author: Woodruff, J.

text:
    William H. Whitford, administrator of the goods, &c., of Jeremiah N. King, plaintiff and appellant, v. The Panama Railroad Company, defendants and respondents.
    1. An action cannot be maintained in this state, by force of the statutes of 1847 and 1849, by the representatives of a deceased person to recover damages for causing the death of such person by wrongful act, default or neglect, when the act causing the death occurred without the state.
    2. Those statutes, when they apply, make no difference between the cases in which the wrongful act or negligence involved also a breach of contract, and those in which it constituted a naked tort. A common carrier cannot, therefore, be held liable to such an action, where the death was caused without the state, upon the idea that he has broken his contract to carry safely.
    3. By the common law no action would he for an injury to the person which caused death, and those statutes, in contravention of the common law, are special in their nature, designed to regulate the rights and responsibilities of persons on our own soil, and not to protect persons in foreign countries. They are not founded in any general maxims of jurisprudence of presumed universal application: and there is, therefore, no presumption that the law of the foreign country is the same.
    4. And our statutes have no extra territorial force to define or declare the legal character or effect of an act done in such foreign state, or annex to it responsibilities which do not there attach to it.
    5. A corporation created by the laws of this state, and by its charter authorized to construct and maintain a railroad in a foreign state, is no more liable, under the statutes above referred to, than a natural person would be for a wrongful act or neglect causing a death in such foreign state.
    Such a corporation exercises the privileges conferred by the charter (if permitted to do so by the foreign state), subject to the responsibilities imposed by the laws of such foreign country, and our courts cannot presume that such statutes exist therein.
    (Before Duer, Oh. J., and Woodruff, J.)
    Heard, October 16th, 1857;
    decided, April 24th, 1858.
    Appeal from a judgment for the defendant, rendered at Special Term, May 19, 1857, before Mr. Justice Bosworth, on demurrer to the plaintiff’s complaint.
    The complaint was as follows:

      City and county of Hew York, ss:
    The complaint of William H. Whitford, administrator of all and singular the goods, chattels and credits which were of Jeremiah H. King, deceased, plaintiff in this action, respectfully shows to this court—
    That the defendants are a corporation, incorporated by the name of The Panama Railroad Company, under and by virtue of an act of the Legislature of the State of Hew York, entitled “ An act to incorporate The Panama Railroad Company,” passed April 7th, 1849.
    That the defendants, being such corporation, are, and at the time of committing the wrongs and grievances hereinafter complained of, were common carriers, and the owners of a certain railroad, with the cars, engines, machinery and equipments thereof, known by the name of The Panama railroad, and which said railroad is located on the Isthmus of Panama, in the republic of Hew Granada, and connects the town or city of Aspinwall, with the town or city of Panama, both in said republic. And that the said defendants, at the time of committing the wrongs and grievances hereinafter complained of, were and still are engaged in the business of transporting passengers and merchandise, as common carriers in their said cars, and over their said road, and that they then had and still have their principal office and place of business in the city, county and State of Hew York.
    And the plaintiff further shows, that on or about the 20th day of April, 1856, at the said city of Hew York, the said Jeremiah H. King, depeased, took passage from Hew York to San Francisco,, by the way of Panama, and over the defendants’ said railroad, and paid his fare for such passage, and that on or about the 6th day of May, 1856, the said Jeremiah H. King, deceased, was such passenger in the cars, and upon the said railroad of the defendants, and was to be, and ought to have been, transported and conveyed in safety by the said defendants, from the said town of Aspinwall to the said city of Panama, on his way, with other passengers, from the city of Hew York to the city of San Francisco aforesaid, and that by reason .thereof the said defendants ought to have conveyed, or caused the said Jeremiah H. King, deceased, to be conveyed in their said cars, and over their said railroad on the aforesaid journey in safety; yet the said defendants, not regarding their duty in that respect, so carelessly, negligently and nnskillfully conducted themselves, that by and through the carelessness, neglect and unskillfulness of the said defendants, or their servants or agents, or from the want of due care or attention in that behalf, the said train of cars, in one of which was the said Jeremiah N. King, deceased, as such passenger, while in motion upon the track of the defendants’ said railroad, and when not far distant from the said town of Aspinwall, ran off, or were thrown off the track of said railroad, and was broken with great violence, and the said Jeremiah N. King was thrown from his place in one of said cars with great violence and was greatly injured and wounded, and divers bones of his body were broken, or he was otherwise bruised, mangled and injured, so that the said Jeremiah N. King, deceased, after receiving the said injuries in the manner above described, lingered for a short time in great pain, and then died at the said town of Aspinwall, on or shortly after the 6th day of May, 1856, and that his death was caused by the injuries above mentioned.
    And this plaintiff further shows, that the said death of the said Jeremiah N. King, deceased, was caused by the wrongful act, neglect or default of the said defendants, or their servants or agents, and that the said wrongful act, neglect or default was such, that the said Jeremiah N. King, deceased, could have sustained an action against the said defendants for the damages occasioned thereby if he had not died.
    And the plaintiff further shows, that the said Jeremiah N. King, deceased, left him surviving a widow named Mary King and six children, named respectively, Candace A., Joseph C., Ellen M., Mary A., Harriet E., and Henry W.; that the said widow is now advanced in life; that the eldest son is a cripple for life, and is incapable of earning his own support, and that the said Jeremiah N. King, deceased, did not leave sufficient property to maintain and educate the said children, and maintain the said widow in the manner in which he could have maintained and educated them if living; that the said widow and children were mainly dependent on the daily labor of said Jeremiah N. King, deceased, for their support and maintenance, and that the said widow and children, by his death, have been left in a state of comparative dependence and poverty.

      That the said Jeremiah N. King, deceased, at the time of his death, was forty-eight years of age, in good health, and was, by occupation a machinist, and enabled by his said occupation to earn about twelve hundred dollars per annum.
    And the plaintiff further shows, that the said widow and next of kin of the said Jeremiah N. King, deceased, have sustained pecuniary damages, by reason of the death of the said Jeremiah N. King, deceased, to the amount of $5,000.
    And the plaintiff further shows to this Court, that letters of administration were duly granted to the plaintiff by the Surrogate of the city and county of New York, on the 11th day of February, 1857, upon all and singular the goods, chattels and credits which were of the said Jeremiah N. King, deceased, which said letters of administration are in the possession of this plaintiff, and ready to be produced as this Court may direct.
    Wherefore, this plaintiff claims that he is entitled, as administrator aforesaid, to recover from the said defendants' the damages as aforesaid; and he prays judgment against the said defendants for the sum of $5,000, besides the costs of this action.
    The demurrer to this complaint was in the words following, viz.:
    “ The defendant The Panama Railroad Company, by Eaton & Davis, attorneys, demurs to the complaint in the above entitled action; because it appears upon the face thereof.
    “ Firstly.—That the Court has no jurisdiction of the subject of the action.
    “ Secondly.—That the said complaint does not state facts sufficient to constitute a cause of action against the defendant.
    “And the defendant states, as the grounds of objection to the said complaint, and of his demurrer, as follows :
    “That it appears upon the face of said complaint that the death of the said Jeremiah N. King was caused by the wrongful act, neglect, or default of the said defendant, on the Isthmus of Panama, in the republic of New Granada, and out of the State and jurisdiction of New York, and that no statute or law is in force in the State of New York which gives to the plaintiff against the defendant any right of action, by reason of anything alleged in said complaint.” .

      This demurrer was heard at the Special Term, and the following opinion was there delivered:
    “Bosworth, J.—The statutes of this state have not, ex profirió vigore, any extra territorial force. They-operate upon and affect persons only by reason of such acts as are done within its jurisdictional limits. They do not give a right of action for acts done out of its jurisdictional limits, when such acts would not create a right of action by the common law, and do not create one by the laws of the country in which they were committed.
    “ The acts complained of did not, by the settled rules of the common law, as recognized and enforced in this state and England, create a right of action which would survive the decedent.
    “ It is not alleged that any such right of action was created or existed by the laws of New Granada. No authority has been cited which justifies the court in presuming that a right of action existed there which is unknown to the common law.
    “ The statute of December the 13th, 1847, as subsequently amended, creates a new right of action and furnishes a new remedy for certain acts which it specifies. These statutes cannot subject parties guilty of them, out of the territorial limits of the state, to any liability which would not exist had no such statutes been passed.
    “If a contrary doctrine should prevail, persons while out of the state, for acts done out of it, and not only not inhibited, but expressly permitted by the law of the place, might, if subsequently found in this state, be subjected to a recovery for damages. (See Campbell, administratrix, &c., v. Rogers et al., vol. 9, Law Rep., N. S., 329, and cases there cited.)
    “Judgment must be given for the defendants on the demurrer.”
    From the judgment entered in conformity with the foregoing opinion, the plaintiff appealed to the General Term.

