text:
    EMILY F. FORD, Plaintiff and Appellant, v. AUGUST BELMONT and JOHN HOME, as Surviving Trustees of Caroline Slidell Belmont, and others, Defendants; said August Belmont and John Home, as Trustees, and Caroline Slidell Belmont, being Respondents.
    I. Deed by A absolute on its pace, accompanied by an instrument executed BY the Grantee, declaring that the lands were held by him for certain purposes, the last of which was, that after the previous purposes had been accomplished, the money remaining from sales of any portions of the land, and the land remaining unsold, should be divided or sold, as the case might be, in the proportion of two-thirds to B, and one-third to the grantee and C, operation op the deed and
    INSTRUMENT.
    1. Held, that the grantee took a legal estate in one-third, onl/y, the legal estate in the other two-t7drds remaining in the grantor, subject to a power of trust in the grantee, to sell the lands and pay two-thirds of the proceeds to B, and liable to be defeated by the exercise of such power (see Ford v. Belmont, 7 JRobertson, 97-508).
    II. Bankruptcy Act op 1843, Assignee in.

      What estate he takes on bankruptcy proceedings instituted by such grantee in the land conveyed to him.'
    1. Not more than the one undivided third.

    III. Determination of Claims to Real Property, Proceeding for. 1. Action for, instead of notice, etc., under the statute.

    1. When an action is brought, it is governed by the same rules as other actions, and the same defences to defeat the right to relief may be relied on.

    3. Possession, Dependant’s Rights to Judgment por.
    1. If he shows a better title than plaintiff, he is entitled to judgment for the possession.
    3. What shows a better Title for this Purpose.—Evidence.
    1. A possession under claim of title in the defendant, and those through whom he derives title, continuing for fourteen years immediately preceding the time when the plaintiff took possession, the plaintiff showing no title except such as may spring out of a possession during three years immediately preceding the institution of the action, and which possession immediately succeeded that of defendant, shows a better title in the defendant.
    Before Freedman and Curtis, JJ.

      Decided November 30, 1872.
    The plaintiff desiring to compel the determination of certain claims to some real estate, under the provisions of title 2, chap. 5, part 3 of the R. S., instead of taking the steps prescribed by that title of notice, etc., commenced a civil action pursuant to the Code of Procedure, under the authority of § 471 of that Code.
    The complaint in the action was as follows:
    “ The plaintiff complains:
    “ That she resides in the city of Brooklyn, Kings County.
    “ That she is the owner of the premises hereinafter described, and has an estate in fee therein; that she holds said premises as purchaser, and the source or means by which her right immediately accrued to her is a deed indented, dated the 6th day of October, 1860, and made between William Coventry H. Waddell, assignee, of the first part, and the plaintiff, of the second part; by which said deed the said William Coventry H. Wardell conveyed to the plaintiff, her heirs and assigns, together with other premises, the premises hereinbefore referred to, and hereinafter described.”
    (Here the premises were described.)
    “ That said premises now are, and for three years preceding this present time have been, in the actual possession of the plaintiff; and the defendants unjustly claim title to the before-mentioned premises.
    “ Plaintiff prays that unless the defendants appear in this court, and assert their claim in the manner provided by law, that they and all persons claiming through or under them, may be forever barred from all claim to any estate of inheritance or freehold, or for a term of years, not less than ten, in possession, reversion, or remainder, to the before-described premises.”
    The defendants, August Belmont and John Home, as surviving trustees of Caroline Slidell Belmont, and Caroline Slidell Belmont answered as follows :

      “First. The said defendants, upon information and belief, deny each and every allegation in the said complaint contained.

      “Second. And the said defendants, for a second and separate defence to this action, say that neither the plaintiff, nor any person under or through whom the plaintiff claims title, or under whose title the said action is prosecuted, or any of them, have or has been seized or possessed of the premises described in the said complaint, or any part thereof, within twenty years before the commission of any act or acts complained of in and by the said complaint.
    “ Third. The said defendants, for a third and separate defence to this action, say that they and the persons under whom they claim title to the premises aforesaid, have been and now are in the uninterrupted use and occupation of the premises aforesaid, and every part thereof, for the period of twenty years and more, and claim, an exclusive title in fee simple thereto.”
    The issues thus formed came on for a trial before one of the justices of this court at a Special Term, without a jury ; who found as matters of fact:

      First. In the year 1833 Alexander M. Bruen was seized in fee simple and possession of the premises in question, and other adjoining land.

      Second. In May, 1835, the said A. M. Bruen, while so seized and possessed of said premises, and one Matthias Bruen, executed a certain instrument under their seals, whereby they empowered one Matthew Saint Clair Clarke within one month to compromise certain claims of the United States Government, against certain other persons (George and Herman Bruen and John Ludgon), and to sell certain lands, including the premises in question, to enable him to carry out such compromise, and whereby they also agreed that he should have the residue of any money, bonds, notes, or obligations received on such sale beyond the sum necessary to carry out such compromise.

      Third. A compromise of the claims mentioned in such agreement jvas within the month therein specified effected by the said Clarke with the United States Government, whereby the latter agreed to accept $200,000 in full satisfaction of such claim.

      Fourth. In the year 1835, before the month of July, the said Clarke, and one Robert Dyson and one Dunbar S. Dyson, agreed that the two latter should raise the sum so to be paid to the United States Government as such compromise, and that the said Clarke, in consideration thereof, would allow them one-third interest in such agreement with the said Alexander M. Bruen, and said Dysons raised said sum.

      Fifth. In pursuance of such agreement between said Bruens and Clarke, and between the latter and said Dysons, on the 7th of July, 1835, by the assent of said Clarke, the said Alexander M. Bruen, by his attorney, S. W. Bruen, duly constituted for the purpose, conveyed said premises mentioned in said agreement, including the premises in question, in fee simple to said Dunbar S. Dyson.

      Sixth. In July, 1835, about the time of the execution of the last-mentioned deed, said Dysons and Clarke executed a certain instrument under seal, whereby they declared the terms upon which said D. S. Dyson held the said premises, which were:
    1. To secure the payment to the United' States Government of such sum of $200,000.
    2. A certain sum ($25,000), paid as a premium for raising such sum, to be charged on the general fund to be raised out of said lots.
    3. Such sum of $200,000 was to be repaid with proper interest.

      4. The remainder of the money or lots unsold were to be divided or sold, as the case might be, in the proportion of two-thirds to said Clarke, and one-third to said Dysons, and said Dysons and Clarke also agreed in said instrument that such lots were to be sold or disposed of as might thereafter be agreed on.

      Seventh. In July, 1842, said D. S. Dyson presented a petition to the District Court of the United States for the Southern District of New York, duly verified by his oath, in order to obtain his discharge as a bankrupt, wherein he alleged that a certain schedule thereto annexed contained an accurate inventory of his property, rights, and credits of every name and description, and the location and situation of each, and every parcel and portion thereof. In such schedule is set down only one-third residuary interest in the premises conveyed by said Alexander M. Bruen to said Dyson, and reference is made to a note at the end of the schedule. Such note stated that Matthew St. Clair Clarke, of Washington City, was entitled to remaining two-thirds interest arising from any excess after satisfying the amount of mortgage on such property which had been allowed said Clarke in accounting.

      Eighth. In August, 1846, the official assignee in bankruptcy for the southern district of New York, conveyed one-third of the premises conveyed to the said D. S. Dyson, including those in question, to one Gordon L. Ford, in fee simple.

      Ninth. On the 25th October, 1847, the said Gordon L. Ford made a deed to John L. Stephens, purporting to convey all the right, title, and interest of him, the said Ford, to and in the property conveyed to him by said last-mentioned deed, including the premises in question.
      Tenth. On the 21st January, 1848, the said John L. Stephens conveyed to Francis Griffin, all his right, title and interest to and in the said premises.

      Eleventh. On November 1st, 1848, the said Francis Griffi leased the premises in question to Isaac F. Snow and James S. Anderson for ten years, and thereafter made a deed which was recorded November 9, 1849, purporting to convey to August Belmont, defendant herein, five equal undivided 12th parts of the said premises.

      Twelfth. For the purpose of a marriage settlement the said August Belmont subsequently conveyed the said five-twelfths parts of the said premises to Jeremiah Larocque, and thereupon a deed was made between the said Jeremiah Larocque of the first part, August Belmont of the second part, Francis Griffin and John Home of the third part, and Caroline Slidell Perry (the intended wife of said August Belmont) of the fourth part, which deed purported to convey to the parties of the second and third parts, the said five-twelfths interests in said premises. This deed was recorded November 9, 1849.

      Thirteenth. By two several deeds made and executed in 1851, the said Francis Griffin reconveyed to John L. Stephens five-twelfths of the premises.

      Fourteenth. The said John L. Stephens died after having devised all his property to Benjamin Stephens. This Benjamin Stephens died intestate, May 19, 1856, leaving one son, Benjamin Stephens, and two daughters, Amelia Ann, wife of Edward M. Willett, and Elizabeth, wife of Joseph B. Smith.

