author: By the Court. Woodruff, J.

text:
    Victor Prosper Considerant v. Albert Brisbane.
    1. A written instrument, whereby the defendant promised “to pay to V. 0., as executive agent of the company—Bureau, G., G. & Co.—the sum of $5000,” is legally payable to the company represented by V. C., and not to V. C., the agent.
    2. Under the provisions of a statute, which requires that all actions shall be brought in the name of the real party in interest, V. C., the agent, cannot maintain an action in his own name, upon such an instrument, to recover the sum agreed to be paid.
    3. The proviso in such statute, which authorizes the trustee of an express trust to sue in his own name, and defines such trustee as one “ with whom, or in whose name a contract is made for the benefit of another,” does not enable V. C. to sue in his own name upon such an instrument. The contract, in such case, is not, in a legal sense, made in the name of Y. C., nor with him.
    4. The consideration of such promise, being stated in the instrument in these words: “ for which I am to receive stock of the said company, to the amount of $5000,” indicates that the company is the real party to the contract, entitled to receive the money, and by whom the stock is to be delivered.
    5. If, upon the face of the note, it were deemed doubtful whether the contract was with Y. 0. personally, and the words describing him'as executive agent, were not conclusive to the contrary; averments in the complaint that the company—Bureau, G., G. & Co.—is a corporation; that Y. C. was, in making the contract, acting as the agent, and as such was authorized to receive subscriptions to the stock of the corporation; and that the defendant authorized him to sub-, scribe the name of the defendant in the company’s books, as an original subscriber ; and that the defendant executed the instrument for the payment of the sum named for the shares so taken by the defendant in said company; show, conclusively, that the contract was made, by the defendant, with the company, and that the defendant’s promise to pay is, legally, a promise to the company, which alone is interested therein. For this reason, therefore, also the agent Y. C. cannot maintain the action.
    6. In judgment of law, the acts of a mere agent, (not shown to have any interest in the subject,) done avowedly for the principal, and on his behalf, and by his authority, are the acts of the principal only; and contracts made with the agent, in such representative capacity, are contracts with the principal, and not with the agent.
    7. In such case, the agent is not personally liable upon the contracts, and he cannot maintain an action thereon in his own name.
    (Before Duer, Ch J., and Bosworth, Hoffman, Slosson and Woodruff, J. J.)
    Heard, Dec. 19th, 1857;
    decided, Feb. 6th, 1858.
    This action came before the Court, upon an appeal, by the defendant, from an order made at Special Term, before Mr.- Justice Slosson, overruling a demurrer to the plaintiff’s amended complaint. The complaint was in the following words:—
    “ The plaintiff, for an amended complaint in the above entitled action, by Francis H. Dykers, his attorney, complains of the defendant, and avers—
    “ First.—That the said defendant, on or about the 1st day of March, 1855, at the City of New York, applied to the said plaintiff, acting as the executive agent, and as such agent, authorized to receive subscriptions to the stock of the European and American Colonization Society, in Texas, a corporation duly created by, and existing under the laws of Belgium, in Europe, and of which said corporation, the business name is Bureau, Guillon, Godin & Co., and authorized said plaintiff to subscribe the name of the said defendant in the books of the said company as an original subscriber for the stock of said company, known as premium stock, to the amount of $10,000, which said plaintiff then and there undertook, and faithfully promised to do.
    , “ Second.—That the said defendant then and there made and executed, in writing, two subscription notes or contracts, for the payment, in the aggregate, of the sum of $10,000, for the shares so taken by said defendant, in said company, which said notes were in the words and figures following, to wit:—
    “ (1) New York, March 1st, 1855.
    “$5000.
    “ On the first day of July, 1856, I promise to pay to Y. Considerant, as executive agent of the company—Bureau,. Guillon, Godin & Co.—the sum of five thousand dollars, for which I am to receive stock of said company, known as premium stock {actions aprimé), to the amount of five thousand dollars, value received.
    “A. Brisbane.
    “ (2) New York, March 1st, 1855.
    “$5000.
    “ On the 1st day of September, 1856,1 promise to pay to Y. Considerant, as executive agent of the company—Bureau, Guillon, Godin & Co.—the sum of five thousand dollars, for which I am to receive stock of said company, known and designated as premium stock {actions aprimé), to the amount of five thousand dollars.
    - “A. Brisbane.

      “ Third.—That said defendant thereupon delivered both of said notes to this plaintiff.
    “ Fourth.—That said plaintiff, acting as such executive agent, and under, and by virtue of the authority vested in him by said defendant, duly caused the name of said defendant to be entered in the books of the said company, at Brussels, in Belgium, for the amount of stock so subscribed for by him, and caused certificates, in the usual form issued by said company, to be issued in the name of said defendant.
    “ Fifth.—That this plaintiff has always been ready and willing to deliver, to said defendant, the certificates of said company of the share or interest so subscribed for, by said defendant as aforesaid, or intended so to be, (and, on the maturity of each of said notes, caused the "same to be tendered to the said defendant,) on the payment by said defendant of the sum agreed to be paid by him for the same, and said plaintiff is still ready and willing so to do, but said defendant has hitherto wholly neglected and refused to pay the same, so agreed to be paid by him as aforesaid, and still wholly neglects and refuses so to do; to the damage of this plaintiff of $10,000 and upwards.
    “ Wherefore said plaintiff demands judgment against said defendant, for the sum of $10,000, with interest on $5000 from the 3d day of July, 1856, and interest on $5000 from the 4th day of September, 1856, besides the costs of this action.”
    To this complaint, the defendant demurred, and the demurrer being overruled, and the complaint held sufficient at Special Term, he appealed to the General Term.

      William, B. Leeds, for the defendant (appellant).
    The action (if any is maintainable) should have been brought by, and in the name of the corporation—Bureau, Guillon, Godin & Co.
    The contract, as set forth in the complaint, was made between the company and the defendant. The words, “as executive agent,” or words of official, and not of personal description. A promise to pay V. C., executive agent, etc., may mean no more than V. C., merchant or mechanic. But a promise to pay V. C., as executive agent, etc., is a promise to him in his official or representative capacity, and enures to the corporation, whose officer or agent he is, and leaves no right of action for the breach thereof, in the plaintiff. (Bayley v. The Onondaga County Mutual Ins. Co., 6 Hill, 476; Taintor v. Prendergast, 3 Hill, 72; Buckbee v. Brown, 21 Wend. R. 110; Brockway v. Allen, 17 Wend. R. 40; Safford v. Stevens, 2 Wend. 158; Gilmore v. Pope, 5 Mass. R. 491; Bowen v. Morris, 2 Taunton R. 374; Piggott v. Thompson, 3 Bos. & Pull. 147, 150; Sargent v. Morris, 3 Barn. & Ald. 277 ; The Inhabitants of Garland v. Reynolds, 2 App. 45 ; Irish v. Webster, 5 Greenleaf R. 171; Commercial Bank v. French, 21 Pick. R. 486; Taunton and South Boston Turnpike v. Whitney, 10 Mass. R. 327; Arlington v. Hinds, D. Chipman R. 431; Middlebury v. Case, 6 Vermont R. 165.)
    The plaintiff was' not personally bound by the'contract set forth in the complaint. (Bank of Genesee v. Patchin Bank, 3 Kernan, 318; Babcock v. Beman, 1 Kernan, 200; Watervleit Bank v. White, 1 Denio, 608; Brockway v. Allen, 17 Wend. 40; Randall v. Van Vechten, 19 John. R. 60; Hall v. Huntoon, 17 Vermont R. 244; Many v. Beekman Iron Co., 9 Paige, 188; Evans v. Wells, 22 Wend. R. 325; Kirkpatrick v. Stainer, 22 Wend. 244.)
    If the words, “as executive agent,” etc., in the contract, set forth in the plaintiff’s complaint, show that it was the intention to bind the corporation for the performance of the contract, and not the executive agent as an individual; why do not the same words show that it was also the intention that the obligations of the defendant should enure to the corporation, and not to the executive agent, as an individual?
    But even if the words, “ as executive agent,” etc., in the promises of the defendant, are construed to be words of mere description, and not of substance, yet the plaintiff cannot maintain this action, because it appears, upon the face of the complaint, that the consideration of the contract proceeds from the company—Bureau, Guillon, Godin & Co.—a corporation, and the plaintiff is a mere naked agent or officer of the corporation, not bound by the contract, and with no beneficial interest in it. (Sailly v. Cleveland, 10 Wend. 156; Safford v. Stevens, 2 Wend. 158; Taintor v. Prendergast, 3 Hill, 72 ; Hall v. Huntoon, 17 Vermont R. 244.)
    This action must be governed by section 111 of the Code, unless the exceptions enumerated in section 113 apply. A trustee of an express trust, as defined in section 113 óf the Code, is construed to mean “ a person with whom, or in whose name a contract is made for the benefit of another.” This means a person who contracts as principal, or in whose name a contract is made as principal, (the other party to the contract accepting an obligation from him, and contracting an obligation to him,) for the benefit of another. . It cannot mean a mere naked agent or officer, who is not bound by the contract, is not beneficially interested in it, and furnishes no part of the consideration for it. (2 Sand. 706.)
    To entitle the plaintiff to recover, the contract must have been . made by him or in his name.
    If it was made by him, or in his name, he is a party to the con-contract.
    And if a party to the contract, he is bound by the contract.
    But the plaintiff is not bound by the contract, (see cases above cited.)
    The company—Bureau, Guillon, Godin & Co.—by their executive agent, engage to make the defendant an original subscriber to their stock to the amount of $10,000; this makes them the party of the first part. The defendant agrees to pay therefor the sum of $10,000; this makes him the party of the second part. But the defendant agrees to pay this $10,000 to the plaintiff as executive agent of the company. Does this engagement make him a party to the contract, within the meaning of section 113 of the Code? If the contract is made by him, what does he agree to do? or what is agreed to be done in his name? The agreement of the defendant to pay to the plaintiff, as the executive agent of the company, $10,000, is an agreement to pay the company $10,000 (see the authorities cited above).

