on behalf of his coplaintiff, or a codefendant as to any matter in which he is not jointly interested or liable with such co-plaintiff, or codefendant, and as to which a separate, and not joint verdict or judgment can be rendered.”

This section must be construed in connection with the 898th and 899th sections. By the former, no person offered as a witness shall be excluded by reason of his interest in the event of the action. But by the next, this section shall not apply to a party to the action, nor to any person for whose immediate benefit it is prosecuted or defended.

As to a party then, an interest in the event of the action as effectually excludes him, as it would have done any witness before the Code. But then the 897th section permits an examination of a party, on the application of a party associated with him, as to matters in which he is not jointly interested with that party, and as to which a separate judgment could be rendered in favor of, or against that party.

We consider the effect of these provisions to be this:—If it is manifest, that no material evidence can be given upon the issues in the cause by the party offered, which will not enure to his own benefit, and the verdict must be in favor of all, the party should be excluded.

We do not consider the case of Beal v. Finch, (1 Kernan 128,) to be in conflict with this view. There in an action against several defendants for an assault and battery, separate answers denying the charge were put in, and at the trial, one of the defendants was offered as a witness on behalf of his codefendant. He was rejected, and the Court of Appeals held that the rejection was wrong.

Now it is obvious, that in such an action, as in torts generally, there may be, and frequently are, verdicts in favor of one, and against another party; in other words, a separate verdict and judgment. So as in the instances put by the learned Judges, a large number of questions may be very pertinent in which the party examined has no joint interest at all, but solely pertinent to the separate case of the defendant calling him.

But, here, it is scarcely possible to imagine a question, material to the issue, which could be addressed to Brahms, the answer to which, if against the defendant, would not necessarily be to Brahms’ own benefit. The object of the suit is to obtain from the defendant a fund applicable to pay Brahms’ creditors, and possibly something to Brahms himself. We think the-ruling of the Judge was correct.

Another exception to the ruling of the Judge is, that he refused to permit the examination of one Butler, on behalf of the plaintiffs, on the ground that he was a creditor of Brahms, and that the suit was prosecuted for his immediate benefit. Butler was sworn as a witness, and admitted that he was a creditor on his examination.

This court has in several cases construed this section of the Code, and laid down the general rules thus: that it must appear, in order to disqualify the witness, that he is & cestui que trust, or has given an indemnity which makes him the real party in interest, that is, an indemnity in the action, and that such action is prosecuted or defended at his instance. (Catlin v. Hanson, 1 Duer, 329; Van Wyck v. McIntosh, 2 Duer, 86; Giberton v. Alcock, May, 1855, MSS.)

The position of a creditor not named in the complaint, in relation to an action of this nature, is this: If it proceed to a judgment of account and distribution of the fund in question, it is a judgment in his favor, upon establishing his own demand. It is not merely a judgment which will directly enure to his benefit, but he will be prohibited from instituting any other suit, and he is entitled to interfere in cases of neglect by the actual plaintiff to control the suit. Prior, however, to such a judgment, he is at liberty to proceed with his own separate action. And if the creditor’s suit fails, and no decree is pronounced, he is at liberty to go on with his own, if one has been commenced, or institute a new one. He is not bound until after judgment, for he cannot interfere till then.

If a judgment is pronounced in this action against the defendant, it would be as fully a judgment in favor of a proposed witness who is a creditor, as of the creditors actually parties to the record. It would seem, then, that any creditpr ought to be rejected.

But we consider that, under the provision of the Code, this proposition admits of a qualification. The phrase is, that the 398th section is not to apply “to any person for whose immediate benefit the action is prosecuted or defended.” We think that it should appear, not merely that the creditor proposed as a witness is in a legal situation, in which the judgment may avail him, but that it should appear positively and unequivocally that he will receive the fund, or a portion of it. For example, it may appear that a creditor under an assignment is one to be paid in preference, and the fund which he is called to increase must go to him, and that he will not be paid in full without the increase. He would then be inadmissible. But if it is not certain that he must receive a direct benefit, but this depends upon contingencies, which leave it uncertain, he shall be considered competent.

The converse proposition is undoubtedly plausible, viz.: that the proposed creditor should be deemed inadmissible, unless it plainly appear that he could not be benefited. But the rule which we have stated appears to us most Consistent with the intention and true meaning of the Code, and with the series of authorities in our own court. In Davies v. Cram, (4 Sandf. 355,) in a suit by assignees to recover a fund, not only the assignor, but one of his creditors, protected by the assignment, was admitted as a witness.

Testing the present case by this rule, the proposed witness will appear to be admissible. It is true, that if the subsequent sale of the property afforded a fair estimate of its value, with which to charge the defendant, the witness may possibly receive something, after paying all the preferred creditors. But this is wholly conditional and uncertain. It depends upon the amount of the increase of the fund, and the amount of the prior preferred debts, and of the separate debts of Brahms.