      L. R. Marsh, for the plaintiff, appellant.
    I. The defendants are admitted to be a domestic corporation, created under the laws of the State of New York. To the laws of this state they owe their origin, their existence, and are more essentially the subject of the law than a natural person.
    Their existence, franchise, immunities and privileges are the gift of the law, and it would be an anomaly to hold that they are independent of or exempt from the control of the power that created them.
    The acceptance of chartered rights and privileges by the defendants created an obligation and imposed a duty on the part of the defendants to hold themselves at all times amenable to the laws of the state, as then existing or as might subsequently be enacted.
    II. The defendants are a domestic corporation, their local existence, their chief place of business, their domicil is in the city and State of Hew York, and if by the permission of the law they are enabled to transact business in other states or countries, it can only be subject to the effect and operations of the laws under which they are so acting. The defendants are not migratory or transitory in their character, but are supposed to be constantly within the jurisdiction of our law — to have no existence ; to be capable of no act; to have no corporate powers beyond or out of the jurisdiction of the power that created them.
    A natural person has rights independent of law: he may remove himself from the jurisdiction of one state to another, he may transfer allegiance, and wherever he may go certain natural rights will follow him; but not so with that artificial being— a corporation.
    III. The plaintiff is a resident administrator, appointed by the Surrogate of the city of Hew York. He is amenable here to the law of distribution. He does not come into Court to enforce the law of another state or country.
    1. The statute in question is a remedial and. not a penal statute: everything must be done by the Courts in advancement of the remedy (3 Dow, 15; Sedgw. on Stat., 390).
    2. The plaintiff in this action does not seek to enforce any penal statute of this state for acts committed elsewhere, nor yet does he seek to enforce in the Courts of this state the penal laws of another. The authorities relied on by the defendants falling within these two classes, are not applicable to this case.

      IV. This action is founded upon contract, and is brought to recover compensation or damages for the breach or default on the part of the defendant of that contract.
    It is admitted that Jeremiah N. King, the decedent, purchased his ticket in the city of New York from the authorized agents of the defendants, for his passage from the city of New York, by way of the Panama railroad, to San Francisco, in the State of California.
    1. By that-act (the purchase and sale of the ticket), there arose between the parties a contract or obligation by which the defendants agreed and undertook, in consideration of the payment of the purchase money by the said Jeremiah N. King, to transport him in safety from New York to San Francisco.
    2. And for their breach of that contract or obligation they are properly responsible, according to the law of the place where made.
    3. The Court must hold that such contract, in the absence of contrary evidence, was made and entered into by the defendants with special reference to the laws of the State of New York as existing at the time; and the statute in question was one of thelaws.
    4. There is no principle better settled than the one applicable to this point, that parties making a “ contract must be presumed to be conusant of the laws of the place ” where they then are, “ and to expect that the contract is to be judged of, and carried into effect according to these laws.” (Story on Conflict of Laws, § 278: “ The law of the place is the law of the contract; ” Oh. J. Marshall, 20 Martin R.)
    5. Arid the contract in this case, on the part of the defendants was, that if Jeremiah N. King would purchase a ticket from them, and pay the passage money therefor, they would transport him in safety from New York to San Francisco by the way of their railroad; and if he should be killed by any neglect of theirs, they would pay to his personal representatives such sum as compensation for his death as a jury might award, not exceeding $5,000.
    V. It is claimed by the defence, that the New York statute, under which this action is brought, can have no application or force beyond the limits of the state enacting it.

      In answering this proposition, we premise that whatever the rule is, it is equally applicable to statute and common law. There is no distinction, in this respect, between those laws of a state which derive their force from legislative enactments, and those which have grown into law by immemorial prescription.
    We may also state, that whatever the rule shall be found to be, it is the same between the different states of this Union, as between one of those states and a foreign country. (Sedgwick on Statutes, p. 74, and cases cited.)
    1. How we grant that the laws of a state or country have no force propria vigore, in another state or country; the meaning of which we understand to be, that those laws cannot, of their own vitality and power, demand enforcement upon the territory and by the Courts of another state or country.
    But the question, as here, is a very different one, when it arises in the courts of the country, whose laws are sought to be enforced, though for acts beyond the limits of that country. The question here, is not whether Hew York law can be enforced in Hew Granada (which is the question defendants argue), but whether Hew York Courts, on Hew York soil, will enforce Hew York law, as against this corporation, over which they have jurisdiction—for negligence in doing certain acts in Hew Granada, which it was authorized to do, solely by virtue of its charter granted by Hew York.
    2. This corporation cannot escape from the jurisdiction of Hew York.
    Its charter creates it a body corporate with power, and for the purpose of constructing and maintaining a railroad in Hew Granada. (Session Laws, 1849, p. 407, § 1.) Its directors are to be chosen in the city of Hew York (§ 3). It has power to hold lands in Hew Granada (§ 7).
    The corporation, therefore, though it may reach its arm over into Hew Granada for certain authorized' purposes, yet cannot itself go there. It cannot get away from Hew York. Its origin was here; its charter is here; its head-quarters are here; its office here; its elections must be held here; it is never out of the jurisdiction of Hew York. A natural person may go away entirely; but this legal entity is fast. It may work by its agents abroad; itself is here. It stands in Hew York and reaches into New Granada, and it reaches there only by permission, and subject to the laws of New York.
    A corporation can only act out of the state creating it by comity of such other state or country, and then can only do . such acts as its charter authorizes (13 Peters, 584, 592). Whatever life, therefore, it carries abroad it derives from the law of the state creating it. Shall it, then, walk across the state line, carrying all its power, but exempted from all responsibilities ? Would it not be a strange doctrine, that the State of New York can give permission and authority to this corporation to do certain acts in a foreign country, and yet have no power, as between itself and the corporation, to regulate the mode in which it shall perform those acts, and the terms of its liabilities for negligence in doing them. Suppose the statute under which this action is brought had been embodied- in the defendants’ charter, and made specifically applicable to it, can there be any doubt of the power of the Courts of this state to enforce it? But it is equally binding now, as it was the law of the state applicable to all corporations at the time of the act incorporating defendants. Suppose the defendants had committed in New Granada any of the acts which, by the law in this state applying to all corporations would forfeit its charter, could not such forfeiture be enforced here ?
    3. When the question comes up in its own Courts, the state may regulate the rights, duties and obligations of its own citizens, wherever they may be. (Story on Conflict of Laws, § 540.)
    If this is true as to natural persons, who have certain rights independent of the state, it is yet more applicable to a legal entity, dependent altogether upon the laws of the state for its very existence. (Story on Conflict of Laws, § 21.)
    4. Laws of one state or country are often, by comity, considered to extend over foreign territory.
    a. As in the case of ships. (Wheaton’s History Law of Nations, 723, 724.)

      b. As in the case of marriages. (Wheaton’s Law of Nations, 724. )
    c. As in cases of assignments of foreign bankrupts (except now when it interferes with the rights of citizens). (Story, § 37; 1 Seld.,-340, 344.)

      d. As in the case of corporations, which, though deriving life only by statute of the state creating them, may yet, so far as that statute permits, exercise their functions, where not opposed by positive law, in another state. (18 Peters, 584, 592.)

      e. If it is true, as defendant contends, that the statutes of New York, the moment they overstep the state limits, have no extra territorial force, but are utterly powerless, then by what authority does the defendant, by force of New York statutes, carry on its functions in New Granada ?
    If, as may be presumed from the fact that said corporation is not obstructed there, New Granada, by comity, permits this offspring of New York statute to exercise its powers there, it must also be presumed that that is subject to all the laws of New York affecting said corporation.

      f. The laws in one state or country may not be presumed to be permitted, by the comity of another state or country, to extend over its territory, when the same are injurious to its people. E converso, where they are beneficial. The statute in question is certainly beneficial, requiring this corporation to beware of negligence in the discharge of its duty in New Granada.

      D. B. Eaton, for the defendants (respondents).
    I. Prior to the New York statutes of 1847 (Laws 1847, p. 575, ch. 450), and 1849 (Laws 1849, p. 888, ch. 256), giving an action to the next of kin, &c., of persons killed by negligence, under certain circumstances stated in those acts, the next of kin or personal representatives had not any right of action against those who should by negligence cause the death of a human being. No such right of action is recognised by the common law, or by the laws of New York.

