author: Robertson, J. Barbour, J., (dissenting.)

text:
    Francis S. Coghlan, Plaintiff and Respondent, v. William B. Dinsmore, President of the Adams Express Company, Defendant and Appellant.
    I. In an action against bankers or collecting agents, to recover damages for their neglect to present a note intrusted to them for collection or give • notice of non-payment to the indorsers, the burden of proof is on the defendants to show the insolvency of the indorsers, if they rely on that fact as a defense.
    2. Whether the burden of proof is upon the plaintiff to show the insolvency of the maker ? Query.

    3. In such an action it appeared that before the maturity of the note, the maker, who was indebted to the indorsers, paid them a part of the amount of the note, upon their promise to pay the note at maturity and give him further credit, and this transaction was unknown to the other parties.

      Held, that this payment was not available as a defense, pro tanto, in favor of the collecting agents, it not being a payment for the use or benefit of the holder of the note.

      Held, further, that the payment and promise having been unknown to the holder of the note until after the commencement of his action against the collecting agents; «such facts did not amount to a waiver, on the part of the indorsers, of demand and notice of non-payment, which would exonerate the defendant from any consequences of their neglect to make such demand and give such notice.
    4. It seems that an indorser of a note, who, being informed by the maker that he will be unable to pay the note, receives from him, without the holder’s knowledge, a part of the amount of the note, promising to pay the note at maturity and give the maker further time, does not thereby waive demand and notice of non-payment.
    (Before Robertson, White and Barbour, J. J.)
    Heard, June 11;
    decided, October 6, 1862.
    This was an action for damages for failing to take proper steps to charge the parties to a note left with the defendants for collection.
    The note was dated the 17th of June, 1860, and was for $1,922.34, drawn by Q-. W. Hichols, payable ten months after its date, to the order of Saltus & Co., at the office of Payne & Harrison of Hew Orleans, with current rate of exchange on Hew York at maturity. It was indorsed by Saltus & Co., and also by Mrs. Anna Saltus.
    The defendants signed a receipt, dated the 6th of April, 1861, of such note from the plaintiff for collection, proceeds to be returned with exchange on Hew York, in which it was expressed that if not honored, it “ was to be returned, and “ all charges for protest, express service, &c., to be paid by the consignor.” The note was afterwards returned unprotested and the plaintiff refused to receive it, no notice having been given to the indorsers.
    ' The complaint alleged the defendants to be a joint stock company, doing business as collection agents, set out the ownership of the note in question by the plaintiff, its making by ¡Nichols, and the indorsements, and the undertaking by the defendants to collect the note or charge the parties thereto, and their failure to perform it, by not protesting the note, and omitting to notify the indorsers. The answer denied every allegation in the complaint, except the making and indorsement of the note "in question, and averred that the maker paid the plaintiff, after the maturity thereof, on account of such note $1,000, in consideration whereof the plaintiff had agreed to extend the time for the payment of the residue, for a definite period, and thereby discharged the indorsers.
    On the trial the defendant read in evidence a complaint in an action brought by the present plaintiff against the indorsers of such note, which was only signed by the plaintiff’s attorneys, and not signed or verified by the plaintiff, in which it was alleged that the maker of such note deposited with Saltus & Co., the indorsers of it, $1,000, to be applied on such note when it became due, and the defendants in that suit had notice that it would not then be otherwise paid, and the then defendants, Saltus & Go., agreed, for themselves and Mrs. Saltus, of whom they were agents, to apply such money on such account; and it was also further alleged that such note was duly presented and notice of non-payment given to the indorsers. Such action was pending at the time of the trial of this action.
    The maker of the note, (Nichols,) testified that on the 12th of April, 1861, he wrote a letter to Saltus & Co., in which he stated “ that he would send them a draft for “ $1,000 if they would protect the note, and give him twelve “months ” in which to pay the residue. The letter itself was not produced, having been mislaid. Saltus & Co. sent an answer to such letter, to the maker, in which they stated that the letter of the 12th was received, and requested him to send them by return mail his draft on his bankers in New Orleans, at one day’s sight, for $1,000, advising them of the same; and if they had no funds there, a draft for the same amount on his house in Shreveport, and at the foot was written: “ If possible by return mail.” Nichols further testified that he gave Saltus & Oo. the $1,000, and they agreed to relieve him from that note and give him credit for the balance for twelve months, and he notified them it was impossible for him to pay it at maturity. On cross-examination he admitted that Saltus & Oo. held other notes of his at that time. He also stated that it was understood that Saltus & Oo. should take up the note; their agreement was that they would protect it; and being a second time cross-examined, he stated that it was understood between them that the note would have to be protested. He further testified that, at the time this note matured, he was not able to provide for it; and on the 12th of April he understood it had gone forward and could not be prevented from being protested. Theodore Saltus, one of the firm of Saltus & Co., being examined as a witness, testified that the $1,000 was received on account of the debts owing them by Nichols.
    The maker of the note, (Nichols,) also stated the condition of his affairs. He did not think a forced sale of his property at the north would pay his debts, although it might. He did not consider himself insolvent. He owed $7,200 for merchandise and $9,000 for mortgages on houses, and the estimated value of his property was $20,000 to $25,000. When the political troubles broke out, he had merchandise amounting to $20,000 in Texas, which had been confiscated by the Bebel Government, and he also had a rental of $6,000 a year in Shreveport and Texas. He had not attempted to sell his real estate here; his creditors had agreed to advance him money to finish certain houses he was building, and it was agreed that the rents should be applied to extinguish his debts. He expected to get his property south. He never had the means to pay this note in money.
    Mrs. Anna Saltus testified that she supposed Saltus & Co. to be solvent at the time and still supposed so, which testimony was objected to by the defendant.

      A motion was made for a nonsuit, upon the ground of want of proof of non-presentment for payment, and of non-notification of the indorsers, which was refused. Another motion was made for leave to amend the answer, by setting up a special agreement between the indorsers and maker of the note in question, to the effect that the indorsers would protect the note at maturity, thereby waiving notice and demand, which was refused; but the Court permitted the defendants to give evidence of waiver of notice of non-payment and protest.
    At the conclusion of the trial, the Court charged that there was no proof of such waiver of notice of protest by the indorsers as, between the plaintiff and defendant, would discharge the defendants from performing their agreement to protest the note in question, to which the defendant excepted. The counsel for the defendant then requested the Court to charge that the plaintiff could not recover unless the Jury should believe, from the evidence, that the maker of the note was insolvent, which was refused and an exception taken. The Court then directed a verdict for the plaintiff for the amount claimed, for which judgment was entered, and an appeal taken therefrom. No motion was made for a new trial.

      C. A. Seward, for defendant, appellant.
    I. The primary inquiries are:
    1. Wliat was the contract between the parties ?
    2. What are the plaintiff’s rights, if such contract was not performed?
    1. The contract was “ a mere contract of agency, which left the plaintiff all his rights and remedies for the recovery of his debt as against other parties, and only rendered the agent liable for the actual or probable damages which his principal sustained in consequence of the negligence of the agent.” (Allen v. Suydam, 20 Wend., 327.)
    2. Assuming that the contract was not performed, what are the actual or probable damages which the plaintiff has sustained ? This must be decided by the light of conceded analogies, and the force of positive precedent.
    To entitle the plaintiff to recover against the defendant, he must prove, as elements of damage, first, the insolvency of the maker of the note, and, second, the solvency of the indorsers; and such proof must be submitted to the Jury. (Russell v. Palmer, 2 Wils., 325; Arnold v. Commonwealth, 8 B. Monr., 109; Clark v. Smith, 10 Conn. R., 1; Varril v. Heald, 2 Greenl., 91; Wolcott v. Gray, Brayton’s R., 91; Potter v. Lansing, 1 Johns., 215; Van Wart v. Wooley, 5 Dowl. & Ryl., 374; Allen v. Suydam, 20 Wend., 327; Warren Bank v. Parker, 8 Gray, 222 ; Bank of Utica v. McKinster, 11 Wend., 473; Smedes v. Bank of Utica, 20 Johns., 372; Mechanics’ Bank v. Merchants’ Bank, 6 Metc., 13; East River Bank v. Gedney, 4 E. D. Smith, 582; Stowe v. Bank of Cape Fear, 3 Dev., 408.)
    Upon the evidence, Uichols, the maker of the note, was solvent and able to pay it.
    II. The Court erred in deciding that the evidence on the part of the defendant did not amount to proof of waiver of notice of non-payment and notice of protest by Saltus & Co., the first indorsers of the note, and was not sufficient to discharge the Company from the performance of its agreement.
    The neglect to give notice of protest, was justified, in this case, by the acts of the indorser. (Citing and commenting on Phipson v. Kneller, 1 Starkie, 116; Bond v. Farnham, 5 Mass. R., 170; Mechanics’ Bank v. Griswold, 7 Wend., 165; Coddington v. Davis, 3 Denio, 16; Taylor v. French, 4 E. D. Smith, 458; Seacord v. Miller, 3 Kern., 58; Burke v. McKay, 2 How. U. S. R., 66; Ilsley v. Jewett, 3 Metcalf, 434; Marshall v. Mitchell, 35 Maine, [5 Red.,] 221; Boyd v. Cleveland, 4 Pick., 525; Mechanics’ Bank v. Griswold, 7 Wend., 168.)
    III. It is immaterial whether Anna Saltus was charged as an indorser; because,
    1. As between her and Saltus & Co., the note was to be paid by them; and,

