author: By the Court. Oakley, Ch. J.

text:
    Holford v. Adams, and others.
    (Before Oakley, Ch. J., and Emmet, J.)
    November 11;
    December 10, 1853.
    The defendants, an Express Company, received from the agents of the plaintiffs • at Mew Orleans, a package, valued at §40,000, to be transported and delivered to the plaintiff at Mew York. By the terms of the receipt given for the package, the defendants were not to be responsible for any loss or damage not arising from their own fraud or gross negligence, or that of their servants; and • it was proved that there was the same care in the transportation of all articles without regard .to their value. When the package arrived at Mew York, the defendants refused to deliver it to the plaintiff, unless upon the payment of §400, being 1 per cent, upon its estimated value.

      Held, that, under these circumstances, there was no reason for enhancing the charge for transportation in proportion to the value of the articles transported, and that the charge made was therefore, prima facie, unreasonable and extravagant.

      Held also, that the charge was not justified by usage, the usage proved not being general, but that of the defendants alone, and there being no proof that it was known to the plaintiff or his agents.
    Appeal by plaintiff from a judgment, at special term, upon exceptions taken at the trial.
    The action was for the delivery of personal property, with damages for its detention.

      The complaint charged that Robb & Co., agents of the plaintiff at New Orleans, on the 11th of December, 1851, delivered to the defendants, transacting business under the name of Adams & Co., a package, containing Arkansas bonds of $1,000 each, with coupons attached, belonging to the plaintiff? to be transported by the defendants, by steamer, from New Orleans to the city of New York, and there to be delivered to the plaintiff for a reasonable consideration, to be paid by him to the defendants. That, when the package was so delivered, the agent of the defendants, at New Orleans, signed and delivered a receipt therefor, by which it was stipulated that the defendants should not be responsible for any loss or damage arising from the dangers of the sea, steam or river navigation, or from any cause whatever, unless the same should be proved to have occurred from the fraud or gross negligence of the defendants, their servants, or agents.
    The complaint then averred that the defendants had transported the package to New York; that he, the plaintiff, had tendered to them a reasonable sum as a compensation for transporting it, and had demanded its delivery ; but that they had refused to deliver and still retained it: and then demanded judgment in the usual form.
    The defendants, in their answer, denied that the package containing the bonds was delivered to them, to be transported to New York, and there delivered to the plaintiff for & reasonable consideration. They denied that any receipt was signed or given, as alleged in the complaint; and that the plaintiff had offered to pay to them a reasonable sum as a compensation for transporting the package.
    They averred that when the package was delivered to them at New Orleans, Robb & Co. expressly stated that the bonds which it contained were of the value of $40,000 ; and that it was then expressly understood and agreed between them and Robb & Co., that, in consideration of their taking charge of, transporting, and delivering the package, the plaintiff would pay to them, upon its delivery to him in New York, one per cent, upon the value of the bonds, as represented and fixed. They then insisted that they were entitled to retain the possession of the bonds until this sum, amounting to $400, should be paid, which they averred was no more than a reasonable and usual compensation for the transportation of similar packages. The reply took issue upon the new allegations in the answer.
    The cause was tried before Paute, J., and a jury, in December, 1852. TJpon the trial, the counsel for the plaintiff read the following stipulation.
    “ Whereas this suit has been commenced by the plaintiff to recover the possession of certain bonds and coupons in the complaint described, and damages for the detention thereof, and the defendants’ claiming a lien on said bonds and coupons, and a right to detain the same, for their labor and services in the transportation thereof, from New Orleans to the city of New York.
    “ And whereas the defendants have surrendered up to the plaintiff the possession of said bonds and coupons under the agreement hereinafter set forth.
    “Now it is stipulated and agreed between the attorneys for the respective parties, that, upon the trial of this action, the jury shall assess the amount to which the defendants are entitled for such labour and service; and that in case the amount so assessed shall exceed the amount heretofore tendered by the plaintiff, namely, twenty dollars, the defendants shall be entitled to judgment with costs, and the plaintiff shall, upon demand, pay to the defendants such judgment, and the costs and extra allowance of this suit, or return such bonds and coupons to the defendants, to be held by them as a security for the payment thereof, in the same manner, and with the same right of lien, as though they had never parted with the possession thereof.
    “ Dated, New York, April 3d, 1852.
    “ Tucker & Cbapo,
    “ At't’ys Pltff.
    “E. H. Oweit,
    “ Defts. Att’y.”
    The counsel for the plaintiff then rested his case.
    It was then admitted by the counsel for the defendants, that a receipt for the package had been given by their agent at New Orleans, which corresponded in its terms with the statement in the complaint.
    The counsel for the plaintiff then admitted, that on the outside of the envelope which contained the bonds was endorsed the words and figures “ James Holford, Esq., 49 "William street, New York—value $40,000.”
    The counsel for the defendants then called

      A. L. Simson, who, being sworn, testified as follows: I am an express man in Adams & Co.’s office; I have been there about three years; I am in the New Orleans department; I have • charge of it; the business of Adams & Co. consists in transporting parcels and freight to most parts of the country, and also to California; they also transport valuable packages, which compensates for the small amounts they receive for the carriage of articles of small intrinsic value; in the transportation of parcels, the valuable parcels compensate for transporting less valuable packages, and enable Adams & Co. to transport the less valuable packages cheaper than they otherwise would; we have agencies at the principal points of the Union.
    Being asked by the defendants’ counsel, what was the usual compensation of Adams & Co., for receiving at New Orleans, and for transporting and delivering in New York packages of value; the question was objected to by the plaintiff’s counsel, which objection was overruled by the judge; to which decision of the judge the plaintiff’s counsel excepted. The witness answered one per cent, on the value of the package.
    The counsel for the defendants then asked the witness:
    What is the usual charge of other express men and carriers, for transporting packages of value from New Orleans to New York?
    To which question the plaintiff’s counsel objected, which objection was overruled; to which decision of the judge the plaintiff’s counsel objected.
    The witness then answered: One per cent, on the value, that is the usual charge of Adams & Co.; it is my impression that the steam-ships charged at the same rate; it is invariably our customary charge; we make special bargains with people sometimes.
    Being cross-examined by the plaintiff’s counsel, the witness testified:
    There are, I think, about sixty Express offices in the city of New York; this number includes all sorts ; the local expresses as well as the large ones ; I never was employed in the express business before I engaged with Adams & Co.; I have never known Adams & Co. to transport Arkansas bonds before; I don’t remember their transporting any bonds except some Texas bonds; I can’t say whether they did or not; I don’t remember any other bonds than the Texas and Arkansas bonds.
    Being asked by plaintiff’s counsel what articles of value the defendants have forwarded, he says:
    I cannot name any article of value particularly; I cannot name a single parcel; I remember a parcel of gold dust worth $1,000.
    Being again examined in the direct, the witness said-:
    Packages, when brought to us to be forwarded, are usually sealed; we rely as to the value of the package on the declaration of the party employing us; sometimes he don’t declare its value; we then let it go as a common parcel; the charge on these bonds as a common parcel would have been $1.50 ; there is no difference between parcels of valuable goods and common articles in the care we take of them; we charge one per cent, on the value over a certain amount; I remember the bill of this parcel; when this package was received it was sealed; we always ask as to the contents.
    Being again cross-examined, the witness testified:
    We did not insure this parcel; I remember forwarding gold dust; they sometimes transport goods for jewellers, and we generally make a bargain with them as to compensation.
    In answer to a question of the judge, the witness said, the receipt produced is in the common form of the receipts we give.
    In answer to a question from one of the jury, the witness said, I do not remember that we ever carried anything for Robb or Holford except this one package.
    The defendants’ counsel then called

      WilliO/m McGill, who, being sworn, testified: I am an express man in the employ of Adams & Co.; have been with them twelve months last Hay; they are at 59 Broadway; I am employed in the California department, in the general department. Being asked, what is the usual rate of charge of Adams & Co. for valuable articles from New Orleans to New York, the plaintiff’s counsel objected to the question, which objection was overruled by the court, to which decision the plaintiff’s counsel excepted. The witness then answered, one per cent.
    Being cross-examined by the plaintiff’s counsel, the witness testified:
    That he had never been in the express business excepting in the employ of the defendants.
    The plaintiff’s counsel then offered to show that the bonds, to recover which this action is brought, were actually bought by the plaintiff in December, 1851, for $26,000.
    To which offer the defendants’ counsel objected, which objection was sustained by the court, to which decision the plaintiff’s counsel excepted.
    The cause was then summed up by the counsel for defendants and plaintiff.
    Whereupon the judge charged the jury, That, if they believed from the evidence that the customary charge by Express offices was one per cent, on valuable articles from New Orleans to New York, they should find for the defendant to that amount on the value of the package, as the same was marked on the package, and declared to the agent in New Orleans when the receipt was taken. That, with regard to the value, the sum of $40,000, declared to the agent in New Orleans, and marked on the package, and inserted in the receipt, was to be taken as the value. "
    That, if the jury should think that the $20, tendered by the plaintiff, was, under the evidence, enough for bringing this package, they would find for the plaintiff.
    If not, they would find for defendants what they thought a proper compensation.
    To this charge of the judge, ana to each and every part thereof, the counsel for the plaintiff excepted.

      Whereupon, the jury found a verdict of $425 for the defendants.