      Actio personalis moritur cum persona, &c. (Broom’s Legal Maxims, p. 558; Chitty on Pleadings, pp. 68, 69; Statute, 9 and 10, Viet., ch. 93, p. 531; Cory, &c., v. The Berks. R. R. Co., 1 Cush. Rep., 475; Pack v. The Mayor, &c., 3 Comst. R., 493, disapproving, 20 Wend., 210; Higgins v. Butcher, 1 Brownlow, 205; Stafford v. Drew, 12 N. Y. Legal Obser., May, 1854, p. 150; Worley v. The Cin., Ham. & Day., &c., Co., 1 Handy’s Oh. Rep., 481; Campbell v. Rogers, 2 Handy’s Oh. Rep.; 21 Barb., 245; 3 Duer, 637; 1 Cush., 475 ; 9 ib., 105, and 180; 10 S. and R., 31; 14 B. Monroe, 204.)
    II. The before cited statutes of Hew York, on which alone an action could be maintained, had the death been caused within the State of Hew York, are exclusively inter-territorial in their application, and no action upon them can be maintained in Hew York, when the negligent acts charged as causing the death happened out of the State of Hew York, and in the dominions of a foreign state.
    Ho question is made in this case, but a Court may presume the common law of a foreign state relative to absolute personal rights to be the same as in Hew York; and treating the invasion of such rights as a transitory cause of action, the Courts of Hew York may sustain a suit for redress; but what is denied is, that when the right of action only arises by statute in Hew York, that statute can be a foundation of an action, when the acts of negligence for which the statute gives the action did not occur in the State of Hew York. (Poison’s Law of Hations, 62 Eng. Law Lib., N. S. P., 23; Phillimore on International Law, 67 Law Lib., N. S. P., 356; Story on Conflict of Laws, §§ 7, 8, 18, 20, 29, 31, and 539, 540, 621; Hoyt v. Thompson, 1 Seld. Rep., 320, 340; Scoville v. Canfield, 14 Johns., 338; Hunt v. The Town of Pownal, 9 Vermont, 411, 417; Blanchard v. Russell, 15 Mass. Rep., 14; State v. Knight, 1 Taylor Term Rep., 65; Inhs. of W. Cambridge v. Inhs. of Lexington, 1 Pick. Rep., 506; Pickering v. Fisk, 6 Vermont Rep., 102; Commonwealth v. Clary, 8 Mass. Rep., 72; 1 Equity Cases, abridged, 288; Ferrett v. Bartlett, 21 Vermont, 184, 189; Holmon v. Johnson, 1 Cowper Eep., 341; Indiana v. Johns., 5 Ohio, 217; The Antelope, 10 Wheaton, 66, 223; Champion v. Janitzen, 16 Ohio, 91; Coodsell v. St. Louis, 16 Ohio, 178; Campbell, Sc., v. Rogers, 2 Handy’s Rep. of the Superior Court of Cincinnati, 1855 ; 6 Law Reporter, 329.)
   By the Court.

Woodruff, J.

—The liability of the defendants upon the facts alleged in the complaint is insisted upon, upon two principal grounds:

First. That the statutes of Hew York, giving an action where death is caused by the wrongful act, neglect or default of another, are of universal application, and give in this state a remedy against all who by a wrongful act, default or neglect have caused the death of any person, wheresoever the cause of death may have happened; and

Second. That those statutes are at all events applicable to every case of death so caused by a corporation created under our own statutes.

I. The question before us will be rendered more simple, if we consider the soundness of this second proposition before noticing the first, which we regard as the main branch of the inquiry.

In April, 1849, by act of the Legislature of the State of Hew York, William H. Aspinwall and twelve others, - and their associates, successors and assigns were constituted a body corporate by the name of “ The Panama Railroad Company,” for the purpose of constructing and maintaining a railroad with one or more tracks and all convenient buildings, fixtures, machinery and appurtenances across the Isthmus of Panama in the republic of Hew Granada, under the grant made by the said republic to William H. Aspinwall, John L. Stephens and Henry Chauncey, and of purchasing and navigating such steam or sailing vessels as may be proper and convenient to be used in connection with the said road, and for such purposes, all the necessary and incidental power is hereby granted to said corporation.

The charter then fixes the amount of the capital stock; prescribes the number of directors who shall manage the concerns of the company; provides that they shall be elected annually in the city of Hew York, and makes other provisions relative to voting, the payment of subscriptions, the by-laws, &c., for the management of its affairs, and by section 7, enacts, “It shall be lawful for the said corporation to contract with the said William H: Aspinwall, John L. Stephens and Henry Chauncey for the purchase of all the rights, privileges and immunities granted to them by the said republic of Hew Granada and for the purchase of the lands granted to them by the said republic, and to receive a conveyance of and hold the same in like manner as the said William H. Aspinwall, John L. Stephens and Henry Chauncey, now do or can do, and to lease or sell and convey any of such lands which the said corporation shall not deem it necessary to retain, and to build and ■ construct all such buildings, piers, docks, basins and harbors on the said lands as the said corporation may deem expedient, in like manner as the said William H. A spin wall, John L. Stephens and Henry Chauncey can do under the said grant.”

These are all of the provisions of the act which in any manner mention anything which is to be done or which may be done by the defendants upon the Isthmus of Panama; and there is not a word in the act which defines the mode or manner of the. defendants’ action within the limits of New Granada, or which prescribes the liabilities or responsibilities under which the corporation shall do the things which they are privileged to do under the grant from that republic.

It is hereupon insisted that as the defendants exist as a corporation only by virtue of the laws of this state, and hold their corporate franchise, immunities and privileges as a gift conferred by those laws, all their acts are done and all their business is transacted in subordination to all laws of this state. That in judgment of law all their acts are done within the limits of this state, because, in a legal sense, they have no existence and no power to act out of the jurisdiction of the power that created them; that, in a legal sense, they cannot leave this state, and therefore for every act, default or neglect they are responsible to all the consequences which the laws of this state impose. These suggestions, however specious or plausible, seem to us unsound in reason and untrue in fact.

First. These defendants do and may, by the express permission contained in the charter, act out of the limits of this state, and within the country of another independent government. The whole purpose and design of their incorporation was to enable them in their corporate capacity to do so. To construct and maintain a railroad on the Isthmus of Panama, is by no legal fiction to do an act within the limits of New York. It is quite true that the State of New York cannot confer power on the defendants to do this in a foreign country, without the consent of the government of that country, but it is not for New York nor her legal tribunals to say that either in theory or in fact, the defendants have not power to act in that country when the Legislature have unqualifiedly consented that they may do so. As between the two countries the act of the Legislature of this state is permissive only, but when the defendants have removed all obstacles, or received the sanction of Eew Granada, their power is full and complete, and they exist as a corporation, and act in the construction and maintenance of their railroad, in every sense, in that country, as truly as an individual citizen of Eew York would do. Whether in Eew Granada they have actually received corporate powers or enjoy corporate immunities is not at all material to the present question: Non constat but there they actas an association merely, under the fullest weight of joint liability as individuals; but that, if it were so, would not affect their present position in the courts of this state. In those tribunals they stand clothed with all necessary power, to go, by any of the instrumentalities by which they can act anywhere, and build and maintain their road in the republic of E"ew Granada; and in that they can no more be said to be acting in this state, than could one of our citizens who, residing here, should by his agents do the same thing in E"ew Granada.

In the maintenance of their railroad there, or in other words, in acting there, they do not put off the law of E"ew York, but execute the law itself; they do just what E"ew York law in express terms authorizes them to do. In a word, when this state has authorized the defendants to exercise their corporate functions in a foreign country, it is not for her courts, upon any refined theory respecting the nature of corporate existence, to say that their acts are nevertheless done within our state limits.

Second. The act of incorporation itself assumes that the Republic of Eew Granada have granted the necessary privilege, which privilege the defendants were to acquire; and the allegations in the complaint show that they are exercising the privilege which the charter intended they should acquire. We know of no principle or theory which forbids that our Legislature should confer upon an association of individuals purposing to carry on business in a foreign country, the privileges and immunities of a corporation in our own tribunals; and if this be done, it does not affect the nature of the acts done in such foreign country. It may affect the individual responsibility of the members of the association when proceeded against in our courts; but it does not make the whole responsible for ah act for which neither would be liable if no such corporate privilege were conferred. The business so authorized to be done is in every sense done in such foreign country, and done there by the sanction of our law. Whatever, therefore, may be said of the incapacity of our corporations to remove from the state, they may do what their charter authorizes them to do, where the charter authorizes them to do it. And to say that they must be deemed to do it here is to contradict the law itself, and so by theoretical construction to hold in the present case that the defendants are carriers of passengers by railroad in this state, when by the laws of this state they have no power to construct a railroad or carry passengers here at all. If there was any original principle or theory, having the force of law in this state, upon which our corporations can be said to be incapable of acting without this state, then the charter of these defendants has, as to them, repealed it.