      2. The plaintiff, having a remedy against the maker and the first indorsers, cannot be said to have been injured by a failure to charge the other indorser.
    IV. The motion for a nonsuit was improperly denied.
    There is no proof in the case that demand of the note was not made and notice of its non-payment not given. On the contrary, there is proof in the case that payment of the note was duly demanded and that notice of its nonpayment was duly given to its indorsers. Those facts are averred in the complaint in the suit brought by the plaintiff against the indorsers, and there is no evidence contradicting them.
    Even if Nichols was insolvent, and even if the agreement between him and Saltus & Co. did not amount to a waiver of demand and notice, still the decision of the Court that the evidence adduced by the defendant did not discharge the Express Company from the performance of its' agreement, was erroneous; because, the decision fastened upon the defendant a liability to the full amount of the face of the note, when the proof showed that the extent of the plaintiff’s loss was only the difference between the amount of the note and the $1,000 paid thereon by Nichols to Saltus & Co.
    The extent of the plaintiff’s loss is the measure of the liability of the defendant; and the $1,000 paid by Nichols, belonged, of right, to the plaintiff, and should have been held by the Court as diminishing pro tanto the liability of the defendant.

      William Allen Butler, for plaintiff, respondent.
    I. The motion for a nonsuit at the close of the plaintiff’s evidence, was properly denied.
    The burden of proof was on the defendants to show that the note had been protested.
    The averment of the complaint in the suit brought in the name of plaintiff against Saltus & Co., and Anna Saltus, as indorsers, that the note had been protested, &c., is immaterial. The complaint, being unverified, was the act of the attorneys and not of the plaintiff, and is of no effect as an admission or otherwise. (1 Starkie on Ev., 450; Boileau v. Rudlin, 2 Exch., 665; S. C., 12 Jur., 899; Church v. Shelton, 2 Curtis, 271, and cases cited on p. 275.)
    And the defect, if any, was cured by the further testimony on the part of the defendants; and the motion was not renewed at the close of the evidence on both sides.
    IT. The Court correctly decided that the evidence, admitted under the ruling on defendants’ application to amend the complaint, did not amount to proof of waiver of notice of non-payment and notice of protest, by Saltus & Co., and was not sufficient, as between the parties to this action, to discharge the defendants from the performance of their agreement, to cause the note to be protested; and further, that there was no sufficient evidence to go to the Jury, of any waiver of notice of non-payment or notice of protest, ou the part of Anna Saltus.
    Hothing short of the clearest evidence of assent on the part of indorsers will amount to a waiver of notice of protest. The cases in which indorsers have been held to a waiver from the fact that they had received fun^s or security from the maker before maturity, are cases in which they either expressly agreed to waive notice, or did some act by which the holder was induced to omit protest, or when by taking into their possession 'all the property of the maker, by assignment, for the express purpose of meeting his liabilities, the indorsers have obtained everything which the notice was intended to enable them to obtain.

      (Oswego Bank v. Knower, Lalor’s Supp. to Hill & D., 122; Coddington v. Davis, 1 N. Y. R., 186; Spencer v. Harvey,. 17 Wend., 491; Leonard v. Gary, 10 Id., 504; Mechanics’ Bank v. Griswold, 7 Id., 165; Taylor v. French, 4 E. D. Smith, 458.)
    The taking of security, or receiving funds in part pay- ' ment, by the indorsers, does not operate as a waiver, nor can a waiver be implied in any case, from the transactions between the maker and the indorsers, unless the latter assume an unqualified liability to pay the note at maturity, and abandon their recourse against the maker. (Seacord v. Miller, 13 N. Y. R., [3 Kern.,] 55; Kramer v. Sandford, 4 Watts & S., 328.)
    In the present case there was no such assumption of liability on the part of Saltus & Co., nor any waiver of their recourse against Hichols. The indemnity received by them was partial, and they did no act, and came under no obligation dispensing with the demand and notice which were the conditions precedent to their liability as indorsers.
    As to Anna Saltus, the other indorser, there was no evidence whatever of any implied waiver. She' was not a party to the alleged agreement with Hichols; Saltus & Co. were not her agents or attorneys. She was, therefore, liable to plaintiff on her distinct contract of indorsement. Seneca Co. Bank v. Neass, 3 Com., 443; Mohawk Bank v. Corey, 1 Hill, 513; Cayuga Bank v. Warden, 2 Seld., 19.)
    The only exception on this point was taken to the entire ruling of the Court; and if either proposition was correct, the exception must fail entirely.
    III. The Court correctly refused to charge the Jury, as requested, that even though the plaintiff had lost his recourse against the indorsers, through the defendants’ negligence, the plaintiff could not recover unless the Jury should believe, from the evidence, that Hichols, the maker of the note, was insolvent.
    There was no conflicting evidence on this .subject to submit to the Jury.
    The plaintiff was not bound to prove insolvency on the part of the maker (the point requested to be charged) in order to entitle him to a recovery.
    The ground of the action was the negligence of the defendants. All that the plaintiff was required to show was failure on their part to perform the duty undertaken by them. This raised the presumption of their liability for any loss sustained by the plaintiff by reason of their neglect. (Walker v. Bank of State of N. Y., 5 Seld., 582; Bank of Utica v. Smedes, 3 Cow., 662; Bank of Utica v. McKinster, 11 Wend., 475.)

      The plaintiff further showed that the maker of the note was unable to pay it at maturity, and that such inability continued up to the trial.
    The burden of proof was then on the defendants to show, in reduction of damages, that the maker had ample funds to pay, if called upon, or any other fact showing that plaintiff had sustained no actual loss. (Allen v. Suydam, 20 Wend., 321, 329.)
    The defendants gave no proof to reduce the amount of damages below the whole amount of the note, and made no request for any ruling in reference to damages. The plaintiff was entitled to nominal damages at all events, (Allen v. Snydam, 20 Wend., 330,) and the ruling requested could not, therefore, have been granted. Even if it had been a request to charge that only nominal damages could be recovered, unless the Jury believed that Nichols was insolvent, it would have been equally objectionable. The plaintiff would have had a present and immediate right of action against the indorsers had the defendants done their duty. This was lost by their neglect, and they could not compel the plaintiff to await a liquidation of the affairs of the maker, or to resort to a sale of his mortgaged real estate, with its attendant delays and right of redemption, or to abide the event of the rebellion, and the release of his confiscated property.
   Robertson, J.

The plaintiff was entitled to the security of the liability of all the parties to the note in question who were originally liable, and the defendants were bound to take all necessary steps to secure that liability. For any failure to take such steps the defendants were liable to the extent of any damages suffered by the plaintiff. The maker, of course, is liable at all events; and if he is solvent no damage has been suffered; if not, the defendant is liable for not charging the indorsers, unless they never were Bable or were insolvent and worthless. In such case it is not necessary for the plaintiff to prove any solvency of the indorsers; Ms derefiction of duty casts the burden on the delinquent agent, of disproving their solvency. (Walker v. Bank of State of New York, 5 Seld., 582; Bank of Utica v. Smedes, 3 Cow., 662; Bank of Utica v. McKinster, 11 Wend., 475; Allen v. Suydam, 20 Id., 329, Per Chancellor Walworth.) The fact that in some cases the plaintiff introduced evidence to prove the insolvency of the maker or solvency of the drawer, does not affect the rule. (Bank of Utica v. McKinster, 11 Wend., 473; Smedes v. Bank of Utica, 20 Johns., 372; Mechanics’ Bank v. Merchants’ Bank, 6 Metc., 13; East River Bank v. Gedney, 4 E. D. Smith, 582.) Possibly the burden may lie on the plaintiff to prove the insolvency of the maker, but in this case that was prima facie established. The plaintiff is not bound to wait forever for a chance of collecting from the maker: his money is due forthwith. The attempt to show that Mrs. Saltus was never responsible failed.