      Fifteenth. Francis Griffin died in January, 1852, leaving a will, whereby he devised all his property to his wife Mary.

      Sixteenth. From 1852 down to November, 1858, Snow and Anderson, the lessees from Francis Griffin, were in the actual possession and occupation of the premises.

      Seventeenth. About February, 1859, a partition deed was executed between the heirs of Benjamin Stephens, as owners of five-twelfths, the trustees of Mrs. Belmont, as owners of five-twelfths, and the devisee of Francis Griffin, as owner of two-twelfths in said premises, in possession of which they had thus been through their said lessees ; and, by said partition, the particular lots in controversy in this action were - set apart to the trustees of Mrs. Belmont.

      Eighteenth. From 1861 to 1865, the said lots in question were in the actual occupation of one Carman McNulty, who had charge of the premises on behalf of the trustees of Mrs. Belmont.

      Nineteenth. Down to the time of the trial of this cause, the defendant August Belmont paid the taxes on the lots in question.

      Twentieth. In October, 1860, the same official assignee conveyed to the present plaintiff for a nominal sum all of said premises so conveyed to D. S. Dyson by said Bruen, pursuant to an order of the court.

      Twenty-first. At the time of the commencement of the action, plaintiff was in the actual possession of said premises, and had been in such actual possession during the whole of the three years immediately preceding.
    And as conclusions of law from the foregoing facts found and decided:
    1. That the plaintiff has failed to establish any title to the premises in question.
    2. That the defendants, August Belmont and John Home, as surviving trustees to Caroline S. Belmont, are entitled to recover the possession of the said premises.
    3. That the said defendants, as such trustees, are entitled,to judgment against the plaintiff for their costs in this action, and for the possession of the said premises.
    On these findings judgment was taken, adjudging that the defendants, Belmont and Home, as surviving trustees of Caroline Slidell Belmont, recover possession of the premises of and from the plaintiff, and also recover of the plaintiff their costs.
    The plaintiff excepted to the finding, and appealed from the judgment to the General Term upon the pleadings, findings, and exceptions only.

      John Townsend, attorney, and of counsel for appellant, urged:
    I. This judgment coming up for review upon the judgment roll and exceptions only, this court can take cognizance of the facts as found "by the court at Special Term, and nothing more.' As the deeds referred to are not before the court, their construction cannot be passed upon, and their effects must be taken to be those mentioned in the “ findings.”
    II. .The Revised Statutes provided that a proceeding to compel the determination of claims to real estate should be commenced by the party in possession serving a notice on the claimant to show his claim, and the person so served might plead, in bar of the proceedings, that the person serving the notice had not been three years in possession; this was the only plea allowed. Besides this, the person proceeded against might serve a declaration in ejectment, or he might do nothing, or he might disclaim. These were the only courses open to him.
    Afterwards, by the amendment to the Code of Procedure, 1849, the person in possession was allowed to proceed by action instead of notice, and the law of 1855, amending the Revised Statues, merely adapted the proceeding to a proceeding by action (2 R. S. 313; Laws of 1849, ch. 438 [am’d Code]; Laws of 1855, ch. 511).
    III. Under the provisions of the Revised Statutes, the person proceeded against, after pleading, in bar, that the person serving the notice had not had the requisite possession to maintain the proceeding, and that-issue being found against Mm, migM afterwards serve Ms declaration in ejectment (Tanner v. Tibbetts, 18 Wend. 544).
    IV. Since the Code amd the law of 1855, the defendant, besides pleading the non-possession of plaintiff, may-set up title in himself, in which event his answer of title is new matter, of which the burden of proof is upon him (the defendant), and he can recover only to the extent to which he can establish a title. In such a case, all the plaintiff has to do is to establish the three years’ prior possession ; that shows his right to sue, and then the defendant on his issue of title can recover only on such a title as he can make out. His position is that of a plaintiff in ejectment; he is to recover on the strength of his own title (Hagar v. Hagar, 38 Barb. 96).
    V. It was obviously the intention of the Code, that a party proceeding by action should have the same rights as a person proceeding-by notice. And it was obviously the intention of the Revised Statutes to enable persons in possession to force adverse claimants to show the nature and extent of their claims, and to enforce them by action of ejectment, in which, of course, the plaintiffs would recover only to the extent of title they could establish. The law of 1855 did not change this, but provided for a determination of the right by one proceeding instead of two.
    VI. In this proceeding it is not incumbent on the plaintiff to prove any title nor anything beyond three years’ possession under a claim,—that she did, and the defendants could recover only to the extent of title shown by them (Barnard v. Simms, 42 Barb. 304; Burnham v. Onderdonk, 41 N. Y. 435).
    VII. The plaintiff, by showing possession under a claim, did establish a title to the premises, except the part to which the defendants established an adverse title. Possession is evidence of title.
    VIII. The fact that the defendants showed a prior possession, if it had stood alone, would have entitled them to the judgment awarded. But the defendants went further and showed what was their title; they showed that their possession was under a deed which purported to convey only a third interest in the premises. They showed, therefore, that their prior possession was to the extent only of the interest conveyed. Defendants showed a title out of themselves for all the property, except the part conveyed to Gordon L. Ford, under whom they claimed. The case to which the opinion at Special Term refers is an authority for this (Smith n. Lorillard, 10 Johns. 356).
    IX. It is shown that D. S. Dyson was "bankrupt, and it is shown that the official assignee in bankruptcy conveyed to Gordon L. Ford “ one-third of the premises conveyed to the said D. S. Dyson.” It is not stated that the official assignee was the assignee of D. S. Dyson. The bankrupt law of 1841, § 3, provided that on a person being decreed a bankrupt, his property should, by force of the decree, vest in such assignee as the court should from time to time appoint, and a person was appointed, called a general assignee, in whom in all cases where no special assignee was appointed, the estates of all bankrupts became vested. Even if the court take judicial notice of this appointment of a general assignee, still it is not shown that no special assignee of D. S. Dyson was appointed. Nor can it be known what other estates became vested in that assignee. It is known that Robert Dyson was a bankrupt. Really, as appears by the findings, the common source of title was the official assignee, and for aught that appears to the contrary, he had the entire fee, and conveyed one-third to G. L. Ford, and two-thirds to plaintiff. The assignee did not convey merely one-third of the interest held by D. S. Dyson, but his deeds convey (fols. 29, 36) the one a one-third, and the other all of the premises conveyed to D. S. Dyson. It is a. description or identification of the premises, and not of the interest conveyed. Bnt if the court conclude otherwise, or if the assignee had only the estate of D. S. Dyson, then:
    X. When Dunbar S. Dyson became bankrupt, he had either the entire fee or a sixth of the fee,—a third was reserved to the two Dysons, not to D. S. Dyson alone. The assignee could convey only what D. S. Dyson possessed. The assignee undertook to convey to Gordon L. Ford only “ one-third of the premises conveyed to D. S. Dyson.” If D. S. Dyson had the entire fee, this passed one-third of it. If D. S. Dyson had only a sixth, only one-third of that sixth part (one-eighteenth part) passed by that deed.
    XI. If D. S. Dyson had the entire fee, then the assignee’s deed to plaintiff passed two-thirds of the fee. If D. S. Dyson had one-sixth only, then the deed to plaintiff passed one-ninth of the premises to her.
    XII. If the title was one-third in the two Dysons and two-thirds in Clarke, there was nothing to show that the plaintiff had not Clarke’s title. The Clarkes, defendants, made no defence, and the defendants Belmont and Home could not avail themselves of the defence as to a part of the property to which they showed no title. As was said by a judge of the Court of Appeals : “It seems to me no answer, to say that there are other parties who can successfully contest the plaintiff’s title. It may be that such parties will acquiesce as they have hitherto done. Whether they do or not is a matter of no interest to the defendants, and in neither case can they (the defendants) have any claim to the land” (Craft v. Merrill, 14 N. Y. 464).
    XIII. The statement in an insolvent’s or bankrupt’s schedule cannot contradict or limit his assignment (Elverd v. Foster, 6 Dowl. P. C. 922).

    XIV. Where, as in this case, the quantity and quality of the estate of D. S. Dyson rested upon the execution of deeds, the nature of the estate is a conclusion of law, and the declaration of D. S. Dyson cannot change that estate. Declarations as to title can be material only where the title rests in a matter in pais (Brewster v. Stryker, 2 N. Y. 19; Warren v. Leland, 2 Barb. 613 ; Chautauqua Co. B’k v. White, 6 N. Y. 253; Adams Ejectment, 249, note 3.)