Third. But there is no such principle in the sense in which the argument is used. Whatever the charter of our corporations authorizes them to do, they may do in theory and in fact, where-ever they please, unless such charter by its terms or by implication confines their operations within our limits. Much more may they do so when such authority is expressly given. Whether other countries will permit them to carry on their business within their limits is a question to be settled with the foreign government, and the legality of their acts done in such foreign countries, so long as they are not in contravention of their charter, are to be judged by the foreign law.

Fourth. It is true, as argued by the plaintiff, that the defendants hold their charter in subordination to our laws. But the charter itself is the foundation and.capital law under which they act.

It is also true that our laws relating in terms to corporations apply to and affect them in all their provisions.

So our general statutes apply to them and to their acts; but not otherwise than they do to natural persons. And to assume because the defendants hold their corporate franchises in subordination to our laws, that therefore they are liable for an act done in a foreign country, for which by the general rules of law they are not liable, is to beg the main question. The statute under consideration, in our judgment, most clearly applies alike to all our citizens. The granting of corporate privileges confers upon the grantee no responsibilities except those specified in the charter and such as are peculiar to corporations. All their other rights and liabilities, depending on the common law or the general statutes of the state, are enjoyed or shared in common with natural persons.

We have, therefore, no hesitation in concluding that if the present action could not be sustained under our statute against a natural person, it cannot be sustained against the present defendants. Their being a corporation created by our laws does not affect the question, and we pass therefore to the more general and main inquiry above first mentioned.

II. Whether the statutes of this state passed in 1847 and 1849 giving an action to the personal representative of a deceased, whose death is caused by the wrongful act, neglect or default of another, apply to a case in which the 'act causing such death occurred in a foreign country?

The question is thus confined to the force and operation of our statutes; the complaint in the action is framed upon the very terms and provisions of the statutes.

First. The plaintiff neither in his complaint nor in the argument of his appeal proceeds upon any idea that at the common law or upon any principles of universal justice or equity, any such action as the present could, if there were no such statute, be sustained in the courts of this state. For an injury causing death no action would lie in favor of the representatives of the deceased. To what extent compensation may be compelled by one to whom the deceased owed service, or who by reason of the injury and consequent death was put to expenses, it is not necessary to consider. Cases involving that question do not conflict with the rule that no cause of action was transmitted by the deceased to his representatives, for any personal injury. And no action would lie in favor of the next of kin; for this proposition, in its principle decided in England more than two hundred and fifty years ago (Yelv., 89); and recognized as law from that time onward in that country, and uniformly so held in this country, even if it were not conceded on the hearing, we should not deem it necessary to collect the authorities.

Second. It is also conceded that “the laws of a state or country have no force projprio vigore, in another state or country.” • It seems to us that this, in substance, puts an end to discussion. For if upon the general principles of law the killing of a human being by a wrongful act or negligence, gives to his representatives no cause of action, and if the statutes of Mew York have no operation in Mew Granada, and there is no evidence that such a killing there gives, a right of action, it would seem a necessary consequence that this Court cannot say that any such cause of action exists. These statutes are in contravention of the long settled principles of the law as recognized in this state. They are not declaratory but are special in their nature. They are not founded in any general maxims of jurisprudence of presumed universal application. And there is, therefore,-no presumption that the law of Mew Granada is the same.

It will hardly be denied that the consequences of any act done upon the soil of Mew Granada depend upon the laws of that republic. Contracts made and to be performed there are governed by those laws. An act done there which is lawful there, cannot be held illegal anywhere. Acts done or neglects occurring there, if they are justified by the law of that state,'are justified everywhere, and if these defendants are not liable there, they are not liable here, for as said in Campbell, adm’r, v. Rogers (19 Law Rep., N. S., 329), “if there is no right to recover for an alleged injury in the state where it is said to have been committed, there can be none in any other state.” And, on the other hand, if the state in which the alleged injury is committed has declared the consequences and defined the liability therefor, that law must govern. Let it be supposed that Mew Granada has by law, or in the grant under which the defendants act, prescribed "the cases in which the defendants should be liable for a death caused by the negligence of their servants, and the extent of that liability It would not, we think, be gravely insisted that they use their railroad under any other or greater responsibility than is so prescribed.

It is suggested that the proposition that the laws of Mew York have no force in a foreign state, only means that they cannot demand enforcement there, by the foreign Courts. This comes far short of its full meaning. The laws of Mew York cannot impart a legal character to acts done in a foreign state, or define their legal effect. Mor can they annex to them a responsibility which does not attach to them in that state. While, on the other hand, if it were shown that a right of action for acts done there, existed in such foreign state, by laws of that state not in conflict with our own, it is far from clear that such right of action would not be recognized and enforced in this state.

But it is further sought to maintain this action on the ground that it is founded on a contract to carry the deceased safely, and is brought to recover damages for the breach of that contract.

To this the same answers seem to us equally conclusive. ' The argument, in order to have any force, should show that for such a breach of contract the personal representatives could, without the aid of the statute, maintain an action, whereas no such action could be maintained after the death of the party, whether the alleged breach of contract caused the death or not. The maxim “ actio personalis moritur cum persona” is conclusive in this aspect of the case as well as when the action is in form ex delicto.

We cannot resist the conclusion that our statute is to be regarded, as giving a new action, and as creating a new cause of action, and not as continuing in favor of the representative a cause of action already existing. It is not damages sustained by the deceased which are to be recovered, but a “fair and just compensation with reference to the pecuniary injuries resulting from such death, to the wife and next of kin of the deceased.”

And under this statute it is quite immaterial whether the wrongful act or default causing the death involved also a breach of contract or not. To say that a carrier of passengers, who had agreed to carry safely in New Granada, is liable in this state and under our statute, but that one whose act or negligence is not connected with any contract is not so liable, would be making a distinction wholly unwarranted by the terms or just construction of the statute. The statute gives the action whenever death is caused by the wrongful act, neglect or default of another, and whether the cause of death involved also a breach of contract or not, can make no difference in determining whether it applies to cases in which the death was caused in a foreign country.

We have been referred to the case of Doedt, admi'x, v. Wiswall et ail., ex’rs., decided in September last (15 How. Pr. R., 128), in. which it was held by a divided court that the cause of action, under the statute in question, could be prosecuted against the representatives of the wrong doer, if he was a common carrier of passengers, by treating the cause of action as arising on contract and the tort as waived. It is unnecessary to say anything more of that decision, whether we deem it correct or not, than has in substance been already said. The question whether our statute can apply at all when the death was caused in New Granada is not affected by it. But it seems to us that some of the observations of the court not only sustain our views but in some degree conflict with the decision itself. Mr. Justice Gould says, “The action itself never did and never could belong to the party killed.. It is a statute right of property, for which the statute gives an action.” If, then, the statute does not operate within the limits of New Granada, acts occurring there are not actionable anywhere by virtue of the statute.

The statute was designed to regulate and control the conduct of all persons and corporations within our own limits, and protect all upon our soil, and does not assume the protection of the rights of person over the whole world. Such a law no more operates to create a liability for acts done abroad than our laws for the protection of the Sabbath would affect the contracts or other acts of this corporation made or done in New Granada.

One consequence of sustaining the present claim, seems to us inevitable. If such actions can be brought in this state for the injury resulting from death caused by a wrongful act, wherever it is caused, then our courts are open to the prosecution of such actions in favor of all, wherever may be the residence of the parties. Eor if it be not true, that the liability of one who causes death by his act or negligence, depends solely upon the law of the place where such death was caused, then residents of Louisiana, Mississippi and every other state in the Union, nay residents of any country in the world, may have such action here although at home, the place of the occurrence, no liability whatever therefor existed. Our statute makes no distinction between residents and non-residents, and the only necessary condition will be that the defendant is found within our jurisdiction. We cannot think that such a construction of the statute is sound in principle, nor that our Legislature intended to create causes of action for the people of other countries out of acts done abroad, or impose liabilities for acts done in other parts of the world where the governments of such countries have not thought proper to do so.

We have thus noticed the especial grounds urged upon our attention,, in support1 of the appeal by which the force of the opinion of Mr. Justice Bosworth, at Special Term, is sought to be avoided, and we add, that we concur fully in the views there expressed by him.

. The judgment should be affirmed.

Judgment affirmed with costs.