      Francis H. Dykers, for the plaintiff, (respondent).
    The only question is, whether the action is properly brought in. the name of Considerant, the plaintiff.
    I. The objection being that the contract, which is the basis of this action, was virtually made with the company, and not with the plaintiff, the demurrer should have been “for want of legal capacity in the plaintiff to sue,” and not for insufficiency of facts to constitute a cause of action.

      II. But, in any view of the case, the objection is not well founded. Section 113 of the Code says “ a trustee of an express trust, within the meaning of this section, shall be construed to include a person with whom, or in whose name, a contract is made for the benefit of another. Plaintiff has executed his part of the contract and has tendered the stock.
    III. The language of the contract here is, “ I promise to pay V. Considerant as executive agent of,” etc.
    If the language “ as executive agent," is not a personal description, it is, at best, the description of the capacity in which he acts.
    It is, therefore, a contract with the plaintiff and in his name, but in a particular capacity, which capacity shows that the contract is for the benefit of another.
    IY. If the case is clearly within the statute, the Court will not ask for any other reason why the statute should apply.
    Although the action might have been brought in the name of the company, under section 111 of the Code, yet it is properly brought here in the name of the plaintiff.
    The order at Special Term should be affirmed with costs. (See Erickson v. Compton, 6 How. Pr. R. 471; People v. Norton, Court of Appeals, but not reported—referred to in note “ A,” sec. 113 of 5th ed. of Code; Burbank v. Beach, 15th Barb. 326; Moss v. Livingston, 4 Coms. 208; Davis v. Garr, 2 Seld. 124, 133.)
   By the Court. Woodruff, J.

Our statute now provides that every action must be prosecuted in the name of the real party in interest, (Code, § 111,) except as provided in section 113, which declares that an executor or administrator, or a trustee of an express trust, or a person expressly authorized by statute may sue, without joining with him the person for whose benefit the action is prosecuted; and, byway of definition, it is added, that “ a trustee of an express trust shall be construed to include a person with whom, or in whose name, a contract is made for the benefit of another.”

The question before us, and, as we think, the only question, is whether, upon the facts stated in the complaint, the plaintiff is a trustee of an express trust, or, in the words above cited, whether, upon the complaint, the plaintiff appears to be a person with whom, or in whose name, the contract set forth was made.

He is named in the contract; but is the contract, in a just legal sense, made in his name ?

And is the contract made with him, or in legal effect, with the corporation for which he was the agent ?

In judgment of law, the acts of a mere agent done openly and avowedly for his principal, and on his behalf and by his authority, are the acts of the principal only, and the contracts so made are the contracts of the principal. No liability is thereby incurred by the agent, and no rights are acquired by him.

And hence the general doctrine,, that a merely naked agent cannot sue in his own name upon the contracts which he makes for his principal, or which are made through his agency.

But he may contract in such wise as to bind himself personally, and acquire the correlative right to enforce the contract; in which case, although he have no interest whatever in the subject, except what arises out of the contract itself, he may maintain an action thereon. By entering into the personal obligation, he acquires an interest in the contract, and ceases to be the mere agent of his principal.

So in numerous cases, usually spoken of as exceptions to the general rule; as where the principal is not disclosed, in which case the agent does, in fact, bind himself, and so becomes interested in the contract, and acquires the right to enforce it.

So as to an auctioneer, an insurance agent effecting an insurance in his own name for the benefit of another, and a commission merchant, or factor, or a person having a lien upon, or special property in, the subject of the contract. They have long been held entitled to sue upon contracts made by themselves for their principals. By the usages of trade, and in general, because they have an actual interest in the contract itself, or are themselves bound for its performance, they are permitted to sue in their own name for its enforcement.

But clerks, servants and agents generally, selling goods or property for their known principals, and not undertaking themselves for the performance of the contract, have no interest therein, and cannot sue thereon. And yet it is obvious that, if the mere form of words spoken be attended to, millions of property are verbally sold by merchants’ clerks, acting in the known exercise of their authority as clerks, in which the name of the principal is not, in terms, mentioned, and. in which the whole form of negotiation and promise is in the first and second person.

, ' In regard to verbal contracts, we apprehend that no great doubt or embarrassment can arise. When the agent acts purely and professedly as the mere agent of another, words of promise or undertaking, by or to the agent, will be taken as by or to the principal, whether his name be used or not; the agent will be taken to act in a representative character, and so the words employed will be construed as, in legal effect, used by or to the principal in his proper person.

And this will be the sole effect and operation of such a contract, " unless the agent has an interest in the subject of the contract, or by express terms undertakes to bind himself in his individual or personal capacity, and so acquires an interest in the contract itself.

And when the contract -is in writing, if it appear on the face of the contract, that, although named therein, he is mentioned' only in respect of his official or representative character, and not as promisee individually, the promise will not be deemed made to him. When the promise is made to him by his name, without further designation or qualification, purporting to be a contract with him personally, he may sue thereon: the contract is, in every just sense, made with him. When he is designated by name, with the addition of terms of office, or agency, which are merely descriptive of the person, the contract may still be taken to be with him.

But when the terms are such, as clearly import that the party represented is the intended recipient of the subject of the promise, and the designation of the name of the agent is qualified by terms expressive of the capacity or relation which he bears to. such re- • cipient, then the contract is not, in a legal sense, with, nor in the name of the agent.

In short, where the agreement is in writing, it must appear that the agent is himself a party to the contract.

We need hardly specify examples of promissory notes given to agents, by name, without other terms of description; or promissory' notes given to one who, though named, has the word cashier, or trustee, or treasurer, added to his name. ¡Numerous similar examples are to be found in the books; and although there is not entire harmony of decision, it may, we think, be taken as set-tied, that where the promise is in the form of a promissory note, if it be drawn in terms to the agent byname only, or if the designation annexed be words of description only, it may be treated as made with him and in his name, and he may sue thereon.

But where, on the face of the note, it is his official character which was alone in. the mind of the promisor, and contemplated in the promise, the effect is otherwise; as, when the promise was to pay “to the treasurer,” etc., the plaintiff, though in fact treasurer, could not sue, or where the promise was to pay to the cashier of a designated bank, and so of similar cases collected in Paley on Agency, (part 4, chap. 5, and notes to Dunlap’s ed. 1847,) and Story on Agency, (§ 160, § 160a, §§ 401, 418-429,) in treating of this subject.

And the cases most strikingly like the present are in the precise class last defined, in which the promise shows, on its face, that the agent, though named, is named in a capacity or relation that excludes the idea that the promise is made to him personally.