      Bowdoin, Larocque & Barlow, attorneys, and W. W. Macfarland, of counsel for respondents, argued: First Point. When a bankrupt places his property in the hands of the law to be administered as a trust fund for the benefit of his creditors, he necessarily parts with and conveys that, and that only, in which he had a beneficial interest, and might himself have lawfully appropriated to the satisfaction of his debts, this alone being necessary to the due execution of his trust. A trust estate never passes (Webster v. Cooper, 14 How. U. S. 488; Hill on Trustees, mg. pg. 269, 530; Lounsbury v. Purdy, 18 N. Y. 520; Capeman v. Gallant, 1 P. W. 314; Finch v. Earl of Winchelsea, 1 Pere W. 278; Bennet v. Davis, 2 Pere W. 318 ; Scott v. Lurman, Welles, 402; Carpenter v. Marnell, 3 B. & P. 40; Winch v. Keely, 1 T. R. 619; Dangerfield v. Thomas, 9 Ad. & E. 292; Kip v. Bk. of New York, 10 John. 63 ; Blin v. Pierce, 20 Vt. 25; Ontario Bank v. Mumford, 2 Burt. Ch. 596 ; Hynsom n. Burton, 5 Pike, 496; Brice v. Pollard, 2 Dallas, 60; Kennedy v. Strong, 10 John. 289; Clark v. Minot, 4 Met. 356).

      Second Point. The bankrupt never intended to convey, nor did the assignee intend to take, nor did the law require him to take, title to any greater interest in the premises than that specified in the schedule, which was designed to define and describe the property of the bankrupt conveyed to the assignee. This, therefore, was all the assignee had to convey, and all he supposed he had to convey, and he did convey this by the deed to Stephens, leaving no residue of title whatever to pass by his subsequent deed to Ford.

      Third Point. It follows that the plaintiff never obtained any title from the assignee in bankruptcy ; that she wrongfully, and without color of title, invaded the lawful possession of the defendants, and that the defendants are entitled to recover possession (Smith v. Lorillard, 10 John. 338; Jackson v. Harder, 4 John. 202; Jackson v. Graham, 3 Cai. 188; Jackson v. Bush, 10 John. 223).
    . Fourth Point. The judgment of the Special Term should be affirmed, with costs.
   By the Court.—Curtis, J.

The learned judge be: fore whom the action was tried, has found that the plaintiff had been in the actual possession of the premises for three years immediately next preceding the commencement of this action, and that her possession was such as to entitle her to maintain this action. The suit is in the nature of a proceeding to compel the determination of claims to real property, pursuant to the provisions of the Revised Statutes, but prosecuted as an action, under the 449th section of the Code. It is consequently governed by the same rules as other actions, and the same defences to defeat the right to such relief may be set up (Peck v. Brown, 26 How. 360 ; Barnard v. Simms, 42 Barb. 304 ; Hammond v. Tillston, 18 Barb. 332).

The cause was tried at Special Term by both parties, on the assumption that the defendants had properly pleaded their title, and on that assumption was there disposed of. The case comes up for review on the judgment roll and exceptions only.

The first question that arises is, whether the plaintiff has established any title to the premises. She claims title by a deed from the official assignee in bankruptcy executed for a nominal consideration, in October, 1860, purporting to convey all the premises, including the ten lots in question, conveyed by Alexander M. Bruer to Duncan S. Dyson, July 7, 1835. Chief Justice Robertson held that the true construction to be given to the deeds under which D. S. Dyson had an interest which passed to the assignee in bankruptcy was, that thereunder the only estate he had, which was capable of passing to an assignee in bankruptcy, was an undivided one-third part (Ford v. Belmont, 7 Rob. 110); and I agree with the judge before whom this cause was tried at Special Term, that this view is substantially the ground taken in the General Term opinion (7 Robt. 522).

It seems to be determined in this court by the construction already given to the effect of these instruments, and of the assignment to the assignee in bankruptcy by D. S. Dyson, that only an undivided third part passed to the assignee, and there appears no reason for putting a different construction on the instruments and the effect of the proceedings in bankruptcy.

This individual one-third of the premises conveyed to D. S. Dyson, including the ten lots in question, having become vested in the assignee in bankruptcy, was by him conveyed, in August, 1846, to one Gordon L. Ford, in fee simple; consequently, all the estate of the assignee in bankruptcy passed to him, and there was nothing left for the assignee to convey to the plaintiff by his deed to her in 1860.

The next and remaining question is, whether the defendants, Belmont and Home, as surviving trustees of Caroline S. Belmont, are entitled to recover the possession of these ten lots.

The plaintiff shows a possession for three years immediately preceding the commencement of this suit.

From 1861 to 1865 the lots in question were in the actual occupation of one McNulty, who had charge of the premises on behalf of the trustees of Mrs. Belmont, and previous to that they were in the possession and occupation of lessees, whose possession and occupation was also through the trustees of Mrs. Belmont, and enured to their benefit. It had been conveyed to these trustees in November, 1847, for the purposes of a marriage settlement.

The plaintiff by her action seeks that the court shall upon the strength of her three-years’ possession, defeat the prior possessory title of the trustees.

Down to the trial of this cause, the defendant Belmont had paid the taxes on the lots.

The trustees had a long-continued possession under claim of title to the entire interests in the premises, and this possession was immediately-prior to the possession of the plaintiff. This prior possession of the trustees had never been abandoned, and whether it was short of twenty years or not, it was of such a character that it must prevail over the subsequent possession of less than twenty years (Smith v. Lorillard, 10 J. R. 356; Jackson v. Livingston, 7 Cow. 636).

The judgment appealed from should be affirmed, with costs.


source: Caselaw Access Project

author: By the Court.—Freedman, J.

license: Public Domain

text:
    HENRY WISSER, Plaintiff and Appellant, v. JAMES O’BRIEN, Sheriff, etc., Defendant and Respondent.
    I. Assumption on Tkial, Effect of.—Theoby on "which Tbial
    "WAS HAD.
    1. Where on the trial a certain fact was assumed to be either immaterial or, if material, too incontrovertible to be disputed, a judgment will not be reversed on the ground that the fact was material, and that it had not been proved.
    1. Assumption presumed.

    When no motion is made, at the close of plaintiff's case, to dismiss the complaint on ground that the fact has not been proved, and the fact is of such character that proof of it might be supplied, and the defendant goes into evidence, the assumption will be presumed.

      II. Judgment sustained, although ground on which it was
    based erroneous.—Qualification of Rule as to.
    1. Although, if a judgment or order or ruling is right in point of law, the fact that it cannot be sustained on the theory of law on which the court below proceeded, is no reason for reversing it, yet that rule is applied only when all'the facts are before the court, and from them it appears that the correction of the theoretical error is not at all important to a correct decision of the question involved.
    1. Thus it will not he applied either when the erroneous view of the law expressed by the court below induced the appellant to abstain from offering- evidence which would have been material to him under the view taken by the appellate court, or wJiere it appears that a material fact was without objection assumed to exist.
    III. Mortgage Chattel.
    1. BefUing, when not necessa/ry.

    1. When it has been once refiled within the thirty days next preceding the expiration of the first year, no further refiling is necessary.
    2. Payable on Demand.

    1. Can an action be maintained by the mortgagee against the sheriff, for taking the mortgaged property under an execution against the mortgagor, without a previous demand by the mortgagee on the mortgagor ? Query.
    2. Has such a mortgagor a leviable interest in the mortgaged property ? Query.
    Before Freedman and Curtis, JJ.

      Decided November 30, 1872.
    The action was brought as an action of claim and delivery under the Code. It was brought by plaintiff, as mortgagee of chattels, against the defendant, who seized them under an execution against the mortgagor.
    The defendant claimed that at the time of the seizure the mortgagor had a leviable interest in the property.
    The mortgage was payable on demand. It was executed May 4th, 1867 ; filed May 5th, 1867; refiled May 4th, 1868, and May 8th, 1869.
    The defendant seized the property under an execution issued August 5th, 1869, on a judgment against the mortgagor of December 4th, 1867.
    Upon the trial evidence was given on both sides, and at its close the court was requested by plaintiff’s counsel to direct a verdict for the plaintiff, which motion the court denied, and to which ruling plaintiff’s counsel duly excepted.
    The court, thereupon, on motion of defendant’s counsel, directed a verdict for defendant, to which direction plaintiff’s counsel duly excepted.
    Upon the verdict, rendered as directed, judgment was entered, dismissing plaintiff’s complaint upon the merits, and for defendant’s costs, and the plaintiff appealed.

      Joseph M. Dixon, counsel for appellant.

      A. J. Vanderpoel, counsel for respondent.
   By the Court.—Freedman, J.

It may well be that the doctrine of Brown v. Cook, 3 E. D. Smith, 123, and Howland v. Willett, 3 Sandf. 607, to the effect, that where a chattel mortgage is payable on demand, it is payable'immediately, and no demand of payment is necessary, before the mortgagee can maintain an action against the sheriff for taking the mortgaged property under an execution against the mortgagor, has been shaken by the decisions of the Court of Appeals in Hull v. Carnley, 1 Kern. 501; Hull y. Carnley, executrix, 17 N. Y. 202; Groulett v. Asseler, 22 N. Y. 225; Manning v. Monahan, 23 N. Y. 539, and S. C. 28 N. Y. 585, by which that tribunal, as the court of last resort, settled the law of this State to be that the mortgagor’s possessory right for a definite period in the chattels mortgaged, coupled with his right of redemption, constitutes an interest which is liable to levy and sale on execution. But whether such really is or is not the indirect result of the last-named decisions, and whether a mortgagor’s possessory right under a chattel mortgage payable on demand, and therefore payable immediately, does or does not constitute a leviable interest within the true meaning of these decisions, are questions which we do not deem necessary to determine here.

