text:
    Henry J. Wright, Plaintiff and Respondent, v. Richard A. Storrs, Survivor, &c., and John Paine, Administrator, &c., of D. Burgess, deceased, Defendants and Appellants.
    1. The joinder of a cause of action against a surviving partner, with one against the administrator of the deceased partner for the same debt, must be objected to by demurrer. The defect is waived by answering the complaint.
    2. A surety is not discharged by a contract, made with his assent, between the creditor and principal debtor, although it may operate to extend the time of payment.
    (Before Bosworth. Ch. J., and Pierrepont and Moncrief, J. J.)
    Heard, May 15th;
    decided, June 2d, 1860.
    Appeal by the defendants from a judgment rendered on a trial had in February, 1859, before Mr. Justice Hoffman, without a jury. The action is brought by Henry J. Wright, as plaintiff) against Richard A. Storrs, survivor of Daniel Burgess, (who composed the firm of Daniel Burgess & Company,) and John Paine, administrator, &c., of said Daniel Burgess, to recover a sum alleged to be due to the plaintiff from said firm of D. Burgess & Company.
    The complaint prayed, and the judgment entered declared, that plaintiff recover judgment against Storrs, as such survivor, for $15,344 and interest, and that Paine, as administrator, apply the assets in his hands, as such administrator, to pay the plaintiff and other creditors of said firm, and stated the facts on which the right to such relief was based.
    The Judge found, as facts, that, on and after the 23d of' February, 1856, Burgess and Storrs were partners as booksellers and publishers, under the name of Daniel Burgess & Company.
    That, on the 23d of February, 1856, that firm entered into an agreement of that date with the plaintiff, under which he loaned the firm moneys amounting, with interest to June 14, 1856, to $14,043.62, and entered into and continued in the employment of the firm until it was dissolved by the death of Burgess on the 13th of May, 1856; and that there was due to the plaintiff, at the date of his decision, by reason of said loan, $14,982.45.
    By this contract of February 23,1856, the plaintiff was to loan said firm certain sums of money, as therein stated; and was to enter into and continue in their employment at the rate of $2,500 per annum, when he was to be admitted as a partner, having a one-fifth interest; and said firm thereby, as collateral security for the payment of money to be so loaned, assigned to the plaintiff two publishing contracts theretofore made by them with one David B. Tower, of Boston, together with the stereotype plates in said last two contracts mentioned: one of said two contracts was dated June 7, 1854, whereby Tower conveyed to said firm and their assigns the exclusive right of publishing certain school books therein named, of which Tower was the author: the other of said two contracts is dated November 6, 1855, and conveyed the like exclusive right to publish a certain other book of which Tower (in connection with Benjamin F. Tweed) was the author.
    The Judge also found that on the execution of this agreement, the two contracts between the said firm and Tower, were then delivered to and have since been held by the plaintiff. That the said stereotype plates were then in the possession of one O. A. Alvord, a printer, who afterwards printed books therefrom for said D. Burgess &" Company; and that the plaintiff on the making of the agreement of February 23, 1856, notified Alvord thereof, who gave the plaintiff a receipt to the effect that he had received said plates from, and held the same subject to, the plaintiff’s order.
    The Judge also found that on the 29th of April, 1856, Burgess and Storrs entered into an agreement of that date, whereby Storrs agreed to sell and Burgess to purchase all the interest of the former in the property and effects of said firm; Burgess to pay all of the firm’s debts, and Storrs to allow his name to be used as a partner until the 1st of February, 1858. That the making of this agreement was not known to the plaintiff, or generally until after the death of Burgess, which occurred May 13, 1856: That John Paine was duly appointed Administrator of Burgess, on the 5th of June, 1856.
    That on the 6th of J une, 1856, a contract of that date was made "between Storrs and Paine as such Administrator, which recited the fact that Storrs and Burgess had been partners; and also the said agreement of the 29th of April, 1856; the subsequent death of Burgess and the appointment of Paine as his Administrator; and which contract transferred to Paine, as such Administrator, all the title and interest of Storrs in and to all the property and effects of said firm of Burgess & Company.
    That on the 16th of June, 1856, an agreement was entered into between said Paine as Administrator of the first part, and said David B. Tower and one Cornelius Walker as parties of the second part, which recited that Burgess and Storrs had been partners; the two contracts of June 7, 1854, and November 6, 1855, and set forth copies thereof; also recited and set forth a copy of the agreement of February 23, 1856, and .recited the fact of a loan by the plaintiff under it, of $14,043.62, including interest to June 14, 1856; and also recited the agreement of April 29, 1856, the subsequent death of Burgess and the appointment of Paine as his Administrator, and the agreement of June 6, 1856: an indebtedness of Burgess & Company to said Walker & Tower severally, also to one Levi Tower as assignee of D. B. Tower, by which contract said party of the first part transferred to said parties of the second part, the said publishing contracts subject to the plaintiff’s lien thereon, and the parties of the second part agreed, inter alia, to satisfy the debt due to L. Tower and also covenanted * * * to pay to the plaintiff the said sum of $14,043.62 with interest * * * from June 14, 1856,” and released said party of the first part and said D. Burgess & Company from all claims and liabilities upon or by reason of any of the recited matters.
    That on the 18th of June, 1856, a contract of that date was made between said D. B. Tower and C. Walker of the first part, and O. L. Sanborn, J. H. Bazin and Ezra Carter composing the firm of Sanborn, Carter & Bazin, of the second part, which recited the agreement and facts stated in the said contract of June 16th, 1856, and also the making of that contract, and whereby the parties of the first part transferred to said parties of the second part all their interest in the said two publishing contracts, together with said plates subject to the plaintiff’s lien thereon, and the parties agreed to pay to said Walker and to Levi Tower a specified sum for each copy they should sell of said books, and to pay to the plaintiff the sum of $14,088.16 as follows, viz.: on each 1st of August, a sum equal to the sum to be payable under said contract to Tower & Walker, but not to pay otherwise or faster, on any greater amount to the plaintiff, than by such rates they would become liable to pay to Walker & L. Tower.
    That on the said 18th of June, 1856, a contract of that date was made between the plaintiff of the second part, and said San-born, Carter & Bazin of the first part, which recites the said agreement of June 18th, 1856, and the agreement of February 23d, 1856, the loan by the plaintiff, and that there was due to him June 14th, 1856, $14,038.16; and that Sanborn, Carter & Bazin had succeeded to the rights of D. Burgess & Company in the said two publishing contracts, and declares that they, in consideration of the premises and “ of said Wright permitting them to use said stereotype plates for the purpose of publishing the books,” agree to pay the plaintiff semi-annually in installments, on each 1st of August and February, until the whole $14,038.16 is paid, “ each installment to be equal to the amount of the sums paid for copyright as specified in said contracts, on the copies of said books that shall have been sold during the six months previous to the time of payment of such installments.” It then specifies “ the sum to be paid for copyright on each of said books.” It states that the plaintiff is to retain possession of the two publishing contracts, and to retain his interest in them until fully paid; that Sanborn, Carter & Bazin are to be permitted to use the plates to publish said books, and they agreed to publish the same and use all means to keep the market supplied, and it was declared that they were not to be liable to pay a greater sum to plaintiff than shall accrue or be payable, as therein provided for copyright.
    The Judge also found, that on the same 18th of June, 1856, a contract of that date was made between the plaintiff and said C. Walker, by which the latter agreed, “ as a part of the arrangement and agreement between said Sanborn, Carter & Bazin, and the said Wright, to guaranty to the said Wright that the amounts of the several payments, provided for in said agreement, shall be such that the whole of said principal sum of $14,038.16,” with interest, due and to grow due, shall grow due and be paid in the manner therein provided, in two years and six months from that date.
    He also found, that on the 18th of June, 1856, the plaintiff, by a written order of that date, directed to C. A. Alvord, reciting ■that he had agreed with Sanborn, Carter & Bazin, “that they shall take and use (for publishing) the stereotype plates, * * requested him to please deliver all of said plates to" them.
    That Paine, as Administrator, by an order of the same date, made the like request of Alvord, and that on the receipt of said two orders, and on or about that day he also delivered the plates to them.
    “That all the said agreements or instruments bearing date on the 16th and 18th days of June, 1856, were negotiated and made in the city of Hew York, with the knowledge of all the parties to this action, and without objection from or by any of them.
    “ That at the time said agreements were made, the contracts and plates then held by the plaintiff, as pledgee under and in pursuance of said agreements of February 23d, 1856, were in danger of deteriorating in value and of becoming valueless, or .nearly so; and that it was necessary, in order to preserve their value, to make some arrangement by which they might be placed in the hands of a responsible publisher. And that such arrangement was consequently made in and by the said agreements of the 16th and 18th days of June, 1856, by and with the consent of all the said parties, and which arrangement was thought by the said parties, at the time, to be and was for the undoubted benefit of all interested.”
    And that the sum of $14,043.62, with interest to 8th June, 1859, after allowing all sums received by the plaintiff on account of the same, amounts to $14,982.45.
    And the said Justice also decided, as conclusions of law—

      First. That the defendant Storrs, as surviving partner of said late firm of Daniel Burgess & Company, is personally liable to the plaintiff for said sum of $14,982.45.

      Second. That the said firm of Daniel Burgess & Company was dissolved, as between Burgess and Storrs, on 29th April, 1856, and as between them Burgess then assumed and became individually liable to pay all the debts of the firm, and to protect said Storrs, his estate and representatives, from and against the same. And as between said Burgess and Storrs, Burgess then became, and was individually, the owner of all the property and effects of said firm, subject to the payment of said debts.

      Third. That the said agreements, dated 18th June, 1856, or any or either of them, were not in effect either separately or together, nor did they operate as to the defendants, or either of them, as a payment of the said amount of $14,043.62, and the interest thereon, or any part thereof, except to the extent of the amount of money since received by the plaintiff upon or under the same.

      Fourth. That the plaintiff is not, by, under, or by reason of, the said agreements, dated 18th June, 1856, or any, or either of them, barred of or from, nor has he thereby lost or relinquished, his claim against said defendants, or either of them, or the estate of said Daniel Burgess, deceased, for the said sum of $14,043.62, with interest, or any part thereof.