It cannot be known with any approach to certainty whether he will receive a benefit or not, without a full accounting and the adjustment of all antecedent demands upon the fund. We are, for these reasons, all of opinion that the Judge erred in excluding him as a witness.

The judgment must be reversed, and there must be a new trial, with costs to abide the event.


text:
    Catherine M. Johnson, Executrix, &c., v. The Hudson River Railroad Company.
    In an action to recover damages for injuries to the person occasioned by the negligence of the defendant, the burden of proving that there was a want of ordinary care on the part of the person injured, which contributed directly to the accident, rests upon the defendant. The plaintiff, in order to maintain the action, is not hound to prove a negative by showing affirmatively that there was no such, want of ordinary, care.
    No exception, not established by precedents that the Court is hound to follow, ought to he admitted from the general rule, which casts the burden of proof upon the party holding the affirmative.
    Whether the evidence on the part of the plaintiff justifies the inference that the negligence of the person injured contributed to the accident, is a question for the determination of the jury.
    Judgment dismissing complaint reversed, and new trial ordered; costs to abide the event.
    (Before Duek, Bosworth and Hoffman, J.J.)
    Heard, May term;
    decided, June term, 1855.
    Appeal, by plaintiff, from a judgment dismissing tbe complaint. The action was brought for the recovery of damages resulting to the widow and children of Peter A. Johnson, deceased, the plaintiff’s testator, from his death, and the complaint averred that his death was occasioned solely by the injuries and wounds he had received from being run over, on a public highway, by a car belonging to defendants, and that this accident was owing entirely to the negligence of the servants of the defendants, in the management and running of the ¿ar. The answer denied such negligence, and averred that the injuries to the deceased were caused solely by his own negligence and inattention.
    The cause was tried before Campbell, J., and a jury, in November, 1854.
    Upon the trial, evidence was given on the part of the plaintiff, tending to prove all the material allegations in the complaint, but leaving it somewhat doubtful, whether the deceased had not himself been guilty of a want of ordinary care, contributing to the accident.
    When the testimony on behalf of the plaintiff was closed, the counsel for the defendants moved the court to dismiss the complaint upon the grounds, 1st, That there was no proof of negligence on the part of the defendants, and, 2d, That there was no evidence showing that the deceased was not guilty of negligence, which contributed to the accident.
    The learned Judge granted the motion, holding that the evidence given was not sufficient to prove that the deceased was free from negligence, and the counsel for the plaintiff excepted to the decision.
    The cause was heard upon a case containing the evidence and the exception.

      J. B. Sheys, for the plaintiff,
    contended that the Judge had erred in dismissing the complaint, and that the judgment ought therefore to be reversed, and a new trial ordered.

      W. Fullerton, for the defendant,
    relied upon the decision of the Supreme Court of Massachusetts, in Lane v. Crombie, (12 Pick. 177,) as proving that in actions of this nature, the plaintiff is not entitled to recover unless he shows affirmatively that the person injured was wholly free from fault. He also contended that the evidence proved that the negligence of the deceased was the true and sole cause of the accident.
   By the Court. Duer, J.

We are all of opinion that the evidence, on the part of the plaintiff, was quite sufficient to take the cause to the jury. If not contradicted, it was sufficient to prove that the fatal accident, which has given rise to this action, was, in reality, caused by the culpable negligence of the servants of the defendants, and whether the evidence was also sufficient to warrant the inference that there was a want of ordinary care on the part of the deceased, which contributed to the accident, was a question which it belonged, not to the court, but to the jury alone to determine. Nor did our brother, who tried the cause, otherwise decide. It is apparent that he did not withdraw the case from the jury because he deemed that the negligence of the deceased was conclusively shown, but upon another and wholly distinct ground. The only question, therefore, is, whether the complaint ought to have been dismissed for the reason that was alleged, namely, that the plaintiff had failed to prove that the deceased was free from the negligence which was imputed to him by the answer of the defendants. In other words, had failed to prove a negative. That the evidence, as it stood, was consistent with the supposition that the deceased was free from fault, cannot be denied, while, on the other hand, it must be admitted, that it fell very far short of showing that he certainly was so. The question, therefore, is, whether it is this proof that the plaintiff was bound to give.

We believe that this is the first time that the question as to the necessity of such proof, on the part of the plaintiff, in actions like the present, has been raised in this court, or, indeed, in any court of this state; and, from the frequency of such actions, it is a question of no ordinary importance, and merits an attentive consideration.

