author: By the Court.—Mouele, Oh.

text:
    JOSEPH SPYER and BENJAMIN B. VALENTINE, Plaintiffs, v. C. J. FISHER, Defendant.
    I. Broker Acting for both Buyer and Seller.
    1. If there is no fraud or concealment, and each party is aware that the broker is acting for the other as well as for himself, the execution by the broker of bought and sold notes, and the delivery thereof to the respective parties, constitutes a valid contract between them.

      So also,
    3. Ratification.—If one of the parties, not knowing at the time he employed the broker, that the broker was employed by the other, receives the bought or sold note (as the case may be) showing that the broker was also employed by and acting for the other party, and he makes no objection on the ground of any want of authority on the part of the broker to bind Mm, but repudiates the contract for other and different reasons, he ratifies the act of the broker done in his behalf, and the contract is binding on him.
    3. Frauds, Statute of.

      a. The bought and sold notes signed by the broker under such circumstances satisfy the statute, and take the case out of its operation.
    DC. Objection.—Trial.
    1. An objection not talcen at the trial cannot be raised, on appeal.

    ]H. Superior Court,—Jurisdiction of, Under Chapter 339 of the Act of 1873.
    1. Under the decision of the court of appeals in Landers v. Staten Island R. R. Co., 14 Abb. If. S. 346,—Held, that said act, so far as it undertook to extend the territorial jurisdiction of the superior court, was unconstitutional; that is to say, the legislature had no power to extend the jurisdiction of the court to actions in which one or more of the defendants neither resided nor were served with summons in»the city of New York, beyond the jurisdiction which it possessed in that regard at 'the time of the adoption of the sixth article of the constitution at the election held on November 3, 1869. a. The various statutes conferring jurisdiction on the court considered, and the case of Landers v. Staten Island B. B. Co. discussed.

    BUT HELD,
    Waiver.—A voluntary appearance without raising the question of want of jurisdiction by either demurrer or answer waives the objection.

    Before Monell, Ch. J., and Freedman, J.

      Decided, February 28, 1874.
    Exceptions ordered to be heard at general term.
    The action was upon a sale of goods of which the defendant refused to accept delivery. The contract was evidenced by the following :
    “ March 5, 1873.

      “ Sold for account of Messrs. Joseph Spyer & Co,, to C. J. Fisher, Buffalo, N. Y., one hundred cases Vine Grower's’ Co’y, Cognac, black label, to arrive Ex. ‘ Greve Manderstrom,’ at $10gold, net cash, per case,' duties payable in advance by C. J. Fisher, on arrival of vessel. “ S. M. Saunders,
    “ Wine and Spirit Broker.”
    On the arrival of the merchandise, it was tendered to the defendant, and its' acceptance being refused, it was sold at auction, for a less sum than the contract price.
    The plaintiff claimed to recover the difference.
    The defendant answered, making first, a general
      denial; and second, that the pretended sale was of more than fifty dollars, no part of which was paid, no part of the goods delivered, and no writing signed by the defendant. The sale was claimed to be void under the statute of frauds.

      The summons and complaint were served on the defendant in the city of Buffalo. He subsequently appeared and answered, without talcing the objection of want of jurisdiction in this court.

    The action was tried by a court and a jury. At the commencement of the trial, the defendant moved to dismiss the complaint, on the ground of the want of jurisdiction in this court, over the person of the defendant. The motion was denied, and the defendant excepted.
    On the trial it was proved, that Saunders was authorized to make the sale for the plaintiff, and that he signed the bought and sold note.
    Saunders testified that the defendant called upon and requested him to act as his broker, in purchasing goods for him ; that he gave him general authority to purchase certain brands for him; that he signed the bought and sold notes, and delivered one to the plaintiffs and the other to the defendant. On the arrival of the vessel he wrote to the defendant, informing him of the arrival of the goods, and received the following reply :—
    “ Buffalo, April 8, 1873.
    “ Bear Sir ; Please find inclosed a gold draft for $54.00 and $1.00 currency, payable to Joseph Spyer & Co., for which amount please have him acknowledge. In regard to the 1Ó0 cases of Vine Growers’ Brandy that I bought of Mr. Spyer, Thave since been informed by parties that Mr. Spyer bottles his own goods, and I prefer to deal with some other house that I have condence in. “ Yours respectfully,
    “C. J. Fisher.”

      Another witness testified, that the defendant had said to him, that he had received a draft from the plaintiffs, for duties due on some brandies ; that there was no question as to his having bought them, but he said he had heard the plaintiffs were bogus bottlers, and therefore, he did not accept the brandies, and was not going to take them.
    At the close of the evidence, the defendant moved to dismiss the complaint, on the ground, that as the broker had general authority from the plaintiffs to sell, and from the defendant to buy, he acted for buyer and seller.
    The motion was denied, and the defendant excepted. A verdict for the plaintiff was directed.
    The exceptions were ordered to be heard in the first instance at the general term; and judgment was in the meantime suspended.