They are a note given to one as “ town treasurer,” or to a “ town treasurer and his successors in office.”

With these general observations, upon the right of an agent to sue, upon principles recognized before the Code, we observe, further, that where a contract was, in legal effect, made with the principal, in such sense, that the agent could not sue thereon, the contract could not be said to be made with the agent.

And where, though his name was contained in the contract, it was accompanied by such a designation of the official dr representative character in which he was named, as promisee, that the promise was, in judgment of law, taken to the principal, and not to himself, then, and in such cases, the contract could not be said to be made in his name.

These views, we think, are sustained and established by numerous cases, and among them, from our own State, see Harp. v. Osgood, (2 Hill, 219,) Taintor v. Prendergast, (3 Hill, 72,) Bayley v. The Onondaga Co. Mat. Ins. Co., (6 Hill, 476,) Grinnell v. Schmidt, (2 Sand. S. C. R. 706,) Union Ind. R. Co., v. Tomlinson, (1 E. D. Smith, R. 364,) and cases cited, among which, bearing most directly upon the' point now under consideration, are Piggott v. Thompson, (3 Bos. & Puller, 147,) and Bowen v. Morris, (2 Taunt. 374;) and see, also, Sargent v. Morris, (3 Barn. & Aid. 277,) Gilmore v. Pope, (5 Mass. 491,) reaffirmed in Taunt, and So. Boston Turnpike Co. v. Whiting, (10 Mass. 336.)

We must assume, that the Legislature, in declaring what the terms “trustee of an express trust” should include, made use of language with a view to its known legal signification.

That they intended, that when the question arose—with whom is the contract in question made? we should answer it in the light of past adjudication, and if the answer in this particular case, is, with the principal, and not with the agent; then, the agent is not a trustee of an express trust, within the definition. And so, if the contract only refers to the agent for the purpose of defining the capacity in which he acts, and not for describing his person, as in the cases above suggested, in which the promise is taken, to the principal directly; then the contract is not, in a legal sense, made in his name, and again, he is not a trustee of an express trust, within the definition.

If these views are correct, the demurrer, in the present case, is well taken. . The contract, declared on, does not import, that the plaintiff has any interest in the subject matter of the contract— nor in the contract itself—nor that he is in anywise bound for, or will be benefited by its performance; it imposes upon him no duty; the promise contained in it does not purport to be made to him personally—it is precisely like a promise to one, “ as town treasurer,” already referred to—it is, therefore, a contract, not with him, but with his principal, and for the reasons already mentioned, it is not, in a legal sense, in his name—it is only in his character as agent, and not in his name as a person, that the contract is madg.

If there was any thing to be performed to the defendant, it was not by the agent. This is, we think, quite apparent. Had the contract been subscribed by the plaintiff, in terms, “as such executive agent, etc.," it would have been no more, and, we think, no less obvious, that the stock which the defendant was to receive, was to be issued to him by the corporation represented, for the purposes of the contract, by the plaintiff.

In this aspect of the case, the contract was between the defendant and the corporation: the defendant was to pay his subscription notes, and the corporation were to issue to him stock for the amount thereof.

And we feel no hesitation in saying, that, upon issuing and tendering to him the stock, the corporation could maintain the action on his promise; and, we .think, that upon the principles above suggested, the plaintiff, the merely naked agent of the corporation, cannot

If there was any room for doubt upon the question, whether, upon the face of the notes sued upon, any implied obligation could arise, if unexplained, binding the plaintiff to deliver the stock, and so giving to him such an interest in the contract as might enable us to treat it as made with him, the pleader seems to us to have carefully excluded any such possible implication, or any construction other than that the plaintiff is the naked agent of the corporation, by the other averments of his complaint.

He avers, that the defendant applied to the plaintiff, acting as agent, and, as such, authorized to receive subscriptions, and authorized to subscribe the defendant’s name in the books of the company, as a subscriber for the stock; that the notes were subscription-notes, made and given for the shares taken by the defendant in the company; that the plaintiff, as such agent, caused the defendant’s name to be entered in the books of the company, as a subscriber, for the amount designated, and caused certificates, in the usual form, to be issued by the company to him. The promise of the defendant being, to pay to the plaintiff, as such agent, completes a transaction in which, as it seems to us, the whole consideration, and the whole obligation and duty, are, as matter of law, between the defendant and the corporation, respectively and reciprocally; that the plaintiff is in no sense a trustee, or any thing but the mere instrument through whom an immediate and direct legal title passed to the corporation, which he represented as their naked agent, not acting or professing to act in his own name.

The order appealed from must be reversed, and judgment or-

dered for the defendant, on the demurrer; but with leave to the plaintiff to amend, within twenty days, on payment of costs. Costs of the appeal may abide the event of the suit.

Ordered accordingly.


source: Caselaw Access Project

author: By the Court. Pierrepont, J.

license: Public Domain

text:
    Joseph Ehlen, Plaintiff and Respondent, v. The Rutgers Fire Insurance Co., Defendants and Appellants.
    1. When, in an action upon a policy of insurance against loss or damage by fire, , the answer admits a- loss, but not to the amount claimed, and sets up grounds of defence, and a reference is ordered, “ only to ascertain and determine the amount of any loss sustained by the plaintiff, for the recovery of which such action is brought,” and such referee executes the order and reports the amount of such loss, and, on a subsequent trial of the action, his report Is read in evidence without objection, and a verdict passes for the plaintiff; the defendant, on an appeal from the judgment, cannot review the accuracy of .the referee's decision, as to the amount of such loss, nor in respect to the admission or rejection of evidence, on the proceedings before him, as such referee.
    2. It seems that the report might have been excepted to, and reviewed on a special motion.
    (Rule 32, of the Rules adopted in August, 1858, prescribes the mode of reviewing such a report.)
    (Before Hoffman and Pierrepont, J, J.)
    Heard, January 26;
    decided, February 6, 1858.)
    The plaintiff brings this action upon a policy of insurance dated the 29th of September, 1854, by which the defendants insured the plaintiff against loss or damage by fire, in respect to certain property .described in the policy. The complaint states the execution and delivery of the policy, its date and terms, and alleges a loss by fire, the performance by the plaintiff of all. the conditions, on his part, contained in the policy, and prays judgment for $600, the whole sum insured, with interest and costs.
    The answer, among other things, admitted a loss, but alleged that it did not exceed $40. There was served, with the answer, a written offer, that the plaintiff might take judgment for $825 and costs.
    The action being at issue, it was, by an order of the Court, dated the 15th of December, 1855, referred to A. J. Perry, Esq., as sole referee, “ only to ascertain and determine the amount of any loss sustained by the plaintiff, for the recovery of which this action is brought.”
    The referee made a report, dated the 2d of August, 1856, which

      contained the testimony taken, and proceedings had before him on the reference, and in said report, reported, “ that 1 the amount of the loss sustained’ by the plaintiff, for the recovery of which this action is brought, is the sum of four hundred and one dollars and seventy-four cents.”
    The action was tried on the 11th of February, 1857, before Mr. Justice Woodruff and a jury. On the trial, it was admitted, that a fire occurred, as alleged in the complaint, and that the requisite preliminary proofs were furnished in due season. The plaintiff then read, in evidence, the application for an order of reference; the order of reference to Mr. Perry, and his report as such referee. No objection was made to the reception of either of these items of evidence, to establish the amount which the plaintiff was entitled to recover, if he was entitled to any recovery herein.
    The defendants then introduced witnesses to establish certain grounds of defence, stated in their answer, which, if established, would show that the defendant was not entitled to recover at all, under the policy.
    The printed case, after stating the proceedings had, and evidence given on the trial, adds, “ that the case was then submitted to the jury, who found a verdict for the plaintiff for the sum of $457.98, (amount of report of referee and interest,) to set aside which verdict this case was made.”
    The case contains no requests to charge, nor exceptions to the charge made, nor does it state what charge was made.
    Judgment was entered in favor of the plaintiff, for the amount of the verdict, with costs; and the defendant appealed from the judgment, to the General Term, by a notice of appeal, dated February 18, 1857.
    On the 20th of'February, 1857, the defendants’ attorney served on the plaintiff’s attorney a notice, (exclusive of its title,) in these words, viz.:—
    “Sir,—Please to take notice, that the defendants herein except to the report of A. J. Perry, Esq., referee, as follows:—
    “ 1st. That they except to the finding, that the damage to the 625£ pairs of window-shades by the fire, is the sum of $248.66.
    “ 2d. That they except to the finding, that the amount of the loss sustained by the plaintiff, for the recovery of which this action is brought, is the sum of $401.74.

