text:
    EGISTO P. FABBRI et al., Plaintiffs and Respondents, v. MARTIN KALBFLEISCH et al., Defendants and Appellants.

      [Decided March 5, 1870.]
    When a contract made subsequently to the act of Congress authorizing a paper currency does not specifically provide in what currency the business done under it shall be transacted, it will be presumed that it is to be transacted in the paper currency.
    A custom that an agent who procures an insurance for his principal is entitled to scrip issued in respect of such insurance will not be upheld.
    Before Monell, Jones, and Spencer, JJ.
    Appeal from a judgment entered upon the report of a referee.
    This was an action to recover a balance, claimed by the plaintiffs to be due them, for advances and commissions, upon a final settlement of the accounts of four importations of nitrate of soda, made by them for the defendants.
    The accounts were made up in the instance of each cargo, on the footing of the currency cost in New York of the bills bought there to meet the drafts in London, drawn by plaintiffs’ correspondents in South America, on account of the shipments, and as of the day when the bills were to be remitted hence to meet those drafts; of the cost in currency here of the defendants’ proportion of the freight and duty, payable in gold here on entry of the cargoes; of the cost, paid in currency here, of defendants’ proportion of the expenses on the cargoes; of the brokerage and interest accounts in currency; and upon the aggregate of all these amounts the plaintiffs charged their commissions, as agreed.
    The defendants deny the correctness of the accounts, and allege that they should be credited about $600 for insurance scrip, received by the plaintiffs; that they are overcharged about $2,100 on purchases of gold; that they are overcharged about $2,000 on commissions and brokerage.

      The referee found in favor of the plaintiffs, and the defendants appealed from the judgment entered upon the report of the referee.

      Mr. Alexander McCue for appellants.
    The right of the defendants to the insurance scrip is unquestionable. The custom sought to be established as to the brokers’ right to retain scrip issued by way of profit, or reduction of premium on insurance effected by the principal, is against policy and law (Minnesota Central R. R. Co. v. Morgan, 52 Barb., 217).
    Such a custom is entirely inconsistent with fair and honorable dealings as between principal and broker, and holds out the strongest inducement to the broker to effect insurance at the highest rates, at the cost of the principal, in order that he may himself receive the greater amount of return premium. In such a case the interest of the broker is directly in conflict with that of the principal.
    The value of the scrip in question is fixed at $508.
    The plaintiffs and the referee have fallen into the fatal error of regarding gold as merchandise, which the plaintiffs had the right to buy for the defendants at any time they, the plaintiffs, might elect, instead of treating gold as a lawful currency, which by express agreement, and by law, was to govern the entire contract, and to determine the rights of the parties thereunder. The referee therefore erred in not recognizing the fact that gold, in which he finds the commissions were earned, was a currency different and distinct, it is true, from what is called the legal tender, but equally with that currency established and recognized by law as the currency of the country (Rhodes v. Bronson, 7 Wallace, p. 323).
    In that case the court declare “ that there were two descriptions of money in use,” and “ that contracts to pay in either were equally sanctioned by law.”
    The accounts of the plaintiffs, therefore, should have been kept in gold, and settled upon that basis, and the charges and expenses of unloading, etc., should have been charged and paid in legal tender currency, being the currency in which they were incurred; and if the plaintiffs are entitled to commissions thereon, the commissions should be charged in currency.
    The plaintiffs were not authorized to make purchases of gold, as such, for the account of the defendants. It was their duty to purchase and pay for the cargoes, and the defendants were liable only for the actual cost thereof.
    If, on making remittances, they remitted in excess of the actual amount required, the loss, if any, wasi their own—not the defendants’.
    How, had the accounts been made up in gold precisely as the liabilities were incurred, no injustice would have resulted to either party. The plaintiffs paid gold, the value of which never varied. In most instances the defendants advanced gold in kind, and when they paid currency it was only necessary to turn it into gold on that day. This the plaintiffs had a right to do, and the defendants have made up their statement upon this basis.
    On this system, the excess above referred to, which was charged to the defendants, would have resulted only in the loss of a little interest from October, 1864, to April, 1865, when the sum was credited, assuming for the sake of the argument that the plaintiffs had the right to make the defendants suffer for their own mistake; because $1,374.70 in gold, in October, 1864, was $1,374.70 in gold in April, 1865, neither more nor less, while now, when the defendants are called upon to settle, gold which was charged to them at $3,299.28, can be purchased for $1,787.11 in the same currency.

      Mr. George Wales Soren for respondents.
    The defendants cannot maintain exceptions taken to the admission of evidence of usage.
    Though the language of the contract be conceded to be on its face entirely explicit and unambiguous, evidence of usage cannot be excluded on the ground of incompetency (2 Phillips on Evidence (4th ed.),p. 729, note; Gibson v. Culver, 17 Wend., 305; Rushforth v. Hadfield, 7 East., 225; 1 Duer, Insurance, p. 254).
    That one who directs a broker or agent to make' purchases for him must be understood to consent that it should be done in the usual manner, and that evidence of the usage or custom is admissible, see Horton v. Morgan (19 N. Y., 172); Whitehouse v. Moore (13 Abb. Pr., 142); Pollock v. Stables (2 Q. B., 765).
    The evidence as to the expenses was competent, and was properly received. If there was any technical objection to any part of it, it was cured by the testimony subsequently given.
    The referee could not have decided, upon the evidence, as to the insurance scrip, otherwise than he did.
    Evidence of the usage in respect to such scrip being admissible, as already shown, it was proved that it was the custom for the merchant to retain it in such a case as this.
    The only instance to which defendants can appeal to defeat that evidence is that, where the scrip is retained, no special commission is charged. Ho such special commission was paid to the plaintiffs, and they were, therefore, entitled to the scrip, according to usage.
    It is to be observed that the defendants offered no proof, on their own part, to disprove the rule as to the scrip claimed by the plaintiff.
    There is nothing in the so-called legal tender or currency acts, or in the decisions under them, which impairs the validity of the referee’s decision in this case.
    Since the enactment of those laws, two descriptions of lawful money have been recognized as existing, both of them authorized by law, and both made legal tender in payments (Rhodes v. Bronson, 7 Wall., 251).
    Hothing in tl e acts forbids the making of contracts, to be performed by gold payments; and upon the construction of a contract, the courts may, consistently with these acts, inquire in which sort of money, whether gold or paper, the parties intended to make payment.

      The simple question here is, in which currency did the parties intend that their transactions should be conducted—and no statute or decision forbade the referee to uphold such a contract in this respect, as the plaintiffs alleged, and claim to have proven, namely, an agreement to pay all advances and commissions according to currency values.
    The principle is conceded by the Supreme Court of the United States, in its most recent decisions, that since and notwithstanding the currency acts, there may be valid contracts payable in coin, which cannot be satisfied by tender of their nominal equivalent in note dollars.
    See illustrations as to duties, special deposits of coin, agreements by government to pay coin for bullion, etc., in Ehodes v. Bronson (7 Wallace, 229).
    A fair application of that principle here should defeat defendants’ objections to the stating in currency values the amounts paid in gold for duties, exchanges, and freights; and should also forbid any such statement of the accounts as defendants propose, which adds gold cost for such charges to currency cost for other expenses, as if there were no difference between them (see Rhodes v. Bronson, 7 Wallace, 292; Butler v. Horwitz, 7 Wallace, 261; Rankine v. Demott, 4 Law Rep. (Boston), 194, Phil. Leg. Intell., July 2, 1869; compare Rhodes v. Bronson, 34 N. Y., 656; per Agnew, J., 2 P. F. Smith (Penn.), 95, 96).
   By the Court:

Jones, J.

The important question in this case is whether the contract between the parties was to be carried out on a gold or currency basis. If on the former, then the accounts should have been kept in gold, if on the latter, then in currency.

It must have been present in the minds of both parties that the payment for the merchandise to be bought would have to be paid for in sterling, and that the sterling would have to be bought with gold. If there were no other considerations to be taken into view it would be apparent that plaintiff would be bound to advance the gold for the purchase of the sterling, and could only charge the defendants with the amount so advanced at its face. But it was also equally present in the minds of the parties that there existed two currencies—one of gold and one of paper; that the paper currency was called "into existence by the authority of the United States Grovernment to meet an. exigency for which the supply of coin was inadequate; that in meeting this exigency the paper currencynecessarily became the medium through which munitions of war were to be furnished, armies levied, provisioned, clothed, and paid, and mercantile and monetary business was to be transacted within the United States; that as a necessary consequence of this, when the use of the gold currency became necessary for foreign or governmental transactions, it would have to be purchased with the paper currency the same as any other commodity; and as a further consequence of this, that every dollar of gold currency purchased would cost more than a dollar of the paper currency.

"When a contract made subsequent to the calling into existence of the paper currency "does not specifically provide (as the one in question does not) for the transaction of the business under it (including therein the charges to be made, the credits allowed, computations to be made, and accounts kept), it must be presumed that such business is to be transacted in that currency which had been called into existence by the United States Q-overnment, and which was necessarily and universally adopted as the medium through which to transact all mercantile and monetary business within the United States—to wit, the paper currency.