      Fifth. That the plaintiff is entitled to judgment against the defendant, Richard A. Storrs, as survivor of said Daniel Burgess, deceased, for the said sum of $14,982.45.

      Sixth. That all assets, property, and rights of property, which belonged to said firm of Daniel Burgess & Company, on 29th April, 1856, and were in the control or possession of said Daniel Burgess at the time of his death, and have since come to the possession or control of the defendant, John Paine, as Administrator, are assets of said firm of Daniel Burgess & Company, in the hands of said Administrator, and applicable to the payment of the debts of said firm, (including said debt due to the plaintiff) and said debts of said firm are entitled to priority of payment out of said assets over any individual debts of said Burgess.

      Seventh. That said plaintiff is also entitled to the benefit of the collateral securities which he held for the payment of his debt, until the whole of said debt is paid.

      Eighth. That, after the whole of the plaintiff’s debt ($14,982.45) shall have been paid, the defendant, John Paine, as Administrator as aforesaid, will be entitled to the said collateral securities now held by the plaintiff, or so much thereof as shall then remain.
    To each of which findings and decisions, the defendants made and filed exceptions.
    By the judgment entered, the plaintiff rcovered against Storrs $14,982.45; and it was declared that Paine, as Administrator, should apply the assets mentioned in the sixth conclusion of law, to pay the plaintiff and other creditors of D. Burgess & Company, pro rata.

    From this judgment the defendants appealed.

      Dan Marvin, for appellants.
    I. By and under the agreement of February 23d, 1856, the two contracts of Tower & Walker with D. Burgess & Company, and the stereotype plates of the books therein mentioned, were pledged to the plaintiff, to secure the payment of the money agreed to be loaned, and were put into his actual possession and under his complete control.
    II. By the agreement of April 29th, 1856, the copartnership of D. Burgess & Company was dissolved, and thereupon Burgess became the owner of all the property of the firm, and individually liable for all its debts.
    The bona fides of this transaction is not questioned.
    III. As Administrator of the estate of Burgess, Paine became possessed of, and entitled to represent, all the property of D. Burgess & Company prior to the dissolution, and any interest therein which Storrs might by possibility have retained was transferred to him by the assignment dated June 6th, 1856.
    IV. By the agreement made June 16th, 1856, between Walker & Tower, and Paine, as Administrator, Walker & Tower, for good consideration, assumed, and became primarily liable, as between them and Paine, and Burgess’ estate, to pay the debt due Wright.
    And thereupon the estate of Burgess, and Paine as Administrator, became sureties merely for the payment of such debt.
    V. By the three agreements, dated June 18th, 1856, made between Tower & Walker, Sanborn, Carter & Bazin, and Wright, (the plaintiff,) Sanborn, Carter & Bazin, for good consideration, assumed the payment of, and became primarily liable for, the debt which was due to Wright, the plaintiff, and were recognized by him as primarily liable to pay that debt. And the plaintiff agreed to receive payment thereof in the particular manner specified in the contract between them. And in consideration of such new agreement, Wright (the plaintiff) sold to Sanborn, Carter & Bazin his interest in the contracts pledged and in the stereotype plates.
    This transaction operated as, and effected, a payment of the debt of Burgess & Company to the plaintiff, Wright, so far as the estate or the Administrator of Burgess, or Mr. Storrs, were liable therefor. (The Herkimer Man. & Hyd. Co. v. Small, 2 Hill, 127, [1841;] S. C., 21 Wend., 273; Case v. Boughton, 11 id., 106; Morgan v. Plumb, 9 id., 287; Lansing v. Goelet, in error, 9 Cow., 346.)
    VI. The plaintiff is also barred of any claim against Burgess’ estate, because he has given time to Sanborn, Carter & Bazin, the primary debtors, and has thereby released the estate of Burgess, which stood in the position of a surety. (King v. Baldwin & Fowler, 2 Johns. Ch. R., 554; Pain v. Packard, 13 John. R., 174; King v. Baldwin, 17 id., 384.)
    VII. The rule in respect to a surety is, that the principal contract cannot be varied without his consent, and this rule obtains even where the variance is, or appears to be, for his benefit. The surety has the right to say, non in haec foedera veni.

    VIII. In any event the plaintiff is bound, in the first instance, to exhaust his remedies against the pledged property, and also against Tower & Walker, Sanborn, Carter & Bazin, and upon Walker’s guaranty, before he can come upon the estate of Burgess, or have an action against the administrator, and he can in that case only proceed for the balance or deficiency of his debt which he may not have thus realized. The judgment of the Special Term ought to be reversed.

      E. S. Young, for respondent.
    I. The assets and property which belonged to the firm of Daniel Burgess & Company, on the 29th April, 1856, and which afterwards came into the possession of the defendant Paine, Administrator, &c., are assets of said late firm of Daniel Burgess & Company, in the hands of said Administrator, and the creditors of said firm are entitled to priority of payment out of said assets, over any individual creditors of said Burgess. The firm being insolvent, the assets were converted into a trust fund for the payment of its debts. (3 Kent’s Com., 64, &c., 6th ed; Nicholson v. Leavitt, 4 Sand., 302, 306; Dillon, v. Horn, 5 How. Pr. R., 35; Burtus v. Tisdall, 4 Barb., 571-578, &c.)
    1. The trust arises as soon as the insolvency exists. In this case, the firm being insolvent long prior to the agreement between Burgess and the defendant, Storrs, of 29fch April, they could not, by any arrangement as between themselves, divest the copartnership assets of its character of joint property, so as to deprive the joint creditors of their prior right to the joint funds for the payment of their debts. And further, no notice of dissolution was given; as to persons dealing with them, the firm continued to the time of the decease of Burgess. (Cases above cited; Coll. on Part., §§ 889, 897, 898, &c.)
    II. The arrangement made by the instruments of 16th and 18th June, 1856, for preventing the contracts, publishing rights, &c., held by the plaintiff as collaterals, from becoming valueless, in nowise affects the plaintiff’s claim against the assets of the firm, or the estate of Burgess. The condition of those collaterals was such, that it was requisite, for the protection of all parties interested in them, that something should be done to prevent them from depreciating and becoming valueless. The arrangement was with the concurrence of all parties interested in them, and was thought the best that could be made for all the parties concerned. The plaintiff’s assenting to an arrangement necessary for preserving the value of the collaterals held by him, cannot be held to prejudice his right to proceed against his debtors, or the estate in their hands, for the amount due him. (Story on Bailments, § 329.)
    The arrangement made was highly beneficial to the estate of Burgess & Company, relieving it of debts to the amount of $18,169.57, over and above the amount that should accrue therefrom, towards paying the debt due to the plaintiff. The arrangement was not only with the knowledge of the defendants, but was suggested by the defendant, Paine. The defendants cannot take advantage of an arrangement proposed and desired by themselves, to defeat or prejudice the claim of the plaintiff against them, or the estate, for the debt, for securing which the col-laterals were taken and held by him.
    III. The contracts and plates being held by the plaintiff as collateral security, he had a right to proceed against his debtors personally for the debt, independently of the collaterals. (Story on Bailments, §§ 316, 320.)
    The contracts and plates were delivered to, and held by, the the plaintiff in pledge, as collateral security. If the plaintiff had used the pledges in a manner injurious to the defendants, or had converted them, the defendants’ remedy would be an action against him for damages sustained thereby. But they could not set it up in bar of the plaintiff’s claim. (Story on Bailments, §§ 315, 349 ; Wilson v. Little, 2 Comst., 443; Steams v. Marsh, 4 Denio, 227.)
   By the Court—Bosworth, Ch. J.

The firm of D. Burgess & Company owed the plaintiff the amount found at Special Term to be due to him.

The plaintiff had a right to proceed against the defendant, Storrs, at law, as the surviving member of that firm, to recover from him the sum due. He also had the equitable right, Storrs having sold his interest to Burgess on his agreement to indemnify Storrs against all debts of the firm, to be paid by Paine, as administrator, pari passu; with other creditors, out of the copartnership assets, the firm being insolvent.

If both causes of action could not be united in one suit against the will of the defendants, it is enough to say that this defect appeared on the face of the complaint, and if the defendants wished to object to it, they should have demurred to the complaint. (Code, § 144, sub. 5, and §§ 147, 148.)

The plaintiff has done nothing to affect his legal or equitable rights, unless the agreement of the 18th of June, 1856, to which he is a party, in connection with the other agreements of that date, and that of the 16th of that month, work that result.

The two contracts, one of June 7,1854, and the other of November 6, 1855, between David B. Tower of one part, and D. Burgess & Company of the other, and which had been assigned by the latter to the plaintiff as security for the payment of the money due from them to him, could not be made productive of results which would pay any part of the debt due to the plaintiff, or bring money into the hands of the Administrator of Burgess, unless the latter could sell them at a premium, or they could be executed in behalf of the estate of D. Burgess in such wise as to produce profits. That estate was insolvent, and Storrs had ceased to have any title to the contracts, and the firm of D. Burgess & Company had been dissolved by the death of D. Burgess.

The Court found at Special Term, that the arrangement effected by the several agreements of the 16th and 18th of June, 1856, was made “by and with the consent of all the said parties, and which arrangement was thought by the said parties, at that time, to be and was for the undoubted benefit of all interested.”

By the agreement of June 16, 1856, Paine, as Administrator of Burgess, assigned to D. B. Tower and C. Walker, all of Paine’s interest in the two contracts of June 7, 1854, and November 6, 1855, and Tower released D. Burgess & Company, and Paine as Administrator of Burgess, from all claims and demands under or by reason of said contracts; and Tower and Walker covenanted to pay to the plaintiff the amount due to him from D. Burgess & Company, viz.: $14,043 with interest thereon from the 14th of June, 1856.

Thenceforth, neither Storrs nor Paine, as Administrator of Burgess, could do anything under those contracts which D. Burgess & Company had originally agreed to do, and the plaintiff could not in any event find any indemnity in the performance or execution by either of them, of those contracts on behalf of D. Burgess & Company.

Tower and Walker by contract dated the 18th of June, 1856, assigned their interest to Sanborn, Carter & Bazin, and the latter agreed to pay to the plaintiff certain sums on account of the debt due to him, but not, unconditionally, to pay him in full.