It is certainly true, as a general rule, that there can be no recovery in these actions, when it is proved that there was a want of ordinary care, on the part of the person accidentally injured, which directly contributed to the accident; but it by no means follows, that the plaintiff is, in the first instance, bound to show that the person so injured could not have been guilty of the negligence imputed: that is, is bound to prove a state of facte necessarily excluding the supposition of what, for convenience, maybe termed his guilt. Yet this, as we understand it, is exactly the‘proposition that is now contended for. It is exactly the proposition, if the plaintiff, in all these cases, is bound to prove, in order to maintain the action, that there was no want of ordinary care, on his part, or that of the person whom he represents. It is manifest, however, upon a slight consideration, that this proposition, if admitted to be true, is equivalent to saying that, in all these cases, the law presumes, that the negligence of the person accidentally injured contributed to the accident, and that this presumption, unless overthrown by positive evidence, is alone sufficient to defeat a recovery. If such is the law, we are bound so to declare it; but we are unable to see that there is any warrant from reason and good sense, from justice, or public policy, for such a presumption. It is, it seems to us, purely gratuitous and arbitrary, and if established by authority, upon principle, is not be defended. The presumption would be just as reasonable, if not more so, that accidental injuries, in all cases where a compensation in damages is sought, were in reality occasioned, solely by the negligence of the defendant or his servants, so as to entitle the plaintiff to recover merely by proving that the accident happened and the injury followed, and, in all cases casting upon the defendant the burden of repelling the presumption, by demonstrative proof of its falsity. This, however, is a proposition for which no lawyer would willingly contend, and which, assuredly, no court of justice could be expected to sanction. Yet is there, in reality, any difference in the cases ? H negligence cannot be imputed to the defendant, but must be proved, can any reason be given why, without proof, it should be imputed to the plaintiff? If the plaintiff, in order to maintain the action, is bound to prove the negligence of the- defendant, must it not be just as incumbent, upon the defendant to prove the negligence of the plaintiff, in order to bar a recovery ? We certainly think so, and, unless the law is otherwise settled, must so decide.

But we are told that the law is otherwise settled, and, in proof of the assertion, are referred to the decision of the ¡Supreme Court of Massachusetts, in Lane v. Crombie, (12 Pick. 197.) That tins decision distinctly affirms the doctrine for which the counsel for the defendants so earnestly contended, cannot be denied; but whether it is alone sufficient to establish that doctrine as law, is a different question. The court, in this case, ordered a second trial upon the ground that, on the first, the Judge had failed to instruct the jury that the plaintiff was bound to prove that the accident by which he was injured was not occasioned by his own want of ordinary care. The court, therefore, decided that the burden of proof was upon the plaintiff, to show that Ms own negligence was not a cause of the accident, and not upon the defendant to prove that it was; and if tMs decision ought to govern us, we cannot do otherwise than hold that the complaint, in the present case, was properly dismissed.

But with the utmost respect for the learned court by wMch tMs decision was pronounced, we cannot regard it as an authority by which we ought to be governed. Upon the fullest consideration, we cannot regard it as evidence of the law, that we are bound to declare. It is scarcely necessary to say that the decisions of the courts, however respectable and learned, in our sister states, have with us no binding force as precedents, but are only to be followed so far as they command our assent by the reasons and authorities upon which they are founded. When we cannot reconcile them with our own deliberate convictions, it is our duty to reject them.

The decision of Lane v. Crombie was not rested upon argument or analogy, but upon authority alone. Noreasons were given to show the-propriety or justice of the rule which the court held itself bound to follow, but it was considered as settled by prior decisions, the cases to which the court referred. Those cases are Butterfield v. Forester, (11 East. 61,) Harker v. Hunniston, (6 Cow. 191,) and Smith v. Smith, (2 Pick. 621.) We have examined them all with attention, and find ourselves unable to assent to the interpretation that was given to them by the Supreme Court of Massachusetts. As we understand them, they are very far from justifying the conclusion at which the court arrived. In our deliberate judgment, they prove this, and only this, that when it appears by the evidence on the part of a plaintiff, who seeks to recover damages for accidental injuries, that by the exercise of ordinary care he might have avoided the accident, he is not permitted to recover; but this is wholly different from holding that he is not permitted to recover unless he shows, affirmatively, that there was no such want of ordinary care on his part as could have contributed to the accident. The distinction between the two propositions is manifest. In the first, the negligence which is to bar a recovery is proved; in the second, without proof, it is presumed to have occurred. It is presumed, since that which is not proved can rest only upon a presumption.

It escaped the attention of the Supreme Court of Massachusetts, that in numerous cases—we believe in a majority of those that are reported, in which a plaintiff claims damages for accidental injuries, the fact that his own negligence contributed to the accident, is treated expressly or by implication as purely a matter of defence, the burden of proving which, as in every other case of a defence, necessarily rests upon the defendant. According to our own experience and information, it is this rule, that in practice has been constantly observed in the courts of this state, and has been understood by all our Judges to be that which they were bound to follow, and we cannot think that it ought now to be departed from, in deference to a single case in which, upon mistaken grounds, its authority has been denied.