      “ 3d. That they except to so much of the finding of the referee as relates to damage of window-shades, upon the ground that the plaintiff had no insurable interest in such window-shades. That he suffered no damage to such window-shades, and that he had no such interest in said shades as was insured in the policy upon which this suit is brought. Peet & Nichols,
    “ February, 20, 1857. Defts’ Att’ys.”

      O. A. Nichols, for the appellants, insisted upon his right, on this appeal, to have the matters enumerated in his exceptions, contained in the paper of the 20th of Feb., 1857, considered by the Court at General Term, and also his right to review exceptions, taken by him to decisions of the referee, in excluding and admitting evidence on the proceedings had before such referee.

      O. A. May, for respondent.
   By the Court. Pierrepont, J.

This is an appeal from a judgment against the defendants, entered upon the verdict of a jury.

On the 15th of December, 1855, at Special Term, an order was made in this action, that it “ be referred to A. J. Perry, Esq., of the city of New York, counsellor-at-law, as sole referee, only to ascertain and determine the amount of any loss sustained by the plaintiff, for the recovery of which this action is brought.”

In August, 1856, the referee made his report, finding the amount of the loss to be $401.74.

The cause was tried in February, 1857. Upon the trial, the referee’s report was read in evidence, together with proofs of the fire, etc. The jury found for the plaintiff the amount reported by the referee. Upon their verdict, judgment was entered, Feb. 15th, 1857. On the 20th of the same month exceptions were filed to the referee’s report. The evidence taken on the reference is printed in the case, though it does not appear to have been before the Court at the trial. The defendants now seek, at General Term, on appeal from the judgment, to review the referee’s special report. This is not correct practice. The time to object to the report was before it was read to the jury; it might have been excepted to, and reviewed on special motion. The Code (sec. 469) provides that the rules and practice of the Court in civil actions, not inconsistent "with this Act, shall continue in force, subject to the power of the respective Courts.

The mode which the Code prescribes for reviewing the report of a referee, upon an appeal from the judgment entered on it, is not applicable to a special report of this kind.

Rone of the exceptions taken to the ruling of the Judge on the trial were well taken, and upon them them the counsel seemed to place no reliance.

The judgment must be affirmed with costs.

Affirmed accordingly


author: By the Court. Hoffman, J.

text:
    Edgar M. Brown v. Elisha E. Morgan, John Griswold, Edward G. Tinker and others.
    1. Under a contract for the building of a vessel, the ownership continues in the contractor until the vessel is completed and delivered to the party for whom she is built.
    2. The same rule applies where the contract limits the building to “ the hull, spars, top iron work and cabin,” for a sum specified, “ payments to be made as the work progresses."
    3. When a ship is built by the contractor, under such an agreement, the party for whom she is built, is not responsible to a third person for materials, or articles used in the construction of the hull of the ship, which, by the contract, the contractor was bound to provide and use therein.
    (Before Hoffman and Pierrepont, J. J.)
    Heard, Jan. 11th;
    decided, Feb. 13th, 1858.
    This action comes before the Court at General Term, upon questions of law, arising at the trial, which were there ordered to be heard, in the first instance, at the General Term.
    The cause was tried on the 17th and 18th day of December, 1856, and, at the close of the plaintiffs testimony, the complaint was dismissed. The only exception which' the case presented for consideration, material to the review had in the General Term, was the plaintiff’s exception to the order of the Court dismissing the complaint.

      It would seem, from the opinion of the Court at General Term, that the Court deemed the following facts established by the testimony, viz.:—
    That, on the 20th of May, 1854, the defendant John Griswold entered into a contract with Jacob A. Westervelt, ship-builder, which was expressed in writing, as follows:—•
    “Hew York, 20th May, 1854.
    “ Mr. John Griswold : Sir,—I offer to build the hull, spars, top iron work, and a cabin forty feet long, of a ship of the following dimensions, viz.: Two hundred and five feet keel; forty-one feet beam, moulded; twenty-eight feet deep; to have three entire decks; the materials and workmanship to compare favorably in all respects, as well in quality as quantity, with the best modern ships I have heretofore built for the London line of packets or other ships, for the sum of seventy thousand dollars: payments to be made as the work progresses. Respectfully yours,
    “(Signed) Jacob A. Westervelt.
    “ I accede to the above proposition.

      “July 20th, 1854.” John Griswold.”
    During the progress of the work, the defendant Edward G. Tinker, who, on the completion of the vessel, became the captain or master thereof, was on board, exercising a supervision over the work, and giving directions in relation thereto.
    The plaintiff is a brass and copper founder. Orders were given to his employee (his pattern-maker) to be at the ship-yard of Westervelt, to see Captain Tinker. By whom the orders were left, and by whose authority they were given, does not appear. The pattern-maker attended, took the dimensions, etc., under the orders of Captain Tinker, and various work was done, and materials were supplied by the plaintiff, which were used on the hull of the vessel.
    He also furnished other copper work, as the building and completion of the vessel progressed, which was not used in or applied to the hull, but which was confessedly not within the contract of Westervelt.
    The supervision and directions given by Captain Tinker are described by the witness thus: “ He ordered the work done as captains usually order.”
    The work and materials were-charged by the plaintiff to “ the ship Palestine and owner,” that being the name which the new vessel received.
    As the work was, from time to time, delivered by the plaintiff, he took receipts for the goods delivered. These receipts were nearly all of them signed by the son and partner of the contractor, (J. A. Westervelt;) or by his foreman, or by other persons in the said Westervelt’s employ.
    One receipt was signed “ J. A. W., for John Griswold;” one “ J. A. Westervelt, for owners of ship Palestineone, “ J. A. W.,” without any addition, and one “ E. G. Tinker.”
    The plaintiff’s account, as entered in his books, amounted to £1708.22; and the first items were charged under date of Feb. 10th, 1854, and the last, August, 24th, 1854.
    The whole bill was rendered, and became the subject of discussion between the defendant Morgan, (who, at that time, was acting for the defendant John Griswold,) and the contractor, Westervelt. Mr. Griswold refused to pay the whole bill, insisting that such of the work and materials as went into the hull of the vessel were not chargeable to him, nor ordered by him; that, in respect to any work or materials in the hull of the vessel, they were included in his contract with Westervelt; and that Captain Tinker’s supervision, of the progress of the work, was only for the purpose of seeing that the work was ¿properly done, as the contract required.
    On behalf of Mr. Griswold, Capt. Morgan, on his examination of the bill, selected certain of the charges, viz.: “for yellow metal or Coppering,” which, it was conceded, were not embraced in Westervelt’s contract, amounting to $427.02, and for those the plaintiff was paid by John Griswold.
    The vessel was built for John Griswold alone, the other defendants having no interest therein at the time. After her completion, the other defendants, respectively, purchased from John Griswold a share or part of the vessel.
    John Griswold paid to Westervelt the whole amount due to him upon his contract, above set forth.
    The residue of the plaintiff’s account not being paid, the plaintiff commenced this action, not only agáinst John Griswold, for whom the ship was built, but against the other persons who after-wards purchased shares or parts thereof.
    It was claimed on the trial, not only that neither of the defendants were liable, because the work and materials, not paid for by Griswold, went into the hull of the vessel, and were embraced within Westervelt’s contract; and that he, Griswold, never purchased or ordered any of them, nor authorized their purchase on his account or credit; but that the other of the defendants had no interest at all at the time, and were not liable; and also, that the action being joint, no recovery could be had, in this action, even if Griswold could be held liable.
    The complaint was dismissed, and the questions of law were ordered to be heard at General Term, as above stated.

      James W. Gerard, for the plaintiff.
    Wm. M. Evarts, for the defendants.
   By the Court. Hoffman, J.

There is no evidence in the case, and none was offered, which would tend to render either of the defendants liable, except Tinker and John Griswold.