The agreement of the 18th of June, 1856, to which Wright is a party, does not transfer his interest in the contracts to Sanborn, Carter & Bazin, but merely contains his consent that they may use the stereotype plates, on the terms and for the consideration therein stated, and the guaranty of C. Walker of the same date.

After the execution of the agreement between Paine as Administrator, and Tower and Walker, the latter did not become, at law, the plaintiff’s principal debtors. The covenant of Tower and Walker was to a person, not personally liable to pay to the plaintiff the debt owing to him by D. Burgess & Company.

Whether the plaintiff could maintain any action by reason of that covenant, against Tower & Walker, to recover the debt due to him from Burgess & Company, will, to say the least, admit of some doubt. (Doolittle v. Naylor, 2 Bosw., 225; Trotter v. Hughes, 2 Kern., 74; King v. Whitely, 10 Paige, 465.)

On the facts as found, this contract and those of the 18th of the same month, were, in the intent of the parties, parts of a single arrangement, which looked to securing competent and responsible publishers, as the only method of making the contracts, which had been pledged to the plaintiff, of any value to him, or to Storrs, or Paine as Administrator of D. Burgess, or to the owners of the copyrights.

In Chester v. The Bank of Kingston, (16 N. Y. R., 338,) Mr. Justice Comstock, speaking of the dealings between the creditors and principal debtor, relied upon as a discharge of the sureties, says, that “ if they did so deal without the assent of the plaintiffs, (the sureties,) the latter were, to the amount of the note, discharged in equity, if not at law. If, however, they assented to the dealing, or have placed themselves in a situation where they cannot object, then their liability still remains, unless they have some other answer to it.”

No authority is cited, but the rules enunciated are stated, as being elementary or well settled law.

Mr. Theobald states the rule to be, that the surety is not discharged by the creditor’s agreeing to give time, if the agreement was authorized or ratified by the surety. (Prin. & Agent, [by Theobald,] p. 87, § 165.)

In Ex parte Harvey, In re Blakely, (27 Eng. L. & Eq., 280,) Turner, L. J., says: “It is not disputed that a surety, who concurs in an arrangement between the principal and a creditor, is not discharged by such arrangement.”

The concurrence or assent of the surety, or his express agreement, if there were one, may be shown by parol. (Wyke v. Rogers, 12 Eng. L. & Eq., 162.)

A knowledge of the arrangement while it is being negotiated, taking part in and encouraging it, or aiding in perfecting it, will justify a finding that the surety assented to it. (Woodcock v. Oxford and Worcester Railway Co., 21 Eng. L. & Eq., 285.)

Mr. Storrs testifies, that he knew at the time of the arrangement between Sanborn, Carter and Bazin, and Mr. Wright; that these arrangements were understood by the parties generally before any of the contracts were executed; that the arrangement was desired by himself and Paine, and that neither of them objected to it.

Mr. Paine testified, that he knew generally, the features of the arrangement between Wright and the firm of Sanborn, Carter & Bazin; that he heard it talked about, and thinks he suggested the plan of paying Mr. Wright by a double copyright, (the one adopted,) or they spoke to me of it, and I thought it was fair.” Although each of them says he was “ not asked to assent ” to this arrangement, yet we think there was enough proved to warrant the finding, as a fact, of actual assent by Storrs and Paine, to the agreements of the 18th of June, 1856, and that Mr. Wright signed the paper of that date which he did execute, in the full conviction that its execution was desired by them, and received their cordial assent, and that he was justified in acting on that belief.

The judgment should be affirmed.


source: Caselaw Access Project

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

license: Public Domain

text:
    William B. Astor, Plaintiff and Appellant, v. George B. Lent, Defendant and Respondent.
    1. The equitable assignee of a lease, who, as such, enters into possession, and occupies the demised premises, is liable for the rent accruing during such occupancy.
    2. Where such equitable assignee, while occupying the demised premises, makes an assignment of aE his property in trust for. the benefit of his creditors, and last said assignee enters under said assignment upon the demised premises and occupies them as assignee until compelled to surrender possession by proceedings instituted to dispossess him, he is liable for the rent becoming due during such possession and occupancy.
    (Before Bosworth, Ch. J., and Pierrepont and Moncrief, J. J.)
    Heard, May 16th;
    decided, June 2d, 1860.

      Appeal by the plaintiff from a judgment ordered on a trial had November 14, 1859, before Mr. Justice Moncbiee and a jury.
    This action was commenced on the 6th day of February, 1858, to recover $1,000, alleged to be due for the rent of the store and premises No. 163 Greenwich street, in New York city, for the quarter ending November 1, 1857.
    At the commencement of the term, the lessee, Schenck, entered and continued to occupy the premises as tenant to the plaintiff, paying rent to him, according to the lease, until the 1st day of May, 1855. The business which Schenck carried on in the store was that of selling machinery and steam engines. Shortly prior to May, 1855, he made a sale of the business and the stock of goods in the store to one Abraham L. Ackerman, with whom one Jacob Schenck was jointly interested. The evidence tended to show that Ackerman agreed to take the lease and pay the rent to the plaintiff, and to get from him a consent to the transfer and a release of Schenck from further liability. The lease itself was at the time in the safe, which, by the sale, passed, with everything else in the store, to Ackerman. The price paid by Ackerman to Schenck was a round sum for the stock in trade, the store, the good-will, and the lease. No written assignment of the lease was executed, but it remained in the possession of Ackerman until his subsequent assignment to the defendant, and Ackerman was fully informed as to its terms when he purchased. The evidence also tended to show that it was expressly part of the bargain that Schenck transferred to Ackerman all his right of occupancy of the premises; that, immediately after the purchase, Ackerman took possession of the store and of the property in it, and continued to occupy it, and paid the rent reserved in the lease regularly to the plaintiff, down to and including the rent which fell due on the first day of August, 1857; that he continued in possession of the premises, carrying on the same business which Schenck had done there, until the twenty-first day of October, 1857, when, being insolvent, he made, executed and delivered to the defendant, George B. Lent, a general assignment of all his property, real and personal, for the benefit of his creditors, with preferences. The defendant accepted the assignment, and covenanted to perform the trusts contained in it. The goods, wares and merchandise in the store No. 163 Greenwich street are particularly specified in the schedule of property annexed to the assignment, but no specific mention of the lease was made in it. The evidence also tended to show that, on the twenty-second day of October, 1857, the day after the execution of the assignment, the defendant came to Eew York, visited the store, and took possession. Default was made in the payment of the quarter’s rent which fell due on the first day of Eovember, 1857. The defendant, after his entry, continued to occupy the store, and kept in it the machinery assigned to him by Ackerman, and carried on the same business which Ackerman had done, having his own name up, and talcing personal charge of store and property from the twenty-second day of October to the tenth day of the ensuing December, and during that period made no offer or attempt to surrender the lease, or abandon the possession of the premises, or to remove the assigned property therefrom. On the last-named day, by an agreement between the plaintiff and defendant, the lease was canceled, without prejudice to the rights of either party as to the claim in suit, and the possession surrendered by the defendant to the plaintiff, upon the defendant’s paying, pro rata, the proportion of the rent which had become due since the first day of Eovember. So much of the evidence as is material, is stated in the opinion of the Court.
    When the plaintiff rested his case, the counsel for the respective parties conceded that there was no disputed fact to be passed upon by the jury.
    Whereupon his Honor, the Judge, ruled, that upon the evidence in the case, the defendant is not liable, and directed the jury to find a verdict for the defendant; to which ruling and direction, the plaintiff’s counsel excepted.
    Thereupon, the jury rendered a verdict for the defendant. Judgment having been entered, the plaintiff appealed from it to the General Term.

      Charles F. Southmayd, for appellant.
    I. The defendant, being the assignee of the term and of the exclusive right of occupancy of the premises, entered during the quarter, and being in the actual and beneficial enjoyment thereof from the time of such entry up to and at the end of the quarter, when default was made, is liable for the rent which then accrued.

      1. By the agreement between Schenck and Ackerman, the latter became the equitable owner of the term, and as.such, so long as he remained in possession, he was liable for the rent reserved. He might at any time have compelled Schenck to execute an assignment of the lease to him. (Astor v. L'Amoreux, 4 Sandf. S. C. R., 524.)
    2. The defendant took the premises subject to the burdens under which Ackerman had held them, and must pay all rent which accrued after his entry, so long as he continued in possession, notwithstanding that he was merely an assignee for the benefit of his creditors, and not for his own benefit. (Young v. Peyser, 3 Bosw., 308; Martin v. Black, 9 Paige, 643; Muir v. Glinsman, Superior Court General Term, Jan., 1856, in MS.; Holsman v. De Grey, 6 Abb. Pr. R., 79.)
    II. It has been held (Martin v. Black, 9 Paige 643; Bagley v. Freeman, 1 Hilt., 196; Journeay v. Brackley, id., 447,) that an assignee of an insolvent for the benefit of creditors, may, when a lease is included among the assigned property, elect to waive the term, and not to become assignee of the lease, and that if he waives it, and does not enter, he cannot be charged with the covenants. But the principle applied to such a case is not peculiar, since any assignee of a lease has the like election, and does not become liable if he does not accept the assignment.
    1. In the cases of general assignees for creditors, where the assignee has not entered, there is very much discussion as to what acts on his part are equivalent to entry as evidence of acceptance ; and also in cases arising under the English Bankrupt law of 49 George III., chapter 121, which expressly gives, the assignees of a bankrupt his election to accept or reject a lease embraced in the assignment. (See cases cited in Journeay v. Brackley, ut supra; 1 Hilt., 447.)
    But there is no instance in which a deliberate act of taking possession, on the part of the assignee, has been curtailed, of its established legal effect of subjecting the assignee to payment of rent, so long as he remains in possession. (2 Platt on Leases, ch. 6, p. 433, and cases there cited.)
    2. In the present case there was not only a deliberate act of taking possession on the part of the assignee during the quarter, but he continued to occupy the premises, keeping the property in them the same as before, and carrying on the business as before, for upwards of fifty days, during which the quarter’s rent accrued, having his own name up, and doing no act in the meantime which indicated an intention to abandon the premises.
    3. If, upon such a state of facts, there were any doubt as to the intention of the assignee, and if, in such a case, his intention were in any wise material, the question of intention should have been left to the jury. The judgment appealed from ought to be reversed, and a new trial ordered.