The defense, therefore, of the defendants rest in the continued liability of Saltus & Co., on the note, and their waiver of demand and notice; and they also claim that the .$1,000 paid by the maker to Saltus & Co. should go in mitigation of damages. Ho such partial defense as the last is set up in the pleadings, nor was any application made to amend them for the purpose; and if it had been made, it would have been untenable. There is no evidence that the maker of the note paid such sum to the indorser to be paid over to the holder; he paid it to him as his creditor on a general promise to take up the note and protect him. It became the indorsers’ money; no action lay for it in the plaintiff’s favor. The indorsers promised, in consideration of its payment, to take up the note and give the maker credit for the residue of what was due, for a year, which the latter promised to pay, the note to be retained as an evidence of debt. Any other person might have made the same promise, and yet not have discharged the defendants from liability on a contract made before such promise. Ho such secret collateral agreement could discharge them.

The only remaining question is, if Saltus & Co. are

liable as indorsers. They may have been liable to the plaintiff on their new undertaking to pay the note, although made to a third person, (Del. & Hud. Can. Co. v. Westchester Co. B'k, 4 Denio, 97,) and so might any other person on a similar promise, but no such liability is set up in the pleadings, and the relation in such case is different. The real question here is, whether knowledge by the indorser of the inability of the maker to pay, his notice to them that he would not pay, and their promise to pay, amounts to such waiver of notice as to make them liable as indorsers. It has been held that where the indorser takes upon himself the duty of inquiring if a note is paid, (Phipson v. Kneller, 1 Stark., 116,) or has an assignment of all the maker’s property, (Mechanics' B'k v. Griswold, 7 Wend., 175,) or is preferred in a general assignment, (Coddington v. Davis, 3 Denio, 16; Taylor v. French, 4 E. D. Smith, 458,) or becomes otherwise the party to take up the note as between him and the maker, by taking security, (Seacord v. Miller, 3 Kern., 58,) or releases the maker, (Burke v. McKay, 2 How. U. S. R., 66,) or when.he is furnished by the maker with all the funds he has, or equal to the amount of the note, and agrees therewith to pay the note, (Ilsley y. Jewett, 3 Metc., 434,) either of such acts operates as a waiver; and so even a promise to take up a note if not paid by another. (Boyd v. Cleveland, 4 Pick., 525; Marshall v. Mitchell, 35 Maine, [5 Red.,] 221.) It is undoubtedly true, as a general rule, that where any steps to charge the indorser are prevented by some acts of his which puts the holder off his guard, the latter is excused, (Bruce v. Lytle, 13 Barb., 163; Spencer v. Harvey, 17 Wend., 489,) but I am not prepared to say that, therefore, a promise to the maker, not known to the holder, would be sufficient. The fact that the maker is thrown off his guard in preparing to pay the note, does not affect the relations of the holder dnd maker; it does not operate either as an estoppel or contract between them. But when the latter promises the former to pay absolutely and unconditionally, he has a right to assume that the duty of notifying the indorser of a failure on the maker’s part is dispensed with, and that he need not rely upon the maker at all. Notwithstanding a promise by the indorser to the maker, the former may not be able to pay and still not lose his right of proceeding forthwith against the maker, to secure himself, which is the object of the notice. When the promise is made only privately to the maker-of the note, the indorser does not expect the holder to rely upon it, because it is not made to him. A promise to pay, unconditionally, does not operate as a contract but as an estoppel, and when made to the holder is an admission that the indorser will suffer no injury for want of demand and notice, which is the test applied by Judge Nelson, in Mechanics’ Bank v. Griswold, (7 Wend., 168.) I cannot, therefore, subscribe to the reasoning in Marshall v. Mitchell, (ubi sup.,) which makes a promise to the maker equivalent to a promise to the holder as a waiver; and no other case goes so far.

But even if it were so, the defendants in this action ought not to be allowed to avail themselves of a private agreement, unknown to the plaintiff, and first disclosed on the trial; and that, too, where the evidence of the parties concerned is conflicting as to the whole transaction. The result, perhaps, might be, that in this action the plaintiff would fail to recover against the defendants, by the view the Jury would take of the testimony; and in the action by him against the indorsers he might also fail from a different view taken of the same testimony, and thus fail altogether by the defendants’ neglect of duty. I think, in such case, the evidence must bring home knowledge to the holder, at least before the commencement of the action, of the existence of such waiver, if not his actual presence when it was made, before he can be deprived of his right to recover.

The plaintiff is of course not entitled to a double satisfaction, and the defendants are, therefore, probably entitled to subrogation to his rights to the extent of whatever part of the note they may pay. If they pay the whole ' note, they may proceed against the indorsers, and enforce. their liability if they can establish it.

The decision *of the Court that no waiver of demand and none had been proved, and its refusal to charge that the plaintiff could not recover unless Kichols was insolvent, "were correct. The counsel for the -defendants did not require any other facts to be submitted to the Jury; the motion for a nonsuit was properly denied, and there was, therefore, no error in the charge or exclusion of evidence.

The judgment should be affirmed -with costs.

White, J., concurred in affirming the judgment)

Barbour, J., (dissenting.)

The measure of damages, in a case of this kind, is the amount which the owner of the note has lost by the failure of the carrier or agent to perform his duty by protesting the note. (Van Wart v. Wooley, 5 Dowl. & Ryl., 374; Allen v. Suydam, 20 Wend., 327; Warren Bank v. Parker, 8 Gray, 222; Bank of Utica v. McKinster, 11 Wend., 473; Stowe v. Bank of Cape Fear, 3 Dev., 408; and see also, Russell v. Palmer, 2 Wilson, 325; Clark v. Smith, 10 Conn. R., 1; Varril v. Heald, 2 Greenleaf, 91; Wolcott v. Gray, Brayton’s B., 91; Potter v. Lansing, 1 Johns., 215.) In order to sustain his case, it was incumbent upon the plaintiff, therefore, to show, first, that the maker was insolvent, which was done; and, secondly, that the indorsers, or one -of them, were good, which he did prove; and, thirdly, that, because of the failure of the defendants to protest, the indorsers, or the only good one, were legally exonerated from the payment of the note-or some part of it. In regard to this, he proved that Anna Saltus was good) and was thus exonerated. But he failed to show that Saltus & Co., who were able to pay, were so reléased or discharged -from liability. On the contrary, dt appears from' the evidence, :that the ¡firm of Saltus & Co.’had received from the principal: obligor in the note, $1,000, as.a payment to that -extent; and that, in consideration of such payment, made in advance, they undertook and agreed to protect, %. e., to pay, the note. The payment and agreement Hichols swears to positively. That SI,000 must be considered, under a well known rule of law, as having been received by Sal tus & Co., in trust for the plaintiff; and he can as readily collect the same from them as he could have recovered against them upon the note, if it had been duly protested and notice sent to them. This is sufficient to show that the .Judge erred in directing the Jury to find a verdict for the whole amount of the note, without considering the question as to whether the undertaking to protect the note was supported by a sufficient consideration, or is good, not being in writing, under the statute of frauds.

The judgment should be reversed, and a new trial granted.

Judgment affirmed.


source: Caselaw Access Project

author: By the Court—Robertson, J. Bajrboer, J., (dissenting.)

license: Public Domain

text:
    Alfred Field et al., Plaintiffs, v. James H. Banker, Defendant.
    1. The plaintiffs, who were engaged in the business of purchasing hardware, abroad, upon commission, and shipping it to the persons for whom they had received frders therefor, received an order from the defendant in the following terms: “ I annex memorandum of chains, which please forward by an early packet, giving the preference to the ‘Black Ball Line,’ at lowest rate of freight;” this was followed by a description of the goods, and it terminated with expressing “hopes that the quality, price and charges would be so favorable as to enable him to gyve them further orders." They made a contract in England for the purchase of the goods in their own" name, the defendant being unknown there, and notified him that the goods were contracted for; and they paid for them, and subsequently shipped them, consigned to the defendant, by the ‘Black Ball Line,’ receiving a bill of lading therefor, which contained an exception exempting the carriers for liability for loss by firé. Before having left port the goods were injured by a fire which occurred upon the vessel, and were sold for whom it might concern.

      Held, That the relation between the plaintiffs and the defendant was not that of vendor and vendee of the goods; but the plaintiffs were the defendant’s agents for their purchase, and as such agents, were not bound to insure the goods. (Barbour, J., dissented.)