This is one of the results of the decisions holding that there-exists in the United States two distinct kinds of currency authorized and established by its laws—the one a specie currency, and the other a paper currency.

It follows from the above views that the charges are properly made in the paper currency value of the gold used and advanced by plaintiff at the time the same was so used and advanced, and that the credits are properly allowed at the paper currency value of the gold received from defendants at the time of the receipts. The paper currency thus charged constitutes, within the purview of the agreement, the cost of the merchandise on which the commissions are to be charged, and they are to be charged in paper currency.

The circumstances under which the over-payments were made were such as not only to justify the plaintiffs in making them, but to render it their duty to make them.

As they simply performed their duty in this respect they should fee exonerated from loss to arise therefrom. Under the view above taken of the contract, these over-payments are properly charged against the defendant at the currency value at the time they were made, and properly credited at the currency value at the time of repayment.

It is not, however, perceived on what principle a party who procures his own goods to be insured and pays the premium of insurance thereon is, in the absence of an express contract to the contrary, not entitled to all the benefits springing out of such insurance.

A custom was endeavored to be proved to the effect that, as to some of these benefits—to wit, the insurance scrip issued in respect of the insurance—he is not entitled to them, but that his agent who procured the insurance for him is. Such custom cannot be allowed to overrule the principles of law which would otherwise be applicable.

It was sought to found the custom on the ground of the right to receive the scrip being the compensation in part for the services of the agent in procuring the insurance and in attending to the collection of the loss if any should occur. Such a foundation is unsubstantial. It would make the compensation depend not on the intrinsic value of the service, but contingently on the prosperity of the company whereby profits might become divisible among the holders of the scrip. Thus, for services of equal value an agent in one case would receive nothing from his scrip, and in others divers sums varying in amount. A custom which introduces such a sliding scale of compensation for services of equal value cannot be said to be well founded, and should not be .allowed to obtain.

If, however, this foundation were sufficient to support the custom, yet the contract in question provided for the compensation of plaintiffs in procuring insurance, and that provision includes any further compensation, whether by custom or otherwise.

Under a certain state of facts these plaintiffs might perhaps be entitled to the scrip. For instance, if they had given to the insurance company their advance premium notes for a large amount, upon which they were liable to be assessed for the whole amount thereof although no premium had been earned, here they might be said to be entitled to the profits earned, because the sharing in the profits depends not on the payment of premiums, but on the advance to the company of the credit of the giver of the note to be used in the prosecution and furtherance of the business which creates the profits. Such a state of facts does not appear in this case.

The defendants consequently are entitled to be allowed for the value of the scrip, which is $508.

The judgment reversed, order of reference vacated, and new trial ordered, with costs to the appellant to abide the event, unless plaintiffs stipulate to reduce the judgment by $508. If plaintiffs so stipulate, then judgment affirmed, without costs of appeal.


source: Caselaw Access Project

author: Freedman, J.

license: Public Domain

text:
    LIZZIE A. SUNDERLAND, Plaintiff and Respondent, v. ALEXANDER F. WESTCOTT, President of the Westcott Express Company, Defendants and Appellants.

      [Decided March 5, 1870.]
    A common carrier of goods may, by express contract, restrict his common-law liability, and in such case he ceases to be an insurer and becomes an ordinary bailee and private carrier for hire according to the terras of the special contract.
    But he cannot secure a limitation of his liability, either in whole or in part, by a mere notice indorsed upon his receipt, check, or ticket. Such notice, being at most a proposal only for a special contract, requires the assent of the other party to its terms.
    In the absence of evidence showing that the attention of the person employing the carrier was in some manner called to said notice, and that he assented thereto, or from which his assent can be reasonably inferred, the notice is of no effect.
    The duty to carry and deliver safely involves the duty to provide a secure place for the delivery, and to adopt proper safeguards to prevent loss.
    Before Barbour, C.J., MoCunn and Freedman, JJ. .
    Appeal from a judgment entered upon the report of a referee in favor of plaintiff and against the defendants for $427.77.
    The action was brought to recover the value of a trunk and contents intrusted by plaintiff to defendants, an express com- ' pany, as common carriers of baggage, for transportation and delivery, and lost.
    The defense is a special contract and performance.

      Mr. Luke A. Lockwood for appellants.
    The delivery of the carrier’s receipt to the sender, containing the conditions of his acceptance of property for carriage, at the time of delivery of property to him, and the acceptance of such receipt, and delivery of such property by the sender, form a contract (Dorr v. N. J. Steam Nav. Co., 1 Kern., 485; Hopkins v. Westcott’s Ex., MS., Shipman, J., U. S. Court Southern District of New York; Orange Co. Bank v. Brown, 9 Wend., 115; Lee v. Marsh, 43 Barb., 102; Breese v. U. S. Tel. Co., 45 Barb., 274; Moriarty v. Harnden’s Ex., 1 Dally, 227; Meyer v. Harnden’s Ex., 24 Howard, 291; Perkins v. N. Y. Cent. R. R., 24 N. Y., 215; Smith v. N. Y. Cent. R. R., 24 N. Y., 223; Bissell v. N. Y. Cent. R. R., 25 N. Y., 445; York Co. v. Cent. R. R. Co., 3 Wallace, 107; Newstadt v. Adam, 5 Duer, 43.)
    Bo legal distinction can be drawn between the carrier’s receipt and a bill of.lading.. .Both are unilateral contracts ; both relate solely tó:th'e carriage ofproperty/ both contain the condition of the carrier’s undertaking. It does not appear that the plaintiff did not know the conditions of the receipt. The receipt having been shown in the custody of plaintiff, her knowledge of its contents is a legal presumption (King v. Woodbridge, 34 Vermt., 571, followed by Supreme Court, Wis.; Boorman v. American Ex., MS.).
    If the sender did not read or know its contents, it was her own fault (Breese v. U. S. Telegraph Co., supra).

    The defendants performed their undertaking to transport to the boat. The delivery of the trunk, as proved, is a good and sufficient performance of the defendants’ agreement to transport to the boat. The only qualification of the law stated in the second point is, that the conditions upon the receipt must be plain and legible, not on the'back of a card with advertisements, as in Prentice v. Decker (49 Barb., 27), Limberger v. Westcott (id., 283), and receipt must relate to carnage oí property, not oí persons (Brown v. E. R. R. Co., 11 Cush., 97; Nevins v. Bay State S. Co., 4 Bosw., 225).
    The receipt is in regular form, in legible characters, ma/rked with the number of the trank, signed by defendants’ agent, and relates solely to property. The right of a carrier to affix reasonable conditions to acceptance of property for carriage, and that payment of a premium proportionate to the amount of risk assumed, and delivery of property, according to the usual course of business, at place of destination, are reasonable conditions, must be conceded (1 Parsons on Con., 711, Greenleaf on Evid., p. 215, vol. 2, and cases cited infra).

      Mr. George R. Thompson for respondent.
    Defendants are common carriers, and as such, insurers of property delivered to them and responsible for its safe delivery (Sweet v. Bonny, 23 N. Y., 335; Holliston v. Nowlen, 19 Wend., 234).
    The receipt of the baggage is admitted. There was a special agreement that the baggage should be delivered to Isaac Carruth, at the pier foot of Thirty-fourth street and North River, New York. The baggage was never delivered according to the above agreement. In the absence of a special agreement to deliver baggage to the agent in charge, the law would imply a contract to deliver to him. It is not enough that the property is delivered upon the premises ; it is essential that it should be delivered to the agent, under his immediate control, cmd it must be accepted and received by him (Packard v. Getman, 6 Cow., 757; Blanchard v. Isaacs, 3 Barb., 388; 2 Kent Com., 604; 2 Parsons on Con., 654; Abbts. Practice Rpts., N. S., vol. 5, p. 345).
    The defendants cannot limit their liability by a mere receipt, such as this was. It has always been held to be a mere notice and not a contract (Nevins v. Bay State Steamship Co., 4 Bos., 225, 233, 234, 236; McCotter v. Hooker, 4 Selden, 497; Quimby v. Vanderbilt, 17 N. Y., 306; Holliston v. Nowlen, 19 Wend., 234; Prentiss v. Decker, 49 Barb., 21; Limberger v. Westcott, 49 Barb., 283; American Law Register for March, 1869; Belger v. Dinsmore, 34 Howard, 421; 2 Abb., N. Y., 220, N. S.).
    If the carrier wishes to exempt himself from liability, he must inquire as to the value of the baggage (Holliston v. Nowlen, 19 Wend., 234; Phillips v. Earle, 8 Pick., 182; Orange County Bank v. Brown, 9 Wend., 115).
    All the articles contained in the trunk were properly baggage, and can all be recovered for as such (Merrill v. Grinnell, 30 N. Y., 594).
   By the Court:

Freedman, J.