      T. Tucker, for the plaintiff,
    now insisted, that the judgment entered upon the verdict ought to be reversed, the verdict set aside, and a new trial ordered, and rested his argument upon the following points and authorities.
    I. The plaintiff had a right to the possession of the bonds in question, upon tendering to the defendants the sum of $20. 1. The evidence does not present any facts, from which the plaintiff can claim compensation for more than a common parcel. 2. It appears, from the receipt given by the defendants, that they were not responsible for any risk, excepting for their own fraud. 3. It also appears from defendants’ receipt, that their charge, in this instance, was not for insurance. 4. It was also proved, that the defendants bestowed no more care on this than they would have given a common parcel. 5. The bonds were not valuable articles, but mere evidences of debt, the destruction of which would not have involved a loss of their nominal amount.
    II. There was no commercial or other usage which justified the plaintiff in charging, or obliged the defendant to pay $400 for the transportation of the package in question. 1. A usage, like that claimed by the defendant, must be so well settled and of so long continuance, as to raise a fair presumption that it was known to both contracting parties, and that their contract was made in reference to it (Eager v. Atlas Insurance Co., 14 Pick. 143; Rayney v. Vernon, 9 Carrington & P.). It must be so uniform and universal, that every one in the trade must be taken to know it (Wood v. Wood, 1 Carr & Payne, 59; 3 Phil. Ev., Cowen & Hill’s Notes, 1422; Story on Contracts, sec. 650, p. 5150, 2d Ed.). Neither of these requisites is supplied by the defendants’ testimony. 2. The testimony of the defendants’ witnesses was not competent to establish the existence of a usage. The witnesses, two in number, were in the defendants’ employ, and had never had any other experience in the Express business. Their experience in the Express business did not exceed one year; and their knowledge as to transportation of bonds, is confined to one instance. • Evidence of a few instances is not sufficient to establish a usage (3 Chitty Com. Law, 45 ; 1 Marsh, 186). Usage must be proved by witnesses, who have had frequent and actual experience of the usage (2 Green’s Ev. 208).
    III. The defendants’ customary charge for transporting packages was not binding upon the plaintiff, it being in evidence that neither he nor his agent had had any prior dealings with defendants, and there being no evidence that the plaintiff knew, or had notice, that there was any customary charge. “ For whatever may have been the usage, it can have no effect on a contract unless adopted by the parties” (Eager v. Atlas Ins. Co., 14 Pick. 143; Snowden v. Warner, 3 Rawle, p. 106). The usages of individuals cannot affect these contracts, unless it appear that the usage was known to the parties with whom they contracted (Loring v. Gurney, 5 Pick. 16; Garay v. Lloyd, 3 Barr. & Cr. 793; Laurence v. Stonington Bank, 6 Cowen R. 521; Rusforth v. Hadfield, 7 East. 225; Kinkman v. Shadcross, 6 T. R. 4; 2 Phill. on Ev., p. 37; Lewis v. Marshall, 13 Lawson (N.S); Duer on Jus. vol. i., pp. 179,182, 193, 254, in Notes x. to xiii.; Winstroop v. Union Ins. Co., 2 Wash. C. C. R. 16; Astor v. Union Ins. Co., 7 Cowen, 202; Syces v. Bridge, 2 Doug. 527). There must be a general usage, or universal custom, brought home to the knowledge of the party defendant; or it must be the special course or habit of dealing with one of the parties, recognised and assented to by the other (Story on Contr., sec. 14; Wood v. Hickock & Harris, 2 Wend. 501; Child v. Sun Mutual Ins. Co.

    IV. The testimony of A. L. Stinson and W. McGill in relation to the usual rate of charge for valuable articles, was irrelevant, and ought to have been excluded.
    V. The judge erred in his charge to the jury, because, 1. If there was a customary charge of one per cent, on valuable articles by the Express office, the plaintiff had no knowledge or notice of it, implied or direct, and is not bound by it. 2. If such a charge were proper for valuable articles, it could not be applied, to the transportation of Arkansas bonds, these having no intrinsic value, and being evidences of value merely. The plaintiff’s right to recover the amount specified in the bonds would still remain, although the bonds were lost or destroyed. The plaintiff could not have recovered the stated or nominal value of such' bonds of the defendants, under any circumstances. Such bonds, therefore, are not valuable articles upon which the defendants can charge a per centage. 3. The plaintiff was not excluded from proving the actual value of said bonds by the amount stated in the receipt; there being no evidence of the manner, or by whom such statement was made, or that the plaintiff or his agent ever assented to it. 4. There was no evidence that any declaration whatever was made in New Orleans, by the plaintiff’s agent.

      G. F. Betts, for the defendants, contra.

    I. The charge of the judge was correct, in leaving it to the jury, to determine what was the proper compensation (Chitty on Contracts, p. 547; Chapman v. De Tastel, 2 Stark. 295; Bryan v. Flight, 5 Mees. & W. 114).
    H. It was correctly submitted to the jury that if, from the evidence, they believed that the customary charge by express offices was one per cent, on valuable articles, from New Orleans to New York, they should find for the defendant to that amount (Hinton v. Locke, 5 Hill, 437; Vail v. Rice, 1 Seld. 155, 158.)
    III. The evidence as to the customary charge of Adams & Co. was competent: 1. To show what was a reasonable or proper compensation ; that they only asked from the defendants what they asked from all their other customers. 2. It was not offered to prove a local usage of that house, nor was it so submitted to the jury by the court. 3. A general usage having been proved, this evidence could do no harm, being included in the other.
    IV. The sum of $40,000, declared to the agent of Adams & Co., at New Orleans," by Robb & Co., marked on the trackages, and inserted in the receipt, was to be taken as the Robb & Co. were plaintiff’s agents (Letter from Tucker & 'Xys Crapo). And their declaration and contract are binding on. J the plaintiff (Story, Agency, § 135). 2. This was me fiontraSí ’iiQOL'l between consignor and carrier (Endorsement on|eng^g>e^ j '
      Smith v. James, 7 Cowen, 328; Wolfe v. Myers, 3 Sand. 7-13).
    IV. If the' bonds had been actually purchased by plaintiff for $26,000, that was not evidence against the defendants. 1. It was res inter alios acta. 2. The plaintiffs were estopped, by their admissions and contract, from showing the value to have been other than $40,000 (Truscott v. Denis, 4 Barb. 498; Welland Canal Co. v. Hathaway, 8 Wend. 483).
   By the Court. Oakley, Ch. J.

As no proof was given on the part of the defendants of the express agreement set up in their answer, they were entitled to demand no more than a reasonable compensation for the service which they performed. By the receipt which they gave for the package, they were exempt from the usual liability of common carriers as insurers. They were not responsible for any loss or damage, arising from any other cause than the fraud or gross negligence of themselves, their agents, or servants; and their witnesses proved, that the same care and diligence were bestowed in the transportation of all articles and packages intrusted to their charge, without reference to their value. It is not perceived, therefore, that there was any reason for enhancing the charge for transportation in proportion to the value of the articles transported, and, consequently, the charge which the defendants made, which even exceeds the usual rate of insurance from New Orleans to New York, was apparently unreasonable and extravagant.

We are not, however, to be understood as saying, that the charge made, unreasonable as it seems, may not be sanctioned by usage ; but, it is certain, no usage could justify the charge, unless its character were proved to be such, as to warrant the presumption that it was known to both parties, and that their contract was made in reference to its existence; in other words, that it was known to Robb & Co., the agents of the plaintiff, when they delivered the package to the defendants, and that, by their silence at that time, they consented to be bound by it.

Had it been proved that there was a general, uniform, and notorious usage, justifying the charge made, by the defendants, the law would have imputed to the plaintiff and his agents a knowledge of its existence, but there was no pretence for saying that any such evidence was given. If any usage was proved, it was that of the defendants alone. It was special and particular, not general; and such being its character, we deem it needless to cite authorities to show that, to render it binding on the plaintiff, his or his agent’s actual knowledge of its existence and terms, was necessary to be proved. The evidence, even, of the existence of this limited usage was slight and unsatisfactory ; and there was none whatever from which a jury could be warranted to infer, that its existence was known to the plaintiff or to Robb & Co.

The judge, however, upon the trial, charged the jury, that if they believed from the evidence, that the customary charge by Express offices was one per cent, on valuable articles from New Orleans to New York, they should find for the defendants to that amount, on the value of the package. We think that this charge was erroneous, and that, upon the evidence before the court, the question of usage ought not to have been submitted to the jury at all. We have, however, no right to say that it was not upon this evidence that their verdict was founded, and it must therefore be set aside.

The judgment set aside, and a new trial ordered ; costs to abide the event.


source: Caselaw Access Project

author: By the Court. Hoffman, J.

license: Public Domain

text:
    Hunt v. Hudson River Fire Insurance Company.
    A policy of insurance against fire, upon which the action, was brought, contained this clause, “camphene, spirit gas, or other burning fluid, when used as a lights subjects the goods, &c., to an additional premium of 10 cents per $100, and premium for such use must be endorsed in writing upon the policy.” The complaint did not aver that camphene, &c., was not used as a light, or, if used, that the premium was endorsed upon the policy.