There are other considerations that have strengthened our conviction that it is the rule which we are bound to declare and to follow.

If the plaintiff in every action for accidental injuries, were bound to prove, before his case could go to the jury, that the accident could not have been occasioned by any want on Ms own part of ordinary care, it is certain, that an allegation in the declaration that there was no such want, would be a material and necessary averment; it would be so, upon the principle that every fact is necessary to be averred which is necessary to be proved, in order to maintain the action, and hence the omission of such an averment would render the declaration bad upon demurrer. It is true, that such an averment is found in some of the precedents of declaration, in the collections of Wentworth and others, but in many more it is wholly omitted, and we are convinced that there is no adjudged case in which it- has been held or intimated that such an omission is a valid cause of demurrer. That it is not so regarded there is positive evidence.

For more than thirty years past, the Court of Exchequer in England, has been distingmshed for its adherence to the strictest rules of pleading and of evidence, and if there are any errors in the pleadings before them that escape the notice of counsel, they are sure not to escape the zealous vigilance of the Judges. The 2" on in each of the cases of Gough v. Bryan, (2 Mees. & Welsb. 790;) and Bridge v. The Grand Junction R. R. Co., (3 Mees. & Welsb. 244,) was to recover damages for accidental injuries, and in each, a plea, which set up, in a defective form, the negligence of the plaintiff as a bar to Ms recovery, was held to be bad upon demurrer, and judgment, therefore, rendered for the plaintiff; but in neither case did the declaration contain an averment that the accident had happened without any want of ordinary care on the part of the plaintiff, and we may be certain, that had the omission been deemed a fatal defect, it would not have escaped the observation of the counsel or of the court, and would have been "so determined. Had the averment been deemed material—as it certainly would be if the rule of law as to the burden of proof were such as has been adopted in Massachusetts—we do not doubt that the court would, in each case, have rendered judgment for the defendant, instead of the plaintiff, in conformity to the well-known rule, that when a demurrer is interposed, no matter in what stage of the pleadings, judgment must be rendered against the party by whom the first fault in pleading is shown to have been committed. , •

It is not irrelevant to observe that some of the more recent decisions in England have gone to the extent of holding that the negligence of the plaintiff, even when it is proved to have contributed to the accident, is not, in all cases, a bar to his recovery. In the case of Davies v. Mann, (10 Mees. & Welsb. 546,) the act of the plaintiff, which it could not be denied had contributed to the accident that led to the action, was an act, not merely of negligence, but of positive illegality, and yet the defendant, upon the ground that by the exercise of ordinary care he might have prevented the accident, was held to be liable in damages for the injury to his property that the plaintiff had sustained. Comparing the decisions, the doctrine now established in England appears to be this:—that as the plaintiff in the‘action is not allowed to recover, notwithstanding the clearest proof of the negligence of the defendant, when it so also proved that his own negligence directly contributed to the accident, so the defendant is not shielded from a recovery, notwithstanding such negligence on the part of the plaintiff is proved, when it appears, that but for his own subsequent negligence the accident would never have occurred; that is when it appears that his own negligence was its sole proximate cause. We are not aware that the exact question has yet arisen in our own courts, but we are not prepared to say that the doctrine, although somewhat novel, is not highly reasonable, and whether it may not be applicable to the case before us, is a question that, upon a future trial, may deserve consideration.

As the decision in Lane v. Crombie has no adequate support from authority, so it has certainly none from reason or analogy, but, if followed, would introduce an exception from the rules of evidence, unreasonable in itself, as well as before unknown. We know of no rule of evidence that rests upon plainer and surer grounds of equity and good sense, than that which in every controversy casts the burden of proof upon the party who maintains the affirmative—which, in other words, requires that he who asserts a fact, .necessary to be shown to sustain the action or bar a recovery, shall prove its existence. That there are some exceptions from this rule we do not deny, but these, when examined, will be found to rest mainly upon technical rules of pleading, and as all such rules are now abolished, it may well be doubted whether any exception ought now to be allowed, unless in cases where the law has settled that the right to maintain the action depends upon proof of a negative allegation—and in all these cases, as has already been observed, the negative allegation is an essential averment in the declaration or complaint. So also in actions founded upon contract, an exception may be created by the very terms in which the parties have chosen to express their agreement; but we are unable to perceive that any valid reason for allowing an exception, in any other cases, can now be alleged. Although it may not be universally true that a negative proposition is from its nature incapable of proof, it is certain, that in most cases the proof is difficult, and in some, impossible; and to exact the proof in these would be equivalent to a denial of justice. It would frequently operate to deprive a plaintiff of the compensation to which a jury, upon the whole evidence, might justly deem him to be entitled. And by exacting the proof in actions like the present, founded upon the statute, we are persuaded that the just as well as benevolent intentions of the legislature in favor of the wife and children of every person whose death has been caused by the culpable negligence of others, would, in many cases, be wholly defeated.