As to Griswold, there is no testimony of his ordering the articles, either personally or through an agent. There is no proof of the plaintiff intending to charge him, or furnishing the supplies upon his credit.

The contract between him and J. A. Westervelt brings the case within the authority of Andrews v. Durant, (1 Kernan’s Bep. 85.) The ownership of the vessel was in Westervelt, until she was completed and delivered.

It is true, that this contract did not comprise the construction of the whole vessel; it did embrace the hull, spars, top iron work and cabin. All the materials sued for went into the hull.

There may arise a case, in which a building contract is limited to so small a part of the vessel as to create an exception to the rule of Andrews v. Durant, as where the materials could not have been employed in the portion embraced in the contract;- but, whatever be the rule to be adopted in such a case, the present is not of that character. The materials furnished went into the hull, which Wester velt was to build.

His own opinion, therefore, that they were not to be supplied by him within his contract, is immaterial, and his opinion is counterbalanced by that of Captain Morgan.

We consider it to be clear, that no case has been made out against the defendant Griswold.

As to the defendant Tinker, he was neither owner nor master, nor was the credit given to him, nor did the plaintiff ever indicate, until suit brought, an intention to charge him. Indeed, the testimony only proves that he directed where the materials were to be used, their size and fitting—not that he ever ordered them.

The plaintiff has failed to make out a case against either of these defendants. It is needless, therefore, to consider the point raised by the defendants’ counsel, that the misjoinder’ of the other defendants, against whom there was not the least evidence, justified a nonsuit as to all. We apprehend, however, that he is wrong, and that a joint action against any number may be sustained upon the evidence, as to one or more, and fail as to the rest. (1 Kernan, 294; 5 Duer, 328; 15 Barbour, 524.)

The judgment will be for the dismissal of the complaint with costs.


author: By the Court. Bosworth, J.

text:
    Fieldings, Plaintiffs and Appellants, v. J. T. Mills, Respondent.
    1. When a mechanic, in the course of his business, makes repairs, upon an agreement to give credit for a stipulated time, he has no lien upon the article so repaired for the value of such repairs. If the person, for whom they are made, becomes insolvent, before the article, so repaired, goes out of the possession of the mechanic, the latter cannot assert a lien on account of such intervening insolvency.
    2. There .is a marked difference, in some respects, between the right of stoppage, in transitu, and that of a mechanic to detain. Insolvency alone creates the former. The common-law right of a mechanic to detain, arises and exists, as 'well, against a solvent as an insolvent employer. Neither the solvency nor the insolvency of the latter can be deemed an element in the creation of the right of lien which exists in favor of the mechanic.
    3. When a defendant, before answering, serves an offer that the plaintiffs may take judgment, for a sum named with costs, which offer is not accepted, and subsequently puts in an answer which not only controverts the amount due, upon the plaintiffs’ cause of action, but sets up a counter-claim, and the plaintiffs recover the precise sum offered and a judgment that the defendant is entitled to nothing upon his counter-claim, they recover a more favorable judgment than that offered, and' the. defendant is not entitled to costs, as a matter of right, from the time of such offer.
    (Before Bosworth & Woodruff, J. J.)
    Heard, Dec. 7th, 1857;
    decided Feb. 27th, 1858.
    to this action, George and Robert Fielding are the plaintiffs, and J. Doremus Mills and John -T. Mills are the defendants. It comes before the Court, at General Term, on an appeal by the plaintiffs from the judgment entered herein on the- report' of Stephen P. Nash, referee. - It was commenced in September, 1855. The "complaint states, in substance, First, that the plaintiffs are manufacturers of stages, under the firm ofFielding Brothers.” On the first of May, 1855, J. D. Mills sent to them six stages, or omnibuses—their licensed numbers being, 556, 557, '558, 559, 560 and 561—with orders to put them in complete repair, according to directions then given. ■ They received them, • and progressed diligently with the repairs, until the 11th of- June, 1855, when J. T. Mills - told them he had bought the stages, and to finish them; which they proceeded to do, until the 18th of June, 1855, when he told them he would not be accountable for further work or repairs, except upon the stage No. 561, which he ordered to be, and which they finished.

      Second. When told on the 11th of June, 1855, by John T., that he had bought the stages, the value of the repairs done, including work and materials, was $860—of that done after J. T. Mills "ordered the plaintiffs to proceed, was $324.88—making a total of $1184.38. ' . '

      Third. Since the 18th of June, 1855, plaintiffs demanded payment of the defendants of the $1184.38, which they neglect and refuse to pay.

      Fourth. The plaintiffs claim a lien on the stages for the whole amount, have offered to-give, them up on being paid, and have requested the defendants to take them and pay the bill.

      Fifth. The plaintiffs cannot render their lien effectual without the aid of, the Court, as one of equity. They ask a judgment that the defendants pay the $1184.38, with interest from the 18th of June, 1855, and costs, by a day to be named, or in default thereof, that the stages be sold, and the proceeds applied to pay the same.
    John T. Mills, before answering the complaint, served a written offer, dated the 22d of October, 1855, that judgment might be taken against him for $276.38, with interest from the 18th of June, 1855, and the costs of the action, on condition that the plaintiffs delivered the stages to him. The plaintiffs did not accept the offer.
    John T. Mills answered separately, by an answer, verified on the 19th of November, 1855, denying that he excepted stage No. 561, from any directions or declarations made on the 18th of June, 1855. The answer denies, that he ordered that finished; or that the repairs up to the 11th of June, were of the value of $860; or that the value of those done at his request was $324.38. It denies, that plaintiffs have any lien upon said stages, except for the value of the work done at his request. It then “ denies all the allegations of the complaint, which are inconsistent with this answer.” It then avers, that on the 11th day of June, 1855, J. T. and J. D. Mills called, together, on the plaintiffs, and told them J. T. Mills had bought the stages ; and the plaintiffs then agreed to look to J. D. Mills for the value of the work then done, and waived any lien they had therefor, and thereupon J. T. Mills requested them to go on with the repairs as then specified, and charge the future work to him.
    He never agreed to pay for the work done for J. D. Mills; and “ it was solely in consequence of plaintiffs agreeing to look to said J. D. Mills, for the value thereof,” that J. T. Mills ordered them to go on with the repairs; and otherwise, he would not have given said orders.
    A few days after that, plaintiffs told him they did not intend to keep said agreement, and should claim and enforce their lien; whereupon he absolutely ordered them to desist from further repairs, and informed them, he would not be responsible for future repairs, which orders and conversations, are the same as those mentioned in the complaint, but there inaccurately stated.
    Afterwards, and before suit brought, he applied to plaintiffs for their bill of work done at his request; offered to pay it, if they would give up the stages, and is now ready to do so. They neglected to furnish such a bill of to state its amount, and refused to accept his offer. It then states, by way of counter-claim, that, on the 11th of June, 1855, he was, and since has been, running a line of stages, and all the time needed those detained by the plaintiffs, and has suffered damage, by their refusal to keep their agreement or to give up the stages, to the amount of $15 per day; and for the amount of such damage asks judgment.
    It also asks judgment, that the complaint be dismissed and the stages be delivered to him, on his paying the value of the repairs done at his request, up to the time he ordered them to stop repairing—first deducting the damage to John T. Mills, by reason of their refusal to give up the stages; and if such damages exceed the value of such repairs, then a judgment against the plaintiffs, for the excess, with costs.
    The plaintiffs replied to the answer, putting at issue its allegations constituting a counter-claim.
    The action was referred to the referee, to hear and decide the whole issue therein. His report, exclusive of the title of the action and its recital, reads as follows, viz.:—
    “ That on or about the first day of May, 1855, the defendant, J. Doremus Mills sent to the factory of plaintiffs six stages, belonging to him, and employed them to put the same in repair, as particularly stated in the complaint; that plaintiffs received the said stages, and proceeded to repair the same, until the 11th day of June, 1855, when they were notified, by the defendants, that the said John T. Mills had purchased the said stages from the said J. Doremus Mills; that thereupon the said J. Doremus Milla directed the price of the work already done to be charged to Mm; and the said John T. Mills employed the plaintiffs to proceed with the work on said stages, which they did, until the 18th day of June, 1855, when the said John T. Mills directed the said work to be stopped; that the value of the work and repairs done on the said stages, prior to the sale of the same to the defendant John T. Mills, was eight hundred and sixty dollars; that the said work was done for J. Doremus Mills, upon a credit of four months; that the value of the work done, subsequent to the sale to the defendant John T. Mills, was $276.38, and said work was done without credit to be given therefor; that the plaintiffs did not, on the 11th of June, 1855, or at any other time after the sale of said stages by him, agree to look to J. Doremus Mills for the value of the repairs then done upon them, and waive any lien they might have had upon them; that on or about the first day of September, 1855, and before the commencement of this action, the defendant John T. Mills demanded the possession of said stages,.stating his readiness to pay the amount of such repairs as had been done at his request; that the plaintiffs claimed to retain the said stages, and declined to furnish said defendant with a bill of said last-mentioned repairs, distinct from the other repairs which had been put upon said stages; that on the said 11th day of June, 1855, when the plaintiffs were informed of the sale of said stages, said J. Doremus Mills was insolvent, and on that same day'made a general assignment for the benefit of his creditors, of which the plaintiffs were informed before the said 18th day of June, 1855, when the said work was stopped; that the plaintiffs have furnished standing-room and storage for the said stages, since the said work was stopped, and that the value of such storage, up to the date of this my report, is two hundred and eighty-eight dollars.
    “ And I further report, that I find and decide, as matter of law, that the plaintiffs had not, at the time this action was commenced, any lien upon the stages mentioned in the complaint, for the work and repairs done upon them for the defendant J. Doremus Mills, prior to the sale to the defendant J. T. Mills, although at the time of such sale, and before the completion of said work, the said J. Doremus Mills had became insolvent—such work having been done upon a credit of four months from its completion, to be given therefor.
    “ That the plaintiffs had a lien upon said stages, for the subsequent work done upon them, by direction of defendant John T. Mills.
    “ That the demand of said stages by said defendant, and his expressed readiness to pay for such work, was not a sufficient tender to discharge such lien, which, therefore, remained in full force when this action was commenced.
    “ That the plaintiffs are not entitled to recover in this action for the storage of said stages.
    “ That the defendant John T. Mills is not entitled in this action to recover any damages by way of counter-claim, as in his answer alleged.