      Held, that it was not necessary to negative in the complaint a breach of this provision—its observance not being necessary to be proved on the trial as one of the facts constituting the cause of action. If broken, the breach was a matter of defence, which, as such, should have been stated in the answer. Quere, whether the clause ought to be construed as a stipulation against the use of eamphene equivalent to a warranty ?
    (Before Oakley, Ch. J., Emmet and Hoffman, J.J.)
    November 19;
    December 10, 1853.
    It rests wholly in the discretion of the judge who tries the cause, whether he will permit a pleading to be amended upon the trial. The general term will not review his decision upon an exception.
    Appeal by defendants from a judgment at special term, denying a new trial, upon a bill of exceptions.
    The action was upon a policy of insurance against fire, executed and delivered by the defendants to the plaintiff1 upon a stock of goods belonging to him in a store at Racine, in the State of Wisconsin.
    The complaint set forth at large the policy, with the terms and conditions annexed; averred the happening, of a loss by fire within the term insured, and claimed damages by reason thereof to the amount of $1,061.09, for which sum, with interest to the 14th of April, 1852, judgment was demanded.
    The answer admitted the execution and delivery of the policy ; it admitted also that the goods described in the policy, and insured thereby, had been injured and partly destroyed by fire; that the plaintiff had sustained damages thereby; but denied that the proportion of such damages, for which the defendants were liable, amounted to the sum of $1,061.09, or exceeded the sum of $582.19, which last sum, the answer averred, that the defendant had tendered and offered to pay to the plaintiff before the commencement of the action. The answer set up as a further defence, that the amount of the loss for which alone the defendants were liable, had been settled by two successive arbitrations at a less sum even than that which the defendants had offered to pay.
    The reply denied the tender, the submission to arbitrators, and all other allegations of new matter contained in the answer.
    Upon these pleadings the cause was tried before the chief justice and a jury, on the 13th May, 1852; but it is not deemed necessary to state any of the proceedings on the trial, except those to which the exceptions that were taken relate. As soon as the cause had been opened to the jury, the counsel for the defendants moved for judgment in their favor, upon the ground, that the complaint did not set forth facts sufficient to constitute a cause of action. The terms annexed to the policy, as set forth in the complaint, contain this provision, “ camphene, spirit gas, or burning fluid, when used in stores or warehouses as a light, subjects the goods therein to an additional premium of 10 cents per one hundred dollars, and premium for such use must be endorsed in writing on the policy.” The counsel for the defendants insisted that it was a fatal defect in the complaint; that it contained no averment that camphene, spirit gas, or burning fluid, was not used as a light in the store mentioned in the policy, or if used, that premium for such use was endorsed in writing upon the policy. The chief justice denied this motion, and the counsel excepted to the decision.
    When the evidence on the part of the plaintiff was closed, the counsel for the defendants offered to read the following cross-interrogatory addressed to a witness examined on the part of the plaintiff, and also the answer of the witness thereto.
    Fourth cross-interrogatory. What was the size and number of stories of said store? Of what materials were the same built? Was camphene, or any other, or what burning fluid used for the purpose of lighting said store at night ? State the class of articles kept or stored in said store. Answer fully.
    The counsel for the plaintiff objected to the reading in evidence of so much of said answer as is responsive to that part of said cross-interrogatory, which is in the words following, to wit: “Was camphene, or any other, and what burning fluid used for the purpose of lighting said store at night?” on the ground that such part of the interrogatory did not relate to any .issue in the cause, and also that the defendants had by their answer specifically admitted their liability in this action as insurers, and offered to pay the sum of $582.79, and had rested their defence solely on the question of the extent and amount of the plaintiff’s loss.
    Pending the consideration of which objection the counsel for the defendants moved -to amend the answer of the defendants, by striking out all admissions of liability of the defendants to the plaintiff, and inserting an allegation that the plaintiff had used camphene, spirit gas, or burning fluid, as a means of light in said store or warehouse, without the permission of defendants, and contrary to the conditions of said policy of insurance, which motion was denied by the said chief justice, on the ground that the defendants had admitted a partial right of recovery in this action, and had not applied for leave to amend their answer before the trial, by setting up the alleged ground of defence, so as to give the plaintiff an opportunity of meetiúg it by adverse proof, and also because such amendment would not be in furtherance of justice, as it appeared by the evidence that the fire did not originate in the plaintiff’s store but in an adjoining building, and the counsel for the defendants duly excepted.
    The chief justice sustained the objection of the plaintiff’s counsel, and refused to allow the counsel for the defendants to read that part of said cross-interrogatory, and the answer thereto, in evidence, to which the objection referred. The counsel for the defendants duly excepted to the decision.
    The defence was then abandoned, and the jury, without any summing up by the counsel, found a verdict for the plaintiff for $1141.46.

      G. W. Stevens, for the defendants,
    now contended that the judgment upon the verdict ought to be reversed and a new trial granted, upon the following grounds.
    I. The terms and conditions of insurance annexed to the policy, being referred to in the body of the instrument, form part of it, and have the same force as warranties as they would have had if contained in the body of the policy. 9Roberts v. The Chenango Mut. Ins. Co., 3 Hill, 501; Jennings v. The Chenango Mut. Ins. Co., 2 Denio.)
    H. The terms of insurance relative to the use of camphene, spirit gas, and burning fluid, amounted to a warranty of a promissory character upon the part of the assured, but although a warranty be promissory, the party insured is bound to a strict performance. (Egan v. The Mut. Ins. Co. of Albamy, 5 Denio, 326; Ellis on Insurance, 28; 1 Phillips on Insurance, 3d ed. 416, 469; Lothian v. Henderson, 3 B. & P. 515.)

      III. A declaration on a policy of insurance or other contract, must state a full compliance with all warranties and conditions precedent. And if there be a stipulation in a contract that under certain circumstances the defendant shall not be liable, that stipulation must be stated in the declaration, with an averment that the liability of the defendant did not arise out of any of the excepted matters. ( 2 Phillips on Insurance, 3d ed. 619; Ferguson v. Cappea, 6 Harris & J. 394; Latham v. Rutley, 2 Barn. & Cres. 20; Everett v. Desborough, 5 Bing. 503; Gould’s Pleading, 178; 1 Chitty’s Pleading, 321.)
    IV". The complaint in this cause does not contain an averment of the compliance by the plaintiff with each particular warranty, nor any general averment of a compliance with all the warranties. It is bad in substance, and the motion for judgment on the complaint made at the trial was erroneously denied. (Code of Procedure, sec. 148; Rayner v. Clark, 7 Barb. 581.)
    V. The admissions of a party only bind him to the extent that they have been acted on by the party setting them up by way of estoppel. (Merrill v. Tyler,—In the Court of Appeals, April, 1853.)
    VI. The judge erred in denying the motion of the defendant for leave to amend the answer. The amendment of a pleading is matter of right, the discretion of the court is a judicial discretion, and not an arbitrary one, and must be confined to the terms upon which the amendment shall be allowed.
    VII. The judge erred in excluding the fourth cross-inter rogatory to the witness Runyan. 1. It was strict matter of cross-examination to the fourth and fifth direct interrogatories. 2. An issne as to all the material allegations of the complaint, is raised by the last clause of the answer.

      W. Allen Butler, for plaintiff, contra.

    I. The motion to dismiss the cómplaint, at the tidal, on the ground that it did not state facts sufficient to constitute a cause of action, was properly denied. The fact that the plaintiff had not used camphene or burning fluid was, in no sense, one of the facts constituting his cause of action, and only such facts are required to be stated. (Code, § 142, subd. 2.)
    H. The evidence with regard to the use of camphene, &c., for light in the insured premises, was properly excluded. 1. There was no issue in the cause to which such evidence applied. The onh' issues arising on the pleading related to the amount and extr it of the plaintiff’s loss. The. answer admitted a liability on the part of the defendants as insurers to the amount of $582.79. The evidence of the use of camphene without permission and contrary to the provisions of the policy was offered in bar of any recovery. But this ground of defence was wholly inconsistent with the admissions of the answer, and cannot be implied from any part of it. 2. Even if the liability of defendants had not been admitted by the answer, the use of camphene, &c., as a means of light in the insured premises, would not affect the plaintiff’s right of recovery; the provision in the special memorandum respecting camphene, &c., not being a prohibition against its use in any such sense as to make its use a forfeiture of the policy, and the fire not having originated in consequence of its use.
    III. The motion to amend the answer at the trial was addressed to the discretion of the court, and its denial was not the subject of exception. (Roth v. Schloss, 6 Barb. 308; Brown v. McCune, 5 Sandf. 224.)
    IY. The judgment appealed from should be affirmed with costs.
   By the Court. Hoffman, J.

The first oojection relates to the form of the pleading. It is, that the complaint does not contain facts sufficient to constitute a cause of action, inasmuch as by the conditions of the policy it is provided that camphene, spirit gas, or burning fluid, when used in stores or warehouses, as a light, subjects the goods therein to an additional’ charge of ten cents per one hundred dollars, and the premium for such use must be endorsed in writing on the policy; and the complaint contains no averment that camphene, spirit gas, or burning fluid, or either of them, were not used as a light in the store or warehouse mentioned in the said policy of insurance, or if used, that the premium for such use was endorsed in writing on such policy.

The defendant moved to dismiss the complaint for this alleged defect, and the motion was denied.

We are of opinion, that there was no error in the denial, whether the case is considered under the old rules of pleading, or under the Code.