The objection, that plaintiff failed to show a demand upon the mortgagor, does not seem to have been raised below. At the close of plaintiff’s evidence, no motion was made for a non-suit on the ground that plaintiff had not shown enough to maintain the action. The proof showed that a written demand for the return of the goods had been made by plaintiff upon the sheriff, prior to the commencement of the action. But as to a demand upon the mortgagor, the case appears to have been tried upon the assumption by the court as well as the counsel for the respective parties, either that such demand was not necessary, or, if material, that it was duly made, and that such fact was too incontrovertible to be disputed. Under these circumstances, and in view of the fact that appellant’s counsel has strenuously insisted—and we are inclined to believe—that, if the obj ection had been raised, it could and would have been readily obviated by proof, the ends of justice require that we should not entertain the objection, if it is one, on appeal for the first time. Although it is true that, if a judgment or order or ruling is right in point of law, the fact that it cannot be sustained upon the theory' of law on which the court below proceeded, is no reason for reversing it, yet it is equally true that that rule is enforced only when all the facts are before the court, and from them it appears that the correction of the theoretical error is not at all important to a correct decision of the question involved. Whenever there is reason to believe that an erroneous view of the law, expressed and enforced by the court below, induced the appellant to abstain from offering evidence, which would have been material to him under the view taken by the appellate court, or whenever it is made to appear that a material fact was assumed in the court below to exist, without any objection on account of the want of evidence thereof, the appellate court, in either case, will decline to enforce the rule referred to.

The only question, therefore, remaining for our consideration is, whether or not plaintiff’s mortgage, which has not "been impeached as fraudulent against creditors, ceased to "be valid against the execution creditors represented by the defendant, by reason of plaintiff’s omission to refile a true copy pursuant to the requirements of the statute. The evidence shows that the mortgage, which was payable on demand, was executed on the 4th of May, 1867 ; that the following day a copy of it was duly filed; that a copy was refiled on the 4th of May, 1868 ; that still another copy was filed on the 8th of May, 1869, and that the sheriff seized the property under an execution issued on the 5th of August, 1869, on a judgment-obtained against the mortgagor on the 4th of December, 1867. Consequently, in directing a verdict against the plaintiff on the merits, no objection having been raised on account of the absence of proof above referred to, Justice McCttnn, who presided at the trial, must have held, as appellant’s counsel insisted he did hold, that the refiling of the 8th of May, 1869, was too late, and for that reason was no compliance with the requirements of the statute. But as the .commissioners of appeals have since held in Newell v. Warren, 44 N. Y. 244, that a mortgage once refiled within thirty days next preceding the expiration of the first year continues valid without further refiling in subsequent years, the said ruling constituted error, for which the judgment must be reversed, and a new trial granted, with costs to appellant to abide the event.


text:
    MONTGOMERY QUEEN, Plaintiff and Appellant, v. THE SECOND AVENUE RAILROAD CO., Defendant and Respondent.
    I. Corporations.—Railroads. —Contracts with, Powers of Officers, etc., to make.
    1. The president and one of the directors (although constituting a majority of the executive committee) have no authority to make a 'contract with A., that he, except for a good and sufficient cause shown for his removal, should have the perma/nent and supreme control in the management of the company’s road and interests, nor can the executive committee make such a contract unless, perhaps, the by-laws, or the board of directors under the authority of a by-law, confer such authority.
    Semble. Neither the board of directors, nor the corporation itself, could make such a contract.
    II. Contracts.—Substitution of one for another.
    1. When, after the attempt to enter into such contract between A. and the president and one of the directors, A. became a director (and therefore presumed to have knowledge of the by-laws, which prescribed that one of the principal officers should be a vice-president, who should be annually elected, and should hold his office at the pleasure of the board of directors, and until his successor should be duly chosen, unless sooner removed by the board. And also prescribed, that there should be a superintendent, who should have, subject to the direction of the president, the special superintendence of the track, cars, repairs, and running of the road, etc.), and was afterwards elected vice-president, at a meeting of the directors, at which meeting the board of directors passed a resolution as follows : “ Resolved, That the vice-president perform the duties of general superintendent of the road, with the right to employ . . . ; and that the salary of the vice-president be $6,000 per annum ; ” and after the passage of such resolution, entered upon the discharge of the powers and duties imposed on the vice-president by that resolution and the by-laws, and for the salary fixed thereby, he must be deemed to have acquiesced in said action of the board of directors, and by such acquiescence to have entered into a new contract, the terms of which were embodied in the resolution. This new contract took the place of the former one so far as it was inconsistent with the provisions of the former one. By this resolution, the duties which were performed by A., and the salary therefor, were attached to and made incidents of the office of vice-president, and could only be exercised, and received, by the occupant of that office, and by him only so long as he filled the office; under the by-laws the occupant of that office was removable by the board of directors at pleasure ; when the board exercised that power, the right of the occupant to exercise the duties and receive the salary incident to the office necessarily fell with his removal. When A. accepted the office of vice-president, he took it cum onere; as such officer, he was bound to fulfil the duties of the office, and entitled to receive the salary, and was also subject to removal at pleasure, and to all the incidents of such removal, among them the cessation of salary at the moment of removal.
    Before Barbour, Oh. J., Monell and Freedman, JJ.

      Decided November 30, 1872.
    This is an appeal from a judgment entered in favor of the defendant against the plaintiff on a dismissal of the complaint on the trial.
    The motion to dismiss was made upon the pleadings, the admissions made by plaintiff’s counsel in his opening to the jury, and upon .documentary evidence read by the counsel for the respective parties in the course of their arguments.
    From these sources it was made to appear that the plaintiff, in the month of December, 1868, was requested by the officers of the defendant to investigate into, and ascertain, the condition and affairs of defendant’s road; that he was a man noted for his successful management of horse railroads ; that he made such investigation, and reported the result thereof. That thereupon, in February or March, 1869, an arrangement was entered into between plaintiff on the one side, and Mr. Wadsworth, the president, and Mr. Kent, one of the directors of the road, who together constituted a majority of the executive committee of the road, on the other side, whereby it was agreed, among other things, that the plaintiff, except for a good and sufficient cause shown for his removal, should have the permanent and supreme control in the management of the company’s road and interests, at a salary of six thousand dollars per year, and an increase thereof in proportion to a certain increase of the company’s profits. That thereupon, to wit, March 2d, 1869, plaintiff was elected a director of the company, to fill a vacancy then existing ; that at the annual meeting of stockholders, held April 5th, 1869, he was elected a director for a full term, and that at a meeting of the board of directors, held the next day, he was elected vice-president of the company. The bylaws, under which such elections were had, contained the following provisions:
    Section 4 provided, that the principal officers of the company should be a president, a vice-president, a treasurer, a secretary, and a superintendent.
    Section 5 provided, that the president, vice-president, treasurer, secretary, and superintendent of the company, should be annually elected * * *
    and should hold their offices at the pleasure of the Board of Directors, and until their successors should be duly chosen, unless sooner removed by the board.
    Section 10 of the by-laws was in these words: “There shall be a vice-president, who shall perform the duties of the president, in case of his absence or inability to act, and if that office be vacant, he shall act as president until a successor in said office is chosen.”
    Section 13 of the by-laws, also read in evidence, provided, that the superintendent should have, subject to the direction of the president, the special superintendence of the track and cars, and the repairs and running of the road, and a general supervision of the depot, stables, and workshops, and over all the conductors, starters, drivers, hostlers, mechanics, and laborers in the company’s employ : it also imposed upon him other duties and powers necessary to carry out what evidently were the main objects of the office.
    It further appeared that the arrangement which had been entered into between Mr. Wadsworth, Mr. Kent, and the plaintiff, was imparted to the Board of Directors at the same meeting, at which plaintiff was elected vice-president, and that thereupon the following resolution was passed by the board, viz. :
    Resolved, That the vice-president perform the duties of general superintendent of the road, with the right to employ Mr. John W. Smith, the former superintendent, or such other person as he may see fit in his place, to assist him until the further action of the board ; and the salary of the vice-president be six thousand dollars per annum.
    It also appeared that on the day of the passage of that resolution, to wit, April 6,1869, plaintiff assumed the management of the road, and that he continued in such management and in the receipt of a salary at the rate of six thousand dollars per annum, until July 6, 1870, when he was removed from such management, and also from the vice-presidency, by a vote of the Board of Directors, without any cause being assigned for such a removal.

      Aug. Sherman, attorney, and Ira Shafer, of counsel, for appellant.

      John H. Platt, attorney, John Slosson and John E. Burrill, of counsel, for respondent.
   By the Court.—Freedman, J.