      2. In such a case the plaintiffs are not barred from maintaining their action to recover the price paid by them, and their commissions, by reason of their having accepted for the goods, a bill of lading exempting the carriers from their common law liability. Since the goods were not wholly lost, but only injured, the defendant’s claim, if any, on that account, must be established by him, affirmatively, by way of recoupment or counterclaim.
    3. There being, in this case, no evidence that the contract of shipment was out of the usual course, or that the plaintiffs could have made any better one, at the “ lowest rate of freight,” according to the terms of the order,

      Held, that it was correct to instruct the Jury that it was the duty of the plaintiffs to have taken a bill of lading in a proper and usual form, and that the one taken was a sufficient compliance with that duty. (Barbour, J., dissented.)
    4. Evidence that it was the custom of hardware merchants to transmit to their consignee immediate notice of having made a consignment, is inadmissible, the plaintiffs, in this case, having acted only as agents, and not as vendors.
    (Before Robertson, White and Barbour, J. J.)
    Heard, June 12; decided,
    October 6, 1862.)
    This was an action brought by Alfred Field, Robert Ibbotson and Benjamin F. Errington to recover money expended by them for the defendant’s benefit, and a commission for the purchase of certain goods for him, by them, as factors or agents.
    In the year 1858, the business of the plaintiffs, who were partners and had houses in Hew York, Birmingham and Liverpool, was that of purchasing hardware on commission, and shipping it, when purchased, to the United States; the orders being received in Hew York, Philadelphia and elsewhere, and forwarded to Birmingham for execution, and the purchases made at Birmingham or in that vicinity. They sent goods purchased to the order of the party who gave the order, through the medium of their Liverpool house, unless instructed to employ other shippers, which was sometimes the case. In September, 1858, the defendant delivered to one of the plaintiffs, who was the partner resident here, (Robert Ibbotson,) a written order, dated on the 14th of that month, directed to the plaintiffs, in which he said, “‘I annex memorandum of ** chains, which please forward by an early packet, {giving the preference to the Black Ball Line,) at lowest rate of
      “freight; ” tMs was followed by a description, of the goods, and it terminated with expressing “hopes that their “quality, price and charges would be so favorable as to “enable” him to give them further orders. The usual commission on shipping heavy goods, such as chains, was then three per cent commission, and in this case, such were the terms agreed on, with a ninety day note from the date of invoice. The order so given was received by the plaintiffs’ house in Liverpool, on the 27th September, and the chains so ordered were purchased by the plaintiffs’ house-in Birmingham, and written notice that they were contracted for given to the defendant on the 27th of October, 1858, by the resident partner of the plaintiffs, and also-that they would be forwarded from Liverpool, according to the special directions he had given in the order. These goods were marked with the defendant’s initials, and forwarded in October and November, 1858, by railway and canal, to the plaintiffs’ house in Liverpool, which place they reached on the 10th of December, 1858. On the 9th and 18th of November, the latter were instructed by their house in Birmingham, to ship such goods to the defendant in New York, by the ‘Black Ball Line’ in preference.
    In November, 1858, the freight for goods from Liverpool rose to a very high rate, reaching its climax about the 23d of that month, and the plaintiffs directed their shipping agent to delay shipping these goods, in hopes of lower rates. On the 2d of December following, such rates fell thirty per cent, and the plaintiffs engaged freight for these chains on board of “ The Isaac Wright,” one of the Black Ball Line, on board of which vessel the same were shipped on the 10th of that month, and a bill of lading in favor of the defendant, dated the same day, received from the master on the 20th of that month, in which the agreement to deliver was made, subject to the exception of “ dangers and accidents of fire, the seas and navigation ” of every nature and kind.
    An invoice of such goods had been sent by the plaintiffs’ house in Birmingham, to their house in New York, on the 4th of December, 1858, through" the general post-office in Birmingham. The bill of lading of these goods, with an invoice, which had been received- by the plaintiffs in Birmingham on the 21st of December, was deposited by the'" plaintiffs, in Birmingham,- in the general" post-office, inclosed in a letter or envelope directed to the defendant in Hew" York, on the 24th of December,-1858", before'" the departure of the mail which would reach Liverpool in time for the sailing of the next Cunard mail steamer from that port to Hew York, which was the first that sailed after the shipment of the goods in question, at Liverpool;—such being' the usual practice of " the plaintiffs. The invoice so forwarded was headed “Invoice of hardware purchased hy “ order, and for account and risk of Mr. James H. Banker, “ Hew York, forwarded" to Messrs. Field, Ibbotson & Co., “ for shipment, &c.”
    The “Isaac Wright ” started to sail from Liverpool before the 23d of December, 1858, after having been for five days in the' river Mersey; but was Compelled to put back in Consequence of the breaking of a windlass, and on the 23d of that month she took fire while at anchor in the river and was burnt, and scuttled to put out the fire; the chains- were sold at Liverpool, at auction, for whom it might concern.
    Various mail steamers arrived from Liverpool in Hew York, between the 23d of Hovembér, 1858, and January, 1859; one, which sailed on the 10th of Hovember,- arrived on- the 23d of Hovember; one,- which sailed on the 4th of December, arrived on the 19th; and- another, which sailed oh the 11th, arrived’ on the 27th of December, after" the fire. There were other steamers from other ports.-
    The plaintiffs subsequently re-executed the same order for" the defendants.
    The complaint alleged that the plaintiffs Were, and are, partners engaged in the business of purchasing commission merchants in England and the United States, under a certain firth,- and- that in stich-business they received- orders in "the City of Hew York and elsewhere in- the United State's, for hardware, to be by them, bought and paid for in England, and shipped thence directly to the person giving the order therefor, and at his risk, for which they were to receive the purchase price of the articles by them bought and shipped, and certain shipping expenses and commissions in that behalf, in ninety days from the date of the invoice.
    It further alleged that on or about the 14th of September, 1858, the defendant gave the plaintiffs an order for a quantity of chains, to be by them purchased in England, and to be shipped to the defendant in New York, upon the terms, and according to the course of business of the plaintiffs ; and the plaintiffs, in pursuance of such order, purchased and paid for such chains in England, and shipped the same on board of the ship “Isaac Wright,” at Liverpool, in England, to the defendant in New York, and forwarded to him, in the usual mariner, a bill of lading and invoice thereof, which were received by him in January following.
    It then set out the amount of the purchase-money and commissions, and demanded judgment for the amount.
    The defendant, in his answer, controverted the plaintiffs’ business, their purchase of the goods and their payment of the price. He denied that he ordered the goods to be purchased or shipped upon the terms or according to the course of business set out in the complaint, and that the plaintiff forwarded to the defendant a bill of lading or an invoice of the goods, and every other allegation, except as therein after stated. He averred therein that he ordered such goods to be purchased for, and shipped to him, upon the terms and according to the usage, custom and course of business of parties engaged in the hardware trade in the Oity of New York, having branch houses in England; he further averred that he gave the order to the plaintiffs for such chains, to be procured of them houses in Birmingham or Liverpool, and forwarded to him in the usual course of parties in such trade; that he was informed that the plaintiffs had contracted for such chains at certain prices, and he never received any further notice of the shipment of. such chains until the 10th of January, 1859, when he received a letter dated the 24th of December previous, inclosing an invoice and a bill of lading, dated 10th of December.
    The defendant further averred, in his answer, that it is the usage and custom of hardware merchants in the Oity of Hew York, engaged in business in England, and in shipping hardware from thence to persons buying in Hew York, immediately upon shipping goods in sailing vessels to the Oity of Hew York, to notify the consignees, by steamer, of the shipment of the same, and forward an invoice of the same by such steamer, so as to give the consignees an opportunity of insuring. He further averred therein, that between the 9th of Hovember and 8th of December, there were seven steamers by which letters could have been sent notifying him of such shipment; that the “Isaac Wright ” was known as a sailing vessel, and not a steamer, and was burned on the 23d of December, 1858, and her cargo destroyed; and the defendant had no insurance on such chains in consequence of the failure to inform him of such shipment. He finally denied receiving such chains.
    The cause was tried before Mr. Justice White and a Jury, on the 7th of April, 1862. On the trial the defendant moved to dismiss the complaint, on six grounds, chiefly, however, involving the principle that the plaintiffs were bound to have taken a bill of lading making the owners of the vessel liable for the loss of the chains, and that in consequence of their taking a bill of lading exempting the carriers from liabilities for fire, the defendant was not liable. The defendant’s counsel offered to prove the custom set out in his answer, which was excluded, and he excepted to the exclusion. He then offered to prove, first, a general custom, where goods are ordered in Hew York of merchants having branch houses in England, or agents of such houses in this city, which are to be shipped from England directly to the purchaser in Hew York by a sailing vessel, immediately to notify such purchaser of the shipment; secondly, a like custom not only to notify of such shipment by steamer, but also to forward an invoice of the goods by the same steamer, to enable the consignees to insure the same; which was refused, and to such refusal he excepted.
    The Judge before whom the cause was tried, charged the Jury, that it was the duty of the plaintiffs to notify the defendant in the ordinary way, by steamer, within a reasonable time after the goods were shipped; that it was the duty of the plaintiffs to have taken the bill of lading in a proper and usual form, and the one taken was sufficient compliance with that duty; to which the defendant’s counsel excepted.
    The defendant’s counsel requested the Court to charge in substance:
    I. That, as matter of law, the bill of lading in this case did not give the defendant such a remedy against the carrier as he was entitled to.
    II. That, without instructions, the plaintiffs were not authorized to take a bill of lading exempting the carrier from liability for loss by fire.
    III. That, by being deprived of the liability of the carrier, the defendant is relieved from any liability to the plaintiffs.
    This the Court refused; and the defendant’s counsel excepted to such refusal.
    The Jury rendered a verdict for the amount claimed, and the Court ordered the exceptions to be heard in the first instance at (General Term, judgment to be suspended.