The defendants are to be regarded as common carriers, and their responsibility for the safe delivery of property intrusted to them for transportation is to' be measured by the rules of law which prescribe, limit, and determine the rights, duties, and liabilities of such carriers (Russell v. Livingston, 19 Barb., 346; Sherman v. Wells, 28 Barb., 403; Sweet v. Barney, 23 N. Y., 335). According to these rules a common carrier may, by express contract between himself and the party contracting with him, restrict his common-law liability. In regard to the transportation of goods a common carrier, at common law, is an insurer against all accidents, except the act of God and the public enemy. But when a special contract is made, as above mentioned, the relations of the parties are changed; the carrier ceases to be an insurer and becomes as to that transaction an ordinary bailee and private carrier for hire according to the terms of the special contract (Dorr v. N. J. Steam Nav. Co., 11 N. Y., 485; Lee v. Marsh, 43 Barb., 102; Meyer v. Harnden’s Exp., 24 How., 291). This principle of the common law, which always permitted men to manage their own affairs and to make their own contracts, provided they involved nothing immoral or illegal, has even been extended to the transportation of passengers, in which case the common carrier is not in any respect an insurer, but is answerable only for such injury to a passenger against which the utmost skill and foresight could guard (Perkins v. N. Y. Central R. R., 24 N. Y., 215; Smith v. N. Y. Central R. R., 24 N. Y., 223; Bissell v. N. Y. Central R. R., 25 N. Y., 445).

The safe carriage and delivery of property necessarily involves an expense and risk greater or less in proportion to the nature, quantity, and value which each employer intrusts to the carrier; and the carrier, therefore, may require a disclosure of the nature and value of the property to be carried, with a view of charging a price corresponding with the value of the service to be rendered and the risk to be incurred. The only limitation of this right is the requirement that the charges be justly and reasonably proportioned to the varying value of the actual service rendered and the risk actually incurred. Frankness, fair dealing, and a clear opportunity to act intelligently must, in all cases, exist on both sides.

But although it has thus been settled that a' common carrier may secure a limitation of his responsibility by express contract with the persons whose property he is to carry, it is equally well settled that he cannot do so, either in whole or in part, by a mere notice indorsed upon his receipt, check, or ticket. Such notice, at most, is only a proposal for a special contract, which requires the assent of the other party to its terms (Holliston v. Nowlen, 19 Wend., 234; Nevins v. Bay State Steamship Company, 4 Bosw., 225; Prentiss v. Decker, 49 Barb., 21; Limberger v. Westcott, 49 Barb., 283; Belger v. Dinsmore, 34 How., 421; Rawson v. Pennsylvania R.R. Company, 2 Abb., N. S., 220; see also to same effect the language used by Selden, J., and Denio, C.J., in Bissell v. N. Y. Central R. R. Co., 25 N. Y., 445.)

A receipt, check, or ticket containing a notice indorsed thereon, which has not been assented to by the person employing the carrier, is to be regarded as a token rather than, as a contract, and is not within the rule which requires the exclusion of parol evidence offered with a view to . vary a written agreement (Quimby v. Vanderbilt, 17 N. Y., 306).

The case of Breese et al. v. U. S. Telegraph Co., 45 Barb., 247, is not at variance with the views expressed by me. It may well be doubted whether telegraph companies are to be considered as common carriers for all purposes, and, as such, subject to the same legal rales and liabilities. The court in this case' simply held that, where a telegraph company furnishes to a person a printed blank, containing in a conspicuous manner a statement of the terms and conditions upon which messages will- be forwarded, such blank, upon which the message to be sent is to be written by the sender, is not only a notice but a proposal for a special contract; that by writing a message under the said terms and conditions, and signing and delivering it for transmission, the sender accepted the proposal, which thereupon became an agreement binding upon the company only according to its specified terms and conditions, and that this legal consequence was not varied by the fact that the sender of the message had omitted to read the printed conditions and agreement thus deliberately subscribed by him.

In the case at bar the defendants received plaintiff’s trunk without inquiry or objection, and thereupon handed a check or receipt to plaintiff, with a printed stipulation indorsed thereon to the effect that the defendants will not be liable for baggage to railroads, steamboat, or steamship lines, after the same, has been left at the usual place of delivery at such lines; nor in case of loss or damage by negligence or otherwise for an amount exceeding one hundred dollars upon any trunk, valise, bag, package, or parcel, including the contents thereof, unless by special agreement, in writing, to be noted on said receipt, and by payment for such extra amount. In the absence of evidence showing that plaintiff’s attention was in some manner called to this stipulation, and that she assented thereto, or from which plaintiff’s assent could be reasonably inferred, the referee was clearly right in disregarding the special clauses. The evidence, as given, is sufficient to support the finding, as matter of fact, that defendants agreed, for a valuable consideration, to transport plaintiff’s trunk and its contents to the boat running from New York to Albany, and to securely keep the same there in readiness to be transported when the same should be called for by the plaintiff, or to be delivered to her or bér order when she should require the same to be so delivered . At any rate, the duty to carry and deliver safely involved the duty to provide a secure place for the delivery, and to adopt proper safeguai’ds to prevent loss; and there being a conflict of evidence as to what the contract really was, but sufficient to support the finding, the latter, as made, must be held conclusive.

Defendants’ objection to the finding, as a fact, that the defendants did not deliver the said trunk and contents as agreed, but that the same were lost or stolen while in the care or custody of the defendants, appears to be equally untenable. The evidence of the defendants’ driver is to the effect that he carried the trunk to the pier on which the boat usually landed, that there was a particular side on the pier, inside of a railing or fence running across the pier, where the baggage for said boat was usually received, and that he put and left plaintiff’s trunk inside said railing or fence with other baggage which he found there, without, however, placing it in charge of some person or in any manner directing the attention of some person on the pier to it. There is also some evidence showing that six or eight boats went from the same pier and from inside the railing or fence referred to, and that the boat for which plaintiff’s trunk was destined was not there at the time the trunk was left. I am unable to say whether the referee believed or disbelieved the testimony of said driver. The credibility of the witness was a question to be determined by the referee exclusively. But, assuming that full effect was given to said testimony, it fell wholly short of establishing a delivery according to the contract. It was even insufficient to prove a simple delivery to the boat. The liability of the boat could only commence from the time the property was actually delivered either on board or to the boat’s agent having charge of that business. A delivery to such agent must be made in a place under his immediate control, where the property is not exposed to danger, and the delivery remains incomplete until acceptance of the property by such agent. In Grosvenor v. The N. Y. Central R. R. Co., 5 Abb., N. S., 345, it was distinctly held that mere proof that the property was deposited upon the premises and the agent of the company notified does not make out a valid acceptance and delivery.

The referee having found, upon sufficient evidence, that plaintiff’s property was lost or stolen before delivery, I can perceive no reason why defendants should not be held liable for the value. A careful examination of the remaining grounds upon which defendants rely for a new trial has satisfied me that they are not entitled to any special notice.

The judgment appealed from should be affirmed, with costs.


author: Spencer, J.

text:
    WILLIAM MOSES, Plaintiff and Respondent, v. GEORGE W. BANKER and Others, Defendants and Appellants.

      [Decided April 2, 1870.]
    A vendor of goods cannot recover either the contract price nor on a “ quantum meruit ” for a part of the goods delivered under the contract, although the same are accepted by the vendee. He must perform his contract fully before he can recover, and performance must not only be averred in the complaint but proved. The leading cases in support of this rule briefly reviewed.
    Before Monell, Freedman, and Spencer, JJ.
    The case was tried before Mr. Justice Jones and a jury.
    The complaint in this action claimed to recover the price of fifteen barrels of oil, containing 609-|~ gallons, at the price of $1.85 per gallon, alleged to have been sold and delivered by plaintiff to defendants.
    The defense in the action was based upon the fact of the nondelivery of the oil or any portion of the same.
    The contract of sale introduced in evidence in the ease was as follows:
    “ Rew York, July 20, 1866.
    “I have sold Messrs. Banker & Carpenter, for account of William Moses, fifteen (15) barrels of prime winter lard oil, in prime order, to be equal in all respects to sample showed Mr. Woodbury on ’Change to-day. Terms $1.85 per gall., cash on delivery.
    “ Geo. Leonard.”
    The main question in the case on the trial was the delivery of the oil, in relation to which there was some conflicting evidence.
    The third proposition charged by the court to the jury was to the effect that if only a part of the fifteen barrels of oil was delivered the plaintiff would be entitled to recover for that portion, although there was no delivery as to the balance, and to this portion of the charge an exception was taken by the defendants’ counsel.
    The jury found a verdict for the plaintiff for the value of six barrels of oil, computed at the sum of $541.79, including interest, they arriving at the conclusion that six barrels had been delivered under the contract.