Upon this state of facts, plaintiff’s counsel conceded that, if the original arrangement as to plaintiff’s employment was for a longer term than one year, it was void under the statute of frauds. But he claimed that it was a good contract for a year at all events, and being good for that period, and plaintiff having gone on under it not only for that length of time, but also for part of another year, the presumption of law is that the second year was upon the same terms as the first, and that defendant was "bound to keep Mm during the whole of the second year, unless there was cause for his discharge.

The said counsel also conceded that, according to the strict language of section 5 of the by-laws, the Board of Directors possessed the power to remove any officer of the company with or without cause, and that, if the plaintiff occupied simply the character of vice-president, if his relation to the company was simply that of vice-president, the board had the right, power, and authority to remove Mm at any moment with or without cause. But he claimed that the plaintiff, when he assumed control, did it as manager and superintendent entirely aside from his office and character as vice-president, and that he was simply clothed with the character and authority of that officer, for the purpose of being more effectually enabled to carry out his general plans as managing superintendent.

The said counsel finally conceded that if the resolution of the 6th of April, 1869, cut off all prior negotiations, and plaintiff’s actions were based on that resolution, the plaintiff would be compelled to stand or fall in Ms character as vice-president or superintendent. But he insisted that the said resolution was consistent with the prior arrangement, and passed in furtherance thereof ; that the said prior arrangement constituted the real contract between plaintiff and defendant, and that, as such a contract, to run for not more than one year, was not required by any statute or rule of law to be in writing, it could be proved by parol evidence, and should be construed with reference to the resolution and the intent of the parties who made it, and should at least be submitted to the jury as a question of fact. In this view of the case, it was claimed that plaintiff had an unquestionable right to go to the jury as to his right to recover the balance of his salary for the second year, amounting to $4,500.

This view, however, rests wholly upon the assumption that the arrangement between Mr. Wadsworth, Mr. Kent, and the plaintiff was a contract binding upon the defendant—an assumption which further investigation shows to be wholly without foundation.

The defendant is a corporation, and, as such, is incapable of doing any act, except through agents. The acts of such agents, in order to be binding upon the corporation, must either be done in the line of such agency, and within the limits of the authority conferred on them, or be ratified by the corporation.

It is one of the fundamental conditions into which the corporators enter by becoming members of the corporation, that the corporate concern shall be managed in the manner prescribed by the act of incorporation, and the by-laws enacted in accordance therewith. The duties and powers of such officers or agents as the corporation may, by its by-laws, recognize, are generally regulated by such by-laws. And as there is no grant of power in the mere name by which any such officer or agent may be designated, all persons dealing with him are chargeable with notice of his authority, and of the limitations and restrictions upon it contained in the act of incorporation and by-laws.

Mow, the arrangement claimed by plaintiff to have been entered into between himself, Mr. Wadsworth, and Mr. Kent, was, that he, the said plaintiff, except for a good and sufficient cause shown for his removal, should have the permanent and supreme control in the management of said company’s road and interests. That the making of such a contract was beyond the scope of the authority of Mr. Wadsworth as president, and even beyond the powers of the executive committee, was'shown by those sections of the by-laws which defined and prescribed the powers and duties of the president, the superintendent and the executive committee. A fair and impartial interpretation of these sections admits of no other conclusion. Indeed it may well be doubted whether the entire board of directors, or even the corporation itself, could have invested the plaintiff with such permanent and supreme control as the literal reading of plaintiff’s statement of the original arrangement calls for, and which, if conferred, would have worked, in the one case, an abdication, and, in the other, an abolition, of the board of directors. Even if we assume, therefore, that the said original arrangement amounted to a contract between the executive committee and the plaintiff, such contract, under that section of the bylaws which required the executive committee to keep regular minutes to be submitted to the board of directors for approval at the next meeting of the board, could only have been an ad interim contract, made subject to the ratification of the board, and which was liable to be modified or superseded by the action of the board. And when, therefore, we find that the matter was, on the 6th of April, 1869, laid before the board, of which' plaintiff was a member, and that the board acted upon it by the passage of the resolution referred to—when we find, that up to the passage of that resolution the powers and duties of vice-president and of superintendent had been entirely different and distinct ; that the office of vice-president, except in case of the inability of the president to perform his functions, had so far been a comparatively unimportant one, while the powers and duties of the superintendent had been those of an active manager, and had included, among other things, subject only to the supervisory powers of the president, the special superintendence of the track and cars, and the repairs and running of the road, and a general supervision of the depot, stables, and workshops, and over all the conductors, starters, drivers, hostlers, mechanics, and laborers in the company’s employ,—when we find, that by the resolution referred to the said powers ■ and duties of the superintendent were transferred to' the plaintiff as vice-president, and in consideration thereof a salary of six thousand dollars attached to the office of vice-president,—and when, in addition to all this, we find that the plaintiff, who by that time had been a director for five weeks, and presumptively was fully conversant with the by-laws, did not object upon the ground of the incomprehensiveness or insufficiency of the resolution, or in any wise question the determination made by the board ; but that, on the contrary, he thereupon entered upon the discharge of the powers and duties imposed upon him by said resolution and the by-laws, and, for the salary fixed by the same resolution, continued so to perform duty for a period of fifteen months without objection or question,— we can come to no other conclusion than that plaintiff acquiesced in the action of the board of directors, and that, so far as the passage of said resolution and plaintiff’s acquiescence therein constituted a new contract, it was one that was inconsistent with the prior arrangement entered into between plaintiff and the executive committee. Being inconsistent, such new contract became, at least to the extent of its inconsistency, a substitute for the prior arrangement.

Proin this it follows that the learned judge below correctly held, that under the resolution of April 6th, 1869, plaintiff1 was an officer of the company, and that his tenure of office was subject to the fifth section of the bylaws, and consequently terminable at the pleasure of the board.

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


author: By the Court.—Sedgwick, J.

text:
    THE MERCHANTS’ EXCHANGE NATIONAL BANK OF MEMPHIS, Plaintiff and Appellant, v. ABRAHAM H. CARDOZO and Another, Defendants and Respondents.
    I. Acceptance of Bill of Exchange.
    1. Promise to accept, when it sufficiently complies with § 8, title 3, chap. 4, part 3, R. S. of N. Y, to constitute an actual acceptance.

    1. A letter containing the following clauses—“ We can at present only authorize you to draw at sight for $5,000, at the very outside, and then do not make any more sight drafts until you hear from us again.” “ Your bank at Memphis has made inquiries about us, of our bank here. This we got direct from the cashier, and he told us he was satisfied they would take any bills you might wish to make ”—is a sufficient eompliam.ee.

    • 1 And this, although the letter opens with an acknowledgment of the receipt of a letter from the writer’s correspondent, and before the clause of authorization speaks of being at a loss what to say about making cash advances, of the condition of the money market, of their funds being pretty well tied up, and then says, “We were in hopes that you would be able to negotiate time bills, say, at any rate, thirty days, which would enable us to get the cotton here, at least before the draft matured.”

      a. Such a letter contains no restriction on the authority to draw for $5,000, nor does it call for a single draft, nor is it merely an authority to draw against Mis of lading for cotton, nor an authority contingent on an inability to negotiate time bills.
    3. Sight Bills come within "the Statute.
    II. Corporation.—Evidence of its Existence, what sufficient.
    1. A copy of the certificate of its organization, certified to by the Comptroller of the Currency, as required by act of Congress under which it was incorporated, and the certificate of the Comptroller, authorizing it to commence business, together with other facts tending to show it had acted as a corporation under the certificate, is sufficient.
    HI. Certificate of Organization, General Objection to.
    1. Such objection raises only the questions of materiality, relevancy, and competency.
    3. Such certificate is material, relevant, and competent, on the issue, as to plaintiff’s corporate existence.
    IF. National Banks. —Eighteenth Section of Act of Congress CREATING THEM.—COMPLIANCE WITH, AS TO PUBLISHING CERTIFICATE of Comptroller of Currency.
    1. It is not necessary, to enable a national bank to maintain an action, to show a compliance with this section, as to publication.
    V. Evidence.—Letters and Papers referred to in a Document read in Evidence.
    1. Not always necessary for the party reading the document, to produce and read the letters, etc., referred to in it.
    In this case, such production held unnecessary.
    Before Monbll, Curtis, and Sedgwick, JJ.