       The able opinion of Mr. Justice Bacon, in Green v. The Hudson River Railroad Co., 28 Barb., 1, and the authorities cited, bear upon some of the questions discussed in the foregoing case.


source: Caselaw Access Project

author: Hoffman, J.

license: Public Domain

text:
    The New York Exchange Company v. David R. De Wolf.
    1. Where a negotiable promissory note is made and delivered to the payee upon such fraudulent representations, that it is not valid in his hands, and a collection of it by his indorsee would operate as a fraud upon the maker; and such payee indorses and delivers that and other notes to liis landlord (being at the time indebted to him for.rent, past due), upon an agreement, that the same are “ to be credited to the account of the indorser, against the bills of the indorsee, for rent,” and some of such notes do not mature until after another quarter’s rent will fall due; the indorsee does not thereby become a holder for value, in such sense that the note in his hands cannot be impeached by proof of the facts which would defeat a recovery, in a suit upon it by the payee.
    2. The true construction of such an agreement is, that the sums which the indorsee may realize from such notes, shall be credited to the indorser, and that he shall remain liable for any deficiency: The indorsee did not, thereby, abandon his claim against the indorser for the rent.
    3. To make such an indorsee a holder for value, in such sense that the fact that the note was obtained by the payee from the maker by fraud cannot be made available by the maker as a defence to an action against him, the indorser and indorsee must have intended, and in effect agreed that the transfer and acceptance of the notes so indorsed should extinguish tile preexisting debt.
    ( Before Hoffman, Slosson and Pierrepont, J. J.)
    Heard, April 12;
    decided, April 24, 1858.
    This action comes before the Court, on an appeal by the defendant from a judgment entered on the report of a referee. It is brought upon a note which, with the indorsements thereon, reads thus, viz.:
    “$500. New York, Nov. 8, 1855.
    “ Six months after date I promise to pay to the order of the Atlas Mutual Insurance Company five hundred dollars, value IGC61VGCÍ»
    (Indorsed), “D. E. De Wolf,

      “ N. H. Osgood, Pres’t.”
    The complaint states the making of the note by the defendant; the indorsement and delivery of it by the payees to the plaintiffs; that it has become due and is unpaid, and prays judgment for its amount, with interest, and costs of the action.
    The answer, by way of defence, alleged a series of facts which, as the defendant claimed, established that the note was made and left with the Atlas Mutual Insurance Company, in such manner, upon such conditions, under such circumstances, and by reason of such false and fraudulent allegations as to the solvency of the Company; that it was not a valid note in the hands of the Company ; and that it was transferred by the latter to the plaintiffs as collateral security for a pre-existing debt.
    On the trial before the referee, on the 14th of November, 1857, the plaintiffs produced the note in question, and the signature of the defendant was admitted.
    The plaintiffs then produced, as a witness on their part, Simeon Baldwin, who being duly sworn, testified that he then was, and for the last four years had been, the president of the New York Exchange 'Company; that the said company once held the note in suit; that he gave a receipt for it at the time it was taken, stating how it was received; that receipt reads as follows:
    “New York, 1st March, 1856.
    Received from the Atlas Mutual Insurance Company, three notes, amounting to twelve hundred and fifty dollars, as per memorandum below, the same to be credited to the account of the Atlas Mutual Insurance Company, against the bills of this company, for rent.
    “New Yoke: Exchange Co.,
    S. Baldwin, President.”
    “Rich & Knowlton, $250, Jan. 15, 6 mos.
    “T>. R. De Wolf, 500, Nov. 8, 6 mos.
    “ Geo. Logan, 500, Nov. 8, 9 mos.
    . “ The note in suit is one of the notes mentioned in this receipt; these notes were credited accordingly to the Atlas Mutual Insurance Company, as mentioned in the receipt; they were credited, I think, in a few days, on the books of the company; about that time, within ten days, I should think, and long before the notes came to maturity; if it had been a cash payment we should have credited it immediately, but being a note, it was not necessary to enter it immediately; the notes were received just as it is expressed in the receipt.” The Atlas Mutual Insurance Company were then occupying an office, which they rented of the New York Exchange Company, at $4,500 per annum.
    Being cross-examined, the witness further testified as follows : “ The rent was due at the time we took the notes, and past due, exceeding the amount, or about the amount of the three notes; it would not vary $100 either way.
    “I don’t know whether there was any resolution of the directors of the Atlas Mutual Insurance Company authorizing the transfer of these notes ; I had always received the rent from one of the officers of the institution, and supposed they had authority, but I had usually received it in cash ... and one quarter’s rent was due the first of February previous; I sent to the company for the rent, and about a week previous to the transfer of these notes I had an interview in reference to the collection of the rent.” Being asked how long before taking these notes did they propose your taking them, he answers, “it was within five minutes. Mr. Osgood, the president of the Atlas Mutual Insurance Company, called upon me, and upon his proposing it, I immediately took them.
    On being re-examined by plaintiffs’ counsel, the witness further testified: “At the interview I have mentioned, about a week prior to th'e time I took the notes, I told them if they had good notes I would take them, if it was inconvenient to pay the money; the president or vice-president said they would prefer to pay the money, and hoped to be able to do so in a day or two ; I left them with the impression that they would attend to it; after a few days the president came and said they had been disappointed in the money, and offered these notes, and wanted it settled.”
    The plaintiffs then rested and the defendant moved for a non-suit, on the ground that it did not appear that the board of directors of the Atlas Mutual Insurance Company had authorized the transfer of the notes. The referee denied the motion, and the defendant’s counsel then and there excepted.
    The defendant’s counsel then called as a witness “ George H. Tracy, who being duly sworn, testified: I was secretary of the Atlas Mutual Insurance Company up to the 12th of Eebruary, 1856; after that I was vice-president, about the 1st of March, 1856; I was 2d vice-president; I knew of these notes being transferred; I don’t know that I was present during the conversation between Mr. Baldwin and the president of the Atlas Mutual Insurance Company; I don't know that I was present at any interview with Mr. Baldwin, president or any ofiicer of the company; I had charge of the notes of our company, and handed the notes to the president, for the purpose, as I understood, of settling the rent; I knew nothing further of the transaction until the receipt was returned to me.”
    The counsel for the defendant then proceeded to offer testimony to prove the several matters of defence set up in defendants’ answer; but the counsel for the plaintiffs objected to the giving or receiving of such testimony on the alleged ground, and claiming that the testimony showed, that the plaintiffs were bona fide holders of the note for value, and that therefore any existing defence which the defendant might have against the said note could not be set up or maintained as against the plaintiffs.
    The defendant’s counsel claimed that the defendant was entitled to prove on the trial the said matters of defence, that,
    “ First. The testimony did not show that plaintiffs were bona

      fide holders of said note for value, in such sense as to entitle them to shut out the defence of - the defendant thereto.

      “Second. That it appeared from the testimony that said note was taken by the plaintiffs merely on account of an antecedent indebtedness of the Atlas Mutual Insurance Company to the plaintiffs, and without parting with anything of value, or relinquishing any security upon the faith of the note 'so taken, and that it did not appear that there was any agreement that said notes should be taken in absolute payment of said indebtedness.
    “ Third,. That if there was any valid transfer of said notes to the plaintiffs, it was a transfer by assignment, or mere delivery, and, not by indorsement, according to the law merchant, and that therefore proof of the defendant’s defence was admissible.”
    “And the defendant’s counsel further offered to prove, each of the several matters of defence set up in the defendant’s answer, but the plaintiffs’ counsel objected to the giving and receiving of all or any part of such testimony, on the grounds aforesaid; and the referee sustained the objection, and refused to allow such testimony, or any part thereof, to be given on the part of the defendant; to which ruling and decisions of the referee the defendant’s counsel then and there duly excepted.” The foregoing is all the testimony that was given.
    The referee in his report found, as matters of fact, “ that the Atlas Mutual Insurance Company occupied certain offices in the Merchants’ Exchange, in the city of New York, during the years 1855 and 1856, as tenants of the plaintiffs, at the yearly rent of four thousand five hundred dollars, payable quarterly, on the usual quarter days, to wit, on the first day of August, November, February and May; and became and were on the first day of February, 1856, indebted to the plaintiffs for one quarter’s rent, to wit, for the sum of $1,125; that being so indebted, the said Atlas Mutual Insurance Company, on the first day of March, 1856, transferred to the plaintiffs three certain promissory notes, including the promissory note mentioned in the complaint, upon the terms mentioned in a certain receipt, thereupon given by the plaintiffs therefor, as follows: “New York, March 1st, 1856; received from the Atlas Mutual Insurance Company three notes, amounting to twelve hundred and fifty dollars, as per memorandura below, the same to be credited to the account of the Atlas Mutual Insurance Company, against the bills of this Company for rent.
    “New York Exchange Co.,
    S. Baldwin, President.
    “ Rich & Knowlton, $250, Jan. 15, 6 mos.
    “D. R. Be Wolf, 500, Not. 8, 6 mos.
    “ George Logan, 500, Nov. 8, 9 mos.”
    That the plaintiffs received the said notes without notice of any of the matters stated by way of defence in the answer of the defendant; and said note, when so transferred, was only indorsed by the name of N. H. Osgood, Prest, (or president), he being the President of said Atlas Mutual Insurance Company, and authorized to make such transfer and indorsement on its behalf.
    That no resolution of the directors of said Atlas Mutual Insurance Company, authorizing’ such transfer and indorsement by its President, was shown; but it appeared that on the application to the financial officers of that Company by the plaintiffs, for the payment of such rent, it was proposed to take good notes belonging to that Company in payment therefor; and that in consequence of such proposition, said three notes were tendered by the President of the Atlas Mutual Insurance Company to the plaintiffs, and accepted upon the terms mentioned in said receipt.”
    The referee found, as matters of law:
    “That the plaintiffs are holders and owners of said promissory note of the defendant, by indorsement from said Atlas Mutual Insurance Company.
    “ That they received the same from the Atlas Mutual Insurance Company in part payment for $1,125 rent, due the plaintiffs on the first day of February, 1856.
    “ That the parties, by force of such arrangement, changed the nature of the debt; and the plaintiffs also gave time to the said Atlas Mutual Insurance Company (for the amount of said notes until maturity), and thereby gave a valuable consideration therefor, and became and were holders thereof before maturity for value and without notice of any defence existing against the same. That the plaintiffs are entitled to recover the amount of said note, with twenty-one dollars and eight cents interest thereon since maturing to the date of this report, for which said principal sum and interest together amounting to five hundred and twenty-one dollars and eight cents, besides costs, judgment ought to be entered for the plaintiffs.
    “ All of which is respectfully submitted.
    “H. W. Robinson, Referee.