      Mr. Hamilton Odell for appellants.
    The agreement was void by the statute of frauds. Bo note or memorandum thereof was subscribed by or on behalf of the defendants, nor was there any “ acceptance ” of the oil by them (Shindler v. Houston, 1 Comst., 261).
    The law is settled in this State, that where a contract for the sale of property is' entire, and payment is to be made upon delivery, full performance by the vendor is a condition precedent to his right of action against the vendee (Champlin v. Rowley, 13 Wend., 25; S. C. in Error, 18 Wend., 187; Mead v. Degolyer, 16 Wend., 632; Paige v. Ott, 5 Denio, 406 ; McKnight v. Dunlop, 4 Barb., 36; Solomon v. Neidig, 1 Daly, 200; Baker v. Higgins, 21 N. Y., 398; Catlin v. Tobias, 26 N. Y., 217; Reimers v. Ridner, 2 Robt., 11).
    In Mead v. Degolyer a certain quantity of timber was sold, and only a part was delivered, for the value of which the suit was brought. Judge Bronson says: “The mere statement of the case furnishes a complete answer to the action.' The delivery of the timber was a condition precedent to the payment of the price— and the plaintiff must first perform on his part before he has any ground of complaint against the defendant. This court has never held any other doctrine.”
    In Baker v. Higgins the agreement was for 75,000 brick. Only one "cargo—of 21,000—was delivered. The court say: “The plaintiff was not entitled to pay for any part until the whole was delivered, etc.”
    The vendor does not comply with his contract by the tender or delivery of either more or less than the exact quantity contracted for (Benjamin on Sales, 510; 2 Kent, 509, marg.).
    So in cases of contracts for personal service. Full performance is a condition precedent to any right of action (McMillan v. Vanderlip, 13 Johns., 53; Jennings v. Camp, id., 94; Webber v. Duckingfield, id., 290; Reab v. Moore, 19 Johns., 341; Lantry v. Parks, 8 Cow., 63; Marsh v. Rulesson, 1 Wend., 514; Sickels v. Patterson, 14 Wend., 257; Bonesteel v. Mayor, etc., 22 N. Y., 162; Walker v. Millard, 29 N. Y., 375).
    So in cases of building contracts where the specifications are not complied with by the contractor (Pullman v. Corning, 9 N. Y., 93; Smith v. Brady, 17 N. Y., 173; Pike v. Butler, 4 N. Y., 360; Cunningham v. Jones, 20 N. Y., 486).
    Even where, before completion, the work is destroyed by fire (Tompkins v. Dudley, 25 N. Y., 272; Niblo v. Binsse, 45 Barb., 54).

      Mr. W. W. Niles for respondent.
    The jury have found upon the facts, upon evidence all with the respondent, or at worst, upon conflicting evidence, and their verdict will not be disturbed, unless there was error on the part of the judge.
    The question whether plaintiff had proved a delivery was for the jury. We say the evidence was conclusive; but, at least, there was some evidence tending to establish a delivery.
    Even if good at the time, the defect was cured by the subsequent evidence and verdict.
    The evidence that Leonard was a broker, and was acting, and was understood to be acting as such, is positive and uncontradicted. The charge throughout was good law, but was certainly very favorable to the defendants. This is not the case of a seller withholding part, or failing to deliver part of one purchase, but the act of the law; and we say the whole was delivered when carted, to defendants’ store, if done by “ the direction of the defendants.”

      It is not a part of delvoery to put the goods up the hatchway into the loft, but a mere courtesy, and the judge should have so charged, in our favor.
    • But taking the case as it is: Supposing the goods had been many loads, and the first load had arrived “ by the direction of the defendants,” and “ by their directions ” been put into the third loft of their store, and had there been stolen or burned, or seized by a sheriff, would it be at the loss of the seller %

    There is no suspension of the delivery to allow time to inspect, unless a party expressly at the time claims it. But if a purchaser, within a reasonable time, examines and finds the goods not according to contract, and notifies the seller, and tenders back the goods, and proves these things affirmatively, he will be relieved from his covenant to pay; otherwise he may be compelled to pay for goods not according to sample (Ely v. O’Leary, 2 E. D. Smith, 356; Hargous v. Stone, 1 Seld., 86).
    The broker is the agent of both parties, and signs for both, and one memorandum of the contract—sufficient within the statute of frauds—is enough, though not delivered to either party (Dunlap’s Payley’s Agency, pages 313 to 317, and 331, note; Pitts v. Becketts, 13 Meas & Wils., 743 to 757; Merrit v. Classon, 12; Johns. R., 102).
   By the Court:

Spencer, J.

I hold that theré was error in the charge, and the verdict.

This contract' was for fifteen barrels of oil—no more, no less— and until that amount was delivered under the contract plaintiff could recover no part of the contract price. This contract was an entirety and was not divisible.

Mr. Justice Monell, in reviewing the case of Flanagan v. Demarest (3 Robertson, 183), states very clearly and forcibly the rule of law applicable in this case: “ It is well settled in this State that a vendor of goods cannot recover either the contract price nor on a ‘ qua/ntum meruit ’ for a part of the goods delivered, even although accepted by the vendee. The reason of the rule is that full performance of such contracts by the vendor is a condition precedent, and must be averred and proved.”

This principle of law was announced as applicable to contracts for personal services in the Supreme Court of this State, in the case of McMillan v. Vanderlip (12 Johnson, 165), wherein Chief-Justice Spencer reviewed, and criticised, and corrected the decisions of the English courts, which were then favoring recoveries on a quantum meruit, where the contract had not been fully fulfilled. The judge says of the rule adopted in these English cases: The rule contended for holds out temptations to men to violate their contracts.”

In the case of Champlin v. Rowley (13 Wend., 260), Judge Nelson applies the rule enunciated in McMillan v. Yanderlip to contracts for the sale and delivery of property, and says in relation to the case before him: “ The plaintiff assumed to deliver the whole quantity of hay, previous to the last run of the sloops, and he must abide the consequences of his default. We know that it was possible to have performed the contract on his part. The case falls within principles familiar in this court which inculcate the observance of good faith in the fulfilment of contracts,” and he also notices the English cases with disapproval. The principles in these cases were, affirmed in the Court of Errors (18 Wend., 187), and they have been followed and sustained by the courts of this State to the present time.

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


author: Jones J.

text:
    CHARLES WANNEMACHER et al., Plaintiffs and Appellants, v. JOHN DAVIS, Defendant and Respondent.

      [Decided April 30, 1870.]
    Where one with intent to deceive makes several representations, and thereby induces another, relying on the truth of all the representations, to sell him on credit, it is sufficient to sustain an order of arrest that only one of the representations was false, if it be of such a character as to have materially influenced the giving of the credit.
    Before Barbour, C.J., McCunn and Jones, JJ.
    Appeal from order vacating order of arrest.
    The indebtedness in this case was contracted in part on July 9, 1869, and in part on July 16, 1869, and arose out of the sale and delivery to defendant of three cargoes of coal. The indebtedness matured part on August 12, 1869, and part on August 19, 1869. The sale and delivery was procured on the representations made by defendant, that he was doing a good business in the city of New York; that he had about $5,000 capital employed therein; that he owed no one for coal except "Walters Brothers &■ Co., to whom he owed about $1,300, and that he owed nothing for coal, buying for cash.
    The defendant is a retail coal dealer.
    On an affidavit sworn to August 19,1869, showing the above matters, and also that no part of said indebtedness had been paid, and upon an affidavit of John Cox, sworn to August, 1869, showing that on the 21st of June, 1869, defendant was indebted to the firm of Detmold & Cox for coal sold by them to him in the sum of $350, which amount had been due and owing since January, 1869, during which time various efforts had been made to collect it, but without success; that on the 10th of July, 1869, he gave his note for the indebtedness, but failed to pay it when it became due, and has only offered to pay $50 therefor, provided the firm of Detmold & Cox would renew it for the balance, plaintiffs procured an order of arrest against the defendant.
    The defendant moved to vacate the order upon the papers on which it was granted. The motion was granted, and an order vacating it entered.
    From that order the plaintiffs now appeal.

      Mr. Henry Edsall for appellants.

      Mr. Henry Morrison for respondent.
   By the Court:

Jones J.

It is clearly established that defendant was indebted for coal to a party other than Walters Brothers & Co., in the sum of $350, which indebtedness, although standing since January, 1869, the creditors had been unable to collect. The representation that he owed no one but Walters Brothers & Co. was therefore false. If none of the others were false, still the falsity of this one was sufficient to sustain the order of arrest.

The plaintiffs relied not on any particular one of the representations, but on the whole taken together.

It was from the whole of them that they determined on the fitness of giving credit to the defendant, and as to whether his business and means would justify their trusting him. A capital of $5,000 is not so large but that the addition of an indebtedness of $350 to one of $1,300, especially when that additional indebtedness is due to another creditor, might well have a material bearing in the minds of the plaintiffs in determining whether the situation of the defendant justified giving him credit.

The defendant must have known of the existence of the debt and of his inability to pay it; and therefore his representation that he owed nothing except the debt he mentioned, could only have been made with the design to deceive the plaintiffs, for fear either that the knowledge of that fact would of itself deter the plaintiffs from trusting him, or else that they would make inquiries of Detmold & Co, the result of which he might reasonably expect would be the annihilation of Ms hopes for a credit.

But the affidavits, standing uncontradicted, show the falsity of all the representations, except perhaps as to the amount of the indebtedness to Walters Brothers & Co.

The fact that in - one month from the time of representing . that he was doing a good business, and had a capital of $5,000, he was unable to pay the indebtedness to plaintiffs, together with the fact that long prior to the representations, to wit, in January, 1869, he was indebted in the sum of $350, which indebtedness remained uncancelled at the time of the arrest, although he had been frequently pressed to pay it, are so inconsistent with the representations that in July he had a capital of $5,000, and was domg a good business, that, being unexplained, they lead the mind to the conclusion that the representations were untrue.

Order reversed.


author: Jones, J.

text:
    AUGUST RÖLKER et al., Plaintiffs, v. THE GREAT WESTERN INSURANCE COMPANY, Defendants.