The complaint has been framed under the precedent in Chitty’s Pleadings (vol. 2, p. 536). It contains several averments of a negative character, as that the fire did not take place by'means of any invasion, or riot; and Mr. Ellis, in his treatise on fire insurance (Law Library, vol. 4, p. 91), states, that such averments in a declaration are necessary, whether the action is covenant upon a policy under seal, or assumpsit upon one without a seal.

But, in the first place, we consider that such averments contain an anomalous principle in pleading, by introducing allegations which it would be unnecessary to prove. We presume the proffer of evidence, to show that a fire occurred when there was no invasion, would be regarded as frivolous ; we are not inclined to go further than precedents compel us.

In the next place there is a marked distinction between the averments in the precedents, and the averment that camphene was not used, insisted. upon as necessary in the present case. In those instances the negation is of matters which, if they existed, would show, that there was no subsisting contract at all, or not such a contract as the plaintiff claims upon. Thus, if the loss occurred during an invasion, the contract became annulled; if the policy was made after another insurance upon the property, not mentioned in, or endorsed upon it, the insurance was void from the beginning; and so, if another insurance was made previously, or subsequently, with notice, the company was only responsible for a pro rata amount.

In all these cases, the negative allegations are used to make perfect the affirmative proposition of a subsisting contract, within the express conditions of the instrument. They deny the existence of any matter which the instrument itself declares has rendered, or will render it inoperative or qualified.

The clause in question is distinct from all others in the policy, or memorandum, and is of a peculiar nature.

It is not within the enumeration of trades or business, termed in the memorandum of special rates, as hazardous, or extra hazardous. It is not like gunpowder or saltpetre, expressly prohibited. It is as follows:—“ Camphene, spirit gas, or burning fluid, when used in stores and warehouses as a light, subjects the goods therein to an additional charge of ten cents per one hundred dollars, and premium for such use must be endorsed in writing on the policy.” v

We are not at liberty to substitute the word permission for the word premium in this instrument, although it is highly probable the former word was intended. It cannot be doubted that, if such additional premium has, at any time, been accepted by the assurers, the policy would have remained in force, even if it had been omitted to be endorsed (Newcastle Fire Office v. Morran, 3 Dorr. 255).

The case of Meade v. The N. W. Ins. Co., in the Court of Appeals, a statement of which is found in Mr. Selden’s Notes, does not, in the first place, contain an express decision; but, in the next place, it is stated, that the clause required expressly the permission of the assurers for the use of spirit gas.

We are of opinion, that there is nothing in the policy which makes the non-user of camphene such an absolute condition or provision, as that the contract cannot be treated as apparently perfect, or sufficiently stated, without an averment denying its having been used.

But, if the view above taken should be erroneous, we consider, next, that the complaint is fully sustained by the rules of pleading established in the Code. The object of the Legislature, in abolishing previous forms of pleading and substituting a complaint, “ to set out the facts constituting the cause of action in ordinary language,” is, probably, as well attained by pursuing the frame of the stating part of a bill in chancery, as in any other mode (Fay v. Grimsted, 10 Barbour, 328). Until the disuse of special replications led to the employment of what was termed the charging part in a bill, nothing could he more simple or logical than the construction of such a pleading.

It may be laid down as a settled rule that, in such stating part, it would be requisite to allege every affirmative proposition which it would be necessary to prove, in order to establish a right of action and show a ground of relief, and to state nothing more (Willis’s Equity Pleading, 19). If a bill were filed in case of a lost policy (as might at any rate have been formerly done), the making of the policy, and setting out an alleged copy fully, or annexing it—with a statement of the fact and mode of loss, to show that the policy covered it, and of the extent of damage, would be all that would be necessary: a violation of any condition of the policy, however absolute, would be left to the defence.

It is a striking fact, that the forms in the old work called Praxis Almas Curias (vol. 1, page 170), omitting, of course, those parts which perform the office of an examination of the defendant, are excellent guides under our present system.

On both grounds, we consider the complaint to be properly framed (Vide Mann v. Morevoort, 5 Sand. S. C. Rep., p. 565, 566; and Catlin v. Gunter, 1 Duer, 266).

The next objection raised by the bill of exceptions is, that the Chief Justice denied a motion made at the trial, for liberty to strike out the admissions of liability contained in the answer and to insert an averment, that the plaintiff had used camphene, or spirit gas, as a means of light, in the building.

After the decision of this court in Brown v. McCure (5 Sandford, 224), and of the Supreme Court in Ruth v. Schloss (6 Barbour, 308), it cannot be questioned, that such an application, at such a time, is not of absolute right, but addressed to the discretion of the judge. His decision upon such application is not properly appealable. But, if it were so, we should, without hesitation, affirm it. To allow an amendment in the progress of a trial, which annuls a formal admission on the record, and substitutes a defence altogether new, and which the plaintiff had a right to consider could never be set up, would transcend any looseness of proceeding we are yet apprised of (Vide Catlin v. Hansen, 1 Duer, 327, Opinion of Bosworth, J.). We do not mean to say, that if a fraud was first discovered on the eve of, or during a trial, tins course might not be pursued. We leave such a case to he decided when it arises.

The last objection is, that the judge erred, in excluding the answer of the witness Runyan to the fourth cross-interrogatory.

There is no ground for the proposition, that the cross-interrogatory was warranted by the fourth direct interrogatory. That only. required an answer as to the facts, whether a fire did occur at the time alleged ; whether the goods were destroyed, or damaged; how the fire happened; and whether by means of invasion or not.

The cross-interrogatory calls for an answer to ■ the question, whether camphene or burning fluid was used for the purpose of lighting the store at night. The matters of inquiry are wholly distinct, and the one question has not let in the other. The judge rejected only the answer to this clause.

The point is then reduced to this—Whether the statement oí a witness upon a commission, in answer to an unwarranted question, irrelevant to the whole case made on the pleadings, and inconsistent with the admission on the record of the party obtaining the response, is admissible. We regard the decision rejecting it as clearly correct.

The conclusion is, that the appeal must he dismissed, and the judgment he affirmed, with costs.


author: By the Court. Duer, J.

text:
    Westfall v. Hudson River Fire Insurance Co.
    A clause in a policy of insurance against fire, declared that “ camphene, &c., when used in stores or warehouses as a light, subjects the goods therein to an additional charge of ten cents per hundred dollars, and premium for such use must be endorsed on the policy.”

      Held, that these words were not a conditionaiprohibition of the use of camphene, but merely exempted the insurers from any liability for a loss resulting from such use, unless the additional charge had been paid. They created an exception, not a warranty.

      (Before Duer, Campbell, and Bosworth, J.J.)
    December 13, 1853.

      JTeld, therefore, that as there was no evidence that the loss resulted from the use' of camphene, and there was no other defence than a breach of the alleged warranty, the plaintiE was entitled to judgment.
    Case upon a verdict for the plaintiff, subject to the opinion of the court at general term.
    The action was on a policy of insurance against fire, on a stock of groceries and liquors, in the store of one Oarston Hennings, the assured, in the city of New York. The plaintiff claimed as the assignee of Hennings.
    The execution and delivery of the policy,- and the happening of a loss, were admitted, but the principal defence set up in the answer, was, that the assured had used camphene as a light in his store ; and that this use was a breach of a warranty contained in the terms of insurance annexed to the policy, aiid was, therefore, a bar to a recovery.
    The clause relied on as a warranty is in these words:— “ Camphene, spirit gas, or burning fluid, when used in stores or warehouses as a light, subjects the goods therein to an additional charge of ten cents per $100, and premium for such use must be endorsed in writing upon the policy.” The cause was tried before Mr. Justice Boswobth and a jury, on the 27th of April, 1854.
    On the trial, evidence was given on the part of the defendants to show that Hennings had used camphene as a light during the whole time that the policy was running. Ho premium for such use wás endorsed upon the policy, or shown to have been paid. Upon this evidence the counsel for the defendants moved that the complaint should be dismissed. The judge denied the motion, and the counsel excepted to the decision.
    The jury, under the direction of the court, found a verdict for the amount of the loss proved, subject to the opinion of the court at general term, upon the question raised by the exception of the counsel for the defendants.
    The case upon the exception was now heard

      W. Stevens, for the defendants,
    argued the following points.
    I. The terms and conditions of insurance annexed to the policy, being referred to in the body of the instrument, form part of it, and have the same force and effect as warranties as they would have had if contained in the body of the policy. (Roberts v. The Chenango Mut. Ins. Co., 3 Hill, 501; Burritt v. The Saratoga Mut. Ins. Co., 5 Hill, 188; Gates v. The Madison Mut. Ins. Co., 2 Coms. 43.)
    II. The terms of insurance relative to the use of camphene, spirit gas, and burning fluid, amounted to a warranty of a promissory character upon the part of the assured ;■ but, although a warranty be promissory, the party insured is bound to a strict performance. (Lothian v. Henderson, 3 B. & P. 515; Egan v. The Mut. Ins. Co. of Albany, 5 Denio, 326; Ellis on Insurance, 28; 1 Phillips on Insurance, 3d ed. 416, 469.)
    HI. Hennings, the insured, violated the express condition of the policy, by the use of camphene as a means of light, without the payment of additional premium, or the endorsement of permission for such use on the policy. The policy was, therefore, absolutely void. (Mead v. The North Western Ins. Co. in Court of Appeals, Dec. 1852; 2 Denio, p. 45.)