      E. R. Bogardus, for respondent.
    I. There was no privity of contract or estate between Astor and Ackerman (still less between him and the defendant,) inasmuch as Ackerman never became, or agreed to become, assignee of the lease, or ever held himself out to the plaintiff as such, but refused to take any assignment; and Astor never acceded to the terms. (Quackenboss v. Clarke, 12 Wend., 555.)
    The obligation of an assignee of a lease to the landlord, results only from the privity of estate between them, arising from an assignment of the legal interest; a merely equitable assignee, though in possession, is under no liability to the landlord, for want of privity between them, unless by holding himself out to the landlord as assignee, he has estopped himself from denying it, which Ackerman, and certainly the defendant, has never done. (Moore v. Gregg, 2 Phillips, 717; How v. Kennett, 3 Ad. & El., 659.)
    II. As under-tenants of Samuel B. Schenck, Ackerman and J. B. Schenck, as partners, were jointly interested in the occupancy, and neither the assignment to the plaintiff by S. B. Schenck, nor that to the defendant by Ackerman, was sufficient to raise any liability of the defendant to the plaintiff.
    III. The defendant never accepted the leasehold interest; until the defendant’s right of election to accept or reject the lease was determined by some unequivocal act of acceptance, the leasehold interest did not vest in him at all, and no liability for the rent was incurred by him. (A. D., 1806, Turner v. Richardson, 7 East., 335; 1818, Hill v. Dobie, 8 Taunt., 325; Wheeler v. Bramah, 3 Camp., 340; Lindsay v. Lambert, 12 Moore, 209;
      How v. Kennett, 3 Ad. & Eld., 659; Copeland v. Stephens, 1 Barn. & Ald., 593; Pratt v. Leven, 1 Miles, 358; Journeay v. Brackley, 1 Hilt., 447; Young v. Peyser, 3 Bosw., 308; Bokee v. Hamersley, 16 How., 461, 466.)
    1. The case of Muir v. Glinsman, unreported, cannot be supposed to have been intended to overturn the long settled law as above stated, and is not in fact in conflict with them, or with the ruling of the Justice in this case.
    IV. There being no dispute as to the defendant’s intent not to accept the lease, and none as to the defendant’s acts, the Justice rightly held that the defendant’s acts did not constitute an acceptance in law, contrary to his intent, and properly, therefore, directed a verdict in his favor.
    The sole question is, whether defendant’s occupation was irreconcilable in law with his express disclaimer of taking the lease. The Justice properly held not; the occupation was sufficiently explained and qualified, and the plaintiff has been neither injured nor misled. (Wheeler v. Bramah, 3 Camp., 340; Lindsay v. Lambert, 12 Moore, 209; How v. Kennett, 3 Ad. & Eld., 659; Journeay v. Brackley, 1 Hilton, 447; Pratt v. Leven, 1 Miles, 358.) The judgment should be affirmed.
   By the Court — Bosworth, Ch. J.

The equitable assignee of a lease, who, as such, has entered into possession and occupied the demised premises, is liable for the payment of rent accruing during such occupancy. (Close v. Wilberforce, 1 Beav., 113; Jenkins v. Portman, 1 Keen, 435; S. C., 15 Eng. Ch. R., 455, n. 2; Robinson v. Rosher, 1 Young & Col., 7-11.)

He is liable in equity, although an action of covenant might not lie against him, if it was made to appear that no actual legal transfer of the lease had been made. (Quackenboss v. Clarke, 12 Wend., 555.)

The evidence would justify a jury in finding, if they credited the testimony of Samuel B. Sohenck, that Ackerman purchased the lease, and promised Schenck to pay the rent, and procure Ms release from liability.

That Ackerman occupied the premises from May, 1855, into October, 1857, and paid the rent to the plaintiff, is indisputable. He testifies that he “ expected to pay rent whilst occupying the premises,” but denies that he promised to do so.

Jacob B. Schenck testified he was present at the bargain between S. B. Schenck and Ackerman, and that he and Ackerman “were to be jointly interested in the business to be carried on,” and “ Samuel B. Schenck had, by this bargain, no right to turn him” (Ackerman) “out.” “It was a part of the bargain that Samuel B. Schenck had no right to occupy the premises, and Ackerman had.”

Mr. Astor, after having so long received rent from Ackerman, could not terminate the lease or Ackerman’s occupancy under his purchase of it, on the ground that he had not consented in writing to the sale to Ackerman, or to his occupancy under it.

Had Ackerman continued in possession until after Kovember 1, 1857, there could be no doubt of his liability, as equitable assignee, to pay the rent.

The assignment by Ackerman to Lent, of the date of October 21,1857, was sufficiently comprehensive to transfer Ackerman’s interest, as equitable assignee. It conveyed the “ goods, wares and merchandise, in and about the store and premises, of the party of the first part, (Ackerman) No. 163 Greenwich street, in the city of Kew York,” (the premises in question,) and “ all other real and personal property and estate whatever, and wheresoever situate, and all interest therein, and all debts, dues and securities.”

Lent testified that at the time he took the assignment, he “knew from Ackerman he was in, paying $4,000 rent.” “I knew it was Astor’s store; had known it a year.”

Had the lease and its unexpired term b'een worth a premium, so that, concededly, it could have been sold so as to produce something to be divided among the creditors, I think it would have been Lent’s right and duty to convert it for their benefit.

He took possession of the premises, and put up a small sign, with “George B. Lent, Assignee,” upon it. On the first of Kovember, he offered to pay rent for the time he had then occupied, but refused to pay the whole quarter’s rent, which then became due.

He persisted in occupying the premises until he was removed by summary proceedings, or until proceedings instituted to dispossess him, had been so far prosecuted, that a warrant had been issued for his removal.

That having been done, he made a special agreement of the date of the 10th of December, 1857, for their occupation up to December 19.

Lent’s entry was under the assignment. His occupancy, whatever it was, was under it. He continued to occupy, and persisted in doing so, until coerced to leave by proceedings taken to eject him.

If these undisputed facts were not enough to charge him as equitable assignee, in possession and occupying as such, without calling upon the jury to decide any question of fact, then it should have been submitted to the jury, with instructions that if they found that Ackerman purchased the lease and agreed to pay the rent, and occupied the premises under that purchase and paid rent to the plaintiff until he assigned to Lent, and that Lent as his assignee entered upon the premises under the assignment, and occupied them as such assignee, until compelled to surrender possession, by proceedings instituted to dispossess him; the plaintiff was entitled to recover.

The fact is important and significant, that Lent, at the time he took possession, knew the store was owned by the plaintiff, and that his assignor was occupying and paying $4,000 rent. He knew, therefore, that Ackerman was occupying as lessee, or under some agreement with a lessee of the premises. He takes posr session, and although he knows who is the owner and lessor, he does not notify the lessor, that the entry is not for the purpose of taking possession as assignee, (Hanson v. Stevenson, 1 Barn. & Ald., 304; Lord Ellenborough, Ch. J.,) and continues to so occupy until called upon for the rent due November 1, 1857. If he then raised no question, except whether he was liable for the whole quarter, or only from the time he took possession, and if he did not then disavow any intent or purpose (in entering) to enter and occupy as assignee, or to continue to occupy as such, and especially if instead of doing that, he insisted upon the right to continue to occupy until dispossessed by legal proceedings a jury might find, as it seems to me, that the defendant deliberately took possession as assignee, with intent to occupy as such.

If he did that, he is liable for the rent. It cannot be said on the evidence, that the plaintiffs conceded he did not so enter; when conceding that there was no disputed question of fact to be passed upon by the jury. Barnes v. Perine, (2 Kern., 18,) is not opposed to this view.

In that suit, the case made, did not contain all the evidence given, but only so much as was necessary to present the questions made at the trial.

In the case before us, we have all the evidence given, and when it states that the counsel for the respective parties conceded there was no disputed fact to be passed upon by the jury, the fair inference would seem to be, that matters sworn to positively, were conceded to be true, although some slight circumstances in opposition may have been testified to, in the effort made to rebut or overcome such testimony.

Journeay v. Brackley, (1 Hilt., 447,) decides nothing controlling in this case, as in that the assignees “ shortly after the assignment * * * notified the plaintiffs that they did not intend to take the building and would have nothing to do with the lease,” and “ surrendered the possession to the plaintiffs ” before any rent became due. The opinion is valuable, and contains an elaborate examination and review of numerous authorities bearing upon this subject.

It decides nothing in conflict with Young v. Peyser, (3 Bosw., 308,) nor with any point adjudged in Muir v. Glinsman, (referred to, in 1 Hilt., 455.)

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

Ordered accordingly.


author: By the Court—Bosworth, Ch. J.

text:
    George and Joseph T. Donnell, Plaintiffs and Respondents, v. L. Walsh, B. Carver, and John Chase, Defendants and Appellants.
    1. Where one part owner of a vessel brings suit as such, to recover his aliquot share of the net earnings of the vessel on a voyage, the objection that all the owners are not made parties, must be taken by demurrer, when the defect appears on the face of the complaint.
    2. A master of a vessel although part owner, has no power to settle a claim arising before he became master, and allow the ship’s husband to retain the adjusted amount from the proceeds of a voyage performed after persons had become part owners who were not such while the account thus adjusted was accruing. Such settlement cannot affect the incoming part owners, especially when made with a knowledge of their rights, and after they had demanded payment of their aliquot share.
    3. Proof that a person who has been examined de bene esse, resides in another State; that he has been seen there since he was examined; and that'the witness is informed that he is there at the time of the trial, when the competency of the evidence to establish his absence is not questioned, is sufficient, prima fade, to entitle the deposition to be read.
    (Before Bosworth, Ch. J., and Moncrief, J.)
    Heard, May 18th;
    decided, June 2d, 1860.
    Appeal by the defendants from a judgment on a verdict rendered on a trial, had June 7, 1859, before Mr. Justice Pierrepont and a jury.
    This is a suit brought by the plaintiffs, copartners in trade, and as such copartners, owners of one-half of the brig Crimea, of Bath, Maine, to recover the sum of $712.62, net freight-money of said brig, collected by defendants, and belonging to plaintiffs, as owners of said one-half.
    The plaintiffs, to maintain the issues on their part, offered to read in evidence a deposition of Joseph T. Donnell, one of the plaintiffs, taken de lene esse. The defendants’ counsel objected to the reading of said deposition in evidence, on the ground that the absence of said Donnell from the State had not been shown.
    Dexter A. Hawkins was then called as a witness for plaintiffs, who testified: “ I have known Joseph T. Donnell ten or fifteen years; heard from him about a month since; he lives at Bath, Maine, and is now there, as I am informed and believe.”