      [Decided April 30, 1870.]
    When an open policy on such risk as may be approved and ihdorsed thereon, provides that the consideration of the insurance shall be at and after the nominal rate of two per cent., the premium on each risk to be fixed at the time of indorsement, with additions and deductions to conform to the rates of the company when the character of the vessel and time of sailing are known; and the underwriter, on being applied to, refuses to approve or indorse a risk or fix the premium therefor; he cannot, on being sued for a loss on the risk, introduce evidence in support of an answer seeking to counterclaim a demand for a premium on the risk designed to show either—
    1. That neither he nor any prudent underwriter would have taken the risk under the circumstances; or

      2. What under the circumstances would be a fair and proper rate, or usual and market rate of premium; or
    3. What rate was in use by him applicable to an insurance on the risk in question.

      (a) This because the answer does not set forth that there was any such rate, and does not seek to counterclaim a rate fixed by it; or
    4. That there was no rate in use applicable to the risk in question, with a view of showing what would be a fair and reasonable rate.
    (a) This because the insured was only bound to pay a premium fixed by the rates of the company, and not one ascertained in any other manner.
    A witness who has no knowledge or recollection that a paper ever existed, and has never had any connection with its custody, is incompetent to testify as to what has become of it.
    Under a clause in a policy that in case of a prior insurance the underwriter shall be liable only for the amount which such prior insurance shall be deficient towards fully covering the loss, no claim can be made by him arising out of a prior policy existing at the time of the application to him, but which was cancelled before he issued his policy; unless perhaps he issued his policy with the knowledge, and on the faith, of the existence of the prior insurance.
    Before Jones, Freedman, and Spencer, JJ.
    This was an action on a policy of insurance to recover for a loss alleged to have been insured against. The parts of the policy which bear on this controversy are as follows: No. 5,812.
    By the Great Western Insurance Company, A. Rolker, Mollmann & Co., on account of whom it may con-

      cern, for outward shipments and homeward, to he for account of themselves, and to be consigned to them by invoice and bill of lading, in case of loss to be paid to them, do make insurance and cause to be insured, lost or not lost, at and from Mew York to port or ports in the'West Indies, and vice versa ;

    Also at and from
    St. Domingo to Philadelphia and Boston, on specie and merchandise, or either, under and on deck, or either, on deck free from leakage, breakage, or damage by wet. Mo outward shipment to be considered insured until approved and indorsed on this policy by this Company. This policy to be deemed continuous until otherwise directed by either party, due notice being given. Homeward shipments to he reported as soon as ascertai/ned. ' To apply to one third of each shipment. It" is agreed that this policy shall also cover freight per brig John Boynton, on all her passages, to the extent of five hundred dollars, being one third. Also to cover such other rishs as may he approved and endorsed on this policy.

      “ It is understood that either party is at liberty to cancel this policy at any time, on giving notice to that effect, which is not, however, to prejudice any risk then pending.
    £: It is agreed that this policy shall also cover shipments consigned to A. Rolker, Mollmann & Co., and addressed to Yeuve A. Mirentie & Co., upon all kinds of lawful goods and merchandises, laden or to be laden on board the good vessel or vessels, including risk of lightei’s in loading, whereof is master for this present voyage, or whoever else shall go for master in the said vessel, or by whatever other name or names the said vessel, or the master thereof, is or shall be named or called.

      “ Beginning the adventure upon the said goods and merchandises, from and immediately following the loading thereof on board of the said vessel at as aforesaid, and so shall continue and endure until the said goods and merchandises shall be safely landed at as aforesaid. The said goods and merchandises, hereby insured, are valued at 25c. the dollar of invoice, unless other

      wise ordered by shippers before loss occurs / St. Domingo coffee at 11c. per lb.

      “ Touching the adventures and perils which the said Great Western Insurance Company is contented to bear, and takes upon itself in this voyage, they are of the seas, men-of-war, ****** S11bject however to such clauses, terms, and rates of average as are contained in the printed tariff of this company, and in the memorandum in this policy, unless otherwise agreed on in writing ****** having been paid the consideration for this insurance by the assured, or assigns, at a/nd after the nominad rate of two per cent. / the premium on each rish to be fixed at the time of indorsement, with additions a/nd deductions to conform to the rates of the company, when the character of the vessel and time of sailing are known.”
    The policy further provides that if the said assured should have made any other assurance upon premises aforesaid, prior in date to this policy, then the said Great Western Insurance Company should be answerable only for so much as the amount of such prior assurance might be deficient toward fully covering the premises hereby assured, and the said Great Western Insurance Company should return the premium upon so much of the sum by them assured as they should be, by such prior insurance, exonerated from.
    The policy further provided as follows:
    “ All approved indorsements on the pass-book given by this company under this policy, are to apply in all respects to this policy, the same as if indorsed hereon, and not otherwise. Risks applicable hereto to be reported to this company for indorsement as soon as known to the assured.”
    This policy was issued January 17,1857.
    The loss claimed for was on certain coffee shipped as a consignment to the plaintiffs as factors for sale by and on account of the firm of Edward Lloyd & Go., and one Joseph Maunder. The coffee was shipped in the brig Delafield at Port an Prince for the city of Rew York.
    The brig sailed from Port au Prince about December 21, 1856, and has never been heard from since.

      On the 17th of January, 1857, plaintiffs received a letter from Edward Lloyd & Co., which contained the following:
    “ Per Delafield we intend to ship to your consignment about 800 bags of coffee; the vessel will sail in two or three days.”
    On the 5th of February, 1857' plaintiffs received a letter from Edward Lloyd & Co., a letter containing bill of lading and certified invoice for 835 bags of coffee per Delafield for their account, and bill of lading and invoice for 275 bags per account of Hr. Haunder per Delafield.
    This last letter came by the brig Delhi, which brig sailed from Port au Prince after the Delafield.
    On the 6th of February, 1857, plaintiffs sent to defendants the following notice:

      “ Great Western Insurance Company.

      “ Enter on open policy of A. Bolker, Mollmann & Co.,
    Bo. $5,485 on merchandise.
    Subject to average, as per memorandum in the policy, or the printed tariff of this company, unless otherwise agreed upon.
    -g- of shipment, valued at
    on board the brig Delafield, at and from Port au Prince to blew York.
    Bill of lading dated—
    Time of sailing—December 21,1856. Master’s name—Gray.
    Hew York, February 6,1857.
    Where built—Williamsburgh, L. I.
    When built—1854.
    Tonnage—175. Premium—
    When last coppered—’55.
    When last inspected—’56.
    Present condition—fair.
    Bate—2. Good. Approved.
    (Signed)
    J. O. L.
    (To be approved in accordance with the terms of the policy.)” —and requested that the risk be approved and entered on the above-mentioned policy. ■

      . The President of the defendants refused to approve the risk or enter it on the policy, on the ground that the risk had never been taken by the defendants, and that the defendants were not on it.
    Prior to the issuing of the above policy by defendants, plaintiffs held an open policy on outward and homeward shipments to be for account of themselves, and to be consigned to them by invoice and bill of lading for Sew York, to port or ports in the West Indies and vice versa, also at and from St. Domingo to Philadelphia and Boston, issued by the Mercantile Insurance Company.
    This policy was cancelled January 15, 1857, prior to the issue of the policy by defendants, but after plaintiffs had made application therefor.
    The defendants in this action, among other defenses, set up, by way of counterclaim, a demand for the premium of insurance upon the shipment by the brig Delafield.
    The questions determined on the appeal arose out of the issue of the policy by the Mercantile Insurance Co. and its cancelment, and out of the rejection of evidence offered by defendants.
    The points sufficiently appear in the opinion.
    Exceptions ordered to be heard at General Term.