    “December 18th, 1857.”
    “To which report of the referee the said defendant excepted, on the ground that said report and finding of the referee as to matters of fact is against the weight of evidence; and also that said referee erred in his conclusions of law upon the facts shown by the evidence.
    . “ And also that he erred in his conclusion that the plaintiffs are holders and owners of said promissory note of the defendant, by indorsement from the Atlas Mutual Insurance Company; and also in his conclusion that the plaintiffs received said note in part payment of rent due the plaintiffs, so far as by the term payment he means or intends absolute payment.
    “ And also in his conclusion that the parties, by force of the taking of said notes, changed the nature of the debt; and also in his conclusion that by reason of their thereby giving time to the Atlas Mutual Insurance Company for the amount, until the maturity of said notes, the plaintiffs gave a valuable consideration therefor, and became and were holders thereof before maturity for value, in such sense or manner as to preclude any existing defence of the defendant.

      “ And also in his conclusion that the plaintiffs are entitled to recover the amount of said note, with the -interest, as mentioned in said report.”
    Judgment having been entered on the report, the defendant appealed from it to the General Term.

      M iS. Young, for defendant (the appellant).
    I. The referee erred in excluding the testimony to prove the several matters of defence set up in the defendant’s answer, for 1. The testimony did not show that the plaintiffs were bona fide holders of said note for value, so as to ^entitle them to shut out the defence of the defendant thereto.
    2. That it appeared from the testimony that said note was taken by the plaintiffs merely on account of an antecedent indebtedness of the Atlas Mutual Insurance Company to the plaintiffs, and without parting with anything of value, or relinquishing any security upon the faith of the note so taken; and it did not appear that there was any agreement that said note should be taken in absolute payment of said indebtedness. It was consequently taken subject to the defence of the defendant existing at the time. (Bay v. Coddington, 20 J. R., 646; Edwards on Bills,. 192; Stalker v. McDonald, 6 Hill, 93, 97, 98, &c.; Noel v. Murray, 3 Kern., 167, 169; Vail v. Foster, 4 Com., 312, 314; Tobey v. Barber, 5 J. R., 68, 72; Schermerhorn v. Loines, 7 J. R., 311, 313, and note; Johnson v. Weed, 9 J. R., 310, 311; Ontario Bank v. Worthington, 12 Wend., 600; Muldonv. Whitlock, 1 Cow., 290, 306.)z
    3. If there was any valid transfer, or transfer that would pass the title of said note to the plaintiffs, it was a transfer by assignment or mere delivery, and not by indorsement according to the law merchant, and therefore proof of the defendant’s defence was admissible. (Edwards on Bills, 286; Hedges v. Sealy, 9 Barbour, 214, 217.)
    The indorsement is not the indorsement of the Atlas Mutual Insurance Company. The indorsement, to be effectual as an indorsement in the commercial sense, should have been in the name of the company. (Moss v. Livingston, 4 Com., 208; Chitty on Bills, 11 Am. ed., 32, 33; Bank of Rochester v. Monteath, 1 Denio, 402, 404; Pentz v. Stanton-, 10 Wend., 271; Babcock v. Beman, 1 Kern., 200.)
    Adding the word “President ” was an indication that N. H. Osgood did not intend to assume a personal responsibility. The indorsement in the form adopted was perhaps sufficient to transfer the title, but was not sufficient to bind the Atlas Mutual Insurance Company as indorsers. (Babcock v. Beman, 1 Kern., 200.)
    II. The finding of the referee as to matters of fact is against the weight of evidence, in so far as he finds that the President of the Atlas. Mutual Insurance Company was authorized to make such transfer and indorsement on behalf of said company, and in so far as he finds that said note was taken in payment of rent (if by payment he means absolute payment), there being-no evidence of such authority, or of any agreement that said note was to be taken in payment otherwise than on account.
    III. The referee erred in his conclusions of law, stated in his report.
    1. In holding that the plaintiffs are holders and owners of said promissory note of the defendant by indorsement from said Atlas Mutual Insurance Company.
    The indorsement by the name of N. H. Osgood, President, is not the indorsement of the plaintiffs. (See above point I, sub. 3.)
    2. In his conclusion that the plaintiffs received said note in part payment of rent due the plaintiffs, so far as by the term payment he means absolute payment.
    3. In his conclusion that the parties by force of the taking of said notes changed the nature of the debt. For the taking of the notes did not extinguish the original debt, it merely postponed the payment until default in the payment of said notes. (Tobey v. Barber, 5 J. R., 68, 72; Schermerhorn v. Loines, 7 J. R., 313, and note.)
    4. In his conclusion that, by reason of the plaintiffs giving time to the Atlas Mutual Insurance Company for the amount until the maturity of said notes, they thereby gave a valuable consideration therefor, and became holders thereof before maturity for value, in such manner as to preclude any existing defence of the defendant. (Muldon v. Whitlock, 1 Cow., 290, 307.)

      John M Parsons, for plaintiffs (the respondents).
    I. The note in suit was received in part payment for the rent which became due on February 1st, 1856. There having been no offer to prove notice to the plaintiffs of the defendant’s alleged equities, and it appearing that they took the note without such notice, they are holders of the note in good faith and for a valuable consideration. (Booth v. Smith, 3 Wend., 66; Bank of Salina v. Babcock, 21 Wend., 499; Bank of Sandusky v. Scoville, 24 Wend., 115; Mohawk Bank v. Corey, 1 Hill, 513; zzzWhite v.
      Springfield Bank, 3 Sand. S. 0C. R., 222, commenting on Stalker v. McDonald, 6 Hill, 93, and establishing the difference between the case where a note is taken in payment, and that where it is only taken as collateral security. (Youngs v. Lee, 2 Kern., 551.)
    1. The note was received in payment. The receipt operates as a contract between the parties and shows this. Its language is that the notes were tó be credited to the Atlas Mutual Insurance Company. This is the language of all the authorities in cases where the transfer was determined to be in payment. They were given as cash, and merely because the company had been disappointed in getting money in which they preferred to pay. The balance of the face of the notes over the amount of the February rent was to be applied on the accruing rent. The transaction operated as a discount of the notes by the plaintiffs and application of the proceeds to the rent due and accruing due. (Vide authoritiés cited. New York Marbled Iron Works v. Smith, 4 Duer, 362, 377.)
    2. It was proper that the note should be indorsed by the company, and this did not vary the character of the transaction. The liability of the company continued, but became collateral to the obligation of the defendant as maker of the note. The company could not be charged upon the original debt. They got the benefit of the extension of credit. There was the substitution of a new contract between the parties and an absolute payment of the original indebtedness, which thereby became extinguished. (Vide, all authorities above cited, in all of which the notes in suit were indorsed by the original debtor.)
    TT The defence offered to be proved by the defendant was no defence, as against a holder for value in good faith and without notice. Evidence to sustain it was therefore properly rejected.
    III. The indorsement of the note was a sufficient indorsement in form. It was the indorsement of the Atlas Mutual Insurance Company. (Bank of Genesee v. Patchin Bank, 3 Kern., 309.)
    1. The indorsement of the note having been for a valuable consideration, and without notice to the plaintiff of any defence against it, or that its indorsement was not authorized by a previous resolution of the board of directors of the company, it was not necessary that it should be authorized by such resolution. (1 R. S., 4thed", p. 1115, § 8.)
    2. Were this otherwise, this defendant could not raise the objection. It can only be taken by the company or its creditors. (Guernsey v. Burns, 25 Wend., 411; Hall v. Gird, 7 Hill, 586; Aspinwall v. Meyer, 2 Sandf., 180.)
    3. The note being but for $500, does not come within the provision of the statute.
    4. The twelfth section of the act incorporating the Atlantic Mutual Insurance Company, made part of the charter of the Atlas Mutual Insurance Company, provides that the company may receive notes for premiums in advance of persons intending to receive its policies, and may negotiate such notes for the purpose of paying claims or otherwise in the course of its business. This was such a note, and the act excepts it from the provision of section eight above referred to. (Aspinwall v. Meyer, 2 Sandf. S. C. R., 180.)
   By the Court.