      On being cross-examined, witness said: “ I saw him in Bath in August last; have not seen him once since; I have received a letter from him in .relation to attending this trial as a witness. He thought he should be unable to come on. The letter is signed with his firm signature, and is, I think, in the handwriting of his partner, George Donnell. I have the letter. I made inquiries of several persons in South street, of Eastern captains who knew him, and at C. C. Duncan & Company’s counting-room ; don’t recollect their names; have done business for them; have their names at our office; this was the latter part of May. (To the Court.) — Have had correspondence with him since he resided in Maine, for several years last past.”
    The Court held that the evidence of the absence of Joseph T. Donnell was sufficient, and the deposition was allowed to be read in evidence. To which ruling, the counsel for defendants duly excepted.
    Erom the admissions contained in the pleadings and evidence given, it appeared that plaintiffs bought one-half of the brig, March 28th, 1857. She was then at Kew Orleans. She after-wards brought a cargo from Cardenas to Kew York, arriving at Kew York last of May, 1857. With consent of master, defendants collected the freight and demurrage on said-cargo, $2,675 TVo, and out of said money paid for disbursements of brig for that voyage, $950T°/W, leaving in defendants’ hands the sum of $1,724.57, net freight for this voyage. Plaintiffs notified defendants that they were owners of one-half of the brig, and they demanded their share, namely, one-half of the said net freight-money. Thereupon, on June 5th, 1857, defendants paid plaintiffs, as owners of said one-half of said brig, the sum of $150, and also, with plaintiff’s consent, paid the master, for the other owners, $149.30, leaving still in defendants’ hands $1,425.23 of said net freight; one-half of this, or $712.62, belonging to plaintiffs as owners of one-half the brig during said voyage. Payment of this was demanded, but defendants refused to pay it, and claimed to retain the whole balance of freight in their hands, on account of an old bill of $1,425.23, which defendants had against the brig and owners in May, 1855.
    L. Walsh, one of the defendants, testified thus: “ I made arrangements with Captain Stinson, on arrival of vessel, to allow this account. I understood him to allow it. We threatened to attach the vessel, and he said he would prefer us to deduct the amount from the freights. This is the receipt, (marked,) dated June 6, 1857.”
    The receipt was fbr $149T3/o, “ in full, for balance due brig Crimea and owners, as per account rendered,” and was the balance remaining in defendants’ hands, after retaining the $1,425.23, which they claimed a right to hold and apply in payment of their old account to that amount. ' J. Auld was master during the time in which the items of account footing $1,425.23, accrued.
    The Judge, inter alia, charged thus, viz.:
    “ The captain was part owner. It appears that defendants threatened to libel, and the captain said they had better hold the money, and not libel the vessel, and the captain gave a receipt; although defendants had notice of Donnells’ claim, and they took the risk of the right of the captain to make this settlement. The captain, although part owner, under circumstances of the case, had no right to take freight-money and pay the claims of defendants, unless it was a lien on the vessel, and he paid it to release the vessel from a lien. To which defendants’ counsel duly excepted.
    “ The mere fact of his being part owner did not authorize him to make such settlement. To this defendants duly excepted.”
    The jury then found a verdict for plaintiffs, against defendants, for the sum of $812.98.
    From the judgment entered on the verdict, the defendants appealed to the General Term.

      W. R. Beebe, for appeEants.
    I. Owners of ships, as to the earnings, are partners, and actions to recover earnings or freights must be prosecuted in the names of all the owners. One owner cannot sue for his proportionate share of the freights. They are partners in the undertaking, and their rights are to be determined by their rights as partners. (Abb. on Shipping, 111, 115; Story on Partnerships, §§ 56, 57.)
    II. John P. Stinson, as master and part owner of the vessel, had authority to aEow the defendants to retain the amount of their claim; and defendants having, by his authority and direction, retained such amount, and discontinued their proceedings against the vessel, and paid over to the plaintiffs and Captain Stinson the balance, the plaintiffs cannot recover in this action.
    III. The Court erred in permitting the deposition of Joseph T. Donnell to be read in evidence. There was no proof of his absence.
    IV. The claim of defendants for $1,425.23 was a lien upon the brig, and the Captain was authorized to pay and allow the same, and thus discharge the lien. The claim of defendants being a lien on the vessel, they were justified in retaining the same from any moneys of the vessel in their hands.
    V. The Court erred in charging the jury that, under the circumstances of the case, the Captain had no right to take freight-money and pay the claim of defendants, unless it was a lien on the vessel, and he paid it to release the vessel from the lien.
    VI. The Court erred in charging the jury that the mere fact of the Captain being part owner, did not authorize him to make such settlement.
    VII. The objection that, by the provisions of the Code, we should have demurred, cannot be sustained.
    The question in this case, as to the. parties, is not, whether there is a defect of parties, but, that the plaintiffs, as partners or part owners, cannot maintain an action for a proportionate share of the earnings of the vessel, and, consequently, no cause of action exists—this action being brought to recover one-half the earnings of the vessel. (Abb. on Shipping, 150.)

      D. A. Hawkins, for respondents.
    I. Plaintiffs were purchasers in good faith of one-half of the vessel on March 28th, 1857, and without notice of any claim or lien of defendants.
    II. Defendants’ bill of $1,425.23, of May 5, 1855, even if unpaid on March 28, 1857, was not then a lien upon the vessel. (Pratt v. Reed, 19 How. U. S. R., 359.)
    IIL The master had not the power, on June 5th, 1857, to appropriate the freight-money in defendants’ hands to pay the old account of 1855, even if the account was still unpaid.
    The master, as such, has no power to settle disputed clnimg arising before he became master. (1 Parsons’ Mar. Law, 384; Kelly v. Merrill, 14 Maine, 228.)

      This disputed claim arose two years before, while Auld was master.
    IV. This action was properly brought in the name of plaintiffs alone. And even if the other part owners should have been joined in the suit, this defect of parties has been waived by defendants by their not raising the point either by demurrer or by answer.
    Part owners of a ship are tenants in common and not partners. (1 Parsons’ Mar. Law, p. 82, and n. 1, p. 83, and n. 5.) .
    If there is a defect of parties, such defect either appears or does not appear upon the face of the complaint.
    If it appears, defendants should have taken the objection by demurrer. (Code, § 144.)
    If it does not appear, defendants should have taken the objection by answer. (Code, § 147.)
    If no such objection be taken, either by demurrer or by answer, the objection is waived. (Code, § 148.)
    No such objection was taken, hence it is waived.
    The exceptions are not well taken, and should be overruled, and the judgment affirmed.
   By the Court—Bosworth, Ch. J.

The recovery in this action is right, and the judgment should be affirmed, unless the fact that all the owners of the vessel are not plaintiffs; or unless the settlement made by Stinson constitutes a defense.

That all of several partners do not join as plaintiffs is no objection to a recovery by those who do sue, where the defect appears on the face of the complaint, and the defendant fails to demur. (Zabriskie v. Smith, 3 Kern., 322.)

If the plaintiffs might recover the whole sum due, had they sought to do so, it is no objection which the defendants can take, that they have recovered less. The verdict is for the precise sum equitably due to them as owners of one-half of the vessel, provided they are entitled to recover anything.

The owners of the vessel in question, were as to such ownership tenants in common, not partners. The plaintiffs it is true, as between themselves, owned the one-half as partners. (3 Kent’s Com., pp. 151-157.)

Still it may be, that all the owners must have been made parties, had the defendants insisted upon it, in the manner prescribed by the Code.

But that not having been done, the defendants were precluded from taking the objection at the trial, as a bar to a recovery.

The settlement made between Stinson, as master, and .the defendants, was a settlement of a claim which arose before the plaintiffs were owners, and at a time when Stinson was not the master; and the defendants claim the right, under that settlement, to retain money, which was earned by the vessel and received by the defendants as money thus earned, after the plaintiffs became part owners.

No authority is cited in support of any such power being possessed by the master of a vessel; and we are not aware of any principle upon which it can be upheld. Kelly v. Merrill (14 Maine, 228,) holds the contrary. See, also, Parsons on Maritime Law, (vol. 1, p. 384.)

That claim, whatever it was, had been settled and paid, if not absolutely, yet in such sense that it was not a lien upon the vessel as against these plaintiffs.

We think the plaintiffs were entitled to a peremptory instruction, that a verdict should be rendered in their favor for the sum that was given.

The evidence, as to the fact of the non-residence of Joseph T. Donnell and his absence from this State, is stronger than that given in Nixon v. Palmer, (10 Barb. S. C. R., 175,) and which was there held to be sufficient to authorize the reading of the deposition. No objection being made to the competency, of the evidence given to prove his absence, we think there was no error in holding it to be satisfactory. (7 Wend., 26.)

The judgment must be affirmed, with costs.