      . That neither party in this action is entitled to costs, as against the other.

      “ And I, therefore, find and decide, that the plaintiffs are entitled ' to judgment in this action against the defendant John T. Mills, for the sum of $276.38, with interest from the 18th day of June, 1855, amounting, at the date of this my report, to $305.23; and that unless the said sum, with interest, be paid to the plaintiffs or their attorneys herein within fifteen days after the service of a copy of said judgment upon- the attorney of said J. T.-Mills herein, the said stages, or so many of them as may be sufficient for that purpose, be sold under the direction of this Court; and the proceeds applied to the payment of the amount so adjudged to the plaintiffs and the expenses of-such sale; and on the payment of said sum, so adjudged to the plaintiffs, and the expenses of such sale, if the said stages be sold, the said stages, or such of them as shall not be sold under the said judgment, and the surplus proceeds of such as may be sold, shall belong and be paid, or be delivered to the said John T. Mills.
    “All of which is respectfully submitted.
    “ Dated Hew York, Dec. 15th, 1856.
    “ S. P. Hash, Referee.”
    Judgment was entered, conforming to the report of the referee, except that it -awarded to John T. Mills his costs of the1 action, from the time of service of such offer, on the ground, as recited in the judgment, that the plaintiffs had “ failed to obtain a more favorable judgment” than that authorized by the offer. Under what circumstances, or by what authority this provision was inserted in the judgment, the appeal-papers did not disclose.
    The plaintiffs filed and served, in due time, the following exceptions to the decisions of the referee—

      “ Exception 1:—The counsel for the plaintiffs excepts to the said referee’s conclusion of fact, that-the work referred to was done for J. Doremus Mills, on a credit of four months.
    "■ ■“ Exception 2.—The said counsel for plaintiffs excepts- to the said referee’s conclusion of law, that the plaintiffs had not, at the time this action was commenced, any lien on the stages mentioned in the complaint, for the work and repairs done upon them for the defendant J. Doremus Mills, prior to the sale to the defendant John T. Mills, although at the time of such sale, and before the completion of said work, the said J. Doremus Mills had-become insolvent, such work having been done upon a credit of four months from its completion, to be given therefor.
    “ Exception 3.—The. said counsel for plaintiffs. excepts to said referee’s conclusion of law, that the plaintiffs are not entitled to recover in this action for the storage of said stages.
    “ Exception 4.—And the said counsel, in addition to the above exceptions to the said conclusion of fact and law, further excepts to so much of the judgment, entered in this action, by which it is declared that the defendant John T. Mills, before -answering, having served upon plaintiffs an offer in writing to allow judgment to be taken, as therein specified, with costs, and the plaintiffs not having accepted the same within ten days thereafter, or at all, and having failed to obtain a more favorable judgment, and by which it is adjudged that said defendant, John T. Mills, do recover of said plaintiffs eighty-seven dollars and nineteen cents for his costs, from the time of such offer,-said- costs having been-duly adjusted at such an amount.”

      James Humphrey, for appellants.
    I. Admitting that there was a distinct express agreement between the plaintiffs and J. Doremus Mills—that this specific work should be done on a credit of four months from its completion— the lien of the plaintiffs was not thereby defeated, the said J. D. Mills having become insolvent during the progress of the work. The insolvency of the employer-abrogates the contract for credit,- and thus the lien remains unimpaired. 1. As a general rule, insolvency destroys all contracts to give credit, even of the most express character. 2. This principle is most frequently applied to contracts for the sale of. goods: the vendor has a lien on the goods until payment, except when there is an agreement for a credit, which is inconsistent with the existence of a lien; but, where there is an express agreement for a credit, if the vendor becomes insolvent before delivery, the lien exists. (Tooke v. Hollingsworth, 5 T. R. 215;. Bloxam v. Sanders, 4 B. & C. 941; Bloxam v. Morley, id. 951; Cross Law of Lien, 328.) This rule is’even applied to cases where the insolvent vendor has made sub-sales, and been paid for them. (Dixon v. Yates, 5 B. & Adol. 313.) 3. The doctrine of stoppage, in transitu, is founded on the right of lien in the vendor, and illustrates the extent to 'Which the principle contended for is carried, for the protection of the honest dealer. (2 Kent’s Com. 5 ed. 540.) 4. There is no difference in principle between the case of a vendor of goods and that of a mechanic selling both his service and materials, or that of a manufacturer (as in this case) selling the money which he had paid to his workmen and his materials together. 5. The same rule has been applied in cases analogous to the present, wherever the question of intervening insolvency has been directly presented. (Stevenson v. Blakeloch, 1 Maule & S. 535, which is distinguished from Cowell v. Simpson, on this precise point; Abbot on Shipping, 299 ; Hutton v. Bragg, 2 Marshall, 339, per Gibbs, C. J.)
    II. . There was no express contract for credit in this case. At the commencement of the dealing between the parties, when Mills was in good credit, he was informed by plaintiffs “ that work done for him would be on four months’ credit; that they did not give any one longer time than that;” and, accordingly, when bills were rendered, notes were taken at four months. Nothing being said in this particular case, the contract for credit was implied from the former dealings. It must, therefore, be also implied, that the circumstances on which the former credit was based should remain the same. It was certainly implied that the dealer should not become insolvent. It cannot be presumed that a man ever agreed to give four months’ credit to a bankrupt. The rule contended for, in case of an express contract to give credit, applies, with still greater force of reason, when the agreement is only implied.
    III. Liens of this nature are in conformity with natural equity, and, as such, are favored in law. (McFarland v. Wheeler, 26 Wend. 480, per Verplanck, Senator; Grinnell v. Cook, 3 Hill, 491.)
    IV. The fourth exception to the judgment is well taken, and the defendant J. T. Mills was not entitled to costs.
    V- The plaintiffs should have judged for $1136.38, with interest from 18th June, 1855, and costs, with the same provisions for the sale of the property as are contained in the present judgment.