We think, for the reasons that have been given, that the judgment dismissing the complaint was erroneous.

It is, therefore, reversed, and there must be a new trial, with costs to abide the event.


text:
    William A. Wheeler and another v. John A. Newbould.
    Proof of a local usage cannot be received to vary the legal construction of a contract, unless it is clearly proved that its existence and terms were known to the parties, and that it was in reference to it that their contract was made.
    When there is an implied authority to sell personal property pledged as collateral security for the payment of a debt, the sale to be valid must be public, and be preceded by a demand of payment and by a reasonable notice of the time and place of sale.
    But there is no implied authority to sell when the collateral security consists only of the promissory notes of third persons. The only authority which, when the contract is silent, then passes to the creditor, by implication, is to reimburse himself by the collection of the notes, if the debt is unpaid at its maturity. Held, in the principal case, that a sale made by the defendant of certain promissory notes, placed in his hands by the plaintiffs as collateral security for the repayment of a loan, was void, not only as irregular but as made without authority.

      Held, therefore, that the plaintiff was entitled to judgment for the balance collected upon the notes beyond the amount of the loan.
    (Before Oakley, Oh. J., and Düer, J.)
    Heard and decided,
    June term, 1855.
    The action was brought to recover a sum which was alleged to be a balance due to the plaintiffs, from the proceeds of certain promissory notes, which had been deposited with the defendant as collateral security for the repayment of. a loan of $2,000. The notes, fourteen in number, were set forth in the complaint; they were signed by different makers, amounted in the aggregate to $2,614.73, and the whole amount, it was averred, had been collected.
    The defence substantially was, that the loan for the security of which the notes were pledged, not being repaid when it became due, the defendant, to reimburse himself, sold the notes at private sale for the sum of $2,020, which was the best price that could be obtained; and the answer averred that the sale was lawfully made according to the custom and usage of brokers and dealers in commercial paper in the city of New York.
    There are other issues made by the pleadings, but as these were abandoned upon the trial, it is unnecessary to state them.

      The cause was tried before Oakley, Oh. J., and a jury, in April, 1853; and upon the trial, the plaintiffs, who were admitted to be partners in trade, under the firm of William A. Wheeler & Co., to maintain the issues on their part, gave evidence tending to show that on or about the 6th day of November, 1848, the plaintiffs, through one Jeremiah Hotchkiss, a broker, borrowed from the defendant the sum of two thousand dollars, and as collateral security for the repayment thereof, deposited with the defendants certain business paper, consisting of notes and drafts, taken by the plaintiffs in the course of their business, not then due, to the amount of two thousand six hundred and fourteen dollars and seventy-three cents, and also the check of Wheeler, Wood & Co., upon the American Exchange Bank, in the city of New York, for the sum of two thousand dollars, dated on the 20th day of December, 1848.
    That on or about the 21st day of December, 1848, the day after the said check was payable, the plaintiffs caused an offer to be made to the defendant to take up the said loan, and receive back the collateral securities given therefor, and demanded that such collaterals should be given up. That the offer of the plaintiffs was to pay the defendant the sum of two thousand dollars, less the sum of $176, which they alleged had been deducted as and for interest by the broker Hotchkiss, while the defendant demanded payment of $2,000 and interest thereon, at seven per cent., from the time the loan was made.
    The plaintiffs also proved that all the said notes and drafts, so given as collateral security for the said loan, were paid at maturity, and then rested their case.
    The defendant, to maintain the issues on his part, gave evidence tending to prove that on the 20th day of December, the day the said loan matured, the said check of Wheeler, Wood & Co. was presented to the American Exchange Bank for payment, and payment refused. That thereupon the defendant, on the following day, demanded payment of the said loan and interest from the plaintiffs, and gave them notice that unless the loan and interest was paid he should sell the said collateral securities for the best price he could obtain therefor, according to the usual custom and course of business in like cases, in the city of New York, to reimburse himself. That on the 21st day of December, at the time when 'the plaintiffs offered to take up the said loan, and at other times, before the collaterals were sold, the defendant offered to give up to the plaintiffs the said check and all the collateral notes and drafts, upon payment to him of the sum of $2,000, and seven per cent, interest thereon from, the time the loan was made.
    That the said loan and interest not having been repaid, the defendant, on the 28th day of December, 1848, sold the said notes and drafts, at private sale, to one Frederick L. Yates, for the sum of $2,020, and that that was the best price offered for them, none of the same having then become due or payable.
    It was admitted that the defendant afterwards tendered and offered to deliver to the plaintiffs the said check of Wheeler, Wood & Co., received by him,with the collaterals at the time of making the loan.
    The defendant’s counsel then offered to prove that at the time this loan was made, it was, and long had been, the usage and custom, in the city of New York, to sell notes and drafts, pledged as collateral security for loans, after such loans were due, and within a reasonable time after demand of payment thereof, and notice that such sale would be made in default of such payment, at private sale, for the best price that could be obtained, and not at public sale, or by auction.
    The counsel for the plaintiffs objected to such proof, and thereupon the court sustained the objection, and held that such testimony was inadmissible.
    To which ruling and decision, the counsel for the defendant did then and there except.
    The defendant’s counsel then offered to prove that the defendant sold the notes and drafts received by Mm as security, for the said loan of $2,000, for their full value, and for the best price that could be obtained therefor at the time of such sale.
    The plaintiffs’ counsel objected to this proof, and the court sustained the objection, on the ground that the defendant had no right to sell such notes and drafts, either at public or private sale, or at auction, but was bound to hold and collect the same as they became due.
    To which ruling and decision, the defendant’s counsel did then and there duly except.
    The court thereupon charged and directed the jury, that the nature of the transaction was, that certain notes and drafts were deposited with the defendant as collateral security, generally, upon a loan of money; that after the loan matured, he gave notice to the plaintiffs that he would sell the same notes and drafts, without specifying any time, place, or manner of sale, to reimburse himself, unless the loan and interest should be immediately paid. He afterwards sold them to Mr. Yates, by private arrangement.
    The court further charged and directed that the defendant had no right to do this; that the court understood the right of the defendant to be, and so directed the jury, to hold the said notes and drafts, and collect and receive the money thereon, as it became due, and apply it to the payment of the loan, and return the balance, if any, to the plaintiffs. These notes and drafts were all duly paid at maturity. That in judgment of law, therefore, the plaintiffs, were entitled to a verdict for the excess over and above the amount of the loan and interest, for which they were pledged.
    And directed that a verdict be accordingly entered for the plaintiffs, subject to adjustment. To which direction and charge of the court, the counsel for the defendant did then and there duly except. The amount of the verdict was thereupon adjusted by the parties at $772.41.
    The court thereupon directed that the exceptions should be heard, in the first instance, at General Term, and that judgment, in the mean time, be suspended.