      H. S. Dodge, contra.

    I. The only question in the case is -that presented by the second objection to the recovery, namely, the use of camphene, and the motion on this ground was properly overruled, because the question did not arise. 1. The proof did not show that the article burnt in the lamp was “ camphene, spirit gas, or burning fluid,” so as to authorize the court to take that question from the jury. 2. Nor did it appear that the material was used as a light at the time of the fire.
    II. There is no provision in the policy which furnishes a foundation for the defence set up in the answer. That is based upon the mistaken supposition that the stipulations in the policy provides for the case. 1. The provisions do not apply to insurances of goods, but only of buildings, the words, “ the above-mentioned premises or any part thereof,” mean the “ insured premises,” which is the legal and natural meaning. The case of goods insured is provided for in the conditions. All the reported cases on these provisions arose on policies upon the building. (Vide Langdon v. Equitable Ins. Co., 1 Hall, 226; S. C. 6 Wend. 623; O’Neil v. Buffalo Ins. Co., 3 Coms. 122; Gates v. Madison Ins. Co., 1 Selden, 469.) 2. If they do apply, the storing or keeping of camphene, &c., is not prohibited. Camphene, spirit gas, or “ burning fluid,” are neither of them in the list of hazardous or extra-hazardous goods, nor in the memorandum of special rates. Spirituous liquors are, but this policy permits them. 3. The provision as to “ camphene, &c.,” merely adds additional premium when these articles are used as a light in stores and warehouses. But no part of the policy requires previous permission, to use “ camphene, &c.” Nor was it ever agreed that an unauthorized use should avoid the policy, or suspend its operation during the use of the light. 4. There is no penalty attached to the failure to procure the assent of the company to such use. The only consequence would be that the assured would be liable for the additional premium, if unpaid, unless it were proven that such use changed or increased the risk under the first condition. 5. No such proof was offered in this case, nor was it shown that the additional premium had not been included in that paid, nor that the light was used at the time of the fire. Judgment should be ordered for the plaintiff upon the verdict.

       Although this case was heard in December, it was not in fact decided until the following April term; but it is deemed proper to publish it in connexion with the preceding case, as it contains the final decision of the court, upon a conference of all the judges, upon the question, whether the clause relative to the use of camphene imports a warranty.

   By the Court. Duer, J.

In our opinion, there is in this case only a single question which is necessary to be considered. The plaintiff is clearly entitled to retain the verdict, unless the clause in the conditions annexed to the policy relative to the use of camphene, must be construed as a warranty. If such must be its construction, there was sufficient evidence of its breach to render it necessary that the question should have been submitted to the jury ; and as it was not thus submitted, there must be a new trial. If there was no such warranty, the plaintiff must have judgment upon the verdict.

The question whether a particular provision in a policy shall, or shall not, be construed as a warranty, and the effect of the construction when adopted, are exactly the same, whether the insurance be against fire upon land, or against marine risks— and we deem it needless to cite authorities to prove that such is the settled law. In neither case, is the policy usually signed by the assured ; yet, in both, a provision that a particular state of facts shall or shall not exist, or a particular act shall or shall not be performed,- is construed as a positive stipulation by the assured that the provision shall be complied with. It therefore constitutes a warranty, the breach of which, although wholly unconnected with the loss that is claimed, by avoiding the contract, discharges the insurer.

Nor in the case of an insurance against fire, is it of any consequence whether the provision relied on as a warranty, be found in the policy itself, or in the terms and conditions which are annexed ; since, by an express clause in the policy, the rights and obligations of the parties as much- depend upon these terms and conditions as upon the special provisions in the body of the instrument. They are, therefore, an integral and essential part of the contract.

The provision we are now required to construe, and which is found in the terms annexed to the policy, is in these words;

“ Camphene, spirit gas, or burning fluid, when used in stores or warehouses, as a light, subjects the goods therein to an additional charge of 10c. per $100, and premium for such use must be endorsed, in writing, upon the policy.”

In considering this case, our first impression undoubtedly was, that this clause amounted to a conditional prohibition of the use of camphene as a light, and must, therefore, be construed as a warranty by the assured against such use, unless the prescribed conditions should be complied with; but upon further reflection, we became satisfied that such is not the necessary construction of the words of the clause, and that they may be very fairly and reasonably understood in a very different sense. The words, we are now satisfied, are ambiguous; they may mean that if camphene shall be used, the company shall not be liable for a loss resulting from its use, unless the additional premium shall be paid, and its payment be endorsed; or, that unless these conditions are complied with, camphene shall not be used at all. Upon the first construction, the only effect of the clause is to except a particular risk, the use of camphene as a light, from the general risks of the policy. Upon the second, the effect is to create a warranty. If we adopt the first, as there was no evidence that the loss resulted from the use of camphene, the verdict must stand. If the second, as there was evidence that by the use of camphene the warranty was broken, there must be a new trial.

The inquiry, therefore, now is, which is the construction, which as probably most consonant with the intention of the parties, judging of the intent by the settled rules of interpretation, it is the duty of the court to adopt.

Ho rule, in the interpretation of a policy, is more fully established, or more imperative and controlling, than that which declares that, in all cases, it must be liberally construed in favor of the assured, so as not to defeat without a plain necessity, his claim to the indemnity, which, in making the insurance, it was his object to secure. When the words are without violence susceptible of two interpretations, that which will sustain his claim and cover the loss, must in preference be adopted. (Pelly v. Royal Ex. Assur. Co., 1 Burr, 341, 348; Blackett v. Royal Ex. Assur. Co., 2 Cromp. & Jar. 244; Yeaton v. Fry, 5 Cranch, 355; Palmer v. Warden, 1 Story, 360.) Hor is this an arbitrary rule of construction. On the contrary, it follows from the very nature of an insurance, as a contract of indemnity, and has been adopted and confirmed from the conviction that the construction to which it leads is probably that which the real intention of the parties requires shall he followed. (Dorr v. Whithen, 1 Hall Sup. Ct. R. 174; Opinion of Jones, Ch. J.)

It is evident, it seems to us, that this general rule applies with a peculiar force, when the court is required to say, that the words of a disputed clause must be construed as a warranty.

The construction that bur own, as well as the English courts, have unfortunately given to a warranty, is exceedingly strict, but it is too well established to be now changed by any exercise of judicial discretion. It is not enough, that a provision construed as a warranty in its spirit and substance is fulfilled; its terms must be literally complied with. Its breach is not excused by showing that it was the result, not of choice but of accident or necessity; that it worked no prejudice to the insurer, and not only had no influence on the loss that is claimed, but had no tendency to increase, or even vary, the risks that were meant to be assumed. If a breach, however slight, and confessedly immaterial,' is proved, the entire contract is at an end, the assured loses his indemnity, and the insurer retains his premium, and rejoices in his discharge. When the provision that is claimed to be a warranty is, at all, ambiguous, it seems to us, it is a reasonable presumption that the assured never meant to bind himself by a stipulation thus rigidly construed, and we cannot but think, that this presumption, unless the words used are such as plainly, if not necessarily to exclude it, ought to prevail. Certainly, it cannot be said that this presumption is plainly excluded by the words of the clause that is now under consideration. On the contrary, the words, “camvphene, <&e.” when used, &c.,” imply the possibility of its future use, and those which follow, may well be construed as a mere declaration of the consequences of such use, not as a conditional prohibition; as meaning only that unless the premium shall be paid, the particular risk will not be assumed. They may well be construed, therefore, as an exception of a loss resulting from the risk, instead of a warranty that the fact creating the risk Shall not exist.

The terms of the clause which immediately precedes that we are considering, strengthen our belief that the construction we have stated is reasonable in itself, and, probably, expresses the true intention of the parties.

The terms of this clause are, that “ saltpetre, gunpowder, and cotton are expressly prohibited from being deposited, stored, &c., in any building, &c., containing any goods or merchandise insured by this policy, unless by special consent in writing.” And it is difficult to account for the immediate and marked change of phraseology in the next clause, upon any other supposition than that of a change of intention. If the use of camphene was meant to be prohibited in the same sense as the storage of gunpowder, we can discover no reason why the prohibition was not express, in the one case, as well as in the other. Had the intent been the same, it seems to us that such would have been the language; whereas if the intent in the second clause was to create an exception and not a warranty, the alteration in the mode of expression was proper and necessary.