Ordered accordingly.


author: Robertson, J. Woodruff, J.

text:
    John Berry, Receiver of The Atlas Mutual Insurance Company, Plaintiff, v. Martin W. Brett, James E. Brett, J. Ernest Miller and Elija A. Houghton, Defendants.
    1. The maker of a promissory note held by a Corporation, and, on the insolvency of the Corporation, passing to a Receiver thereof, (appointed to wind up its affairs for the benefit of creditors and stockholders,) has the same right of set-off against such note in the hands of the Receiver which he would have in the hands of the Corporation itself.
    2. The fact that the note has not become payable at the time of the appointment of the Receiver, does not affect the rule.
    3. The maker of a promissory note given to the Atlas Mutual Insurance Company for premiums of insurance, or to other Insurance Companies whose charters are in substantially the same form, (Laws of 1843, ch. 92, p. 67; id., 1842, ch. 217, p. 261; id., 1843, ch. 75, p. 50; ch. 90, p. 65; ch. 91, p. 66; ch. 94, p. 71, &c., ¿re.,) when sued thereon by the Company or its Receiver, may set-off, against such note, debts or demands due to such maker from the Company.
    4. The case of Lawrence, Receiver of the General Mutual Insurance Company, v. Nelson, (21 N. Y. R., 158,) commented upon and distinguished, by Robertson, J.
    (Before Woodruff and Robertson, J. J.)
    Heard, March 14th;
    decided, June 9th, 1860.
    This case came before the Court upon a submission of a controversy, without action, pursuant to section 372 of the Code of Procedure.
    The case containing the facts agreed upon by the parties was authenticated in due form, and was as follows, viz.:
    “ The parties to this controversy hereby mutually agree upon and submit to this Court the following statement of facts:

      “jFirst. That the Atlas Mutual Insurance Company was a Corporation, carrying on business in the city of New York, duly chartered and organized under an act, entitled, ‘ An Act to Incorporate the Atlas Mutual Insurance Company,’ passed April 10, 1843, a copy of which act, and the acts therein referred to, are hereto annexed, and marked A., and had been for two years, prior to April, 1855, carrying on the business of insurance on marine risks.
    “ Second. That the defendants- were, on the 20th day of April, 1855, and previously had been, dealers in said Company.

      “ Third. That on or about the said 20th of April, 1855, the said defendants, by their firm name and style of Brett, Son & Co., subscribed a paper writing, of which the following is a copy, and delivered the same to said Company:
    “‘The subscribers hereto agree to give their notes at twelve months, from the twentieth day of April, 1855, to the Atlas Mutual Insurance Company, for the amount set opposite their names, respectively, in advance of premiums of insurance on risks, which may be taken by said Company for them, it being understood that, in consideration thereof, the subscribers are to be allowed by the Company, at the maturity of their notes, five per cent on the amount of premiums charged against said notes.
    “ ‘ Hew York, April 20th, 1855.
    “ ‘Brett, Son & Co.............Five Thousand Dollars.’
    “ Fourth. That subsequently the said defendants, in pursuance of said subscription, executed and delivered to said Company their promissory note, dated on the 25th day of April, 1855, for the sum of twenty-five hundred dollars, being for a part of the amount so subscribed, as aforesaid, a copy of which note is as follows:
    “ ‘ Hew York, April 25, 1855.
    “1 Twelve months after date we promise to pay the Atlas Mutual Insurance Company, or order, for value received, twenty-five hundred dollars.
    “ ‘ $2,500. Brett, Son & Co.’
    “ Fifth. That at the time of the delivery of said note to the said Company, by the said defendants, the said Company also delivered to the said defendants a receipt therefor, of which the following is a copy:
    “ ‘ Office of the Atlas Mutual Insurance Co.,
    “ ‘ (117.) Hew York, April 23, 1855.
    “ ‘ Received of Messrs. Brett, Son & Co. their note for twenty-five hundred dollars, at 12 months, from April 25,1855, in favor of the Atlas Mutual Insurance Company, being their subscription to the Atlas Mutual Insurance Company; to be held and used by the Company for the purpose of paying the losses of the Company, or to be' used in raising money to be applied to the payment of said losses. Five per cent to be paid by the Company on the payment of said note, according to the terms of the charter.
    “ ‘ Geo. H. Tracy, Secretary.’
    “ Sixth. That thereafter and previous to the 25th day of March, 1856, the defendants applied for and received policies of insurance from said Company, upon vessels, cargoes, &c.,—the premiums for which insurances exceeded the amount of such note, and were charged against the same by the Company to the amount thereof.
    “ That the said Company having become insolvent, the plaintiff herein was, on or about the 25th day of March, 1856, duly appointed Receiver thereof, by an order of the Supreme Court, and has entered upon, and is performing the duties of said appointment, and as such, has authority to make this submission.

      “ That at the time of the appointment of the plaintiff this note was held by the Phenix Bank, of New York, as collateral security for a loan, before that time made by the said Bank to said Atlas Mutual Insurance Company. That the payments hereinafter mentioned to have been made by defendants on said note were made to said Phenix Bank, while the note was so held by said Bank. That after the 9th day of November, 1857, the said Phenix Bank, having been paid in full its loan to the Atlas Mutual Insurance Company, delivered up such note, with others, to plaintiff, as such Receiver.
    “ That the said note of said defendants is now in the possession of this plaintiff, and that he is the legal owner and holder thereof, as such Receiver.

      “ That the defendants have paid upon said note as follows: On the 25th day of March, 1857, the sum of $873.06, and on the 9th day of November, 1857, the further sum of $107.68; and no other sum has been paid on the same.
    “ That the defendants have claims against the said Company for losses, which claims were liquidated and allowed at the sum of $2,533.59, by the Atlas Mutual Insurance Company, and due to defendants prior to the appointment of the plaintiff as Receiver, being for losses on policies the premiums for which were charged against said note, and are recognized and allowed by this plaintiff as claims against said Company, which are entitled to be paid out of the assets of said Company only, pro rata with claims of the like nature.
    “ The plaintiff insists that the defendants are bound and liable to pay to him as such Receiver, as aforesaid, the balance unpaid on said note, with interest, without any set-off against the same for said claims.
    ' “ The defendants insist that they are entitled to set-off against the amount unpaid on said note, the amount of said claims, or so much thereof as may be necessary.
    “ The question to be passed upon by the Court is as follows:
    “ Are the defendants entitled to set-off their claims for losses as above mentioned or any part thereof against the balance remaining unpaid on said note ?
    “If this question is answered in the affirmative the defendants are to have judgment to that effect, without costs.
    “ If the question is answered in the negative, then the plaintiff is to have judgment for the sum of $1,634.63, being the amount due on said note on the 9th day of November, 1857, and also interest on that sum from the said 9th day of November, 1857, without costs.”
    The charter of the Atlas Insurance Company in the said case referred to, is contained in Session Laws of 1843, ch. 92, p. 67, and Laws of 1842, ch. 217, p. 261.

      C. C. Egan, for the plaintiff.
    I. The note being a subscription note, formed a part of the capital of the Company, was the security of dealers, and payable at all events. (Charter, § 12 ; Brouwer, Receiver, v. Hill, 1 Sand. S. C. R., 629; The same v. Appleby, 1 id., 158; Hone & Bokee, Receivers, v. Allen & Paxson, id., 171; Deraismes v. The Merchants' Mutual Ins. Co., 1 Comst., 372; Brouwer, [Brown,] Receiver of the Croton Ins. Co., v. Crooke, 4 id., 54.)
    II. The defendants, by their subscription, and by giving their note, became corporators and members of the Company, with all the rights and liabilities attaching to original membership under the charter. (Crocker v. Crane, 21 Wend., 211; The Sun Mutual Ins. Co. v. The Mayor of New York, 4 Seld., 249 ; Verplanck v. The Mercantile Ins. Co., 1 Edw., 84.)

      III. Had the Company, by reason of its insolvency, failed to write against the note, in whole-or in part, still the note must be paid, without deduction, but here it is admitted that premiums were taken upon policies issued to the defendants to an amount exceeding the note. (Hone, &c., v. Allen, &c., supra; Deraismes v. The Merchants' Mu. Ins. Co., 1 Comst., 372.)
    IV. The set-off, claimed by the defendants, is founded upon general losses occurring before the appointment of plaintiff as Receiver, upon policies issued by the Company, and can only be liquidated out of the assets of the Company quando aeciderint; and pro rata with other like demands.
    V. The Receiver, upon his appointment, (being the Trustee for all the creditors,) became vested with all the rights of the corporation to the note in suit as part of its property, and is entitled to recover. (Brouwer, Receiver, v. Crooke, 4 Comst., 55; Verplanck v. The Mercantile Ins. Co., 2 Paige, 438; 2 R. S., 464, §41.)
    VI. The set-off claimed is not a debt existing in favor of the defendants against the plaintiff, (Receiver,) within the meaning of the statute, entitling the defendants to set it off. (2 R. S., 354.)
    The plaintiff should have judgment.

      G. Dean, for the defendants.
    I. The claim of the defendants is a legal and equitable defense to the note now held by the plaintiff.
    1. The defendants’ claim was liquidated and due prior'to the appointment of the plaintiff, and prior to the vesting of any title in him.
    2. At the time the note fell due the legal title was in the Phenix Bank. The defendant paid all that was due to the Bank, and after maturity, plaintiff obtained it.
    3. At the time the note fell due the defendants had claims against the Company for more than the amount, and had a right to set off the amount as against any one but a holder for value.
    The Receiver is not a holder for value.
    II. There is nothing in the charter of the Atlas Insurance Company, or in the character of the note, which takes away the right of set off as established in the late Court of Chancery. (Holbrook v. Receiver of the American Fire Ins. Co., 6 Paige, 220.)

      1. This note was given years after the organization of the Company, and was no more a part of its capital than any note taken for premiums or cash paid.
    2. This note was to be insured against, and could only be taken from persons intending to receive the policies of the Company.
    Judgment should be given for the defendant.
   Robertson, J.

The capital or funds on which the charter of the Atlas Mutual Insurance Company, represented by the plaintiff, contemplated that it was to carry on its business, and to which holders of policies from it were entitled to look for security, consisted of those derived from three sources:

1st. Premiums on the first applications for insurances before the organization of the Company, amounting in the aggregate to half a million of dollars, on the receipt of which it was entitled to commence business. (Laws of 1843, p. 67, §§ 2, 4.)

2d. Advances by third persons of money for such time and upon such terms as should be agreed, not exceeding in the aggregate one hundred thousand dollars. (§ 7.)

3d. Notes for premiums in advance received from persons intending to take out policies. (Laws of 1842, p. 263, § 12.)

Nothing is said in the charter as to how the premiums first mentioned are to be paid, whether in cash or on credit; for the advances so made to the Company, they were to issue certificates of fifty dollars each, pay legal interest thereon, and after apportioning profits and losses between such advances and premiums earned for expired policies, pay on such advances their proportionate share of profits until the whole was refunded, or deduct therefrom their proportionate share of losses until the whole was exhausted. The Company were to be at liberty to negotiate such notes for premiums, in order to pay losses, and upon such portion of them as should exceed the amount of premiums earned by the Company from the makers, they were to pay a compensation at a rate not exceeding five per cent per annum. (§ 12.)