      Field é Minor, attorneys, and of counsel for plaintiff urged :—I.
    In the case of Landers v. Staten Island R. R. Co., 14 Abb. Pr. N. S., 046, the answer of the defendant clearly and distinctly set forth the unconstitutionality of said act, and objected to the jurisdiction of the court; and in the opinion it states tnat the objection being taken by answer was not waived. '
    II. So far as the objection goes to the service of process on the person, it is waived by appearing and pleading to the issue without objecting. It must be set up by answer. McCormick v. Penn. Cen. R. R. Co., 49 N. Y. 303; Hones n. Hope Ins. Co., 8 Barb. 541; Baxter v. Arnold, 9 How. Pr. 445 ; Dale v. Manly, 11 Id. 138; Sullivan v. Fraser, 4 Robt. 616 ; 27 Barb. 337. The answer in this case did not set up that defense.
    III. The rule is, that for the purposes of the statute of frauds, the broker is the agent of both parties, where nothing is concealed, and where he is instructed by both (Story on Agency, 1869, 26, 27 and 28, and notes ; Story on Cont. § 346 ; 2 Parsons on Cont. 5th ed. 541 ; Davis v. Shields, 26 Wend. 341; Merritt v. Clason, 12 Johns. 102; S. C., affirmed, 14 Id. 484 (in. point) ; Parnell v. Pitch, 8 Cow. 215; 17 Ad. & E. N. S. 103).
    It is necessary that the broker should be authorized by both parties (Diluth v. Bostwick, 1 Sweeny, 581).
    In this case the broker did not receive instructions from both parties.
    The defendant knew and fixed the price himself, and knew that the broker was acting for the plaintiffs as well as for himself, and also knew the plaintiffs, and had other dealings with them.

      John T. Gardner, attorney, and E. D. McCarthy, of counsel for defendant, argued
    The term agent is of very extensive signification, and includes every class of persons who are employed by a principal to do some act for him.- The term includes factors and brokers.' S. M. Saunders was in fact the agent or broker of Joseph Spyer & Co., the plaintiffs, at and previous to the time he claims to have acted as agent for' defendant Pisher in making the pretended purchase and sale. An agent must faithfully serve his principal.. He is bound to the exercise of all his skill, ability and industry in favor of his principal. As an agent to-sell, it is his duty to get the highest fair price, and no-agent or trustee can deal with the. subject matter of.' his trust except for the benefit of his principal (McDonald v. Lord, 26 N. Y. 404-407). And the defendant was as much entitled to all the skill, ability, &c., of Saunders, as were the plaintiffs, and his duties to each were inconsistent one with the other. A person cannot act as the agent of both parties in the making of a contract, &c., when each is entitled to the benefit of his judgment, &c. (Utica Ins. Co. v. Toledo Ins. Co., IT
      Bar. 133 ; N. Y. Central Ins. Co. v. National Protection Ins. Co., 14 N. Y. (4 Kern.) 85 ; Moore v. Moore, 1 field., 6 N. Y. 256 ; Terwilliger v. Brown, 59 Bar. 9 ; Same case affirmed, 44 N. Y. 237; Reed v. Warner, 5 Paige, 650; Claflin v. Farmers’ & Citizens’ Bank, 24 How. Pr. 1 ; Capard v. Heriman, 6 Bosw. 8). The pretended sale being for upwards of fifty dollars, and no part having been delivered, and no part of the purchase price paid, and no note or memorandum of such pretended contrsct made in writing and subscribed by the party to be charged thereby, was void under the statute, &c. (3 R. S. 5th ed. 221, 222). The statute of frauds requires an actual manual subscription at the end of the agreement or memorandum by the party by whom the same is to be' made, and a printed name is not. a sufficient subscription within the statute of frauds (Viele v. Osgood, 8 Bar. 180; James v. Patten, 6 N. Y. [2 field.] 9 ; Justice v. Lang, 42 N. Y. 493 ; Same Case, 52 N. Y. 323). The pretended memorandum or bill of sale and purchase is not signed by the defendant, either individually, nor is his name signed or appear thereto signed by any person who claims or might even had authority to do so. To bind the defendant his name must be either subscribed by himself or by his authorized agent for that purpose. Said memorandum is in fact signed individually by S. M. Saunders, and the additional words,wine and spirit broker,” adds nothing—is of no binding character—is a descriptio persona (Sheldon v. Hoy, 11 How. Pr. 12). Where, upon the face of the broker’s note of sale, delivered to the defendant, were indorsed, “I agree to this contract,” and signed by him, and on the one delivered to the plaintiff were indorsed, “ we agree to accept of the draft for this .contract,” and signed by them, held a sufficient subscription (Dana v. Fiedler, 1 E. D. Smith, 463; Same Case, 12 N. Y. [2 Kern.) 40).

      This court has no jurisdiction. The summons was served upon the defendant at the city of Buffalo. Since the commencement of the action and the appearance of defendant, the act of 1873, conferring jurisdiction, has been declared by the court of appeals to be unconstitutional.
   By the Court.—Mouele, Oh.

If this case presented the single question, whether a broker can act on behalf of both seller and purchaser of merchandise, so as to make a valid contract binding upon both, where the dual agency was unknown to one at least of the parties, and there was no subsequent recognition or ratification of the act, the verdict probably could not be upheld.