      A. R. Lawrence, Jr., for defendants.
    I. The Justice erred in denying the motion to dismiss the complaint.
    There was no delivery of the chains to the defendant, either actual or constructive. The vendor sending goods by a carrier must exercise due care and diligence, so as to provide the consignee with a remedy over against the carrier. (1 Parsons on Contracts, 445, note g.; Buckman v. Levi, 3 Camp., 414; Clarke v. Hutchins, 14 East, 475; Alexander v. Gardner, 1 Bing. N. C., 671; Dawes v. Peck, 8 T. R., 330.)
    The plaintiffs, in violation of their duty, took a bill of lading, which exempted the owners of the vessel from responding for loss or injury to the chains, consequent upon fire produced by any cause whatever. Hence, as the vendors failed to provide defendant with the remedy which he was entitled to against the carriers, the mere shipment of the goods did not constitute in law a delivery to him, and he is not liable for their value.
    II. The Justice erred in his refusal to charge as requested by the defendant’s counsel.
    IH. The evidence offered by the defendant’s counsel to show the usage, custom and course of business of hardware merchants, engaged in shipping goods to Eew York from England, was improperly rejected.

      (a.) It is well settled that evidence of usage in a particular trade is admissible, for the purpose of annexing incidents to a written- instrument, concerning which the written instrument is silent. (Boorman v. Jenkins, 12 Wend., 566; Cooper v. Kane, 19 Wend., 386; Esterly v. Cole, 3 Comst., 502; Barber v. Brace, 3 Conn., 9; Brown v. Byrne, 3 Ellis & Blackburn, 704, 716; United States v. Arredondo, 6 Peters, 715; The Reeside, 2 Sumner, 569; Bank of Columbia v. Fitzhugh, 1 Harr. & Gill, 239; The St. Nicholas Ins. Co. v. The Mercantile Mu. Ins. Co., 5 Bosw., 246.)
    Indeed, the rule to be collected from the numerous cases on this subject is, that any mercantile usage is admissible in evidence, unless it labors under the objection of introducing something repugnant to, or inconsistent with the , tenor of the written contract. (Humfrey v. Dale, 7 Ellis & Blackburn, p. 27; Rule so stated per Lord Campbell, Ch. J. ; Brown v. Byrne, 3 Ellis & Blackburn, p. 704; Per Coleridge, J., at p. 716; Moore v. Campbell, 26 E. L. & E., 522; Cuthbert v. Cumming, 30 E. L. & E., 604, and cases cited supra.

      (b.) In this case, the contract between the parties consists of the order of the defendant of September 14th, and the acceptance by the plaintiffs of October 27th, 1858.
    The contract is silent as to the usage, but there is nothing in the contract to which the usage is repugnant, and the offered evidence is precisely within the principle laid down in the cases supra.

    (c.) Again, where there is a general usage of trade, all persons dealing with that trade are supposed to. contract with them upon the footing of that usage, unless something inconsistent therewith appears in ■ the agreement between the parties. (Cooper v. Kane, 19 Wend., 387: Rushforth v. Hadfield, 6 East, 519, per Lord Ellenborough.)

      (d.) The parties by whom the usage was proposed to be shown were perfectly competent, from their experience in the hardware trade, to prove the usage. (Mills v. Hallock, 2 Edw., 652.)
    IV. The evidence as to custom having been improperly excluded, the Court cannot say that if it had been received the same verdict would have been rendered, and its exclusion forms a good ground for a new trial. (Anderson v. Busteed, 5 Duer, 485; Hahn v. Van Doren, 1 E. D. Smith, 411; Ward v. Washington Ins. Co., 6 Bosw., 230.)

      Charles Jones, for plaintiffs.
    I. The motion to dismiss the complaint was properly denied.
    1. The plaintiffs had proved that they had purchased and shipped the chains in accordance with the defendant’s order.
    2. The defendant had notice that his order was accepted, and that the goods would be forwarded according to his directions.
    3. There is no evidence that the bill of lading was not in the usual form of bills of lading given by the proprietors of the “ Black Ball Line.”

      4. The plaintiffs being mere agents to purchase goods and ship them according to the defendant’s order, and the plaintiffs having proved the purchase and shipment in accordance therewith, it was for the defendant to show (if any such defense existed) that the plaintiffs had failed in any duty which they as agents owed to the defendant, their principal.
    There was no such evidence offered or given when the plaintiffs rested their case.
    II. The evidence offered by the defendant was inadmissible.
    1. The evidence of usage or custom was inadmissible.

      (a.) It was not offered to interpret the meaning of the
    language of the contract. There is nothing equivocal or obscure in that respect.

      (b.) It was not admissible to add to the written contract, evidenced by the order, and its acceptance, other and new terms. (1 Greenleaf on Ev., §§ 281, 292, 294; Yates v. Pym, 6 Taunt. R., 446; Gibbon v. Young, 8 Id., 254; Hone v. Mutual Safety Ins. Co., 1 Sandf. S. C. R., 137; Beals v. Terry, 2 Id., 127; The Schooner Reeside, 2 Sumner, 569.)
    2. The evidence offered was immaterial, and no foundation had been laid for its introduction.
    IH. The exceptions to the refusal of the Oourt to charge as requested, are not well taken.
    There was no evidence that the bill of lading was not in the usual and ordinary form of bills of lading issued by the “ Black Ball Line,” by which the plaintiffs were directed to ship the goods, and there is-no presumption that the plaintiffs violated their duty in this regard.
   By the Court—Robertson, J.

The defendant relies on two defenses in this case. First. The failure of the plaintiffs to notify him of the shipment of the goods in time to insure. Second. The taking a bill of lading exempting the carrier from liability for fire. Whether he considers the plaintiffs were bound to do both; that is, give such ■ notice and take a proper bill of lading, or whether, if he secured the liability of the carrier as an insurer, the object of the other act of duty would be sufficiently attained, and the plaintiffs relieved from its performance, does not appear. In either case it will be necessary to examine the relations of the parties, and discover the true nature of the contract.

In the first place, the contract was not to deliver the goods in Yew York, to the defendant, and his liability accrued before that event. It seems to be conceded that he would have become liable at least as early as the shipment at Liverpool. It could not, therefore, be a contract for the sale and delivery of the goods, unless the shipment at Liverpool was to be taken as such delivery; if so, upon that delivery and the forwarding of the bills of lading, the plaintiffs’ performance of their part of the contract would be complete. Yo relation would remain between the parties as vendors and vendee, to impose on the former any duty to protect the latter from harm. Or even if a notice became necessary to the defendant as vendee, would the sale become void because not given at the earliest possible time after the shipment ? If the contract was one of mere sale and delivery, it was the business of the defendant to select the carrier, or, if he left the choice to the plaintiffs, to be ready to insure his interest at the instant of shipment. The carrier was the agent of either the defendant or the plaintiffs, in such case; if of the latter, the delivery was not complete until the goods arrived in Yew York; if of the former, it was so the moment they were put on board.

But there was no such contract as that between vendor and vendee; the plaintiffs were authorized to buy and ship as the defendant’s agents; they might have used his name as purchaser and left him alone responsible. It is true they personally assumed the responsibility to the sellers of the chains; but this did not alter the relation of principal and agent. From the domestic who is sent to a tradesman to purchase, articles for daily use, to the agents employed to buy millions, the rule is the same; the moment the purchase is made for the principal, he owns the property bought, from the time of its delivery to his agent, and is bound to reimburse the latter for moneys expended by him in the purchase; the property is at his risk and not his agent’s, whatever responsibility the agent may be under for the care and safe transmission of the goods afterwards. They are his property, subject to the lien for the purchase-money, and not his agent’s. The recollection of the only plaintiff examined, -is clear and distinct upon the subject of the terms. He says, “ these were the “ terms upon which the invoice was to be filled.” The question was then put to him, “ can you swear positively “that you communicated to the defendant that you were “ to purchase on the terms enumerated, &c.,” and he answered, “yes;” and being asked why, he said, “simply ■“ because it is our usage. I went immediately down when “the order came.” It is true, he added, “I have no distinct recollection of ever communicating these terms “ personally,” but this means no more than that he testified to an invariable custom, although he did not recollect the -particular occasion. The defendant, on his examination, undertook to deny the notice, but did not testify what the terms of the contract actually were. In his answer, also, although controverting the business of the plaintiffs, as described by them, he does not -undertake to say what it was. There is not the slightest evidence in the case that the plaintiffs were either hardware merchants or manufacturers ; the only evidence offered establishes that they were commission merchants; and the defendant, on his examination, does not undertake to deny it. The letter of 27th October, notifies the defendant that his order is contracted for at certain prices,, to which he makes no objection. Under such circumstances, to infer that the defendant believed that he was buying goods of the plaintiffs, instead of employing them to buy them, would be utterly unwarrantable as a violation of all probability. I -shall therefore' be justified in assuming that they acted as agents, notwithstanding that, being in England, where their principal was not known, they may have paid for the goods. . It would be a novel doctrine that everything for which any one paid at the request of another, became the absolute property of the former, and the loss of it was entirely at his risk.