      Decided November 30, 1872.
    TMs action was "brought to recover of and against defendants the amounts of two drafts; one for $250, dated Memphis, Tenn., December 8, 1868, drawn by W. S. Bearden on the defendants at sight, and the other for $135, dated Memphis, December 9, 1868, drawn by W. S. Bearden, agent, on defendants at sight. The drafts were endorsed and delivered by Bearden to the plaintiff. These drafts had never been accepted by defendants, but plaintiff claimed that before the drafts were drawn, they had promised in writing to accept them, and that they had received the drafts and paid value therefor, relying on defendants’ promise.
    This promise to accept was said to be contained in the following letter:
    “ New York, Nov. 6th, 1868.
    “Mr.W. S. Bearden, Paducah, Ky.
    “ Dear Sir :—Tour favor of the 31st ultimo is at hand, and contents had our attention. We are pleased to see that you are in such good spirits, and that your prospects are so good, but are at a loss what to say about making cash advances at present. Our money market is in a horrible position, and none to be had. Parties are now paying from a J to | per cent, per day for money. The banks are not doing anything, and our own funds are pretty well tied up in old tobacco, which we cannot sell at present. We were in hopes that you would "be able to negotiate time bills, say, at any rate, 30 days, which would enable us to get the cotton here at least before the draft matured. We can, at present, only authorize you to draw at sight for five thousand dollars, at the very outside, and then do not make any more sight drafts until you hear from us again, as, if our market keeps this way, we cannot tell what to do, and do not wish to put ourselves in a condition to force sales.
    “ Tour bank at Memphis has made inquiries about us, of our bank here. This we got direct from the cashier, and he told us he was satisfied that they would take any bills you might wish to make. We are desirous of doing something about the Perkins matter, and, if you or Mr. Turner think that you can make the amount by suing, would do so at once. We enclose you a letter from Col. Martin, in reference to this matter,- and wish you would look fully into the matter, and let us know what can be done. Probably Mr. Perkins may offer to make some settlement, and we would willingly make a little loss to have it closed at once. Hoping soon to hear from you again, we are
    ‘ ‘ Tours respectfully,
    “ A. H. Cardozo & Co.”
    The above facts fully appeared on the trial.
    The plaintiff on the trial read in evidence, under defendants’ objection, a copy of the organization certificate of plaintiff, dated June 24th, 1865, certified by the Comptroller of the Currency, as required by the act of Congress, under which the plaintiff was incorporated, and the certificate of the Comptroller authorizing plaintiff to commence the business of banking, dated July 8th, 1865, and proved some facts tending to show that it had acted as a corporation under this certificate.
    "Upon the plaintiff resting his case, defendants moved the court to dismiss the complaint, on the plaintiff’s own evidence, on the grounds :
    First. That the plaintiff had not established legally, for the purposes of this action, its corporate existence, nor its corporate right to maintain this action, within either the act of Congress or the statutes of this State.
    Second. That the eighteenth section of the act of Congress, creating these national banks, makes it the duty of the association to cause the certificate of the Comptroller of the Currency authorizing banks to commence banking business under that act, to be published in a newspaper in the city or county where the association is located for at least sixty days next after the issuing thereof, and there is no proof here that- there has been any compliance with this provision of the act of Congress.
    Third. That it was the duty of the plaintiff to introduce into his case the letter of Mr. Bearden, of 31st October, 1868, which is referred to in the letter of the defendants, of November 6th, 1868, or prove its contents.
    The court dismissed the complaint, upon the grounds, among others, that the letter dated November 6th, 1868, from the defendants to W. S. Bearden, was not an unconditional promise to accept, within the meaning of the statute (3 Revised Statutes, 5th edition, page 68, section 8, part 2, chapter 4, title 2).

    To which ruling and decision of the court dismissing the complaint, plaintiff then and there duly excepted.
    Thereafter judgment was entered against the plaintiff in favor of the defendants, that the defendants recover of and against the plaintiff* their costs and disbursements.
    From the judgment plaintiff appeals to the General Term.
    Prichard, Choate & Smith, attorneys, and Wm. C. Choate, of counsel for appellant.

      Gratz Nathan, attorney, and of counsel for respondents.
   By the Court.—Sedgwick, J.

The ground specifically stated "by the court below, for dismissing the complaint, was, that the letter of November 6, 1868, from the defendants to their agent, W. S. Bearden, was not an unconditional promise to accept, within the meaning of section 8, p. 768 of 2 R S. On the trial, no part of the letter was pointed to as making a condition.

The express authority to draw is equivalent to a promise to accept (Barney v. Worthington, 37 N Y. R. 116; Johnson v. Clark, 39 N. Y. R. 217). On the face of the letter no condition or qualification was annexed to the authority given to draw.

The argument for the respondents is, that the letter, "by its contents, appeared-to be an answer to a previous letter written to defendants by Bearden. Whatever Bear-den’s letter may have had in it by way of request, or promise, or representation, the letter of defendants none the less contained an unconditional authority to him to draw. Nor does it appear that Bearden’s letter had referred to the subject of authorizing him to draw on the defendants.

Another suggestion is, that defendants’ letter gave only a restriction or limitation to some authority theretofore given, the nature of which does not fully appear, and did not purport to give an authority for the first time. This is "based upon the words “We can at present only authorize you to draw at sight for $5,000 at the very outside,” etc.

This only refers to an authority given at the time of writing, and has no intimation that any authority was in existence "before the writing.

The only restriction is upon a sum "beyond $5,000. Up to that amount, there was no restriction.

It is further said that the letter manifestly referred to a draft of a different character from those in suit—that is, to a single draft of $5,000, and not to several drafts, which in the aggregate were not to exceed $5,000.

The letter does not support this view. It says in the next sentence hut one to that giving the authority, that the cashier of Bearden’s Bank at Memphis had “ told “us he was satisfied they would take any bills you “might wish to make.” The defendants evidently meant to authorize the drawing of more than one bill. It is also argued, that, from the letter, it must have appeared that Bearden was only to draw bills against shipments of cotton for advances on the same. The last extract given from the letter is at variance with this. By that, it appears that defendants expected that Bear-den would make the bills, and that his bank would take them, there being no reference to their being accompanied by bills of lading for cotton, or by anything of that nature.

Again, so far from Bearden’s authority to draw sight bills being in the letter made contingent upon Bear-den’s being unable to “negotiate time bills,” it seems to have been the reverse. The defendants wrote, “We had hopes that you could negotiate time bills; but as you could not do that, we authorize you to draw sight bills.”

The defendants again say, that the authority, if equivalent to an unconditional promise, is not within the statute, because the bills were on sight, and were to be presented only for payment, but not for acceptance ; and that, as there was to be no acceptance, the letter could not be construed to be a promise to accept. We think this is erroneous. Suppose Bearden had procured the plaintiffs to discount these bills in Memphis, the bills at the time having thereon written an acceptance by the defendants, payable in Mew York. The defendants would be liable on that acceptance. Or, it was possible that the bills, by defendants’ consent, might have been presented for acceptance before payment was demanded, and in case of acceptance by them, they would be liable on that.

The respondents, the defendants below, claimed that the complaint should be dismissed on the ground ‘£ that the plaintiff has not established legally, for the purposes of this action, its corporate existence nor its corporate right to maintain the action, either within the act of Congress, or the statutes of this State.” This was, in substance, that no evidence had been given upon which to go to the jury, on the issue of the existence of the plaintiff, or the corporation described in the complaint.

There certainly was some evidence as to whether or not there was such a corporation as the plaintiff. A certified copy of the certificate of its organization was put in evidence, under objection.

The objection was general in form, and at the most could raise only the question of the materiality, relevancy, and competency of the proposed proof. There was no objection that the certificate was not genuine, or that its genuineness was not proven. On the contrary, it is stated in the case, as a fact, that the copy put in evidence was certified by the Comptroller of the Currency, as required by the act of Congress. This evidence was relevant and material to the issue, and, in connection with other facts, tending to show that the plaintiff had acted as a corporation under the certificate, was sufficient to take the case to the jury.

The second ground stated by defendants’ counsel for a dismissal of the complaint was, that there was no proof that there had been a compliance with that part of the 18th section of the act of Congress, creating National Banks, which made it the duty of this association to cause the certificate of the Comptroller of the Currency, referred to in the section, to be published in a newspaper, etc.

The objection was not material, for the section does not say that the corporation is not to commence business, or to be deemed to be organized, until such publication. On the contrary, the certificate must be, that the association has complied with all the provisions of the act required to be complied with, before being entitled to commence the business of banking under the act.

The third and last ground taken by the defendants’ counsel for dismissing the complaint was, that it was the duty of the plaintiff to introduce into his case the letter of Mr. Bearden, referred to in the letter authorizing him to draw, or prove its contents. We have seen that the plaintiff had given proof of an unconditional authority to Bearden to draw, and therefore he was not called upon to produce anything further on that point.

The ground, among others, on which the court dismissed the complaint, and which was the only ground specified by the court, as has been before stated, was the one we examined in the first instance.

After reviewing all the grounds, both that stated by the court, and those by the defendants’ counsel, we come to the conclusion that the complaint should not have been dismissed.

A new trial is therefore ordered, with costs to the appellant to abide the event.


author: By the Court.-—Sedgwick, J.

text:
    GRENVILLE P. CLAPP, Plaintiff and Appellant, v. JOHN E. DEVLIN, Defendant and Respondent.
    I. Slakdbb.
    1. Privileged communication, principle concerning.

    1. Words used by one in the conduct of his own affairs, where his interest is concerned, and in reference to that interest, are privileged.
    1. Application of principle.

    Where one to whom a cargo was consigned, claimed that a part of it had not been delivered, and at interviews with those representing the vessel, respecting payment of the freight, declined to pay the full amount, stating that the captain had robbed the cargo, and he could prove it, the communication is privileged.
    2. Recovery, when, although a communicatioh is privileged.