      J. M. Van Cott, for respondent.
    I. The referee correctly found, that the work done prior to the 11th of June, 1855, for which the plaintiffs asserted a lien, “ was done for J. Doremus Mills, on a credit of four months."
    II. Upon the facts found, the alleged lien did' not exist. 1. A contract for credit, is a contract to deliver without payment, and expressly negatives the right to detain till payment. 2. The plaintiffs’ assent, to the sale to John T. Mills, executed the agreement to deliver without payment, and repels the idea of a lien. 3. The plaintiffs having sued before the repairs were completed, are obliged to bring forward, and rely upon such sale to excuse the omission to complete the work. (Story on Bailments, §§ 229, 441.) 4. The stages being held to make repairs for John T. Mills, the plaintiffs were required, by their agreement, to deliver them on being paid for such repairs. 5. There is nothing, in the insolvency of the previous owner, to create a lien for work done for him on a credit prior to the transfer to the present owner. (2 Kent C., 635-8, and notes. Gilman v. Browne, 1 Mason’s R., 191; Chandler v. Belden, 18 J. R. 157; Pinney v. Wells, 10 Conn. R. 104; Crawshay v. Homfray, 4 Barn, and Ald. 50; Lucas v. Nockells, 4 Bing. 729; Alsager v. St. Katharine's Docks, 14 Mes. and Welsh. 794.)
    III. The plaintiffs were not entitled to storage. 1. Ho basis is laid for it in the complaint. 2. The plaintiffs were not storekeepers. There is no contract, express or implied, to pay storage. There was no request to detain—but the contrary. They could not store, any more than they could insure, at the cost of the owner, to keep good the security of a lien. (9 M. and Wels. 675.)
    IV. The evidence would well have justified a dismissal of the complaint, on the ground of the tender and the counter-claim. The judgment should be affirmed, with costs.
   By the Court. Bosworth, J.

The work done for J. D. Mills, was done on a credit of four months. He became insolvent before the work, which the plaintiffs undertook to do, was completed. The question presented by the appeal, in the present case, is this:—Have the plaintiffs a right to retain the stages until the amount, owing for the work done and materials applied in repairing them, is paid ?

It is clear that they have not, if they must abide by the terms of the contract, under which the labor was performed and the materials furnished were supplied.

They must abide by their contract, unless the insolvency of J. Doremus Mills, occurring before the delivery of the stages, puts an end to the agreement, and leaves all the parties to it in precisely the same position as if no agreement for credit had ever been made.

The right of a mechanic to detain the property of his employer until he is paid for the labor done, and materials used, in repairing it, grows out of the usages of trade.

It seems to be well settled, in respect to a common carrier, that no such right exists, when the transportation of the goods was undertaken, upon an agreement which fixes the time of payment of the freight to a day subsequent to that on which, by the terms of the agreement, they are to be delivered.

The fact, that the shipper becomes insolvent while the goods are in transit, or before they are delivered, does not absolve the carrier from his agreement as made, nor authorize him to detain the goods until the freight is paid. (Crawshay, et al., v. Homfray, et al., 4 Barn. & Ald. 47; Alsager v. St. Catharine's Docks, 14 Mee. & Welsb. 794; Pinney v. Wells, 10 Conn. 104; Chandler v. Belden, 18 J. R. 157.)

We can perceive no reason why the common-law right of lien, which exists in favor of the carrier, should not be regarded as favorably as any other that grows out of the usages of trade. If insolvency of the shipper, occurring before the delivery of the goods, will not authorize the carrier to detain them for freight, in a case in which he agreed to give credit for it, until a day subsequent to that on which the goods were contracted to be delivered, it is difficult to assign any reason, why a different rule should be applied in the case before us, in consequence of the insolvency of J. Doremus Mills.

There is a marked difference, in some respects, between the right of stoppage, in transitu, and that of a mechanic to detain. Insolvency alone creates the right to stop, in transitu. The common-law right of the mechanic to detain, arises as well against a solvent as an insolvent employer. Neither the solvency nor insolvency of the latter can be deemed an element in the creation of the right of lien, which exists in favor of the mechanic. No lien exists in favor of the latter, when his services are performed" upon an agreement, that payment for them is not to be made until after the article which they have improved is to be delivered.

It follows, if these views are correct, that the referee was right in holding that the plaintiffs had no lien upon the stages for the work and repairs done upon them for J. Doremus Mills.

We think he has no right to recover in this action for the storage of the stages. J. T. Mills demanded possession of them, and offered to pay for the work and repairs done upon them at his request.

The referee decided that neither party should recover costs as against the other. That decision, if erroneous, could only be corrected by the Court at General Term, on appeal from the judgment. The ground on which the judgment states costs were awarded to J. T. Mills is, that he served an offer before answer, under section 385 of the Code, which was not accepted, and the judgment recovered is no more favorable than that offered. This ground has no existence in fact. The answer set up.a counterclaim, which has been extinguished; and in addition to that, the plaintiffs recovered a judgment for the sum offered. This, of itself, is an answer to the claim of J. T. Mills, to recover costs from the time of the offer, as a matter of right. (Schneider v. Jacobi, 1 Duer, 694.)

The judgment must be so far modified, as to declare that neither party shall recover costs as against the other, and in all other respects it is affirmed without costs of the appeal to either party.


text:
    William T. Hooker, President of the Continental Bank, Plaintiff and Respondent, v. J. F. Franklin, Appellant.
    1. A bank which receives from its customer a check, drawn by a third person on another hank, and credits to the customer, in its account with him, the amount of such check, as so much cash, is not guilty of laches, by reason of not presenting it to the drawee until the following day, when, in so presenting the check, it acts in conformity to the regular and established course of business in such cases.
    2, Such a depositary hank, by such a transaction, does not undertake to exercise, nor subject itself to the duty of exercising, any greater diligence to obtain payment of the check, than is practised by conforming to the established usage of hanks, and the customary course of business in such cases.
    8. Hence, in such a case, the depositor of the check, endorsing it at the time of such deposit, will be liable to the depositary for the amount of it, on its being protested for non-payment, when so presented, and being duly notified of such presentment, and of the refusal of the drawees to pay it, although the drawer had funds in the hank, on which it was drawn, during some parts of the day of such deposit, and subsequently thereto, sufficient to pay it.
    (Before Bosworth and Woodruff, J. J.)
    Heard, December 11, 1857 ;
    decided, February 27, 1858.
    In this action William T. Hooker, as President of the Continental Bank, is plaintiff, and Joseph F. Franklin is defendant.
    It comes before the Court at General Term, on an appeal by the defendant from a judgment entered on the report of John L. Mason, referee. It was commenced on the 22d of April, 1857.
    The action is on a check drawn by the Chicago, St. Paul and Fond du Lac Railroad Company on the American Exchange Bank, dated April 15, 1857, for $10,000, in favor of J. W. Currier, and by him endorsed to the defendant, Joseph F. Franklin. Franklin endorsed and deposited it in the Continental Bank (of which he was a customer) on the same day. The amount of the check was passed to the credit of Franklin, in his bank account, as cash. The check was not paid by the American Exchange Bank, and Franklin is sued as endorser.
    The complaint alleges the above facts, and contains the usual averments of demand of payment, and refusal, and notice, to charge the endorser.
    The answer alleges, that the drawers of the check, the Chicago, St. Paul and Fond du Lac Railroad Company, had funds in the American Exchange Bank on the 15th day of April, 1857, and at the opening of the bank on the 16th, sufficient for the payment of the check, and that its non-payment was wholly owing to the negligence or improper conduct of the plaintiff; denies presentment and notice; avers that the drawers of the check have paid or secured plaintiff, and that this action is for the benefit of the drawers; avers, that plaintiff notified defendant that it was the rule and custom of the Continental Bank to require all large checks to be certified, before receiving them on deposit, except where the bank intended to assume the payment of the same; also an agreement between defendant, Franklin, and the bank, that the latter was to receive no check for $10,000, unless certified, and if it did, was to assume the risk of non-payment, &c.
    The referee’s report, exclusive of its recitals, was as follows, viz.:— .
    “ And I do find, certify and report, that the following facts were established before me:—
    “I. The defendant, Joseph F. Franklin, was, on the fifteenth day of April, one thousand eight hundred and fifty-seven, the holder of the check for the sum of ten thousand dollars mentioned in the complaint, dated on the day and year last mentioned, drawn by the Chicago, St. Paul and Fond du Lac Railroad Company, by Charles Butler, their treasurer, upon and directed to the American Exchange Bank in the City of New York.
    “LL The said defendant endorsed the said check and deposited the same with the Continental Bank, of which the plaintiff is president, at or about 11 o’clock in the forenoon of the said fifteenth day of April, aforesaid, and received credit for the same in cash in account with the said bank.
    “IN. The said check was sent by the said Continental Bank to the American Exchange Bank through the Clearing House, according to the established usage of the banks of the City of New York, on the following day, at or shortly after the opening of the bank.
    “IV. The said check was returned by the American Exchange Bank to the Continental Bank, about twelve o’clock of the same day, unpaid, payment thereof having been stopped by the drawers, of which fact the defendant, Franklin, was immediately notified by the said bank.
    “V. The said check was also duly presented before three o’clock of the same day to the paying teller of the American Exchange Bank by a notary public, and, payment thereof being refused, the same was protested for non-payment, and notice given at or about three o’clock of the same day to the defendant.
    “VI. It was admitted by the parties that there was, on the closing of the bank on the 16th day of April, and still is, a balance in the Continental Bank, to the credit of the defendant, Franklin, of four thousand and forty-four dollars and sixty cents, which was agreed should be credited on the said check if the plaintiff shall recover in this action.
    “ My conclusion of law upon the above facts is—
    “ That the plaintiff is entitled to recover, against the said defendant, Joseph F. Franklin, the balance of the said ten thousand dollars, for which the said check was given, after deducting therefrom the sum of four thousand and forty-four dollars and sixty cents, with interest from the sixteenth day of April, one thousand eight hundred and fifty-seven, to the date of this report. Wherefore, I respectfully certify and report, that the plaintiff should recover against the said defendant, Franklin, the principal sum of five thousand nine hundred and fifty-five dollars and forty cents, and also one hundred and thirteen dollars and forty-six cents for interest thereon, amounting in the whole to the sum of six thousand and sixty-eight dollars and eighty-six cents, with costs. All which is respectfully submitted.
    “ Dated, Hew York, July 24th, 1857.
    “ Jno. L. Mason", Referee.”
    And judgment thereon was entered, on the Slst day of July aforesaid, for the sum of $6162.77, to which said report the said defendant duly excepted. The exceptions taken are covered by the points made on the appeal. • .