Assuming that these parties stood in the attitude of principal and agent to each other, the duty of the plaintiffs was manifest, to obey any orders of the principal as to the transmission of the goods, and in the absence of such orders to transmit them in the usual, way. Hone of the liabilities or duties of a factor, to whom goods are consigned for sale, devolved upon them. They were not bound to insure, as the goods were to be but transiently in their possession; it was the duty of the principal to provide for that.

But the defendant directed the plaintiffs to ship at the lowest rate of freight, and in the first of the line of ships prescribed, that sailed after the fall in rates. There was no difficulty in the defendants insuring the goods by an open policy, without knowing in what vessel the goods were to arrive; they did so as to other risks, and there was no danger of loss of the premium, if the risk never attached. Unless they relied on their ability to do so, they should have directed the plaintiffs to insure.

The learned Justice before whom the cause was tried, charged the Jury that it was the duty of the plaintiffs to notify the defendant of the shipment in a reasonable time after it was completed; and the verdict was rendered upon that point in favor of the plaintiffs. Ho exception was taken to the charge upon that point, nor was any request made for a different instruction; and there is sufficient evidence to support the verdict.

But it is said that the plaintiffs must fail to recover, because they failed to procure insurance by the carrier ; this would make the contract entirely conditional, depriving the plaintiffs of the right of recovering money paid for the defendant’s use by them, because they did not have the goods insured. There is no pretense of recoupment or counterclaim here. If the defendant is right, the plaintiffs could not recover, although the. defendant had received the goods, merely because they failed in their duty in one particular. The loss of the goods was without the fault of any one, and they were not rendered entirely worthless; the plaintiff would have been entitled to recover something ; the defense, therefore, should not be as a bar, but a mere recoupment or set-off.

In case of recoupment, the defendant is bound to make out his case affirmatively. The vessel in which the goods were shipped was of the line prescribed; the bill of lading was such as they chose to give; they could not be compelled to alter it and assume other risks, such as those undertaken by underwriters; and there is no evidence that the contract was out of the usual course, or that the plaintiffs could have got any better, so as to become chargeable with negligence. The rates of freight as prescribed, was to be the lowest, so that any additional sum for insurance was probably deducted; there is, therefore, no reason for dissatisfaction with the charge of the Court on that point.

The evidence offered in regard to customs of hardware merchants could not affect commission merchants; the rule of vendor and vendee is entirely different from that of principal and agent. A vendor whose contract is not fulfilled until the goods sold by him are entirely under the control of the vendee, stands in a different position from the agent who has acquired the property for his principal, and may still have duties to perform in regard to it before he can earn his commission. That evidence was properly excluded.

There being, therefore, no- errors in the rulings of the Court or the exclusion of testimony, the verdict should be affirmed and judgment given for the plaintiff, with costs.

White, J., concurred in this opinion.

Bajrboer, J., (dissenting.)

The order for the goods in this case, which must be considered as the contract between the parties, is, in the usual form of orders given by one merchant to another, and the only member of the plaintiffs’ firm who conversed with the defendant upon the subject has no distinct recollection that he communicated to him the terms upon which the invoice or order was to be filled. Indeed, there is no evidence in the case to show that the defendant knew or supposed the plaintiffs were to buy the chains for him upon commission. That, however, is not very important, inasmuch as it is clear that the goods were ordered from the plaintiffs, and that they, in fact, purchased them in the name of their own firm, or upon their own responsibility, and now seek to recover the purchase price; and, therefore, that they did not act in the transaction as mere agents for the defendant. For the purposes of this suit, the parties may be considered as vendor and purchaser.

The plaintiffs, under the order given to them to forward the goods by packet, and the undertaking on their part to execute that order, were required to do more than merely to send such goods on board the ship. They were also bound to perform all such acts, incidental to the shipment, and customary among persons in that business, as would render the same effective and beneficial to the owner; such as taking a bill of lading, and sending forward an invoice so that the articles could be entered and passed at the custom house here. The taking of the bill of lading may be considered a part and parcel" of the shipment itself, as such shipment would be incomplete without it. But it by no means follows that the placing of the goods on board and taking therefor a proper bill of lading was not an execution of the order to such an extent as to make the delivery to the defendant complete, even though no invoice,- bill of lading, nor advice of shipment was sent forward at that time, or even until long thereafter. The consignors, in such a case, would, doubtless, be liable to the consignee for any injury sustained by him in consequence of such omission of duty on their part, but the . delivery being complete, and the goods not having *been destroyed, but only partially injured, he could only recover such damages, in an action of this kind, by way of recoupment, and not as an absolute defense to the entire action. In this view of the matter, the exclusion of the testimony offered by the defendant to prove the custom of merchants in regard to sending forward advices of shipment and invoices was not erroneous, because the fact, if proved, would have been unimportant.

The plaintiffs were directed by the order to “ forward, “ by an early packet, giving preference to the Black Ball “ Line.” If the direction to forward had been general, without referring to any particular line, the plaintiffs would, undoubtedly, have been bound to ship the goods in the ordinary way, and upon such a bill of lading as is usual and customary among merchants and shippers, which the one taken in this case, containing as it does an exemption of the vessel from liability in case of loss by fire, is not. If the bill contains any exemption from liability, except from loss occasioned by the act of God or the enemies of the government of the country from which the goods are shipped, it is not the-bill of lading which has been recognized by the common law for centuries as* customary among merchants. It is the duty of the vendor, where goods are transmitted: to a- purchaser by a- carrier,, to exercise due ©are- and diligence so as to- provide the consignee with a remedy over against the carrier. (1 Parsons on Cont., 445, note g.; Buckman v. Levi,, 3 Camp. R., 414; Clarke v. Hutchins, 14 East, 475; Alexander v. Gardner, 1 Bing. N. C., 671; Dawes v. Peck, 8 T. R., 330.) That obligation would, in the case supposed, have rested upon the plaintiffs; and to excuse themselves for its non- ■ performance, it would be incumbent upon them to show that packet ships issuing the usual bill of lading could not be found.

I am unable to preceive that the direction to give a preference to the Black Ball Line, removes the obligation above suggested, or authorizes the plaintiffs to ship the goods otherwise than in the customary manner. They are to- give a preference to the line in question; that is, all things being equal, they are required to ship by that line. But the order no more empowers them to ship under a bill of lading containing unusual and extraordinary exceptions, than it permits a shipment by such line at an extortionate price, to the exclusion of other packet ships, offering to carry at low rates of freight. As the shipment, then, under the bill of lading set forth in the case, was unauthorized by the order, as well as in violation of the plaintiffs’ legal obligations, it follows that the goods were never delivered to the defendant, under or in accordance with his order directing the plaintiffs to foward them by packet; and, therefore, no cause of action as alleged in the complaint, has accrued to- them against the defendant.

Bor these reasons,, the verdict should be set aside as contrary to evidence, and a new trial granted.

Judgment for plaintiffs on the verdict.


author: Robertson, J.

text:
    James Patrick et al., Plaintiffs, v. Benjamin F. Metcalf et al., Defendants.
    1. The plaintiffs alleged in their complaint, that their assignors having chartered a vessel, earned freight, which the defendants, the consignees of the vessel, had collected and refused to pay over. The defendants in their answer denied that the plaintiffs’ assignors had chartered the vessel in any other way than by a charter-party, which provided that their right to any share of the freight should be contingent on the freight exceeding §25,000.