Hoffman, J.

—The question is, have the plaintiffs shown, that in this transaction, they became purchasers for value of the note in question, in that sense which enables them to shut out a defence on the part of the maker of the note, clearly available against the original payee ?

In the first place, I think we must regard as of some influence upon the case, the credit which was given upon the books of the company of the notes in question, against the debit for the rent. This was not done until several days after the first of March, the date of the receipt. Baldwin says that it was within ten days. How one statement of the answer which is offered to be proven is, that the Atlas Company suspended business about the fifth of March. The credit was not given, as we are justified in assuming, until after that day, and then all hope of payment from the company was given up as vain. This circumstance rather sustains the inference that the plaintiffs did not intend to discharge the Atlas Company.

But supposing this fact inconclusive; then the evidence, irrespective of the receipt of the first of March, is indecisive; indeed it does not give any explanation of the receipt, or support any version of it in favor of either party. The Atlas Company could not pay in money, offered the notes and wanted the matter settled. The plaintiffs took the notes.

The case, in my judgment, mainly rests upon the receipt of the first of March. It expresses that the notes, amounting to $1,250, “ were received, to be credited to the account of the Atlas Insurance Company, against the bills of this company (the plaintiffs) for rent.” The rent then due was $1,125.

It is consistent with the most critical construction of the receipt, and with a common sense interpretation of it, to hold, that the amount of the notes when and as collected, was to be credited to the account of rent; that if less than the rent due was received, that alone should be credited, but if the whole face of the notes was collected, the excess should be accounted for.

But the phrase “against the bills of this company” is used. There was but one quarter’s rent then due, that of February. Now some of the notes would not fall due until the May quarter became due; and in this view, the meaning may have been, that after paying the February quarter, the proceeds should be applied to that of May.

Without asserting that the receipt will not bear the meaning of an absolute acceptance of the notes in discharge of the rent due, and on account of that to accrue in May, we think it a more reasonable and apparent construction, that the sums the plaintiffs might realize should be credited as received, and The Atlas Company remain liable for any deficiency.

The principle, to be deduced from the authorities applicable to the present question, we consider tobe this: that the parties must have intended, upon a transfer and reception of other securities, to extinguish the subsisting debt. If one note is substituted for another not yet due, and the latter is given up, the intention is evident. If it is not surrendered, the presumption is the other way. All cotemporaneous acts, declarations, or receipts are to be used to shed light upon the question of intent. The extinction of a legal demand in its original form, is to be proven affirmatively: and the question, whether a party is a holder for value of the new securities, so as to displace in his favor any right or equity against the party to whom they were given, depends upon the fact being established of an intended and actual extinguishment. (Clark v. Ely, 2 Sandf. Ch. R., 168; White v. The Springfield Bank, S Sandf. Sup. Ct. R., 222; Youngs v. Lee, 2 Kern., 551; The N. Y. Marbled Iron Works v. Smith, 4 Duer, 377; Farrington v. The Frankfort Bank, 24 Barb., 554.)

The case of Farrington v. The Frankfort Bank, was decided with the concurrence of the four judges of the fourth Circuit, and is very pertinent to the present action. The defendants had been in the habit of discounting drafts of the firm of Osborn, Turnbull & McDonald. On the 14th of January, 1856, they held two protested drafts, chargeable to such firm. Osborn, one of the firm, induced the plaintiff to indorse two drafts made by his firm, by false and fraudulent pretences. These were delivered to the defendants on the 17th of January, 1856. There was no agreement between the bank’s agent and Osborn, that the drafts should be received in payment of those under protest, but Osborn intended that they should be held as additional and collateral security, for the indebtedness then existing. Pomeroy, the cashier of the bank, on the 19th of January, 1856, passed the drafts in suit to the credit of Osborn, upon the books of the bank, and charged him with the protested drafts, and stamped them with the canceling iron; but they remained in the possession of the bank, in a drawer with papers of the like character.

It was held that the plaintiff, indorser of the drafts, was not precluded from any defence he was entitled to against them; that there was not an absolute discharge of the old debt within the rule of law; and relief was given to him, the action being on his behalf to obtain a cancelment of his indorsements.

So in the present case, I do not think that the plaintiffs ever abandoned their claim upon the Atlas Company for the rent; and therefore did not become purchasers, for value, of the note sued upon, so as to prevent the maker insisting upon any defence he possesses as against the payee.

The referee has therefore erred in his conclusion. A new trial must be had; and the order of reference discharged. The costs to abide the event.

Judgment accordingly.


text:
    McConochie et al. v. The Sun Mutual Insurance Co.
    1. A person insured, on receiving information of facts which, if true, make it highly probable that a constructive total loss has occurred, has a right to give notice of his election to abandon.
    2. And an abandonment valid in other respects, and authorized by the facts existing at the time, is sufficient when made on such information.
    3. It is not essential to a valid abandonment that the insured at the time of giving notice should have information of facts which, if true, would make the inference that a constructive total loss had occurred, necessary and unavoidable, it is enough that they render such a result highly probable.

    (Before Bosworth, Hoffman, Slosson, Woodruff and Pierrepont, J. J.)
    Heard, March 6;
    decided, April 24, 1858.
    This is an appeal by the plaintiffs from an order made at Special Term, sustaining a demurrer to their complaint: The action is on a policy of insurance by which the defendants insured the plaintiffs upon 280 hogsheads of sugar, of the value of $23,800, against loss or damage from the perils of the seas on a voyage from Matanzas to New York. The only point is, whether the abandonment set forth in the complaint is sufficient to entitle the plaintiffs to recover for a constructive total loss.
    The complaint, after describing the issuing of the policy, and its terms, and the shipment of the sugars, and the sailing of the vessel on her voyage, alleges that while the policy was in force, the vessel, M. L. Frank, “ encountered stormy and tempestuous weather, causing her to labor badly and make a good deal of water, so that she had large quantities of sea-water in her hold, whereby she was compelled to and did ” put into the port of Savannah in distress; that by reason of the sea-water in the hold of the vessel, it became necessary to remove the sugar from the vessel, and land it, whereupon it was found to be wet by sea-water, one of the perils insured against, and damaged to more than 72 per cent of its value, whereupon, and “the day after the plaintiffs received intelligence of damage to the said goods,” they gave to the defendants a notice, in writing, reading thus:

      “Hew York, 5th April, 1856.
    “A. B. Nelson, Esq., President:
    “Dear Sir—Understanding that the bark M. L. Frank on her voyage from Matanzas to Hew York has been compelled to seek the port of Savannah, in distress, where she arrived, we hear, with several feet of water in her hold; the cargo was landed and found very seriously damaged; we therefore, hereby, abandon to you two hundred and eighty hogsheads of sugar, valued at $85 per hhd., insured by you, under our open policy, Ho. 29, 179, for $23,800, and shall claim for a total loss.
    “We are yours respectfully,
    “ Alex. McOonochie & Co.”
    The defendants demurred to the complaint, by a demurrer in these words, viz.:
    “The defendants demur to the.complaint in this action and specify as the ground of such demurrer that the said complaint does not state facts sufficient to constitute a cause of action, in that, the matters therein averred do not show an actual total loss of the merchandise therein mentioned, nor is the abandonment therein set forth sufficient to warrant the plaintiffs in claiming as for a constructive total loss, while it appears by the said complaint that the defendants have paid to the plaintiffs all that was due them by reason of any partial loss upon the said merchandise set forth in the said complaint.”
    The demurrer was argued, at Special Term, in January, 1857, before Mr. Justice Duer, who ordered that the demurrer be allowed, with liberty to the plaintiffs, to amend their complaint on payment of costs. He “held, that an abandonment, to be valid, must in all cases set forth the grounds upon which it is made; and that these must be such that, admitting them to be true, the right of the assured to recover a total loss is a necessary consequence. That, tested by this rule, the abandonment set forth in the complaint was defective and void; that the allegation that the goods insured were “very seriously damaged” did not necessarily import that the damage exceeded half their value. It might be true, and yet the plaintiffs not be entitled to recover, the total loss which they claimed.”
    From the order allowing the demurrer this appeal is taken.