      E. Ward, for the plaintiffs,
    insisted that they were entitled to judgment upon the verdict. That the sale of the notes at private sale without notice of the time and place of sale, was illegal, and that the defendant had in truth no authority to sell at all, either at public or private sale, the rule, which applies to other personal property not being applicable to commercial paper. He cited 2 Caines’ Cases, 201; 12 John. 146; 4 Denio, 227; 3 Hill, 593; 7 Hill, 297, and other authorities.

      E. W. Stoughton, for the defendant,
    contended that the general rule, that when property is pledged to secure the repayment of a loan, the lender has full power to sell it after a default in payment, and due notice to the borrower, was just as applicable to commercial paper as to any other description of personal property. That the sale in this case was fully justified by the usage that was offered to be proved, the evidence of which ought not to have been rejected, and that as the Judge had erred in excluding this evidence, a new trial ought to be granted. He cited 1 Caines, 43; 2 John. 327; 6 John. Ch. R. 437; 12 Wend. 866; 19 Wend. 386, and several other cases.
   By the Court. Duer, J.

We are clearly of opinion that the plaintiffs are entitled to judgment upon the verdict which the jury was instructed to render.

The usage that was offered to be proved on the trial was confined to this city. It was strictly a local usage, and as the evidence offered went no further than to prove its existence, it was properly excluded. The law may be considered as settled, that proof of a local usage can never be received to vary the construction that the law would otherwise give to a contract, unless it is clearly proved that its existence was known to the parties, and that their contract was made in reference to its terms. (Goday v. Lloyd, 3 Bing. 793; Bartlett v. Pentland, 10 B. & Cross, 760; Russel v. Bangley, 4 B. & Al. 368; Scott v. Irving, 1B. & Al. 605; vide 1 Duer on Ins., 263 § 57, and note § 1, p. 286, where cases collected.) Chancellor Walworth, indeed, in the case of Allen v. Dykers, in the Court of Errors, (7 Hill, 497,) seems to have held that a usage of the Brokers in Wall street can never be given in evidence when opposed to the general law of the state, but he probably meant only to say, that such a usage does not bind the parties merely by its existence, without proof that they intended it should govern their contract. We do not doubt that a local usage is just as binding as a general, when it appears with sufficient certainty that it was in the contemplation of the parties when they made their contract. In such a case, it becomes a part of their agreement, with the same effect as if incorporated in terms. In the case before us, there was no offer on the part of the defendant, to show that the alleged usage was known to the plaintiffs, nor, consequently, that they meant to be bound by it. The offer, as made, was, therefore, properly rejected, as insufficient and irrelevant.