    1. If the defendant did not speak in good faith, believing the statement to be true, and was chargeable with express malice, the plaintiff can recover.
    1. This question of good faith, etc., must be submitted to the jury, although there is no specific evidence concerning it outside of the train of facts put in evidence in connection with the uttering of the alleged slander.
    2. Malice, express, evidence of.

    The fact that defendant had repeatedly used the words complained of concerning the plaintiff, is evidence of express malice.
    3. Words.—Sense in which used, sometimes proper question for a jury.

    Although the words complained of are evidently not used technically, yet, under some circumstances, it should be left to the jury to determine what the defendant meant.
    1. This principle applied.
    Before Monell, Curtis, and Sedgwick, JJ.

      Decided November 30, 1872.
    This is an action for slander. The complaint alleged that defendant, on the-20th March, 1867, said of plaintiff, “ These nnts ” (being of the cargo of the bark Ellen Dyer, whereof plaintiff was master) “were short; the “captain robbed the cargo, and I can prove it—I mean “ Captain Clapp.” And again on 26th March, said, “Captain Clapp and officers robbed the cargo, and I “can prove it.”
    The answer was: General denial, except as admitted or avoided ; that a controversy arose between the master and the owners of the bark and the defendant, as to the right delivery of cargo owned by and consigned to defendant; that the delivery was short; that defendant was informed, and believed it had been wrongfully taken. In such controversy, and alluding to the short delivery, defendant said, “ Cargo is short; it is no better “than robbery—I consider it no better than robbery.”
    That the words were not spoken publicly, but in defendant’s counting-room to plaintiff and the owners or agents of the bark, and only in regard to the abstraction and short delivery and the freight moneys demanded.
    The issue came on to be tried before the court and a jury. On the trial the following matters, with others, appeared:
    The plaintiff was master of the bark Ellen Dyer, on her voyage from Malaga to New York, about November, 1866. The vessel was chartered by defendant for that voyage, and had a cargo of raisins, almonds, and grapes consigned to the defendant. H. D. and J. U. Brook-man represented the vessel and her owners. On the bark’s arrival at this port, her cargo was discharged, and thereafter J. IT. Brookman called on defendant to settle the charter party. When he first called, defendant claimed that the cargo was short, and said he wanted to look into it. After this, and after the plaintiff had sailed from the port, defendant, at various interviews with J. IT. Brookman in relation to the settlement of the charter party, stated that Captain Clapp had robbed the almonds. Mr. Brookman said, “Mr. Devlin, do you mean to say that Captain Clapp robbed the almonds ? ” To which Devlin replied, ‘ ‘ I mean to say that Captain Clapp robbed the almonds, and I can prove it.” And finally, when J. TJ. Brookman settled the freight, he took the bill, on which there was a statement that the cargo was robbed, and passing it to the defendant, said: “ Mr. Devlin, is that true ? Did Captain Clapp rob that cargo?” The defendant replied, “ He did; and I can prove it.” On another occasion, Henry -D. Brookman called on defendant for the purpose of bringing about a settlement, and defendant said to Mm that the captain had robbed or stolen the cargo, and declined to pay unless his claimed deduction was made. Mr. Henry D. Brookman then said to Mm, “ Mr. Devlin, I would not like to make a charge of that kind against him.” To which defendant answered, “ I c,an prove it.”
    After the plaintiff had rested, defendant’s counsel moved that the complaint be dismissed, which motion was granted.by the court, and an exception taken by plaintiff’s counsel.
    Thereafter judgment was entered, dismissing the complaint, and adjudging that defendant recover his costs of and against plaintiff.
    From this judgment plaintiff appealed to the General Term.

      Goodrich & Wheeler, attorneys, and W. W. Goodrich, of counsel for appellant.

      A. J. Heath, attorney, and Luther R. Marsh, of counsel for respondent.
   By the Court.-—Sedgwick, J.

The words, “I mean to say that Captain Clapp ” (the plaintiff) “ robbed the almonds, and I can prove it,” were used by the defendant in the conduct of his own affairs, where his interest was concerned, and in reference to his interest. They therefore formed a privileged commumcation (Klinck v. Colby, 46 N. Y. R. 433). This was matter of law for the court to decide (Id. 431).

To maintain this action, the plaintiff had to offer some evidence of the existence of malice, beyond the mere falsity of the charge (Lewis v. Chapman, 16 N. Y. R. 373).

The Court of Appeals holds, that, after the court has determined the communication to be privileged, “the question of good faith, belief in the truth of the statement, and the existence of actual value, remains,” and this question is one for the jury (Klinck v. Colby, 46 N. Y. R. p. 431; Lewis v. Chapman, 16 N. Y. R. 375).

The present case does not call for a consideration of whether the plaintiff may rely upon the presumption of innocence, as sufficient on his part to show the falsity of the charge. He gave affirmative testimony as to the falsity of the charge. If the presumption of innocence is not sufficient to take the case to the jury on the point of the falsity of the charge, and there is no testimony offered by the plaintiff as to his innocence, it may be that the court should treat it in the manner that matters of fact in general are treated, as to which no evidence has been offered.

Beyond this, it is clear, under the cases cited, the court must call on the jury to say whether it has been shown that the defendant was actuated by express malice in his use of the words. The court cannot decide this as matter of law against a plaintiff. This is true, if no specific evidence of malice is given, outside of the train of facts put in evidence, in connection with the uttering of the alleged slander. The plaintiff in the present case did give some such specific evidence, when his witnesses testified that the defendant had repeatedly used the words concerning the plaintiff (Root v. Loundes, 6 Hill, 519).

Therefore the court should have allowed the case to go to the jury, on the question of the good faith of the defendant, his belief in the truth of the statement, and the existence of actual malice.

The instruction to the jury would have been that they must find for the defendant, unless the evidence showed that he did not speak in good faith, believing the statement to be true, and that he was chargeable with express malice.

I think the complaint was erroneously dismissed.

The respondent takes the ground, that as the word “robbed” could not have had its technical meaning in the mouth of the defendant, the court may have held that when considered in connection with the business settlement in the course of which it was used, it was intended to only mean and refer to the claim made by the defendant, that the cargo was short, or that the whole of it had not been delivered as required by the bill of lading ; and therefore that the word was not slanderous.

This cannot be sustained. If the word evidently was not used technically, then, in a state of facts like the present, the jury should have been asked to fix what the defendant did mean by it.

At any rate, it is not clear that the defendant meant only to say that the plaintiff was responsible for the cargo being short.

The judgment should be set aside, and a new trial had, with costs to the appellant to abide the event.


text:
    CHARLES H. MALLORY, Plaintiff, v. THE WEST SHORE HUDSON RIVER RAILROAD COMPANY, Defendant.
    The defendant executed and issued a series of bonds of $1,000 each, amounting in the aggregate to $2,000,000, bearing date June 1, 1868, payable June 1, 1888, to U. A. Murdock and William Butler Duncan, or iea/rer, bearing interest payable semi-ann.ually, as provided in interest coupons attached. Upon each of said bonds was a certificate, signed by the said Murdock and Duncan, which stated, among other facts, that the said series of bonds was secured by a first mortgage, which contained a provision, “ihat the principal sum secured by said mortgage shall become due, in case the interest on the bonds remains unpaid for four months The bonds contained no such provision, and did not refer to the said mortgage.
    The plaintiff, being the owner of thirteen of these bonds, and the interest on the same remaining unpaid for a period of four months after the same was due, brings suit on these bonds and seeks to recover the principal of each ; claiming that the same had become due and payable by reason of said provision in said mortgage, and the said certificate of the fact upon said bonds.

      Held, That the plaintiff was not entitled to recover the principal sums named in said bonds, and only entitled to recover the interest remaining unpaid and represented by the coupons. That this provision was not placed in the mortgage to give the several bond-holders actions upon it for the principal of their bonds in case of non-payment of interest, but to give the trustees named in said mortgage (with whom, in trust for the bondholders, the covenant was made) a right of action upon it, for the foreclosure of the mortgage, thus making the mortgage a more complete security to the bond-holders.
    Before Howell, Curtis, and Sedgwick, JJ.

      Decided January 4, 1873.
    Motion for judgment on a verdict subject to the opinion of the court at General Term.
    The facts and points in the case appear fully in the opinion of the court.

      William P. Dixon, for plaintiff.
    Burrill, Davidson & Burrill, for defendant.
   By the Court.—Sedgwick, J.

The complaint alleged that the defendant executed thirteen bonds, by each of which it promised to pay to U. A. Murdock and William Butler Duncan, or bearer, one thousand dollars, on the 1st of June, 1888, and semi-annual interest.

The complaint further alleged “that it was agreed by “ and between the defendants and the said U. A. Mur- “ dock and William Butler Duncan', or whoever should “"be the lawful holders of said "bonds, that in case ‘ ‘ default should be made, for the space of four months, “inthe payment of the semi-annual interest, due or to “become due upon either of said bonds, then, and in “that case, the whole principal sum mentioned in all “and each of said bonds should forthwith become due “ find payable.”