In the recent case in the Court of Appeals, to which we were referred on the argument, in which the clause relative to the use of camphene was held to he a warranty, we have asceiv tained that the words, in the last member of the clause, were materially different. They were, that 4 permission ” for such use (ir e. of camphene) must be endorsed upon the policy—and necessarily implied that without a permission so evidenced, the use was forbidden. The words 4 premium for such use, &c.,” carry with them no such implication; but as we have already shown, taken in connexion with those that precede them, are satisfied by holding them to mean, that unless the required premium should be paid and endorsed, the risk would not he assumed. We therefore think that we are bound to say that they created an exception, and not a warranty, and that the plaintiff is entitled to our judgment,

Judgment for plaintiff, with costs,


author: By the Court.

text:
    Smith & another v. Leland.
    Where goods purehased by, and delivered to A for his own use and as his own property, are, by his direction, charged to B, the transaction is within the mischief that the statute of frauds was designed to prevent; and in an action against B, the parole evidence against him, as purchaser, ought to be free front any suspicion.
    A recovery in such an action ought not to be permitted when A is the only witness on behalf of the seller of the goods, and is contradicted by other witnesses.
    Nor ought a recovery to be permitted, where the complaint avers that the goods were sold and delivered to B.
    The authority of A to make the purchase in the name of B, and the delivery of the goods to him, with the consent of B, are material and issuable facts, which the plaintiff is bound to prove upon the trial, and is, therefore, bound to aver in the complaint.
    (Before Oakley, Ch. J., Emmet and Hoffman, J.J.)
    November 18;
    December 10, 1853.
    Upon these grounds, report of a referee set aside, and order of reference vacated.
    Appeal, by the defendant, from an order at special term, setting aside the report of a referee in favor of the plaintiff.
    The action was for goods sold and delivered to the defendant, and work performed for Mm, and at his request. The answer merely took issue on the allegations in the complaint.
    The cause was, on January 10th, 1852, referred to Michael Ulshoeffer, as sole referee, before whom, on the trial, the following testimony was given :

      Ma/ry Ann fflidds, sworn for the plaintiffs, testified: I know Jeremiah Lounsberry, the gentleman present; I did not know him at the time I purchased the goods in question; J do not know the plaintiffs personally; their store is in Pearl street, opposite William street; I went there, and saw the man present here, in May a year ago in 1850; I knew the defendant; I purchased the goods amounting to one hundred dollars or a little over; they wére carpets and three door mats ; they were for the house in which I resided, Ho. Ill Fourth Avenue ; the arrangement was tMs, I was to furMsh the house, and my son-in-law, Mr. Simpson, was to board with me, and to pay every three months, but he did not pay, and I could not get along ; I wanted money, and I went to borrow it of the defendant; I asked the defendant to lend me one hundred dollars; he said he could not that day, that he had paid away Ms money; I told Mm I was sorry, as I wanted some very much, and told him what I wanted to do with the money, and he told me that he could do the same thing for me as letting me have the money; he told me he regretted he had not the money to lend me, and asked me what I wanted it for; I told him I wanted it to purchase carpets, that my husband had not the money for me, and that I did not want my husband to know that I had applied to borrow it; Warren Leland then said he could arrange it just as well for me as to lend me the money; he asked me if I knew Smith & Lounsberry •; I said I did not; he told me where their store was, and to go down to their store in Pearl street, opposite William street, and see if they had the carpets I wanted, and, if so, to purchase what I wanted, and tell Smith & Lounsberry to charge the carpets to him; I then told him I did not wish my husband or his brother to know this, and I stated to him that I would pay him as soon as I could; I expected some money soon; he replied it will be all right; I went to the store alone, I had never been there before; I asked to look at some carpet, and found some that suited me; (defendant said to me, go down to the store, and get what you want, and tell them to charge it to Warren Leland; I said to him I did not want my husband or his brother to knowit,) but would not purchase until I could bring my daughter down with me to see them ; I asked the gentleman in the store whether he knew Mr. Warren Leland ; he said, he did, very well; I told him the carpets 1 wished to purchase were to be charged to Mr. Leland; he said, very well; I then went home and wrote Mr. Leland that I had seen carpets that suited me 5 to this letter I received no answer;
    I wrote it only, not that I had promised to do so, but because I thought it was but civil to write to him informing him of it; after that I went down to the store with my daughter, and selected the carpets with her; I saw a gentleman at the desk, and asked him if he knew Mr. Warren Leland, he said, very well indeed; I then said I wanted to purchase on Mr. Warren v Leland’s account, and wanted them charged to Mr. Warren Leland; the gentleman Said it was all right; I purchased the goods, they were made up and sent home.
    The bill produced, and shown her—the witness testified, that is the bill.
    The bill amounted to $100-I5oV
    Cross-examination.—I have been shown the bill of these - goods before, some time last spring, the spring after they had been purchased; a young man from the plaintiffs’ store brought the bill to me, and said, here is a bill of carpeting got by you from the plaintiffs; I said to him take that bill back; I asked him if it had been presented to Mi*. Leland; he said he did not know, that the defendant was abroad or in California; I do not remember the bill being presented again until the gentleman present called with it; I think it was a brother of the one present, Mr. Lounsberry, a brother of one of the plaintiffs’ firm; he said they had sent to Mr. Leland, and he would have nothing to do with it, and then said you have bought the goods on false pretences; they made no threats to me; I said I would go and see him myself, and have the matter explained properly; I went to see Mr. Leland, the defendant, and did see him; these were the only times the bill was presented to me, as far as I remember.

      Q. What conversation passed between you at that time ?
    Objected to; objection sustained. Defendant’s counsel excepts.

      Q. At the first interview you had with defendant, when you went to borrow money, did not defendant say, upon the plaintiffs being named, “ you go to them (the plaintiffs), and refer to me, and they will sell you the carpets, I presume ?”

      A, No, he did not say so.

      Q, Did he not say, “ Glo there, and refer to me ?”

      A. No, he did not.

      Q. Did you not state to me (Cyrus Lawton, counsel for defendant), in Twelfth street, that the defendant did not authorize you to have the goods charged to Mm?

      A. I did not; I tMnk I remember the conversation as near as possible ; I do not remember saying anytMng of that kind; when I conversed with you, you said you would see the defendant, and advise him to settle the matter; I don’t remember any thing more; I went to Mr. Leland’s in the morning about 9 o’clock, and he told me where the plaintiffs’ store was, and I went directly there, and looked at some carpets, and found they would suit me ; I then went home to the Fourth Avenue, and wrote a note to Mr. Leland, but got no answer; my daughter wrote the note as I told her.

      Q. Did you not purchase carpets of another person, and tell them to charge it to Warren Leland, and did not they refuse to deliver them to you because defendant had refused ?

      A. Never: I will tell you what you refer to; when I went back to purchase the carpets of Smith & Lounsberry, I by mistake got into the adjoining store to that of Smith & LounsberTy; I asked the clerk if this was Smith & Lounsberry’s store; he said it was; I went up stairs with the clerk, and selected the carpets and rugs, came down, saw a gentleman at the desk, and asked him if he knew Mr, Warren Leland; he said he did; I told him I wanted to purchase goods on Warren Leland’s account, to be charged to him; he said it was all right; I then left without discovering my mistake; the carpet was made and sent to my house with the bill, subject to my daughter’s approval of the carpet; she did not like it; I then discovered the mistake, and refused to let him leave the goods; I told them that they had imposed upon me by representing themselves to be Smith and Lounsberry, and I would not receive their goods; in a few days after this my daughter and myself went down to Smith & Lounsberry’s, and made our selections, and we then told how we had been treated by the people next door,
    Foe the Deeehoe.

      Jeremiah Lounsberry was sworn and testified; I am a clerk for the plaintiffs; I Was at the time (May and June, 1850), the carpet in question was sold; Mrs. Hidds’s interview was with Mr. Smith, one of the plaintiffs; I know that the note was written at the time in the store to Mr. Leland, which was sent by a porter; we were not in the habit of selling goods; and charging them to other people without an order, and we would not in the usual course of business have delivered the goods without seeing the defendant; it was in the afternoon, and the carpet was lying on the walk when we sent to Mr. Leland; I was in the store when Mrs. Hidds first came there; her interview was with Mr. Smith, one of the plaintiffs; Mr. Smith and Mrs, Hidds went up stairs together to look at carpets ; when they came back, they went to the desk, and Mrs. Hidds wrote a letter to Warren Leland, and the porter took it, and was told to make haste back; I never before the goods were delivered went to Mr. Leland’s to ask if it was right to charge Warren Leland for the goods sold to Mrs- Hidds; I did not go to Clinton Hall in the spring dr summer of 185Ó, to ask any questions in relation to the matter; I went to Clinton Hall in the fall of 1850, to collect this bill, and was then informed that Warren Leland was out of town ; the bill Was not made out or presented until the fall of 1850 ; Mrs. Hidds the morning she and her daughter came and selected the carpet, stated the people next door had deceived her by inducing her to believe that their store was ours<

      Simeon Lelmd, sworn for defendant, testified: Í formerly kept the Clinton hotel, my brothers keep it now 5 the defendant is one of the proprietors now 5 I recollect in May or June, the circumstance of the carpet sold to Mrsj Hidds by the plaintiff; I am frequently in at the Clinton hotel, and when there assist them; I reside at New Rochelle^ and when in the city am at the Clinton hotel; I know the plaintiffs^ and have for a long time; we were in the habit of referring people there to buy carpets; there was a land of under-standing; we referred people stopping at our house, and to them we were not to be respom sible, and nobody ever thought of such a thing; I was at the hotel in the last of May or first of June, 1850, when a porter of the plaintiffs came, and wanted to know if it was all right to deliver the carpets and things to Mrs. Hidds, which she wanted. I told him no, and not to deliver it, for if Warren wanted to assist her he would have given her the money, and the man Went away, and very shortly returned with Mr. Lounsberry, here present, and I told them the same thing; they had a bill of the carpet, but Said it had not been delivered, and they huti-ied away to stop its being delivered; Warren Leland was not in town, and they did not see him, he had left a day or two before, and gone to Cleveland, Ohio ; he was gone from six to ten days, on business; I recollect the matter perfectly Well; the defendant Went to California in December, 1848; he was here in 1850 ; he was home inHovember, 1850 ; and again went to California; my brother Charles was present at the conversation referred to.