The usage being out of the case, the right of the plaintiffs to recover is not at all doubtful, even upon the supposition that a pledge of promissory notes, or other securities for money, stands on the same ground, as a pledge of stocks or merchandise, and carries with it the same authority to sell the property, in the event of a default in the payment of the debt, it was intended to secure. When the contract is silent, as to any such authority, it is certain that a sale binding on the debtor can only be made after payment of the debt has been demanded, and reasonable notice of the time and place of sale has been given; this last condition evidently implying that, in all cases, the sale must be public. (Cortelyou v. Lansing, 2 Caines’ Cases, 200; Allen v. Dykers, 3 Hill, 593; S. C., 7 Hill, 497; Stearns v. Marsh, 4 Denio, 227; Brownell v. Hawkins, 4 Barb. 491; Wilson v. Little, 2 Comst. 443.) In the present case, a demand of payment was proved, but the sale was made without any notice of time and place, and was private. There was, indeed, a general notice of an intention to sell, but it would be extravagant to suppose, that such a notice, without any designation of time or place, is that which the law requires. It was plainly insufficient and ineffectual. The sale, therefore, although it may have passed a title to the purchaser, was, in respect to the plaintiffs, unauthorized and void; and, consequently, the liability to them of the defendant is exactly the same that it would have been, had he retained the notes and collected the amount of each, as they severally became due.

What we have now said would suffice for the decision of this case, but it is not our intention to pass over the far more important and interesting question, which the bill of exceptions distinctly presents, and to which the arguments of the counsel before us were principally directed, namely: whether the general rule that a creditor has an implied authority, where the contract is silent, to sell the property pledged to bim as collateral security, if the debt remains unpaid, is applicable, not only where the pledge consists of stocks or merchandise, but equally, when it consists of promissory notes, or bills of exchange, or other choses in action; or whether, in respect to these, the authority implied is not limited to the collection of the securities, and the use of the necessary means to enforce their payment ? That such, in these cases, is the only authority that can be implied, was the opinion of the Chief Justice upon the trial, and it was mainly upon this ground that he directed a verdict for the plaintiff. He adheres to this opinion; and, after some hesitation and doubt, I concur with him in holding that it is a true expression of the law that we are bound to declare.

Although the broad terms in which the general rule is laid down, both by Chancellor Kent and by Mr. Justice Story, (2 Kent’s Com. pp. 582-3; Story on Bailments, § 310,) seem to warrant the inference that the authority of the pledgee to sell is coextensive with the power of the debtor to create the pledge, and consequently embraces every species of property which is a legitimate subject of the contract, it is, nevertheless, certain that there is no reported case in which the doctrine has been carried to this extent. There is no adjudication that a sale by a pledgee of evidences of debt, created by individuals, can be justified, otherwise than by an express authority; and when we inquire into the reasons upon which the modern rule is founded, and by which alone it can be defended, it will at once be seen, that to a sale of this character they are wholly inapplicable, and that by sustaining an authority to make the sale we should open a wide door to imposition and fraud.

In all cases, when personal property is placed in the hands of a creditor as a collateral security, it is a very reasonable presumption that the parties intend that, in the event of a failure on the part of the debtor to meet his engagement, the property shall be applied, in some form, to the satisfaction of the debt. They mean, that out of or by means of the property, the loan or advance for which it is pledged shall be reimbursed ;1 and it is obvious, that where the property consists of stocks or merchandise, it is only by a sale that it can be made available to the purpose intended. Hence, in these cases, the authority of the pledgee to sell is founded, not on an arbi-; trary rule, but upon the actual intention of the parties, as deduced, not merely from the nature of the contract, but from that of the: property which it embraces. And it is evidently upon this grounthat Chief Justice Gibbs, in Pothonier v. Dawson, (1 Holt, N. P. R. p. 385,) placed his decision, (Story on Bail, § 311.)

And here I cannot refrain from remarking that, so far as I have been able to discover, Pothonier v. Dawson is the only case to be found in the English books in which the implied authority of a pledgee to sell, without resorting to a court of equity, has been judicially asserted. I am aware that there are other cases which are usually referred to, as having introduced and established the doctrine, and these are Tucker v. Wilson (3 P. Will, 261 S. C. 1 Brown, P. Ca. 494) and Lockwood v. Ewer (2 Atk. 303;) but it is remarkable that, in each of these cases, the contract was, upon its face and by its necessary legal construction, a mortgage and not a pledge, and this Chancellor Kent, in his opinion in Hart v. Van Eyck, expressly admits (2 John. Ch. R. 100, vide also Cortelyou v. Lansing, 2 Caines’ Cases, 210.) I mention these facts, as proving that the doctrine of an implied authority rests more upon a general usage, which, in respect to stocks and merchandise, is well known, and has long prevailed, than upon any decisions of controlling authority. It ought not, therefore, it seems to us, to be extended by construction to any cases which the usage, as general and known, has failed to embrace. In the very elaborate and learned opinion which was prepared for delivery by Chancellor Kent, as a Justice of the Supreme Court, in Cortelyou v. Lansing, but was never, in fact, delivered, he speaks of a sale by a pawnee after notice, as a practice which then prevailed “in cases of the transfer of stocks,” (2 Caines’ Cases, 212,) and was evidently of opinion that it was to such cases that the practice and the authority were confined.