The Trustees of the Company were also authorized to issue certificates to persons in whose names policies of insurance, on which the risk had expired had been issued, of a certain per centage on the premiums paid by them for such risks; which certificates should be for their share of the profits, to be subject to future deductions for losses, and to redemption when the net profits exceed a certain sum. (§ 13, Charter of Atlantic Company.) Persons insuring, or entitled to certificates, were expressly declared not to be answerable by reason thereof, or of anything contained in the act of incorporation except for the premiums or notes given in advance for premiums.

There is no prohibition in such charter, express or implied, against giving credit for premiums, nor are any persons insured declared to be members or incorporators.

Prior to incorporating the class of Insurance Companies of which the Atlas Company was one of whose charter that of the Atlantic Mutual Insurance Company, passed in April, 1842, was the model, another class of Insurance Companies, including the General Mutual Insurance Company of New York, of whose charters that of the United Mutual Insurance Company was the model, (Laws of 1840, p. 260, § 6,) were incorporated. By the sixth section of the act incorporating the General Mutual Insurance Company, (Laws of 1841, p. 231,) every person who in his own name or that of his firm, had taken out a policy of insurance from such Company, was declared to be a member of such Company, and every one who should so become a member was required the first time he effected insurance before receiving his policy, to pay the rates that should be fixed by the Trustees. It was also declared that no premium so paid should ever be withdrawn from such Company, but should be liable to all losses and expenses incurred by it during its existence.

In the case of Lawrence, Receiver of the General Mutual Insurance Company, v. Nelson, decided at the last term of the Court of Appeals, in which the judgment of this Court at General Term was affirmed, the liability of persons insured in such Company for the payment of their premiums to the Company, without a right of offset of a claim against such Company, came up for adjudication. The Court decided in favor of such liability, and, as I understand the opinion delivered, expressly upon the grounds that they became, under the charter, members, merely by making the insurance; that they were to pay their premiums in cash; and that such premiums, so paid in, were made, by the charter, a fund incapable of being used except to pay losses. Judge Weight, who delivered that opinion, says, expressly: “The defendants in this case became members of a Mutual Insurance Company, by effecting insurance therein: it was that class of Mutual Companies authorized to commence and transact an insurance business on the cash premiums paid by the associates. The first premiums paid were never to be withdrawn, but were to be pledged for the losses and expenses of the Company. The dealers and corporators were to pay their premiums in cash; and such premiums, and the income derived from their investment, were to constitute a fund for the payment of losses and expenses of the Company.” He had previously stated that the rule is different from that of an ordinary Insurance Company, “where the Company is a mutual one, and the insured a member or corpora-tor, an insurer as well as party assured, and the Association has no dealings in regard to insurance except with its own members.” “In a company of mutual insurers, each sufferer is bound to make compensation as well as receive it: the premium, whether paid, or secured to be paid, is withdrawn from his control, in contemplation of law, and placed in a common fund, subject, not only to his claims, but those of all others in the Company.” “ The members of the Association virtually agree to insure each other, and provide a common fund to indemnify in case of loss, as all have contributed to it.” Such is the reasoning, and the result to which it leads, in a strictly Mutual Company, where no one is insured, except he becomes a member, where his premium of insurance forms part of the capital stock, is required by law to be paid in cash, and is bound to go into a common fund to indemnify all the members against a loss. But the same reasoning docs not apply to a Company where any one can be insured, where credit may be given on premiums for policies, where the premiums are not required to be kept apart as a fund, and where five per cent is to be paid for a loan of credit wherewith to meet losses. Besides this, in the case now before the Court, the liability of the defendants was permitted to be made by a promissory note, with all the advantages and disadvantages of that form of contract. What are sometimes loosely called subscription notes, under the twelfth section, do not have attached to them the statutory liability of a stockholder to pay in his subscription: the makers of them receive, for such portion as they do not work out as premiums on policies of insurance, the extra compensation of five per cent for the risk they run in being obliged to pay the whole note. In the strictly Mutual Company, every policy of insurance taken out is a subscription to the capital stock, to the extent of the premium, which the statute requires to be paid in cash, and, when paid, becomes inviolable, except for payment of losses, either in full or pro rata. In such Companies, giving and accepting a note payable at a future day for a premium amounts simply to an agreement to subscribe at a future day. The Company is, in law, a trustee of the mass of premiums for all the stockholders; and what is due from it as an artificial person to a single stockholder cannot be offset.

I think, therefore, that the conclusions of that case are not applicable to this, and that the maker of a note under the 12th section, whether he has used it up by premiums or not, is not a member or corporator; and that his liability is not beyond that of any other maker of a note for value taken by the Company in the course of its business, and that any money to be paid by him was not to be held in trust for the payment'of losses beyond any other assets of the Company.

But if the maker of such a note were to be considered as a member, and therefore partner with the other parties insured by such Company, and so not entitled to an offset, notwithstanding he was to receive five per cent compensation for the loan of his credit by such note, until he changed it into a credit to himself for premiums due; the note in question varied in character from one of such description, for the agreement upon which it was given was to have a deduction of one-twentieth on the premiums charged against it, although the receipt given for it expresses that five per cent was to be paid by the Company on the payment of the note. Neither of these provisions correspond with the conditions attached by the 12th section to notes given under it, and ought to be enough to save the defendants from the penalty of being a delinquent stockholder of a strictly Mutual Company; but, I am satisfied to place the position of the defendants on the first grounds stated.

If the note in question, or the premiums it represents, therefore be an ordinary debt to the Company, on which credit has "been given, I think the defendants clearly entitled, under the decision in the case of Holbrook v. The Receiver of the American Fire Ins. Co., (6 Paige, 220,) to offset his claim, liquidated before the appointment of the plaintiff, against the amount claimed to be due on the note, and that judgment should be given for the defendants to that effect, without costs, as stipulated in the submitted case.

Woodruff, J.

I concur with Mr. Justice Robertson in his conclusion that if an action had been prosecuted by the payees of the note in question, the Atlas Mutual Insurance Company, the defendants would have been entitled, to set off against the note, their claim against the Company for losses which had been adjusted and fully liquidated before the note became payable. And that such right of set-off would not have been defeated nor affected by proof that the Company was insolvent and could not pay other debts and claims for losses in full.

And I entertain this opinion without deeming it necessary to determine whether the note in question was, or was not, such a note as is described and referred to in the 12th section of the charter of the Atlantic Insurance Company, which forms a part of the charter of the Atlas Mutual Insurance Company. The agreement under which it was given was not, in all its particulars, such as that section authorizes.

In either aspect this note was a valid binding note. It was delivered to the Company in advance for premiums on risks proposed to be taken, and those risks were taken by the Company. The note was therefore a valid note, and held for a full consideration. Whether it could have been collected if no risks had been taken it is not necessary to say, for in my judgment it cannot affect the result, it is enough that it was a good note for which the defendants were liable to the full amount.

Concurring then in the conclusion that the defendants might have set off their claims for losses had the Company brought an action on this note, the inquiry is:

Does the appointment of the plaintiff, a Receiver of the Company in proceedings against the Company as an Insolvent Corporation, defeat the right of set-off?

To the right understanding of the subject, it should be stated that before the plaintiff’s appointment, the defendants’ claim for losses had been liquidated by the Company at $2,533.59, a sum greater than the balance due on the defendants’ note.

At that time, the Company had hypothecated the note with the Phenix Bank as security for a loan made to the Company by the said bank, and it was held by that bank until after its maturity.

By payments made by these defendants on account of this note, and otherwise, the lien of that bank was discharged, and the note was returned, not to the Company, but to the present plaintiff who in the meantime had been appointed Receiver, and as such, he holds the note.

The plaintiff was appointed Receiver about one month before the note became due, and then succeeded to all the rights of the Company in or to the note and the moneys secured thereby.

In my opinion the defendants’ right of set-off was precisely the same as against the Receiver of the Company, as it would have been against the Company itself.

By the terms of the 10th subdivision of section 12 [18] of the act concerning set-offs, (2 R. S., 354, 355,) it is provided that “ if the plaintiff be a Trustee for any other, or if the suit be in the name of a plaintiff who has no real interest in the contract upon which the suit is founded, so much of a demand, existing against those whom the plaintiff represents, or for whose benefit the action is brought, may be set off as will satisfy the plaintiff’s debt, if the same might have been set off in an action brought by those beneficially interested.”

There is much ground for saying that within the meaning of this provision the present plaintiff represents the insolvent corporation. He sues in right of such corporation. By virtue of his appointment he succeeded to the rights of such corporation, and he enforces those rights without any real interest in the contract upon which the suit is founded. He answers literally the description in the statute, being a Trustee for another.

In this view of the statute, the claim of the defendants being one which could be set off if the Company were plaintiff, it may be set off as against the Receiver.

But without resting upon this construction of the statute of set-off; by the act concerning the voluntary dissolution of corporations, (2 R. S., pp. 467-469, § 79, [68,] to 85, [74,]) the powers and duties of Receiver are made to correspond with those ot Trustees under the Act relating to Trustees of absent, absconding and insolvent debtors, and by section 51, [42,] of the Act concerning proceedings in equity against insolvent corporations, (2 R. S., pp. 462, 464,) receivers appointed in virtue thereof have the same powers and duties.

The Trustees under the Act so referred to and made applicable to Receivers, and therefore to this plaintiff, are authorized “where mutual debts have subsisted between such debtor and any other person, to set off such debts and pay the proportion or receive the balance due.” (2 R. S., p. 47, § 41, [36,] and see also (pp. 41, 42, § 9, subd. 1, and p. 47, § 42, [37.])

This seems to me to require 'the allowance of the set-off in favor of these defendants. Their claim was ascertained and liquidated, owing to them by the Company, due and payable before the plaintiff’s appointment.

This is expressly affirmed by the Chancellor in Holbrook et al. v. The Receiver of the American Fire Insurance Company. (6 Paige, 220.) Indeed, that case goes much further. There (as in this case) the demand held by the Receiver did not become due until after the insolvency of the Company, and the defendant’s claim (unlike the present case) was an unliquidated demand. It had been decided, that the defendant in any action, could not at law (under the Revised Statutes) set off an unliquidated claim, and that a claim for a loss under an open policy of insurance is an unliquidated demand. (Butts v. Collins, 13 Wend., 139; Reab v. McAlister, 8 Wend., 112; Osborn v. Etheridge, 13 Wend., 339, and Gordon v. Bowne, 2 J. R., 150.)