      Held, that this put in issue plaintiffs’ allegation of a charter, and that the plaintiffs must prove, either an unconditional charter, or that under the charter alleged by defendants the freight had exceeded $25,000.
    2. It seems, that one to whom a fund was rightfully payable, cannot maintain an action against another, who, merely as agent for an adverse claimant, has collected the fund on behalf of the latter, in disregard of notice from the former not to do so.
    (Before Robertson, White and Babbour, J. J.)
    Heard, June 2;
    decided October 11, 1862.
    This was an action brought by James Patrick and Alexander McDougal, to recover from the defendants, Benjamin F. Metcalf and Samuel Duncan, a certain sum of money received by the defendants from officers of the government of the United States, for the transportation of certain goods from Hew York to Mare’s Island.
    The complaint alleged that the plaintiffs were partners composing the firm of James Patrick & Co., and the defendants composed the firm of Metcalf & Duncan. That prior to July 5, 1859, a firm of Wells & Emanuel had chartered a vessel for a voyage from Hew York to San Francisco. That about that day they agreed with the United States naval storekeeper in Hew York, to transport certain goods from Hew York to the navy yard at Mare’s Island, for the sum of $1,882.84, freight and prim-age, at a certain rate of freight, to be paid to them in the City of Hew York, on the receipt of a certificate or other proper evidence of delivery at their destination. That in pursuance of such agreement, such goods being shipped on board of such vessel, Wells & Emanuel executed a bill of lading in duplicate or quadruplicate in the usual form, of which all but one was delivered to such storekeeper, and that one was retained by Wells & Emanuel as evidence of the agreement. That on the 21st of July, 1859, Wells & Emanuel assigned such bill of lading, and their rights therein, and their rights to such freight, and delivered such bill of lading and assignment to the plaintiffs, and directed the delivery of such freight to them, who had ever since continued sole owners thereof, and exclusively entitled to receive it. That the goods were transported to San Francisco, where they arrived on the 10th of March, 1860, and from thence conveyed by the plaintiffs to Mare’s Island. That in May following, the plaintiffs furnished to such naval storekeeper satisfactory evidence of the delivery of such goods at such navy yard; and he gave them a certificate that $1,849.97 was a correct charge therefor, against the United States Havy Department, and a bill for that amount was approved by the commandant of the navy yard at Hew York, and thereupon the plaintiffs became entitled to receive that sum from the United States government. That part of the sum last mentioned was due from such, government for transporting such goods from San Francisco to Mare’s Island. That the plaintiffs demanded the whole sum and the defendants forbade its payment, in consequence of which the navy agent refused to pay the same. That the defendants had notice of the assignment to the plaintiffs prior to August 20th, 1860, and the defendants were required to pay all the moneys they should receive for such freight to them, and that they would be held personally responsible therefor. That about the 17th of September following, the defendants wrongfully obtained from the United States navy agent at Hew York the sum claimed by the plaintiffs for transportation of such goods to the navy yard at Mare’s Island, and have been requested to pay the same to the plaintiffs, but have always refused.
    The defendants in their answer, controvert and put in issue the allegation in the complaint, as to a charter to Wells & Emanuel, of a vessel, except as stated in such answer; also, the making of any agreement with Wells & Emanuel for the transportation of goods, as set out in the complaint. They therein deny any shipment of such goods, according to such agreement, but aver their shipment by the United States storekeeper, under the charter set up in the answer, the execution of a bill of lading by the defendants, as agents of the master of such vessel, which was delivered to Wells & Emanuel, and the transportation of such goods under such bill of lading. They therein controvert the delivery of any bill of lading by Wells & Emanuel, and deny that it was binding on such vessel. They also therein controvert the assignment to the plaintiffs, and deny any right of Wells & Emanuel to pledge any bill of lading. They further admit therein that the plaintiffs were consignees of the ship at San Francisco, and as its agents, attended to the delivery of the cargo and collection of the freight, forwarded such goods to Mare’s Island, and received a certificate of due delivery thereof, except a small part, valued at thirty odd dollars, for which services they have "been paid by the owners of such vessel, $625; that the residue of the freight collected by them for such owners, did not amount to $25,000, but only to $22,900; the amount of freight for transporting such goods was $1,849 leaving $749 fof, and still due to make up $25,000. They also avdfc therein the refusal of the United States to pay the plaintiffs such freight or Dadmit any liability to them therefor; and the commandant of the navy yard approved a bill made out to the master of the vessel, whereby the ¡Navy Department became bound to pay such freight to such master, and the defendant received such sum as his agent. They deny the right of Wells & Emanuel to assign such freight.
    The charter set up in such answer, and which is the only one admitted thereby, was one made by Wells & Emanuel with the owners of the vessel, (the B. D. Metcalf,) by which it was agreed that such vessel should perform a voyage from Hew York to San Francisco ; that Wells & Emanuel should procure for her a cargo at a rate of freight so as to amount, in the whole, to $25,000; that bills of lading should be executed by the master, who should, through his consignees, collect the freight when earned, and apply the same to paying such sum of $25,000; and, if, after paying that sum and all expenses of loading such ship, chargeable to Wells & Emanuel, and a commission of five per cent to them, there should be any residue of freight money, it was to be equally divided between the owners .of the vessel and Wells & Emanuel.
    On the trial the plaintiffs produced an instrument in writing, dated July 8th, 1859, signed only by Wells & Emanuel, “for the captain,” purporting to be a bill of lading of the goods in question, as shipped on board of the B. D. Metcalf, bound for California, for certain freight, .amounting to $1,882 -nfo- A witness, one of the firm of Wells & Emanuel, (Amos G-. Wells,) testified that his firm ■procured from the United States naval storekeeper the freight mentioned in such instrument, and that the same was shipped on board of such vessel in the first part of July, 1859, and that they shipped other goods on their own account, being a general assorted cargo, and that the vessel sailed from Yew York in October, 1859; that the plaintiffs have a house in San Francisco; his firm made the negotiation with the naval storekeeper for the shipment of the goods; he also testified to the signature of his firm to the supposed bill of lading, and an indorsement by them thereon, made on the 21st day of July, 1859, directing the freight to be paid to the plaintiffs’ firm, and the payment of $1,500 to him, for such order, by that firm.
    It was admitted that such bill of lading was brought into Court from the naval storekeeper’s office. A clerk of the plaintiffs’ (Henderson) testified that one of- the plaintiffs delivered it to him about the end of April, 1860, and he took it to the naval storekeeper; afterwards obtained a port-warden’s certificate, and some days afterward freight bills in triplicate, certified by the commandant of the yard and the storekeeper, one of which was produced in the form of a bill against the United States Yavy Department; the certificate stated the charge to be correct; on it an order for such freight was indorsed, signed by Wells & Emanuel in favor of the plaintiffs. A clerk in the navy agent’s office (Blood) proved that the defendants claimed the amount of the freight soon after the delivery of the freight bills, and their prohibition of its payment to the plaintiffs, and that they received the amount in September, 1860, as attorneys of the captain of the vessel, upon a bill made out in his favor. The defendants’ counsel admitted the execution, by certain persons, of a bond of indemnity in favor of the United States, in which it was recited that it had been agreed to pay such freight to the master of the vessel on his giving indemnity. A notice, demanding the freight received of the defendants, was also proved to have been served on them on the 18th of August, 1860.
    The only evidence offered by the plaintiffs of any charter to Wells & Emanuel, was the allegation to that effect in the complaint; so also the only evidence of their causing the goods in question to be transported to San Francisco, and afterwards to Mare’s Island, at the expense of the plaintiffs, and of the receipt by the latter of certificates of due delivery, and of the amount of freight, consisted of the allegation in the complaint and admission in the answer to that effect, and of the furnishing of such certificates to the naval storekeeper at Kew York.
    A certificate of due delivery at Mare’s Island, indorsed on such bill of lading, was also read in evidence.
    The counsel for the defendants moved to dismiss the complaint, which motion was granted; and an exception which was taken to such decision was ordered to be heard first at General Term.

      George N. Titus, for the plaintiffs.
    I. The order of Wells & Emanuel indorsed upon this bill of lading, which was delivered to the plaintiffs in July, * 1859, was a valid, equitable assignment of this freight money, and entitled them to receive the same from the U. S. government, when earned.
    (1.) It was an order for value upon the government for the payment of this freight, in accordance with the agreement of its authorized agent. Kotice of this order (the order being indorsed on the bill of lading) was given to such agent by the plaintiffs in April, 1860. (2 Story’s Eq. Jur., § 1044; Lett v. Morris, 4 Simons, 607; Ex parte South, 3 Swanst., 392; Burn v. Carvalho, 4 Mylne & Craig, 690, 702; Yeates v. Groves, 1 Vesey, Jr., 280; Smith v. Everitt, 4 Bro. Ch., 64; Morton v. Naylor, 1 Hill, 583.)
    (2.) An assignment of freight, to be earned in futuro, is good in equity, and will be enforced against the party from whom it becomes due. (In re Ship Ware, 8 Price, 269; Douglass v. Russell, 4 Sim., 524; 2 Story’s Eq. Jur., § 1055.)
    (3.) Ko particular form is necessary to constitute an assignment of a debt in equity. Any order which makes an appropriation of it is sufficient. (2 Story Eq. Jur., § 1047.)