      Oha/rles Leta/nd, sworn for defendant, testified: i am one of the proprietors of the Clinton hotel; I recollect the plaintiff’s porter and clerk calling at the office tif the hotel fol* Warren Leland, and hearing conversation about Carpeting, With Simeon; Warren had been away for-six or sSvéh days; I heard my brother Simeon talk rather short to the man who came for payment of the bill; this was, say, June, 1850; the bill was taken away, because my brother Simeon said he did not know any thing about it; I recollect saying to my brother Simeon, “ Don’t be so hasty, it may be right after allthe bill came in for payment, as I supposed; I was only present at the interview ; I think two persons came.

      O. 0. Wilsonsworn for defendant, testified: I know the plaintiffs, and was engaged in business next door to them in 1850; Mrs. Midds called at our store in the latter part of May or June, 1850, and selected some carpets ; she said, “ Send the bill to Mr. Leland, at the Clinton hotel;” she gave the address of the defendant, and where to send the carpet; she said nothing about Smith & Lounsberry; we sent to Mr. Leland, the defendant; I went and saw him, and we then sold Mrs. Midds the carpet on her own credit, and had them made up and sent to her house with the bill of purchase, and when she saw the man with the bill, she shut the door, and would not let the carpet or the man into the house.
    Our store was 450 Pearl street, and the plaintiffs’ was Mo. 448 Pearl street; we measured the rooms of Mrs. Midds, and made the carpet, and we sent it two days after the purchase ; she said nothing about the plaintiffs, and had not then purchased any carpet of them; it was in or during these two days that I had seen Mr. Warren Leland ; I had no authority to charge the carpet to the defendant, either from him or Mrs. Midds, and did not do so: I am not in the carpet business now.
    On cross-examination, witness testified: My store was next door to Smith & Lounsberry; we did not send the carpet to her the day she engaged it, but a day or two afterwards; I saw Warren Leland before I sent it to her; a clerk of ours, Mr, Merrill, first saw Mrs. Midds, and went up stairs with her to select the carpet; Merrill came into the store with her; I did not have any conversation with her until she came down stairs and selected the carpet; after she sent the carpet back, she said we had deceived her, that she went to purchase of S. & L., and that we had represented another as theirs.

      Gyrus Lmoton, sworn for the defendant, testified: After this suit was brought, at the request of the defendant, I called on Mrs. Ridds, to inquire of her what the facts were, and she stated that she wanted some carpets, and Went to defendant to borrow money to buy them; he declined, but told her she had better go to Smith k Lounsberry, and refer to him, and he had no doubt they would sell her the carpet on time ; I asked her if the defendant had authorized her to have the goods charged to him; she said, “ Ro, but she thought she might do so I then told her, if he did not authorize her to have the goods charged to him, I did not see how they could recover and make him pay for them, and that I should advise Mr. leland to defend the suit; she said she hoped I would not, but would try to get the defendant to settle it, for she said the plaintiffs had been there, and had threatened to have her arrested for getting goods under false pretences, and to get her in difficulty, that she had not the money, and she was afraid she would get into trouble.
    Upon his cross-examination, this witness testified: The idea I wished to convey to her was, that he did not use the word “ charge;” I then told her, if he had not used the word “ charge,” the plaintiff could not recover.
    The parties having rested and summed Up, the referee after-wards made his report in faVOr of the plaintiff, for '$101.82.
    The decision of the referee not being satisfactory to the defendant, he obtained an order for a review of the testimony, &c., which was heard before Mr. Justice Paine, at a special term, who, having heard counsel for the respective parties, on the 15th March, 1853, made an order setting aside the report of the referee, and gave the following opinion.
    Paine, J.—This is a perplexing Case to dispose of, as it is Clearly within the spirit and mischief of the statute of frauds, and yet, perhaps, has been taken Out Of it by the course of decisions, Rut I think, that in looking at the evidence in such a case, we should still be governed by the spirit of the statute, and its acknowledged object; and, that where' there is the same inducement to fraud and perjury as it contemplates, the parole evidence should be free from suspicion.
    The only proof in this case of a promise of a third person to pay a debt, is the testimony of the debtor. But she is distinctly contradicted by a respectable Witness, upon the point upon Which the case turns, She says the defendant told her to tell the plaintiffs to charge the goods to him, and that she did so. On her cross-examination she is asked, “ Did you not state to me, Cyrus Lawton, that the defendant did not authorize you to have the goods charged to him ?” Her answer was, “ I did Hot.” Mr. Lawton’s testimony upon that point is this, “ I asked her, if the defendant had authorised her to buy the goods, and have them charged to him ; she said no, hut she thought she might do so.” He also states some other facts, which affect her credibility.
    As the plaintiff is always bound to make out his case by satisfactory evidence, that burden being upon him, I am obliged to say in this case, that I do not think he has done so.
    1 will state another ground upon which 1 am inclined to think the plaintiffs cannot recover < although I do not place the decision on that ground. Admitting that Mrs. Kidds has proved, that she was the agent of the defendant to make a promise for him, in a transaction Where he was not principal, and had no earthly interest, and where' she alone was principal, and had all the interest, admitting that this may properly be called an agency, and that therefore the defendant was hound by the promise she made for him, yet I see no proof in the case, that she Was constituted his agent to accept and receive the goods for him; and 1 do not think that in such a case we are to strain the evidence for the purpose of presuming or implying an agency for that purpose. The declaration in this case avers a sale and delivery to the defendant. This may he the right form of declaring, although I think that principle and the Weight of authority are against it, "Where the whole credit is given to the defendant, as it must be, and it is so proved, there is sound reason to say, that the goods are sold to the defendant. Bnt where in such case the goods are avowedly bought for a third person, and for her use, in the absence of the defendant, and without any authority being proved to deliver them to her; and where they are proved to have been delivered to such third person, for her exclusive use, with the full understanding that she is never to deliver them to him, but is to keep them herself, and for herself, I am unable to perceive, how the averment in the declaration, that they were delivered to the defendant, is at all supported. The courts have so far dispensed with the statute, as to have settled, that the authority of an agent need not be in writing, although his execution of it must be ; but surely we are not to go further, and say, that the authority need not be expressly proved, but may be implied without proof.
    The statute requires, that where the price of the'goods is over fifty dollars, the buyer shall accept and receive a part of the goods, or pay part of the purchase money. The buyer, in this case, both by the averments of the declaration and the necessary conclusion of law (if the defendant is to be held liable) was the defendant. But the goods were never accepted and received by him, nor by any one proved to have been his agent for that purpose.
    Still, I am unwilling to place my decision upon this ground, when I think the other less free iroin question.

      J. W. Gilbert, for the plaintiff,
    now moved that, the order made at special term should be reversed and judgment be entered for the plaintiffs, upon the report of the referee. He relied upon the following points and authorities.
    I. The testimony of Mrs. Nidds proves a sale and delivery of the goods in question to the defendant—by showing: 1. An authority to make the purchase for the defendant. 2, That such purchase was made. 3. A delivery of the goods conform-ably to her directions. 4. Mrs. Nidds was a competent witness to prove her authority and the other facts.
    H. An authority to purchase necessarily includes an authority to receive the thing purchased,
    HI. The case is not within the statute of frauds. &
    IV. The testimony of Mr. Lawton is insufficient to impeach Mrs. Uidds. 1. An impeachment cannot be made out by a single witness. 2. The reply of Mrs. Nidds to the question put by Mr. Lawton may be explained upon the supposition that she did not comprehend the purport, or effect of the question, and it is the duty off the court so to reconcile the testimony. 3. Upon the whole testimony of Mr. Lawton, it is doubtful what language he employed in putting the question, and Mrs. Nidds’ reply being merely “ Ho,” it would be harsh to conclude that she intended to make a contradictory statement,

      V. At most, the alleged contradiction of Mrs, Hidds merely affected her credibility. The referee sustained her, and his decision is final and conclusive. (5 Sandf. 190,)
    VI. The decision of a referee, upon questions of fact, will not be set aside. Unless it be manifestly against the evidence.
    C. Lawton, contra.