      Gerardus Clark, for appellant.
    I. The presentation of the check at the Clearing House by .the Continental Bank, and there having it passed to their credit, was a payment, at least so far as the defendant was concerned; and if not so, then the subsequent presentation to, and acceptance thereof by, the American Exchange Bank, was clearly a payment; and the endorser (Franklin) was thereby absolved from all further liability on the check.
    II. The American Exchange Bank, having funds of the drawers in their hands, had no right, after having received the check and credited it to the Continental Bank, to change that credit at the request of the drawers, and then call upon the Continental Bank for repayment; and still less had the Continental Bank the right to repay the amount, to the detriment of the defendant. Such a course is calculated to throw monetary operations into great confusion and uncertainty.
    III. It is evident, from the testimony of De Baun, that if the check had been presented at the American Exchange Bank any time during banking hours on the 15th of April, it would have been paid or certified; and the Continental Bank, by omitting to make such presentation, and presenting it at the Clearing House on the 16th, and there receiving credit for the full amount, assumed the responsibility of its payment, and showed that they intended to rely upon the drawer, according to the evidence of the teller, Henderson and Tallman.
    IV. This idea, that the Continental Bank intended to assume the risk, is confirmed by what seems to have been the understanding between the bank and Franklin, as shown by him.
    V. The drawers having funds sufficient to pay the check, in the hands of the drawees, the moment the latter received the check, it operated as an appropriation of so much of those funds, and, therefore, as a payment in respect to all other parties. (Conroy v. Warren, 3 Johnson’s Ca. 264; Cruger v. Armstrong, id. 5-8.)
    VI. The plaintiffs were chargeable with gross negligence, in not presenting the check to be certified or paid, on the 15th of April, at the American Exchange Bank, where there were ample funds for the payment thereof.1 And the defendant is thereby exonerated.
    VII. For the reasons above stated, the report of the referee was erroneous, and should be set aside, together with the judgment entered thereon.

      Wm. Allen Butler, for respondent.
    I. The proof, as to the presentment of the check, demand of payment and notice to the defendant, Franklin, as endorser, was sufficient.
    II. There was no want of diligence, nor any improper conduct, on the part of the plaintiff, the Continental Bank, in regard to the presentment of the check, or in any other respect. (.Merchants’ Bank v. Spicer, 6 Wend. 443; Gough v. Staats, 13 Wend. 549.)
    III. There was no proof that the check would have been paid, if presented on the 15th, or that the drawers bad funds in bank when it was presented. The American Exchange Bank refused to pay it, and the check did not, of itself, operate as a transfer or assignment of any of the drawers’ funds in their hands, or create any lien thereon. (Chapman v. White, 2 Seld. 412; Ballard v. Randall, 1 Gray, 605 ; Dykers v. Leather Bank, 11 Paige, 613.)
    IV. There was nothing in the transactions at the Clearing House which operated to discharge the defendant, Franklin. The defendant’s proof showed, that the credits given at the Clearing House are for all checks, independent of the question whether they will be paid by the banks on- which they are drawn, and that this check was dealt with according to the usage and custom of banks, in regard to checks of which the payment has been stopped by the drawers.
    V. The taking of security, by plaintiff, for the ultimate payment of the debt, did not discharge the endorser, no time having been given to the drawers, nor their liability in any manner released. (Story on Bills, § 427; Mohawk Bank v. Van Horne, 7 Wend. 117.)
    VI. The defence of a rule or agreement as to uncertified checks, received on deposit, being at the risk of the Continental Bank, wholly failed for want of proof.
    VII- The several rulings of the referee, in respect to evidence, and his conclusions of fact and law, are correct, and the judgment should be affirmed with costs.
   By the Court. Bosworth, J.

The defendant kept an account with the Continental Bank, and on depositing with that bank, on the 15th of April, 1857, the check in question, received credit for its amount. Instead of taking it to the American Exchange Bank, and obtaining payment of it, he deposited it with the Continental Bank.

The Continental Bank, in its proceedings to obtain payment of the check, conformed to the established usage of the banks in the City of Hew York, and the customary course of business in such cases.

The Continental Bank did not undertake, expressly or by implication, to exercise, or subject itself to the duty of exercising, any greater diligence to obtain payment of the check.

It passed through the Clearing House to, and was presented at, the American Exchange Bank, on which it was drawn, soon after that bank opened, on the 16th. That bank refused to pay it, and returned it to the Continental Bank, about 12 o’clock of that day. The defendant was immediately and personally notified of these facts: the defendant said there must be some mistake in the matter, and he would see to it immediately. He told Mr. Tallman, another teller, who went to him with the check, and with information that payment of it had been stopped, “ something about some third person, and that he would make it good before three o’clock, p. M.”

When a case presents no peculiar circumstances, laches cannot be imputed to the holder of a check, as between him and his immediate endorser, merely because he does not present it until the day after he received it. (Merchants’ Bank v. Spicer, 6 Wend. 443; Gough v. Staats, 13 id. 549.)

Certainly no laches can be imputed to a depositary, receiving it tor presentment and collection, who, in presenting it on the next day after its receipt, acts in conformity with the regular and established course of business in such cases.

A rule which required all banks in the City of Hew York to present, for payment, all the checks deposited by their customers, on the day of their deposit, would compel them to decline business of that character, and defeat the objects, in many cases, for which deposits are made, and put an end to certain facilities, which result from obtaining credit for the amount of a check, for the day of its deposit, without providing for its payment until the following morning.

The transaction at the Clearing House did not operate as a payment of the check by the American Exchange Bank, nor make it the duty of that bank to credit the amount of it to the Continental Bank. Giving to the transaction that effect, would be in direct conflict with the established course of business.

The American Exchange Bank never accepted the check, in any such sense, as to have agreed, even by implication, to pay it, or credit its amount to the Continental Bank.

There was no evidence which authorized the referee to find that the Continental Bank received the check, as a purchaser and at its own risk, or upon an agreement not to look to the defendant, in the event of its being dishonored.

In our opinion, there is no error in the judgment appealed from, and it must be affirmed, with costs.