      The order in this case was a valid assignment of this freight money to the plaintiffs. (2 Story Eq. Jnr., § 1044.)
    II. Upon the delivery of this order to Mr. Herrick, the naval storekeeper at the Brooklyn Navy Yard, he and the government agents, having notice thereof, became
    accountable to the plaintiffs for the debt then due for this .freight. The money appropriated by the government for its payment, was a trust fund for the plaintiffs, upon which they had an equitable lien. (2 Story Eq. Jur., § 1041.)
    In equity the assignee of a debt may enforce its payment by action directly against the debtor, although he may not have assented to its assignment, (2 Story Eq. Jur., § 1057; Lett v. Morris, 4 Simons, 607, and cases cited under first point;) and against any third party, who, having no superior rights, may have obtained the money appropriated for its payment. (Story v. Lord Windsor, 2 Atkyns, 630; Shepherd v. McEvers, 4 Johns Ch., 136; Munsell v. Lewis, 2 Denio, 224; 2 Story Eq. Jur., §§ 1057, 1058, 1059; Bradley v. Root, 5 Paige Ch., 632, 641, 642.)
    III. In this case the defendants, without color of right, and with full notice of the assignment of this debt to the plaintiffs, intervened and obtained from the navy agent in New York the money appropriated by the government to its payment, which the plaintiffs were entitled to.
    For the amount so received by the defendants they are liable to the plaintiffs, at law, as well as in equity. (2 Story Eq. Jur., §§ 1055, 1056.)
    (1.) At law an action for money had and received, which is an equitable action, lies against a party who has obtained money which, in equity and justice he ought not to retain. (Munsell v. Lewis, 2 Denio, 224; Fairbanks v. Blackington, 9 Pick., 93; Heard v. Bradford, 4 Mass. R., 326; Allen v. McKeen, 1 Sumner, 317; Durdon v. Gaskill, 2 Yeates, 268.)
    (2.) No privity of contract between these parties is necessary to support this action, save that which results from the defendants having possession of this money, which they have not a right conscientiously to retain.

      The law, in such case, raises a promise that the receiver will pay, and that without a previous request. (1 U. S. Digest, (Assumpsit,) 285, § 415; Mason v. Waite, 17 Mass. R., 563; Hawley v. Sage, 15 Conn. R., 52; Norton v. Coons, 3 Denio, 130.)
    (3.) The defendants are liable to the plaintiffs for this freight money, although they may have claimed the same on behalf of the captain of the ship, and as his attorneys. They had notice of its assignment to the plaintiffs, and that they would be held responsible for this money before they collected it. (Garland v. Salem Bank, 9 Mass. R., 408; Frye v. Lockwood, 4 Cow., 454.)

      E. C. Benedict, for defendants.
    I. The complaint does not show a cause of action against the defendants. 1. Wells & Emanuel did not as'sign any claim against the defendants. They had no claim against them to assign. 2. The plaintiffs had no claim, except against the shipper, and that claim could not be released or impaired by the defendants. 3. Between the plaintiffs and the defendants there was no privity, connection, or relation. They were strangers. 4. If the defendants were entitled to the money,- they cannot be compelled to pay it to the plaintiffs. If they were not entitled to it they are only responsible to return it to the shipper from whom they got it. 5. If the plaintiffs were entitled to it from the shippers they are so still—the shippers having paid it to the defendants, did so in their own wrong, and could not set up that wrong against the plaintiffs’ right.
    II. On the proofs the <5ase is weaker than on the complaint. The pretended cause of action is disapproved.
    1. The freight did not belong to WellS & Emanuel, but to the owners of the vessel. 2. It was not collectible by Wells & Emanuel, but by Stetson, the master. 3. Wells & Emanuel had thus no right to collect the freight, or to assign it, or to order it paid to the plaintiffs. 4. It was not collected by the defendants, but by the owners of the vessel, through' Stetson, the master, for whom the defendants only acted as attorneys in fact. 5. Wells & Emanuel had no right to make and sign a bill of lading. The paper made and signed by them was not, in fact or in law, a bill of lading, and conferred no right on them to collect the freight. 6. The order to pay the money to the plaintiffs gave them no right to enforce the payment of the freight. It was but an order, and was not accepted by the captain, or the owners, or the defendants.
   Robertson, J.

There was no proper evidence in this case of any charter of the vessel in question, entitling the plaintiffs to any freight, and it was not pretended that Wells & Emanuel had any other authority to collect it than the charter in evidence. The allegation in the complaint, of a charter, was distinctly put in issue by being controverted in the answer. (Code, §§ 149, 168.) If the plaintiffs wished to avail themselves of the adrnission in such answer of a charter containing the particular provisions therein alleged, he should have read it, and it would then have been evidence for the defendant of such provisions, (Dorlon v. Douglass, 6 Barb., 451; Stuart v. Kissam, 2 Id., 493,) and its effect would be confined to the issue raised. (Robins v. Maidstone, 4 Q. B., 811.) The specific denial of any other charter but that admitted, puts in issue the existence of any other charter giving the plaintiffs the right to the freight. (Troy & Rutland R. R. Co. v. Kerr, 17 Barb., 581; Swift v. Kingsley, 24 Id., 541.) The charter set up in the answer, if it be the one relied upon by the plaintiffs, gave them no right to freight unless that exceeded 25,000 dollars and expenses, of which there was no proof in this case, and such.proof, upon that charter, the plaintiffs were bound to give.

There was evidence in this case, that Wells & Emanuel procured the freight for the vessel, and made the negotiation with the United States navy agent for the shipment of the goods in question to Mare’s Island, but they signed the bill of lading as agents for the captain, and only-claimed to be entitled as charterers to the freight. That bill of lading was only signed by Wells & Emanuel, and not by any officer of the United States government, and was kept in their possession until April, I860,- when they sent it to collect the freight on it from the government officers, and left it in the naval storekeeper’s office; no obligation was therefore imposed on the United States government or officers by that document; there was no evidence that they ever assented to its terms or agreed to pay Wells & Emanuel the freight; indeed, the agreement, if any, is professed to be made for the captain of the vessel. There was, therefore, no agreement by the naval storekeeper to pay them the freight established.

The answer also controverts and puts in issue any shipment of the goods in question, pursuant to any agreement with Wells & Emanuel, and avers they were put on board in pursuance of the charter set up in the answer, and a bill of lading given therefor, in the name of the master, by the defendants as his agents. This is far from admitting any liability by the United States officers to Wells & Emanuel.

The complaint alleges that Wells & Emanuel caused the goods in question to be conveyed to San Francisco, and from thence they were taken at the plaintiffs’ expense and by their procurement, to Mare’s Island, and delivered to the proper officers. The answer only admits that 'they forwarded them as agents of the ship, and alleges they were paid six hundred and twenty-five dollars therefor. It is true the defendants have not denied that they carried them otherwise than as agents, but the plaintiffs did not claim that their allegation was not controverted, but only that it was admitted.

Besides the defects in the plaintiffs’ evidence, there is a fatal objection to their recovery against the defendants. The latter claimed only as agents of the captain of the vessel, (Stetson;) the bill against the government was made out in his name; the receipt was signed by them as agents for Mm, and the bond of indemnity was given for the payment to him; it was the same thing as if the money had been paid into his hands. I do not see how any notice to them not to collect as such agents, can make them • liable. The money had no earmark in the possession of the United States officers; never became the plaintiffs’ until it was paid over to the captain; was not converted by the defendants as the plaintiffs’ property. If they are responsible, every clerk sent by his employer to collect a bill claimed as due to the latter, is responsible to a third party for the money he may receive, if he happens to know that such third party claims to be paid for the same services. I do not see that the defendants, having received the money for the captain, could interpose as a defense to a suit by Mm, that the plaintiffs were entitled to it, or how, having been employed by him, they could be converted into agents for the plaintiffs.

These considerations are sufficient for the disposition of the case; the remaining question of the right of a party to sue another, with whom he has no privity, for money paid the latter by a supposed debtor, upon an. adverse claim, if that debtor be the Federal Government, need not be considered. It may, however, be noticed that neither the case of Munsell v. Lewis, (2 Den., 224,) nor Bradley v. Root, (5 Paige Ch. R., 632, 641, 642,) if closely scrutinized, will be found to go that length; there was privity with those cases, between the claimants, and the question itself was not discussed. No authority or reason can be shown for any general principle that any one can sue another for money paid by a third person to the latter, on a claim of right by him, merely because the second claimant ought to have been paid the same amount, for the same cause, by the same person, where there is no pretense of trust or authority, by the recipient, for such new claimant.

For the reasons before mentioned, the judgment should be affirmed, with costs.

White, J., concurred in tMs opiMon.

Barbour, J. I concur in the conclusion; but only upon the ground that the plaintiffs failed to prove the "unconditional charter set up in their complaint.