It is certain, indeed, that, by the ancient rules of the common law, a sale of a pledge could only be made under and in pursuance of a judicial sentence, and that it was only by force of such a judicial sentence that the right of the pledger to reclaim could ever bebarred, (2 Caines’ Cases, pp. 204,205; Story on Bail, §§ 210, 246.) And when we reflect upon the security against abuse and fraud which these rules certainly afforded, we may be disposed to regret that they have ever been relaxed; but if the modern doctrine, that the pledgee has an election, to resort to a court of equity or to sell ex suo motu, be confined to sales of merchandise and stocks, under the conditions already named, it seems that there is very little reasomto fear that the interests of the debtor will not be sufficiently protected. As stocks and merchandise have, at all times, a known market value, if they are sold at public auction, and after due personal notice to the debtor, it is not probable that he will sustain any loss that would not have occurred had the sale been judicial, while, at the same time, he is relieved from the expenses that would necessarily attend a judicial proceeding. It is, doubtless, because experience has shown that such are the facts, that the usage of a sale, in these cases, by the mere act of the pledgee, has become established, and that the sanction of the courts has been given to the practice.

It follows from these observations, that the reasons by which alone the doctrine that a pledgee has an implied authority to sell, where the contract is silent, can alone be justified, and upon which we are therefore bound to suppose that it is in reality founded, are: first, the necessity of a sale, as the only means of obtaining a satisfaction of the debt; and next, the probability that by a sale properly conducted} the rights and interests of the debtor will not be sacrificed; nor can it be denied, that where these reasons exist, the intention of the debtor to clothe the pledgee, with the requisite authority, may be reasonably and safely inferred.

It is manifest, however, that neither of the reasons that has been stated can be said to exist when the pledge consists solely of the personal securities of individuals, and hence, it seems to us, that, in such cases, no court can be warranted to infer the existence of a similar intention. It is true that the same presumption exists in these, as in all other cases, that the parties intend that the pledge shall be applied to the satisfaction of the debt, but this presumption is far from justifying the belief that the debtor contemplated, and meant to authorize, a sale. 'It cannot be said, that a necessity for a sale exists in order to furnish the means of satisfying the debt, since those means are furnished by the securities themselves, and will result from that, which the parties doubtless anticipate, their actual payment as they become due; and as the personal obligations of private individuals, with rare exceptions, can have no market value, it is certain that a sale, whether public or private, before they reach their maturity, will involve a large sacrifice of their true value, and entail a heavy loss upon the unfortunate debtor, and of this the very case before us affords a striking example and proof. It is, therefore, not reasonable to believe that the debtor, in creating the pledge, meant to confer an authority, the exercise of which he must have known would be attended by these consequences, and which the object to be answered—the reimbursement of the creditor—would not require. On the contrary, the reasonable presumption is, that he meant to give no other or larger authority than would enable the pledgee to use the property for the purpose intended—the satisfaction of the debt—and, therefore, meant to give no other authority than that of collecting the amount of the securities from the parties liable, and of adopting the necessary means of enforcing payment; and it is this conclusion, we are convinced, that a just regard to the nature and object of the contract, the protection of the debtor, and the intentions of the parties, requires us to adopt. It may be that the doctrine, that has been contended for, of an unlimited discretion to sell, would better suit the interests, and correspond with the usage of brokers; but as a learned senator observed in Allen v. Dykers, the usages of brokers are not always in perfect harmony with the interests of their employers, or with the rules of justice and sound morality.

The only reported cases we have found in which a promissory note has been the subject of a pledge, are Garlick v. James, (12 John. 146;) and Bowman v. Wood, (15 Mass. 534,) and in each, the language of the court certainly implies, although we will not say that such was the decision, that the only authority of the pledgee is to receive the amount of the note from the party liable.

In holding, as we do, that a pledgee of chases in action, created by private individuals, and having no market value, 'has not an implied authority to sell them, we are not to be understood as saying that a sale may not, under special circumstances, be decreed by a Court of Equity. We decline, however, to express or intimate an opinion upon a question, which is not before us, and which, when it arises, will demand a serious consideration.

There must be judgment for the plaintiffs for the sum found by the jury, with costs.

       In Barrow v. Paxton, (5 John. 260,) when Cortelyou v, Lansing was referred to, by the counsel for the defendant, as a decision of the court, Kent, Ch. J., said: “ That case was never decided by this court. It was argued once, and 1 had prepared the written opinion, which appears in the report of Mr. Caines, hut the court directed a second argument, which, for some reason, was not brought on, so that no decision took place.”—(R.)