      Mr. Joseph M. Choate for defendants.
    By the true construction of the open policy issued by the defendants to the plaintiffs under the terms of which unknown and future risks might be reported, and, if approved, indorsed, the rate of premium in the policy being merely nominal, and the actual premium on each risk to be fixed at the time of indorsement, with additions and deductions to conform to the rates of the company when the character of the vessel and time of sailing are known, it is well settled that the contract is not complete as to any risk until, upon its being reported, the underwriter has exercised his right to fix the premium to conform to the rates of the company, when the character of the vessel and the time of sailing are known; and the risk having been rejected by the defendants, when reported, was never insured under the policy. The contract of insurance in respect to this particular shipment never became complete or binding.
    The learned court below erred in refusing to permit the defendants to prove the circumstances under which the policy was issued, and that at the time of making it it was expressly agreed between the parties that it should not apply to any shipments which-had been made before the date of the policy unless such shipments, being reported, should be accepted and indorsed. The contract containing nothing to determine explicitly whether it was intended by the parties to apply to risks then pending, the evidence that there were or might be such risks, and the agreement that they were not to be included unless expressly indorsed, was clearly admissible, and should have been received, and the question left to the jury to determine.
    But if the company, in this case, are to be considered as bound by the terms- of them policy to accept the risk in question when reported, nevertheless, since by the terms of the policy the premium on each risk is to be fixed at the time of indorsement, with additions and deductions to conform to the rates of the company when the character of the vessel and the time of sailing are known, the exclusion by the learned court of the defendants’ evidence, offered to show what would have been the proper and fair rate of premium to charge upon the risk in question when it was reported, and when the character of the vessel and the time of sailing were known, was clearly error, and the case should be' sent back for a new trial. The plaintiffs failed to report the risk by the Delafield, as a risk applicable to the policy, as soon as it was known to them. This provision is clearly inserted for the benefit of the company: “ Bisks applicable hereto to be reported to this company for indorsement as soon as known to the insured and again, “ homeward shipments to be reported as soon as ascertainedthe latter in writing. If this provision were faithfully acted upon, the company would have the full benefit and protection of whatever reinsurance they might see fit to obtain, and that upon the earliest intelligence of the risk, when the obtaining of reinsurance would be practicable upon the same terms, at least, as those at which they themselves received it.
    At any rate this question of delay in reporting the various intelligence received by the plaintiffs of the risk by the Delajield should have been left to the jury to determine they did report it as soon as ascertained or as soon as known to the assured.
    The defendants, if held upon the risk, are certainly by the terms of the policy entitled to a premium, proportioned to the great hazard and danger of it, from the fact of its being so long out of time and not heard from ; and the case should be sent back for the jury to determine, as they only can determine, what was a fair rate under those circumstances.
    The learned court below erred in allowing the plaintiffs to add 8 per cent, to the invoice weight in order to make a larger weight in pounds upon the standard of American weights. There is no such right reserved by the policy. On the contrary, it insures the risk in question, if at all, as a risk to be consigned to the plaintiffs by invoice and bill of lading, and declares that San Domingo coffee shall be valued at eleven cents per pound, and the bill of lading and invoice are in pounds, French weight, and there is no stipulation in the policy, like that which had been iu the Mercantile policy, allowing an addition of 8 per cent, to the French weight. Parties to the policy are making an agreement relating to shipments, .by French weight, of an article so invoiced and entered in bills of lading, and must be held to have intended the weight usually meant in reference to that particular article, and coming under such documents.
    In a policy “ for. account of whom it may concern,” which has been repeatedly held by this court to cover the interest, and only the interest of those parties who not only had an actual interest but who were intended by the party obtaining the insurance to be covered, the plaintiffs, even though the policy is made in their name, and payable in case of loss, to them, cannot recover without proving both the fact of interest in the parties intended to be covered, and that they applied for the insurance with the intent to cover those parties; and inasmuch as the plaintiffs offered no evidence on the latter of these points (for the preliminary proofs cannot be regarded as evidence in chief on the point of intention), their action must fail (Crosby v. N. Y. Mut. Ins. Co., 5 Bosw., 369, 377; Forgay v. Atlantic Mut. Ins. Co., 3. Rob., 79, 90).

      Mr. Augustus F. Smith for plaintiffs.
    The policy in question is an open policy, by which, for a nominal premium of two per cent., the defendants insure all goods of the plaintiffs, or goods consigned to them, from Yew York to the West Indies, and from the West Indies to Yew Y ork. In respect to outward shipments, they were not insured until approved and indorsed. In respect to homeward shipments, they were insured immediately, and the risks were only required to be reported as soon as ascertained.
    Under the old form of policy, the thing at risk was specified; under this form, every thing is at risk which comes within the description (1 Phillips on Ins., § 438).
    Besides the nominal premium of two per cent., for which the plaintiffs gave their note, the defendants reserved the right to themselves to fix or adjust at the time of indorsement the premium on each risk; but this was no arbitrary power, but the rate to be fixed must conform to the rates of the company as they existed at the time of the sailing of the vessel, and were to depend upon the then character of the vessel.
    It has been claimed that the defendants had a right to fix the rate of premium with reference to the state of things as they existed when notice to enter the risk was given. In other words, that if the vessel was then lost, that they could fix a rate of 100 per cent., so that, practically, the assured would have no policy of any value to them until they had reported the risk and had it entered.
    Such a construction of the policy would be a fraud upon the assured, and would defeat the purpose of such open or running policies, which is to indemnify the assured in cases in which they anticipate shipments, but have not received advices.
    On the other hand, to fix a rate of premium as of the time when the vessel sailed, and looking to the then character of the vessel, is precisely what would do justice to both parties.
    If there be any difficulty in construing the words of the policy on this subject, the well known rules are to look to the situation of the parties; to give the words a reasonable construction; to carry out the obvious intent of the parties, and, if need be, to construe them most strongly against the party whose contract is under construction (2 Parsons on Contracts, 11, 18, 22, note (v.); Gates v. McKee, 3 Ker., 232; Hoffman v. Etna Ins. Co., 32 N. Y., 405-413).
    The fair meaning of the words is—The premimn on each risle to be fixed at the time of indorsement, with additions a/nd deductions to conform to the rates of the company which they were accustomed to cha/rge at the time the risle began, had they then lenown the cha/racter of the vessel and time of sailing.

    But whatever the rights of the defendants were in fixing the premium, they were bound to exercise those rights, and when they refused, it is but reasonable to hold that they acquiesced in the sufficiency of the rate of two per cent, named in the policy.
    The motion for a nonsuit was rightly denied.
    The first ground of this motion was, that when the notice was presented to enter the risk, there was no obligation on the company to do it.
    This can hardly have been serious, for it seems to be based only upon the idea that the plaintiffs were insured, whether the defendants entered the risk or refused to enter it.
    Ho doubt they were insured in either event. But, nevertheless, the defendants, impliedly at least, bound themselves to enter the risk.
    The second ground was, that if the policy was a contract, it was only an executory agreement to fix a reasonable and usual rate of premium, and for such a premium to enter the risk; and that for the breach of such an agreement no damages are proved, and from the nature of the case there could be no damages.
    Now the contract was an insurance of all risks within the description of the policy. It was, especially in respect to homeward risks, an executed as distinguished from an executory agreement. The plaintiffs were covered the moment the risk began; but for the safety of the defendants, and to prevent fraud, the defendants were entitled to notice of a risk as soon as known, and they had then the right to adjust the premium.
    The third ground was, that if the company was bound to accept the risk from the date of the policy, nevertheless, since the premium is to be fixed at the time of indorsement, and the rate of that premium was never fixed, no right of action on this policy ever accrued to the plaintiffs (See Audubon v. Excelsior Ins. Co., 27 N. Y., 217).
    The plaintiffs are without fault; the defendants have not availed themselves of a privilege, and say they will not therefore fulfil a contract express in its terms, and having an ample consideration actually paid (1 Parsons’ Marine Ins., p. 321; E. Carver Company v. Mfgs. Ins. Co., 6 Gray, 214).
    The fourth ground was that the plaintiffs refused to report the risk as soon as the information was obtained.
    The testimony showed that the plaintiffs received their letters late in the afternoon, and too late for notice that day, and gave notice the next morning.
    The fifth ground was that upon the true construction of the policy it did not cover a risk pending when the policy was made.
    The policy is “ lost or not lost ” (3 Keyes, 17).
    The defendants stated an additional ground for a non-suit after all the evidence was in, viz.: that the policy in the Mercantile Company was pending when the application was made to the defendants, and though cancelled before the policy was issued, that it was a prior insurance, and that the defendants were not liable.
    The answer to this is, that the policy is the contract, and that the application is obsolete from the time the policy was given. When the policy was issued the Mercantile policy had been cancelled (Date of this policy, January 17, Mercantile policy cancelled January 15, 1 Phil. on Ins., section 16).
    The valuation in the policy of 11 cents a pound, was the American pound. The contract must be construed with reference to Hew York, where it was made.
    The exceptions to the admission of evidence were none of them well taken.
    The offer to prove a parol agreement made at the time of the contract of insurance, was the first of these, and was properly overruled.
    This was not an offer to prove a mistake with a view to have the contract reformed.
   By the Court:

Jones, J.

I think all the grounds on which the defendants moved for a dismissal of the complaint at the close of the plaintiffs’ testimony were decided adversely to it by the Court of Appeals when this case was before.it on an appeal from a judgment rendered dismissing the complaint.

The same evidence that is now before the court was then before the Court of Appeals, and that court, in reversing the judgment of dismissal, necessarily held that on that evidence the plaintiff was entitled to recover.

The terms of the policy and the facts that the vessel was out of time, that the defendants had refused to enter the risk in the pass-book or to fix a premium, as well as evidence as to the time when the plaintiffs reported the risk, were all before the Court of Appeals, and that court commented on them and held that they had not the effect of relieving defendants from liability on the policy for the loss of the shipment in question; and held that, notwithstanding all these matters, the defendants were forced to accept the risk.

That decision is controlling on us. It seems to be the result of that decision, that if the company desired to protect themselves from an obligation to take a risk that is out of time, they must insert in the policy a special clause of exemption.

The evidence introduced on the part of the defendants at the last trial does not alter the aspect of the case, except so far as the question arising out of-the insurance in the Mercantile Insurance Company is concerned.

As that insurance was cancelled prior to the issue of the one by the defendants, the defendants cannot claim from its having at one time existed.

The only questions left arise out of the rejection of evidence.

The questions, objections to which were sustained, were designed (except as hereinafter mentioned) to establish:

First.—A parol agreement made at the time of making the contract of insurance represented by the policy.