      Daniel Lord, for the plaintiffs and appellants, made and argued the following points:
    I. Where a notice of abandonment in a case where an assured abandons to his insurers intending to claim for a technical total loss, the damage exceeding fifty per. cent of the value of the article insured, is such as to leave no reasonable doubt of the intention of the assured to abandon, and of that intention and of the grounds of the abandonment being understood by the insurers, it will be sufficient; and the abandonment will be complete, if justified by the facts existing at the time it is made. (2 Arnould on Insurance, 1162; 2 Phillips on Insurance, 394 to 397; Southgate v. The Patapsco Ins. Co., 5 Peters, 604; 22 Pick., 191, Reynolds v. Ocean Ins. Co.; Hazard v. The New England Marine Ins. Co., 1 Sumner, 218.)
    II. The object of stating in the notice the grounds of the abandonment, is to indicate the character of the loss, i. e., whether by fire, capture, shipwreck or otherwise, and to notify the insurers that the loss was occasioned by one of the risks covered by the policy. The notice need, therefore, only state the grounds with sufficient distinctness to accomplish this object. The intention to abandon, and the claim on the part of the assured that the facts warrant an abandonment, appear by his offer to abandon. (2 Phillips on Ins., 381, 384; Suydam v. Marine Ins. Co., 1 Johns. R., 181; Pierce v. Ocean Ins. Co., 18 Pick., 83; Ralston v. Union Ins. Co., 4 Binney, 386, 400; Macy v. Whaling Ins. Co., 9 Metcalf, 354; Hazard v. The N. E. Marine Ins. Co., Dickey v. The New Yorh Ins. Co., 4 Cowen, 222.)
    III. The sufficiency of the notice in this case must be determined by reference to the information it conveyed to the defendants, and the purpose of any such notice.
    They knew of the right to abandon in a case like this. The intention to abandon was stated clearly and distinctly. The occasion of the loss was also mentioned (water in the hold of the vessel). The defendants must then have been informed by the notice, and known that by “very seriously damaged” the plaintiffs meant damaged to more than fifty per centum of value.
    If the loss had been less than fifty per cent, the plaintiffs could not have abandoned; if total, no notice was necessary. In connection with the facts indisputably stated in the notice, the intention it expressed, and the words “ very seriously damaged,” must have given the insurers all the information to which, under any construction of the rule of law, they could be entitled.
    lY. A notice of abandonment is not to be confounded with preliminary proofs of the details of loss, but supposes that the latter are to be afterwards delivered. It will virtually destroy the right to abandon, to subject it to a restrictive nicety scarcely required in preliminary proofs of loss.

      F. B. Gutting, for the respondents,
    contended that the notice of abandonment, and that alone converts what would otherwise be only a partial, into a total loss. That such a notice, in order to be sufficient, must, among other things, either allege in terms, that the loss exceeds half the value, or state facts which, if true, would make the inference a necessary one, that the loss was to that extent. He cited and commented on 21 Pick., '456, 470; 16 id., 310, 313; 1 J. R., 181; 2 id., 138; 4 Gowen, 222; 18 Pick., 89, 93 and 94; 4 Mass., 221, 230; 4 Binney, 400, 403 ; 3 Gill & John., 450; 2 Wash., 300; 2 Phillips (last ed.), 1666.
    On the 24th April, 1858, the judgment of the Court was announced by Boswobth, J., who stated that the members of the Court (with the exception of Slossoh, J., who dissented) concurred in the following propositions, viz.:
   By the Court.

We hold: First. That the facts alleged in the complaint and admitted by the demurrer to be true, establish that the loss, at the time the abandonment was made, was constructively total.

Second. That a person insured on receiving information of facts which, if true, make it highly probable that a constructive total loss had occurred, has a right to give notice of an election to abandon. And that an abandonment valid in other respects and authorized by the facts existing at the time, is sufficient when made on such information. That it is not essential to a valid abandonment, that the assured should have information of facts which, if true, would make the inference, that a constructive total loss had occurred, necessary and unavoidable, it is enough that they render such a result highly probable.

Third. The notice in question states truly as the cause of the loss, a peril insured against and such information as to the nature and extent of the damage as rendered the inference of a constructive total loss highly probable, and abandons absolutely and without any qualification or condition.

Fourth. The complaint imports that the assured at the time of abandoning had information of the nature, and as specific as that communicated by the notice of abandonment. The abandonment set forth in the complaint is, therefore, sufficient, and the order appealed from must be reversed and judgment entered in favor of the plaintiffs, with liberty to the defendants to answer on payment of the costs of the demurrer, and $10 costs of this appeal.


author: Bosworth, J.

text:
    Duncan et al., Respondents (the plaintiffs), v. Lawrence et al., Appellants (the defendants).
    1. Where, in an action, by an indorsee of a promissory note against the maker, all the allegations of the complaint, which are employed to show the title and possession of the note to be in the plaintiff, are put at issue by the answer, the answer is sufficient as a pleading, although it puts each of such allegations at issue by an averment, that the defendant has not any knowledge or information thereof sufficient to form a belief.
    (Before Bosworth, Hoffman, Slosson and Woodruff, J. J.)
    Heard, April 24th;
    decided, May 8th, 1858.
    This is an appeal by the defendants, from an order that the plaintiffs have judgment on account of the frivolousness of the answer. The complaint states that the defendants are partners, and on the 24th of August, 1857, in their firm name of S. & T. Lawrence & Company, made a note of that date payable to their own order; and sets forth a copy of the note, and then alleges that they “ indorsed the said note in writing, in their said firm name of S. & T. Lawrence & Company, in blank, and that the said note was afterwards, and before its maturity, duly transferred and delivered for value to the said plaintiffs, then and still being bankers and copartners, carrying on business at the city of Hew York, under the firm name of Duncan, Sherman & Company, and that the said plaintiffs, before the. maturity of said note, became and still are the lawful owners and holders thereof, for value.” That the note is past due and unpaid, and prays judgment for the amount due, including interest.
    The defendants in their answer state, that “they have no knowledge or information sufficient to form a belief, whether the plaintiffs now compose or ever did compose the copartnership or firm of Duncan, Sherman & Co., or whether the plaintiffs are or ever were copartners, or whether the promissory note set forth in the complaint was ever at any time transferred or delivered to plaintiffs, or whether the plaintiffs before the maturity of said note, or at any time became, or now are the lawful owners or holders of said note.”
    The complaint and answer were both verified.
    A. B. Dyetl, for appellants.

      Jeremiah Larocqueu for respondents.
   By the Court.

Bosworth, J.

—The complaint does not state that the defendants transferred or delivered the note to the plaintiffs.

The Code permits any allegation in a complaint to be put at issue by an answer which states that the defendant has not “any knowledge or information thereof, sufficient to form a belief.” Code, § 149, sub. 1.

All the allegations in the complaint, which are inserted to show title to the note to be in the plaintiffs, are severally put nt issue by an answer in that form. They are thus as directly and absolutely controverted, according to the present rules of pleading, as if the truth of each had been expressly denied. The plaintiffs on the trial of this action, cannot recover without first giving evidence sufficient to establish prima facie, that the note had been delivered to and is held by them.

When in an action, by an indorsee of a promissory note, the answer puts at issue, in a form prescribed by the Code, all the allegations employed in a complaint to show the title and possession of the note to be in the plaintiffs, it is not only not frivolous, but is sufficient as a pleading. (Metropolitan Bank v. Lord, 4 Duer, 630.)

The answer in this action is therefore sufficient. It raises a material issue, the truth of which the plaintiffs must establish in order to recover.

The order appealed from must, therefore, be reversed, and $10; the cost of this appeal, and the costs for opposing the motion for judgment, must abide the event of the action.

Ordered accordingly.