      I. The complaint in this action is for goods sold and delivered by the plaintiffs to the defendant, and there is no evidence in the ease either of a sale or delivery to the defendant. (Code) § 142, 111; 1 Chitty’s P. 0, 346.)
    II. This case is clearly within the statute of frauds, as held by bis honor Justice Paine. The undertaking', if any, was collateral, and there is no evidence that the goods were charged to defendant; (2d Term R. 80; 8 Johns. R. 39; Gallagher v. Bunnell, 6 Cow, R. 346.)
    III. An authority to purchase is not an authority to receive the goods, and any authority to act for another must be strictly pursued, and when proven by parol must be strictly construed, There is no pretence of an authority for the work and labor. (Dunlap’s Paley’s Agency, 202.)
    IV. The plaintiffs’ case rests solely on the testimony of Mrs, Hidds, which is contradicted and her evidence impeached, and is entirely unworthy of credit. (1 Stark, Ev. 582& 3 ; 2d Cow, Treatise, 983 to 9858 Cow. 60.)
    V, Mrs, Hidds was not a competent witness to prove the defendant’s liability; she was not the defendant’s agent, she says she was to buy for herself, but she does not say that the defendant promised to pay for the goods, nor did the defendant do any act from which the plaintiffs could infer or be led to believe that he intended to pay for them. (Shiras v. Morris, 8 Cow. 60; 1st Stark, Ev. 582 & 3; Filmer v. Flynn, 4 Nevile and Manning, 559; 2d Cow. Treat. 983-5.)
    VI. The plaintiffs had notice not to deliver the goods to Mrs. Nidds before they delivered them, which was a full revocation of all authority to purchase on the credit of the defendant, if any had been given,
    VII. The referee erred in not allowing the testimony as to what passed between Mrs. Nidds and the defendant at the second interview, The circumstances were peculiar, and the largest liberty ought to have been allowed on cross-examination,
    VIII. The equities of this case are all with the defendant. The plaintiffs and the Messrs. Leland had an understanding as to referring people to then* store to buy carpets, a part of which Was that they were in no case to be held responsible,
    IX. Upon the whole case it is clear that a gross fraud is attempted to be perpetrated upon the defendant in this action. The plaintiffs ought not to recover, and the order appealed from should be affirmed With costs.
   By the Court.

We are of opinion that the order made by our brother Paine, setting aside the report of the referee, must be affirmed, with costs, and this, not only upon the ground upon Which he has rested his decision, but also upon that in respect to which he has merely stated the inclination of his opinion. The Code requires that all the facts constituting the cause of action, must be set forth in the complaint, and the definition embraces all material and issuable facts; all that the plaintiff must prove upon the trial to entitle him to recover. When goods sold, are delivered to a third person for the exclusive use of such person, his authority to receive them, and their delivery to him, are material and issuable facts, which the plaintiff', in an action against the purchaser, is bound to prove upon the trial, and is therefore bound to aver in the complaint. Here the complaint neither avers the authority of Mrs, Ridds to receive the goods, nor their delivery to her, and the evidence bearing upon these facts which was given before the referee, is not only most unsatisfactory in itself, but under the complaint as framed, ought not to have been admitted. It is true that the delivery of goods sold to a third person for the use of such person, under an- authority from the purchaser, is, in judgment of law, a delivery to such purchaser; but it is so, not as a fact, hut as a conclusion of law, and we have repeatedly held that they are the facts from which the proper legal conclusions may be drawn, and not the conclusions themselves, that must be stated in the complaint.

We do not think that we are concluded by the finding of the referee upon the main question, whether Mrs, Hidds was authorized by the defendant to purchase the goods in his name. Her testimony is not merely suspicious in itself, hut she was materially contradicted by the witness Wilson, as well as by Mr. Lawton. Giving to the finding of the referee the same effect as to the verdict of a jury, we think it may he properly set aside, as against the weight of evidence.

Order appealed from affirmed, with costs, and rule for a reference vacated.


text:
    Watson v. Bailey.
    (Before Oakley, Ch. J., Emmet and Hoffman, J.J.)
    November 21;
    December 10.
    A person who transiera a promissory note by delivery, without endorsement, is not an assignor within the meaning of the Code, so that when he has been examined as a witness for the plaintiff, the defendant may offer himself as a witness to the same matter in his own behalf (Code, § 399.)
    Whether an endorser is an assignor within the meaning of the Code, duiitatwr. The defence of usury cannot he admitted under a general allegation in the answer, not stating the terms of the usurious agreement,
    The refusal of the judge upon the trial to permit the answer to be amended, so as to let in the defence, is not a ground of exception, nor ought such m amend» ment to be allowed.
    Appeal from a judgment at special term, in favor of the plaintiff for $261.08. The appeal was founded upon exceptions taken by the defendant’s counsel upon the trial.

      The action was brought by the plaintiff, as endorsee, against the defendant, as first endorser of a promissory note. The defences set up in the answer were, want of notice of the dishonor of the note, and usury.
    The cause was tried before Mr. Justice Paine and a jury, in April, 1853.
    * It is not necessary to state the proceedings on the trial, except so far as they relate to the two following exceptions, which are all that were taken to the ruling of the judge. One Gaige, who, without endorsing the note, had transferred it for value to the plaintiff, was examined as a witness on his behalf. The defendant, on the ground that Gaige was an assignor, offered himself as a witness on his own behalf to the same matter. He was objected to as incompetent; the judge rejected his testimony, and the counsel for the defendant excepted.
    The answer, in setting forth the defence of usury, alleged, that $fthe contract between Gaige, the first holder, and Batt, the maker of the note, was usurious and void, by reason of the fact that the said Gaige took and exacted from the said Batt an illegal usurious interest for the loan or forbearance of the moneys to the said Batt, on the said note, when he received the note, iu violation of the statute in such case made and provided ; and that the said Gaige received from the said Batt, on the acception of said note for a loan on the same, a greater interest than at the rate of seven dollars for one hundred dollars.” Upon the trial, the defendant offered to prove by Batt, that he had allowed an usurious rate of interest to Gaige when he gave the note. The counsel for the plaintiff objected to the evidence, upon the ground, that no usurious agreement was set forth in the answer. The judge was of that opinion and excluded the evidence, and the defendant’s counsel excepted. The counsel then asked leave to amend the answer by making the charge of usury more definite, and the judge refused to allow the amendment. The jury found a verdict for the plaintiff for the amount of the note, with interest.
    —Porter

    moved to reverse the judgment, and for anew trial, insisting that,—

      I. The judge erred in rejecting the defendant as a witness. 1. The witness Gaige was an " assignor of a thing in action or contract,” within the meaning of section 399 of the Code. The note was a “ thing in action or contract.” (Kent. Com. 2 vol. 351; Chitty on Bills, 5, 245.) The witness Gaige was an " assignor.” Webster’s Dictionary words, “ assign,” "assignment,” “ assignor.” (Code, sec. 112, and note to page 405, 2d ed.)
    II. The defence of usury is set forth in the answer; if defectively set forth, the defendant should have been allowed to amend, (Utica Ins. Co. v. Scott, 6 Cowen 606.)
    III. The defendant ought now to be allowed to amend.

      T. Romeyn, for plaintiff,
    contended that—
    I. There was no error in the court’s overruling the application to receive the testimony of Bailey. Gaige, the witness for the plaintiff, was not the assignor of a thing in action within the meaning of § 399 of the Code. A negotiable note is not a chose in action, within the meaning of this section. At least, as between a blank endorsement and the holder (as was the case here) the latter takes as bearer. This has been repeatedly held in questions of jurisdiction in the U. S. courts. (2d Peter 326; 1 Mason 243.)
    H, The evidence as to usury was properly rejected, the answer not having sufficiently set forth an usurious agreement. (10th Barb. 321; 12th Barb. 603.)
    HI. The application to amend was addressed to the discretion of the court, and its refusal is rio ground of error.
   By the Court. Hoffman, J.

Two questions only are raised.

I. Charles W, Pratt made his promissory note in favor of Samuel Bailey, the defendant. The latter endorsed it in blank, and transferred and delivered it to Preserved Gaige, and Gaige, in the language of the complaint, “ transferred and delivered the same to the plaintiff, who is now the lawful bearer and owner of the same.” It is sufficiently shown by the evidence that Gaige delivered this note without endorsing it. Gaige was examined as a witness on the trial on behalf of the plaintiff, and after his examination, the defendant offered himself as a witness to the same points as those to which G-aige had been examined, Upon an objection made, the witness was rejected, and this rejection presents the first exception taken,

The ground to sustain the admissibility of the defendant is, that Gaige was an assignor of a thing in action through which the plaintiff derived title, and that the adverse party may, in such case, offer himself as a witness to the same matter, under the 399th section of the Code.

Whether this section applies to the case of endorsers of negotiable paper at all, is a question we do not feel called upon to discuss. We are clearly of opinion, that the ease of an endorser delivering a note without his own endorsement, is not within the provision,

It deserves notice that the holder of a note or bill may strike out all intervening endorsements; may omit to state them in his declaration after the first endorsement in blank; and may aver that such first endorser endorsed immediately to himself (Byles on Bills, 87); and if a bill be once endorsed in blank, although afterwards endorsed in foil, it will still, as against the drawer, payee, and acceptor, be payable to bearer; though as against the special endorser, title must be made through his endorsee, (Smith v. Clark, Peake 225.)

The effect of this rule of law is, that a holder, however remote, may overlook the derivation of his title through a series of endorsers, and treat the payee of the note as the original source of his right. We cannot conceive that the Legislature meant, in the section before us, to adopt a rule which would conflict in principle with so settled a doctrine of mercantile law.

H, The next question arises upon the refusal of the judge to admit testimony to establish the defence of usury in the note, on the ground that the answer did not set forth sufficiently the facts constituting the usury, or usurious agreement.

The answer avers merely, “that the said Gaige took and exacted from the said Pratt an illegal usurious interest for the loan and forbearance of the moneys to the said Pratt on the said note, when he received the same in violation of the statute; and that he received a greater interest than at the rate of seven dollars for $100.”'

It is needless to dwell upon this point. The answer is wholly insufficient to warrant the production of any testimony, and the application to amend it at the trial was also rightly denied. Both these positions rest upon authorities so numerous and consistent as to establish truisms in the law.

The appeal must be dismissed, and the judgment affirmed, with costs.