As it was not proposed to prove a state of facts which authorize a court of equity to reform the policy, mere proof of a parol contract made before or at the time the policy was issued ' was properly excluded.

Second.—To establish that neither the defendants nor any prudent underwriter would have taken this risk if, when the policy was applied for, it was known that the vessel had sailed on December 21 and had not since been heard from.

The question being not what the defendants or a prudent underwriter would do under such circumstances, but simply what contract the defendants did, in fact, enter into, without any fraud or imposition practised by the plaintiffs, the evidence was properly excluded.

Third.—To show what, under the circumstanees, would be a fair and proper rate, or the Usual and market rate, of premium to charge on this vessel on the 6th of February.

The premiums the plaintiffs agreed to pay were those that should conform to the rates of the company; consequently it was inadmissible to prove any other rate of premium.

There are two other .questions and an offer, objections to which were sustained, to be noticed.

The first is:

State what has become of that paper ?

It appeared that the witness had no recollection of the paper, and it did not appear that he had searched for it. It is necessary that a witness should have some knowledge or recollection of the fact that a paper did once exist, and have some connection with its custody, before he is in a position to testify to what has become of it.

The second is:

Was there any rate in use by your company applicable to a vessel reported forty-seven days out from Port an Prince and not heard from ?

This would have been proper if the defendants had pleaded that there was such a rate, and asked to counterclaim a premium fixed by it. As there is no such pleading, it was properly excluded.

It may be suggested that the object of this question was to prove that there was no such rate, and so to let in proof as to what would be a fair and reasonable rate, for otherwise the company would be liable on a risk without receiving any adequate premium therefor.

The answer is, that if they have neglected to provide for these exceptional cases in their contract, they must take the consequences of their neglect, if it deprives them of an adequate compensation.

If there are no rates to meet a case like this, then the company are entitled to the rate of two per cent., as fixed by the policy.

The offer was to prove what the printed form of application was.

I understand this to be an offer to prove what the ordinary printed blank in use by the company was. I so understand because the witness who was under examination at the time the offer was made had testified to all that he recollected about the contents of the application sent in for the policy in question, and no other witness is suggested as having any knowledge or recollection of the contents of that particular application. The evidence offered was, in this view of the offer, inadmissible.

I perceive by the defendants’ points that they claim that the court below erred in allowing the plaintiffs to turn the French weight, in which the bill of lading and invoice is made, into American weight.

I discover no objection or exception taken in the court below which raises this point. This might be sufficient to prevent any review of the verdict on this ground. It perhaps, however, is as well to say that the word pound used in this sentence in the policy—“ St. Domingo coffee at 11c. per lb ” is to be construed as meaning American pounds.

Exceptions overruled and judgment ordered for plaintiffs on the verdict, with costs.


author: Spencer, J. Monell, J.

text:
    ANDREW L. IRELAND, Plaintiff, v. WILLIAM H. NICHOLS and others, Defendants.

      [Decided April 30, 1870.]
    The old principle or rule, “ that the acceptance of rent under a lease, after a forfeiture^ is a waiver of the forfeiture,” reasserted and the leading cases reviewed.
    The Christie case, and the opinion of Chief Justice Robertson (5 Robertson, 169), reviewed and considered as not being antagonistic to the current of authorities that support the above rule, and as being in accordance with many cases cited, that hold substantially, that rent may be paid and received under circumstances that clearly show that it was paid and received without the knowledge or supposition of either party that thereby the forfeiture was waived; or that it was paid and received as a compensation for the use and profits of the land, and the intention of waiving the lease expressly negatived by both parties.”
    Where the forfeiture claimed was the breach of a condition not to underlet the premises without consent, etc., and there was but one underletting, held that the act of forfeiture was single and indivisible. The continuance of the same underletting, after rent had been paid, and thereby the forfeiture waived, cannot be considered as the breach of a continuing covenant, as illustrated in the cases of Ambler v. Wood-ride (9 Barn. & Cress., 376) and Fowler v. Peck (1 Bam. <& Aid,, 428).
    _ Before Monell, Freedman, and Spencer, JJ.
    TMs action was commenced in November, 1868, and was tried in November, 1869, before Mr. Justice Jones and a jury.
    The plaintiff, in his complaint, claims to recover possession of premises in the city of New York, known as Nos. 51 and 53 Eighth avenue, because of a forfeiture under a covenant of the lease of the same from plaintiff to defendants, stated in these words:
    “And the said party of the second part further covenants that he will not assign, let, or underlet the whole or any part of the said premises, nor make any alteration therein, without the written consent of the party of the first part, under the penalty of forfeiture and damages,” alleging that defendant William Henry Nichols had violated this covenant by underletting, etc.

      The defendant Nichols, by his answer, admitted the lease, and also the underletting of the premises, as alleged in the complaint, but alleged that plaintiff, after said underletting, waived the forfeiture which otherwise would have been incurred, and his right of .re-entry consequent therein; and notwithstanding such underletting the plaintiff, with full knowledge thereof, confirmed and affirmed the said lease, and' the tenancy of the defendant under the same.
    William Henry Nichols, a witness'for defendants, testified substantially as follows: That he was the lessee; that he underlet the premises in May, 1868; that John B. Ireland was plaintiff’s agent in the premises; he signed the lease in the name of plaintiff. “I told him (Ireland) I was going to underlet the premises. I told him after I had done it. I afterwards paid him the rent up to the 1st day of October, 1868.”
    The receipts of plaintiff for rent were introduced without objection. The last receipt is as follows:
    “ October 28, 1868. ¡Received of Mr. William H. Nichols ninety-three dollars and thirty-two cents, in full for rent of house No. 51 Eighth avenue, New York City, to November 1, 1868. A. L. Ireland, “ $93.32. ¡Per John B. Ireland, Attorney P ■

    The defendants rested. The following admissions were then made by the parties in court:

      K It is admitted that the parties to whom the premises were ■underlet in May, 1868, as testified to by witness Nichols, remained in possession, under such said contract of underletting made May, 1868, and not otherwise, until after the commencement of this action. This action was commenced by the service of a summons and complaint on the defendant on the 9th day of November, 1868. It is admitted that the mesne profits of said premises from the 1st of November, 1868, to the time of the .trial, amounted to the sum of two thousand nine hundred and .twenty dollars.”
    The plaintiff here rested his case, and the defendants requested the court to direct a verdict for the defendants. The court directed the jury to find a verdict for the defendants, to which ruling and direction the plaintiffs duly excepted. The jury, by the direction of the court, found a verdict for the defendants _ The exceptions were ordered to be heard at General Term in the first instance, and judgment in meantime suspended.

      Mr. Ira D. Warren for plaintiff.
    The underletting being admitted, the burden of proof was upon the defendants to prove a waiver (Lawrence v. Williams, 5 Duer, 385; Burrill’s Law Dic., vol. 1, page 507; see “ Forfeiture”).
    The receipt of rent by the landlord after the forfeiture of the lease by the tenant for violating the condition not to underlet, did not waive the forfeiture and re-establish the lease. The tenant was bound to pay the rent due, whether he had forfeited the estate or not.
    The fact that he had forfeited the estate, by violating one of the conditions upon which he held it, would not relieve him from his contract to pay the rent.
    The obligation to pay the rent remains, although the relation of landlord and tenant is gone ; the landlord has done no unlawful act which would defeat or impair his claim for rent, while the forfeiture is produced by a failure on the part of the tenant to do what he was bound to perform.
    They are entirely independent covenants and conditions.
    Had the forfeiture been incurred for the non-payment of rent, then the receipt of it would have waived the forfeiture.
    The forfeiture was for another and entirely independent cause, and had nothing to do with the rent. The tenant was bound to pay the rent notwithstanding the forfeiture.
    This precise question has been decided by the General Term of this Court (Importers and Traders’ Insurance Co. v. Christie, 5 Rob. Rep., 180).
    If the receipt of rent by the landlord waived the forfeiture, it did not waive it beyond the time he received the rent, where the original cause of forfeiture continued.

      The evidence shows that the rent was payable monthly in advance. The defendants paid the rent due on the first of October, 1868, which paid the rent up to the 1st of November.
    The defendants never paid the rent due on the first of November. This was a continuing condition (Doe v. Watt, 1 Mann’s R., 694). If the receipt of rent affirmed the lease, it was only on the same terms as before, and the landlord had a right to bring his action at any time for continuing the underletting, provided he had not received rent covering that time. Oontinuing the original underletting is tantamount to a new underletting, and a fresh breach of the condition every day it continued, and a new cause of action every day it continued (Stewart v. Hunter, 4 Sand. Ch., 591; Taylor, Landlord and Tenant, § 500; Bleecker v. Smith, 13 Wend., 532; Jackson v. Allen, 3 Cowen, 221; Doe v. Allen, 3 Taunt., 78).