And yet the Chancellor not only decided that as against a Receiver, a demand against the insolvent corporation could be set off, but that in equity it might be allowed although the demand sought to be set off was not liquidated. (See the general principle that a Receiver takes, subject to all rights and equities existing against the Company, in the opinions of the Vice-Chancellor and Chancellor in that case, and also in Miller v. Receiver of the Franklin Bank. (1 Paige, 444.)

In my opinion the set-off should be allowed, and that so much of the sum of $2,533.50, which is the liquidated amount due to the defendant, as is required to extinguish the balance due on the note held by the plaintiff should be so applied.

Judgment ordered accordingly.


author: By the Court—Hoffman, J.

text:
    John T. Hendrickson, Plaintiff and Respondent, v. George W. Beers, Defendant and Appellant.
    1. One who loses money at play may assign his claim against the winner of the money, and an action will lie against the latter at the suit of such assignee.
    2. An assignment of “ all interest (of the loser) in a certain claim for $1,666 against” the winner, is sufficient in form to transfer it, that being the true amount of the claim, and that being the only claim of the assignor against the winner.
    3. A receipt by the loser to the winner of “ seventy dollars in full of all demands,” does not preclude proof that only $70 of the whole sum lost was paid, and is no bar to a suit to recover the balance.
    (Before Hoffman, Pierrepont and Robertson, J. J.)
    Heard, June 4;
    decided, June 16, 1860.
    Appeal by the defendant from a judgment entered upon the report of A. Underhill, Esq., as Eeferee.
    The action was brought, December 26, 1857, by the plaintiff, as assignee of E. 0. Suydam, to recover $1,666, for moneys lost by Suydam at play at the game of faro, and won by the defendant, between the 19th of September and 51st of October, 1857. The complaint states that Suydam so lost, in all $1,736. That the defendant had refunded $70 of the amount won, and that on the 24th of December, 1857, Suydam assigned all his interest in the residue of the moneys so lost and won, and his claim against the defendant therefor, to the plaintiff.
    The answer denied each allegation of the complaint, and set up as a defense, that the defendant and Suydam accounted together; that $70 was found due to Suydam, and that defendant paid to Suydam and the latter received the $70 and gave to defendant “ a full discharge and acquittance of all demands, for or on account of any indebtedness of this defendant to the said Suydam.”

      The Referee found the facts in favor of the plaintiff and gave judgment for the sum claimed. The assignment from Suydam to the plaintiff is in the words following, viz.:
    “ For value received, I hereby transfer and assign all my interest in a certain claim for sixteen hundred and sixty-six dollars, against George Beers, to John T. Hendrickson, of the city of Hew York, to have and to hold the same to and for the use of the said John T. Hendrickson.
    “E. 0. SUYDAM.

      "Dec. 24, 1857.”
    The defendant proved and read in evidence a receipt in the words following, viz.:
    “Hew York, Dec. 11, 1857.
    “Received from Mr. George W. Beers, seventy dollars in full of all demands.
    “it'm
    “E. 0. SUYDAM.”
    The plaintiff was permitted to prove, against the objection and exception of the defendant, that, at the time the $70 were paid and receipt given, there was nothing said about taking that sum in full of all demands.
    When the testimony was closed, the defendant moved the Referee to dismiss the complaint, on the grounds,
    1st. That the plaintiff had failed to prove his case, there being no sufficient evidence that the money lost by Suydam was lost' at play with the defendant; and that there was no proof that any money was paid by Suydam to the defendant.
    2d. That the plaintiff was not entitled to recover in this action, on the ground that the evidence was insufficient to establish any ownership of the claim of Suydam in the plaintiff.
    Sd. That whatever claim Suydam might have had against the defendant was extinguished by Suydam’s receipt of December 11, 1857.
    The motion was denied, and the defendant excepted. The Referee accompanied his report with an opinion in the words following, viz.:
    “The first objection to a recovery taken by defendant is, that there is not sufficient proof that defendant won Suydam’s money and that it was paid to him, or that the money, if lost, was lost in playing with defendant.
    “I think the evidence sufficiently shows that the defendant was the proprietor of the faro bank and gambling-house where Suydam lost the money in question; and that Suydam lost said money while playing at said faro bank, and paid over the money when lost. It was immaterial whether defendant was actually himself dealing at his bank when Suydam lost said money, or whether some one else was dealing for him, as the persons, who play, play against the bank, or proprietor of the bank, in this game of faro. If Suydam lost; the bank, that is, the defendant, its proprietor, won. Such is, notoriously, the operation of the faro bank, or game of faro; such is the uniform description, or definition, of the faro bank, or game of faro, by Hoyle and other writers describing it. If there was anything in this faro bank of defendant different from the ordinary faro bank or game of faro, defendant, who himself went on the stand in his own behalf, should have shown this fact.
    “The second objection of defendant is, that the assignment of the claim is insufficient; that it does not set out a sufficient consideration, and does not sufficiently describe the claim. The instrument of assignment declares that the assignment is made for value received. It is well settled that this is a sufficient setting out of a consideration to sustain a written agreement. Again, if there is anything vague in the assignment as to what claim of $1,666 it refers to, it is made sufficiently definite by the evidence of Suydam, who swears that this claim for money lost was the only claim he had against defendant. Again, he swears, substantially, that this assignment intended the demand in suit. I think, therefore, that the assignment is sufficient.
    “ The third objection taken by defendant is, that the claim of Suydam was extinguished by giving the receipt for $70, even admitting that he had a valid claim before that. The receipt has no more effect than if Suydam had, instead of giving a receipt, admitted, in the presence of witnesses, verbally, that the $70 then paid was in full of all demands. If the fact and truth of the case was, that the payment, instead of being the full amount of the money lost, was only $70 parcel of $1,736 so lost, such verbal admission would amount to nothing. Even had said $1,736 not been money lost at play, a receipt given in full by Suydam, when in fact only $70 was paid, would not have barred an action for the balance; much more will it not where such $1,736 was money lost at play.
    “ The case of Ruckman v. Pitcher, (1 Comst., 392,) goes much further than is necessary to defeat the objection now under consideration. If the loser there had given the stakeholder a receipt in full for the stakes, without receiving from him any part thereof, or on receiving from him a small portion thereof, it is clear, within the principle of that decision, such receipt would have formed no defense to an action for so much of the stakes as had not been actually paid to the loser; for such supposed case of such stakeholder would not have been as strong or meritorious as the actual one, where he paid over the money on the direction of the loser to the winner; and yet he was compelled to pay it again to the loser.”

      James E. Beers, for the appellant.
    I. There is nothing in the whole case which establishes the allegation that Suydam “ played ” with the defendant; or' that defendant “won” any money of Suydam; or that Suydam “paid” any money to the defendant; or that defendant ever “ received ” any money from Suydam. And, as this action, is founded upon the statute against betting and gaming, it is necessary that these allegations should be proved, in order to bring the case within sections 9 and 14 of that statute. (1 R. S., p. 662, §§ 9, 14.)
    II. The plaintiff in any event has no right of action against the defendant. The statute above cited, gives the right of action only to the person who shall play and lose, &c. It is a personal right, and cannot be assigned. The person who played and lost was Suydam. The plaintiff did not play—and whatever his rights may be, they are derived from Suydam, through the assignment made on the 24th December, 1857. The right of action in this case depends entirely upon the statute of “ betting and gaming,” and. unless this statute authorizes an assignment of a claim of this nature, the plaintiff has acquired no interest therein.

      III. The assignment made by Snydam to plaintiff, of Suydam’s interest, &c., is void for want of consideration and delivery.
    IV. Whatever claim Suydam had against the defendant, was extinguished by the payment of the $70, and the execution of the receipt therefor. This paper was executed on the 11th December, and about two weeks prior to the date of the assignment from Suydam to plaintiff. It purports to be a receipt in full of all demands; and being in writing and not ambiguous, could not be varied or contradicted by parol, especially so by any statements made by Suydam, who was the person that signed it.

      C. D. Miller, for respondent.
    I. The receipt did not extinguish the claim which Suydam had on the 11th December, 1857. And because on its face it is seen that but $70 was received by Suydam, whereas the aggregate amount won and received by defendant was $1,736. It was but a mere receipt, and open to explanation. (Mead v. Steger, 5 Port., 498; l Greenleaf Ev., § 212, and cases referred to; also, § 305; Ensign v. Webster, 1 John. Cases, 145.) It was not in the nature of a contract. (Egleston v. Knickerbacker, 6 Barb., 458; Coon v. Knap, 4 Seld., 402.)
    II. But, independent of the considerations presented in the foregoing point, which treat the matter as though it were but the ordinary case of account or debt, the statute entitled “ of betting and gaming,” nullifies the transaction, even conceding it to have been the intention of the parties that the $70 should be in full.
    1. The playing was illegal, and whatever was paid by Suydam to the defendant, was paid contrary to statutory prohibition, and so long as it, or any part of it, remained in his hands, the statutory condemnation was upon it, and any attempt on the part of the defendant to acquire title to it, or of Suydam to confer title to it, was in direct contravention of the plain letter and spirit of the statute. All contracts to that end are void, says the statute, section 8. (Ruckman v. Pitcher, 1 Comst., 411; Storey v. Brennan, 15 N. Y. R., 524.)
    III. It is manifestly one object of the statute to restore the money to the loser. He may sue a stakeholder for the money deposited before or after the determination of the event, even though paid over to the winner. (§ 9.) And it seems he may do so, notwithstanding such payment over was by his express assent and direction. (Ruckman v. Pitcher, 1 Comst., 411; 13 Barb., 556; Storey v. Brennan, 15 N. Y. R., 524.)
   By the Court—Hoffman, J.

There is no ground to differ from the conclusions of fact found by the Referee.

The receipt in full of all demands, which the defendant made an unsuccessful attempt to explain, is not merely not conclusive against the plaintiff, but tends to support the assignor’s account of the transaction. The assignment to the present plaintiff was plainly sufficient and valid.

The Referee’s conclusion of law, that the money could be recovered, is correct. (Storey v. Brennan, 15 N. Y. R., 524.)

Judgment affirmed, with costs.