The complaint then stated that the plaintiff was the lawful holder and owner of the bonds; that default had been made for the space of four months in payment of interest, and demanded judgment for the principal sum of the bonds in the aggregate, and interest.

The answer made certain issues on the complaint. At the trial, it appeared that the plaintiff was the holder of thirteen bonds, on which the sum of $16,131.88, principal and interest, was unpaid, and that the interest on them had been in default for more than four months before the action had been begun. The bonds were produced with a certificate signed by U. A. Murdock and W. Butler Duncan, trustees, added to each of them. The plaintiff further gave in evidence a mortgage made to secure payment of the bonds. So much of these instruments as affects this motion will be stated in the course of this opinion. The court directed a verdict for plaintiff in the sum unpaid on the bonds, subject to the opinion of the court at General Term.

The plaintiff should have judgment, if it appear that the defendant has made an agreement, on which the plaintiff has a cause of action, that in case of default in payment of interest, the principal sum of the bonds is to become due. Such an agreement may exist, and refer to, and modify, the tenor of the bonds, although it be stated in an instrument separate from the bonds. It is not important to look at the complaint to see if it states that an agreement was made, on which the plaintiff* may bring an action. If the evidence shows the existence of such an agreement, a slight amendment of the complaint would conform it to the proof.

We proceed to look in the evidence for the agreement on which the plaintiff relies. The bond itself has no agreement as to the consequences of a default in payment of interest.

The next instrument to be considered is the certificate accompanying the bond and made by Murdock and Duncan, as trustees. It certifies that the foregoing bond is one of a series of two thousand bonds, amounting in the aggregate to two millions of dollars, secured by a first mortgage executed by the defendant, and also by the Hudson Biver West Shore Railroad Company, upon certain property, with power of entry and foreclosure in case of default, “and with provision that “the principal sum secured by said mortgage shall “become due, in case the interest on the bonds remains “ unpaid for four months.”

The plaintiff argues that this is a statement made by persons acting for or with the defendant, in the particular matter of the negotiation of the bonds, and that it binds the defendant in favor of the plaintiff who took the bonds, on faith in the statement that the bonds fell due on default of payment of interest, as covenanted in the mortgage.

There might be a case that would call for such a construction, for instance, where the instrument was evidently made to describe the incidents and liabilities of the bonds severally. In this case the certificate refers primarily to the mortgage, and states.that it is a security for the bonds in a mass. The specific part of it now in question is descriptive of the character of that mortgage as a security and not of the bonds themselves, and it should be construed as referring to the object of the mortgage. To properly understand the particular effects of such a provision, it was necessary that the bondholder should go to the mortgage itself. In effect, the certificate referred the holder of the bond to the mortgage. It states that the provision was in a mortgage, which, it may be assumed, the plaintiff knew was not made to him. In such case the plaintiff would be forced to go to the mortgage to see what his individual rights were under an instrument not made with him.

In looking at the mortgage to see if the plaintiff ever gained from any provision in it, an agreement, which would entitle him to bring this action, the first observation is, that the mortgage, and all the covenants in it, are made by and between the defendant and The Hudson River West Shore Railroad Company, as parties of the first part, and U. A. Murdock and W. B. Duncan, as trustees, or parties of the second part. A part of one of the covenants is, that in case default shall be made ££ for the space of four months, in the payment of the semi-annual interest due or to become due upon either “ of said bonds, then, and in said case, the whole princi- ££ pal sum mentioned in all and each of said bonds, shall ££ forthwith become due and payable,” etc. This covenant not having been made with the plaintiff, it must appear' to enable him to bring an action upon it, that it was made to benefit him in that particular way. It must appear that the covenant was made not only to give the trustees a right of action for his benefit, but was made with the trustees to give him a right of action upon it. The language often used by the cases on this subject is, that it must appear that the contract was made for his benefit. As, however, the contract is to be enforced according to the intention of the parties to it, if the parties did not mean that the individual who is to be benefited solely or jointly with others by the operation of the covenant should himself enforce it by action, he cannot by virtue of the covenant bring an action upon it (G-urnsey v. Rogers, 47 N. Y. R. 233; Ricard v. Sanderson, 41 N. Y. 179; Turk v. Ridge, Id. 207; Lawrence v. Fox, 20 N. Y. R. 268; Beers v. Beers, 24 N. Y. R. 187; 1 Chitty Pl. 3 & 4).

First. These words quoted from the mortgage, would by themselves be an agreement, that, in default of payment of interest, each of the bonds referred to should become due (Fellows v. Gilman and others, 4 Wend. 414) so as to give the holder a right of action upon it.

Second. The words do not stand by themselves. They are a part of an instrument with several provisions, and are immediately connected with other words. The sense and meaning of the parties should “be collected ex anteeedentibus and consequentibus, that is “to say, every part of it should be brought into action, “to collect from the whole one uniform and consistent “sense, if that may be done; or, in other words, the con- “ struction must be made upon the entire instrument, 66 and not merely upon disjointed parts of it; the whole “context must be considered in endeavoring to collect “the intention of the parties, although the immediate ‘£ object of inquiry be the meaning of an isolated clause ’ ’ (Broom's L. Max. 514).

Third. The clause in question was left out of the bond. If this intention had been to enable the holder to bring an action on the bond, the usual and direct course would have been to place, the clause in the bond. Therefore, placing it in the mortgage,' suggests an inference that it had some peculiar relation to the object of the mortgage. This became important, only upon the suggestion being confirmed by an inspection of the mortgage.

Fourth. Apart from the general object of securing the payment of the bonds, the mortgage states that it was made to secure the payment of the bonds and “the interest to grow due thereon, equally in proportion to their respective amounts, without preference to the holders of any of said bonds over others, by reason of priority in their issue.” And in executing the power of sale, the trustees are directed to make this equal distribution of the proceeds of sale. If the clause in question meant to permit that, in default of interest, the several bond-holders might bring actions on the bond, a judgment by a diligent bond-holder would or might give him a preference over others, which is at variance with the declared purpose of the mortgage.

As execution on such a judgment could not be levied on the mortgaged property, it may be said that a judgment at law would not disturb an equal distribution under the mortgage. The question then is, did the parties mean, in a mortgage expressly made to secure equal distribution under it, to provide for a priority of the most diligent bond-holders, through judgments that would sweep away all, perhaps, of the property owned by the railroad and not mortgaged? From the mortgage, little if any property of the kind usually owned by railroad corporations, except móney and rights of action, is omitted. Did such a mortgage intend to give a bond-holder the right to absorb, by proceedings on a judgment, the means of going on with the business of the corporation ?

Fifth. The interest clause in the mortgage, is placed in a subdivision wholly (except that clause) devoted to describing, in detail, the powers of the trustees in foreclosing the mortgage. The natural inference is, that it was so placed, because it was specially made with reference to the trustees’ power in that regard. This has peculiar force, when the terms of the power are considered. The mortgage in no other subdivision describes the powers of the trustees to foreclose. By the words, they are only bound to proceed to foreclose “upon the written request of the holder of a majority in amount of such bonds, then outstanding,” and such bonds, as there used, means bonds on which there has been a default on payment of interest. This raises a .doubt in the construction of this instrument, but it strongly shows that the interest clause was inserted with reference to the powers of the trustees under the mortgage, and not with reference to a right of action "by the "bond-holders upon the bonds.

Sixth. The words that have been adduced from the mortgage, and which are used in the complaint, do not stand in a sentence by themselves in the mortgage. The rest of the sentence is, i£ and the lien or encumbrance hereby created, for the security thereof, may be at once enforced.” Then follows the rest of the subdivision, as to the mode in which the security may be at once enforced. This shows the meaning of the parties to be, that, in default in the interest, the principal should fall due, so that the mortgage might be foreclosed for it, as well as for interest. The parties having, by express words, attached a particular consequence to the interest clause, the law presumes they did not intend other consequences to follow. This is by the same principle, by which it is held, that where an instrument contains an express covenant in respect of any subject, no covenants are to be implied in respect to the same subject (Burr v. Stenton, 43 N. Y. R. 464; Vanderkarr v. Vanderkarr, 11 Johns. 122).

Other particulars might be noticed, but if the view taken is correct, sufficient has been said to justify it. The just conclusion, I think, is, that the interest clause was not placed in the mortgage to give the several bond-holders action upon it for the principal of the bonds, but to give the trustees, with whom, in trust for the bond-holders, the covenant was made, a right of action upon it, so that, through foreclosing the mortgage, it might be a more complete security to the bondholders with such a clause, than it would be without it.

The mortgage has been examined only with reference • to the construction of the interest clause. There can be no doubt that the holders of these bonds are left to the hazards that attend "bonds that have no interest clause. We can go no further than to see that the parties agreed that such should be the case.

As the conclusion is that the defendant did not agree that the plaintiff should have an action at law on the bond, as "becoming due, upon default in payment of interest, judgment should be declared for the plaintiff, for the amount of the interest that fell due before the verdict; without the costs of this motion to either party.