      Mr. D. T. Walden for defendants.
    If a landlord, with knowledge of a cause for forfeiture by his tenant, does any act affirming the existence of the lease and recognizing the defendant as his tenant, and as lawfully in possession, he waives the forfeiture, and the tenancy continues notwithstanding the previous act of which he might have taken advantage (1 Parsons on Contracts (5 Ed.), 506; 2 Platt on Leases, 471; 1 Wm. Saund., 287 to 288; 1 Wash. on Real Pro., 424).
    The forfeiture is waived if the lessor with full knowledge of the cause for forfeiture accepts from the lessee rent under the lease which became due after the act of forfeiture (1 Wm. Saund., 287, do., 288; Doe v. Bliss, 4 Taunt., 753; 2 Platt on Leases, 471; Doe v. Woodbridge, 9 Barn. & Cress., 376, 377; 4 Man. & Ry., 302; Jackson v. Allen, 3 Cowen, 230; Pr. Sutherland, J., and cases cited; Bleecker v. Smith, 13 Wend., 530, 3, 4).
    There are cases where the acceptance of rent has been held not to be a waiver, for the reason that waiver being a question of intent, and neither party intending to waive the forfeiture or affirm the tenancy, the receipt was consistent with the claim of forfeiture (Jones v. Carter, 15 M. and W., 718; Doe v. Meaux, 1 Car. and P., 348; Manice v. Millen, 26 Barb., 41; Importers and Traders’ Ins. Co. v. Christie, 5 Robertson R., 169).
    ¡Notice to the agent was notice to the plaintiff; the agent made the lease, and acted in all respects for the lessor (Bk. of U. S. v. Davis, 2 Hill, 451; Sutton v. Dillaye, 3 Barb., 529; Weaver v. Denison, 10 N. Y., 68; Wilson v. Genesee Mut. Ins. Co., 14 ib., 418; McEowen v. Montgomery Co. Mut. Ins. Co., 5 Hill, 101).
   By the Court:

Spencer, J.

The main question to be considered and determined in this case is, whether the forfeiture incurred by the underletting in Hay, 1868, was subsequently waived by the act of the plaintiff in accepting rent under the lease, which became due after the act of forfeiture, and after the same became known to plaintiff.

I think this question would have been practically decided in the affirmative on the argument, had not the plaintiff’s counsel claimed that a negative conclusion had been reached by the General Term of this court in the case of The Importers and Traders’ Insurance Company v. Christie, reported in 5 Robertson, at pages 169 to 183, in which our late learned and honored chief-justicé delivered the opinion of the court.

After a full examination of the cases bearing upon this question, I have concluded that the main questions in this case and the Christie case are so broadly distinctive and different from each other that the decision of the court in the latter action in nowise governs or affects this case.

This question was argued and decided, in a very similar case, in the Court of ¡King’s Bench in the year 1778 (Goodright v. Davids, Cowper’s Reports, 803). The covenant in the lease against underletting is nearly identical with the covenant in this lease. Its breach was fully established, as also the facts that the lessor knew of the same, and with such knowledge received rent upon the premises, and afterwards brought ejectment to recover the premises because of a forfeiture under a breach of this covenant; and it appeared in that case as in this, that the under-letting continued after the payment of the rent, and until after the action was brought.

Thornton, counsel for the tenant, cited as the law in England the following paragraph from Coke on Littleton: If the lessor accept rent due at a day after, he shall not enter for the condition broken, because he thereby affirmeth the lease to have continuance.”

Lord Mansfield, in announcing the opinion of the court, says:

“ This case is extremely clear. To construe this acceptance of rent due since the condition lyrolcen a waiver of the forfeiture, is to construe it according to the intention of the parties. Upon the breach of this condition the landlord had a right to enter. He had full notice of the breach, and does not take advantage of it, but accepts rent subsequently earned. That shows he meant the lease should continue.”

This is one of the early English cases, but I believe that this construction has been held by the English courts, in an unwavering line of decisions, to the present time. I refer only to one or two later cases.

In Croft v. Lumly, Court of Queen’s Bench, reported 85 E. C. L. Reports, 647, and in the Court of Exchequer, page 681, and in the House of Lords, vol. 96, E. C. L. Reports, page 1070, this question of a waiver of the forfeiture by payment of rent was fully discussed.

In the House of Lords eight judges out of nine who heard the case expressed themselves clearly and fully in support of the doctrine as laid down in the earlier cases; and also that, in the case before them, if there had been a forfeiture, it had been fully waived by the receipt of the money which was offered as rent (and yet in that case the lessor refused to accept it as rent, although he took it from defendant when so offered).

Dendy v. Nichols (93 E. C. Law Reports, 376) is a case also in point. Crompton, J., says: “ If this action (ejectment) were to be held to be maintainable, this gross inconsistency would result, namely, that the plaintiff, having already recovered the rent to Lady Day, 1857, would recover the land by reason of the forfeiture in 1854, and mesne profits down to the time of the verdict.

The plaintiff has elected conclusively to treat the defendant as his tenant, and cannot afterwards turn around and make him a trespasser.”

This construction of the law has been followed by the American courts, especially the courts of this State. Judge Sutherland discussed this question in 1824 (Jackson v. Allen, 3 Cow., 230), and after citing many English cases, says: If the lessor, therefore, with a full knowledge of the forfeiture, had accepted rent which fell due after that event, the eases cited show it would have been a waiver.”

Chief-Justice Savage says (Bleecker v. Smith, 13 Wend., 534): Any act of the lessor which recognizes the lease as a subsisting operative contract, such as receiving rent wider it, is a waiver of the forfeiture.”

In the review of “Dumpor’s case” (Smith’s Leading Cases, 6 Am. ed., vol. i., part 1, page 89 and post), the learned author and editors have collected and cited nearly all of the early and later English and American cases relating to this question of waiver.

I have been unable to find any case that will support the position that is claimed by plaintiff’s counsel in regard to the case in 5 Robertson, yet I do find much good authority in support of that case without placing it in opposition to the current of authorities on this question of waiver that have been flowing in one direction for over a century.

In the Christie case (5 Robertson, 169) the rent in question was paid after the cause was at issue, during the pendency of the action of ejectment, and the learned justice before whom the same was tried states (as a finding of fact) that the payment by Christie of the quarter’s rent due on the 1st of May, 1866, and the receipt of the same by plaintiff, was without the knowledge or supposition of either party that such payment and receipt would affect the rights of the parties in the action, which was treated at the time as cm existing action. ¡Now, I hold that paying the rent under these circumstances is a very different act, and fraught with very different results, than if paid under the circumstances detailed in the case now under consideration. It has been held, in many cases, that the facts which form a case of waiver of forfeiture, through a payment of rent, make up a question of intent for the court or jury to pass upon, and some of the English judges have held, or suggested, that the question (which generally arises), Did the lessor, by receiving the rent, intend to waive the forfeiture?” should be, or might properly be, submitted to the jury as a question of fact.

Without further discussion of the extreme view of the question, I notice the following eases in support of the Christie case:

“ Bent may be received under circumstances showing it to be paid and accepted as a compensation for use of land, and not with the intention of setting up (setting up—restoring or renewing) the lease. Nay, a contrary intention may be expressed at the time of its receipt. A receipt for rent paid under such circumstances would not amount to a waiver of the forfeiture” (Doe v. Butten, 1 Cowp., 243).
“A receipt of rent after the lessor has, by unequivocal act, such as bringing an action in ejectment (as had been done in the Christie case), expressed his intention to treat the lease as void, cannot operate to revive it” (Jones v. Carter, 15 M. & W., 718).

In Manice v. Miller (26 Barb., 42), a decision of the General Term of the Supreme Court of the First District, a landlord was held to be entitled to re-enter for a breach of condition, caused by the non-payment of taxes, although the time of payment of the same had been extended, and rent had been received which had accrued during the interval, and after the period originally fixed for the fulfilment of the condition. The court held that the effect of the receipt of rent, or other prima facie evidence or admission of the continuance of the tenancy, was a question of intention, it being inferred, from the payment of rent, that both parties recognized the lease was valid, yet that the contrary might be shown by express proof. ' I consider the Christie case as a decision of the General Term of this court sustaining this doctrine: “ That the question, whether the reception of rent is a waiver of a prior forfeiture, is one of intent, to be considered and decided upon by the court or jury upon the facts arising in each case.”

It was contended, on the argument by the plaintiff’s counsel, that this covenant or condition of the lease in question is a continuing covenant, as illustrated by the cases of Ambler v. Wood-bridge (9 Barn. & Cress., 376), Fowler v. Peck (1 Barn. & Ald. 428). I think otherwise. It was stipulated on the trial (substantially) that there was but one underletting, and the under-tenant remained in possession under the same until after the commencement of this action. The act of forfeiture was single and indivisible. It was complete in May, 1868. There has been no repetition, no breach, but the one, which is the only one complained of.

Exceptions overruled, and judgment ordered for the defendants upon the verdict, with costs.

Monell, J.

(concurring). I concur in the opinion of my associate, that this case is distinguishable from the case of The Importers and Traders’ Insurance Company v. Christie (5 Robt., 169), and that, therefore, we are not concluded by that decision in determining the principal question in this case.

I desire, however, to say of that case, that it was decided without my knowledge or concurrence. For although I was a member of the General Term when it was argued, and heard the argument, I was not consulted in the decision, and never saw the opinion until it was published by the reporter.

The report of the decision indicates that I concurred in the opinion, which I never did, and from much of which I should have dissented had I had the opportunity of doing so; and I therefore wish now to place myself upon the record as dissenting from all such propositions in that opinion as are at variance with the view we now take of the law.