The general rule is, that, except for some purposes (i. e., signing a contract within the statute of frauds), a broker is forbidden to act for both parties, concealing his agency for one from the other. But the rule is confined to cases where the mutual agency is concealed. Under such circumstances, it is deemed to be incompatible with the duties of a broker to act for both. In the interest of the seller he would be bound to get the highest and best price; and in the interest of the buyer, to obtain the lowest price.

But, as has been said, the rule is restricted to cases of'concealment or fraud.

I had occasion to collect and review the cases on this subject, quite recently, in Rowe v. Stevens, decided at the January term, 1873, 35 Supr. Ct. Rep. 139, which has since been affirmed by the court of appeals, and it is not necessary to repeat them here.

The deduction from the cases is, that- if there is no concealment or fraud, and the parties are made aware that the broker is acting for both buyer and seller, the act is not incompatible with the broker’s duty.

If, therefore, the defendant, knowing of Saunders’ authority to act for the plaintiffs, recognized and adopted the purchase, which had been made for him, by the same agent, such purchase was binding on the defendant

The uncontradicted evidence established that the broker was acting on behalf of the plaintiff. The bought and sold notes contained that statement. It was communicated to the defendant, by the delivery of the sold note to him ; and he afterwards, by letter and in conversation, admitted the purchase, and with such knowledge of the broker’s agency of the plaintiffs, ratified the act as that of his, the'defendants’ agent, in making the purchase.

He made no objection to the purchase on the ground of any want of authority on the part of the broker to bind him, but repudiated the sale for other and different reasons.

Under these circumstances, the purchase or the contract of purchase, was binding upon the defendant; and the motion to dismiss the complaint was properly denied.

The objection that the contract was void under the statute of frauds, set up in the defendant’s answer, was not taken at the trial, and, if it was important to consider it, it is too late to raise the question now.

But Saunders had sufficient authority to bind the defendant; and his signing the contract as the defendant’ s broker, took it out of the operation of the statute. To save a contract from the statute a broker may be the agent and may sign for both parties (Allan v. Aguira, 5 N. Y. Leg. Obs. 380; Dilworth v. Bostwick, 1 Sweeny, 581).

Another objection taken at the trial, was, that this court has not jurisdiction of the person of the defendant.

The summons had been served in the city of Buffalo, and it was claimed that a summons to commence an action in this court could not be served out of the city and county of New York.

The act of 1828, organizing this court (§ 5), gave it power to hear, try and determine all local actions arising within the city and county of New York, and all transitory actions, although the same may not have arisen therein ; and the only restriction to its jurisdiction over such actions, was, that it should have no power to send any process into any other county, except writs of subpoena, and attachments to enforce their obedience.

The act conferred no equity jurisdiction whatever; it ha d merely common law powers.

By section 33 of the Code, equity powers were conferred on the court (Forrest v. Forrest, 25 N. Y. 501) ; and its common law; jurisdiction extended to all actions, where all the defendants resided or were served in this city. In 1852, it was' further extended to cases where one or more of several defendants, jointly liable on contract, resided or were served therein. Under that amendment this court held, that in actions of joint liability upon contract, if one of the defendants resided in this city the summons might be served in any other place (Porter v. Lord, 13 How. Pr. 254). And in actions enumerated in sections 123 and 124, this court was given co-equal jurisdiction with the supreme court, and the summons may be served in any part of the State (Kerr v. Mount, 28 N. Y. 659). In that case Judge Dentó says (p. 664), in the actions enumerated in these sections the superior court has jurisdiction without regard to the defendant's residence. And hence it has not, I believe, been doubted, that in these actions, not only may the process of this court be served in any county in the State, but it may be served by publication, or any of the other modes of substituted service (see also, Varian v. Stevens, 2 Duer, 635.)

In giving a construction of the several acts regulating the jurisdiction of the court, we determined in a recent case (Van Pelt v. United States Metallic Spring Co., 13 Abb. Pr. N. S. 325), that under these statutes, this court, except in respect to the person of the defendant, had co-equal jurisdiction with the supreme court, in all cases, where an “ action ” could be maintained in either court.

Such was the jurisdiction of the superior court, when article 6 of the constitution was agreed to in convention, and adopted by the people. The court was u continued^ with the powers and jurisdiction it then had, “ and such further civil and criminal jurisdiction as might be conferred bylaw.”

.Under the power thus granted, the act of April, 1873, was passed, giving to this court, ^original jurisdiction, at law and in equity, concurrent and co-extensive with the supreme court, of all civil actions.”

In Landers v. Staten Island R. R. Co. (14 Abb. Pr. N. S. 346), the court of appeals has held, that an act passed in 1871 (Sess. Laws 1871, p. 555), extending the territorial jurisdiction of the city court of Brooklyn, was unauthorized by the constitution, and in deciding that case, they have incidentally held that the act of 1873 was open to the same objection.

The argument of the court of appeals, is, that these city courts having been created local courts, were merely continued as such by the judiciary article, and could not have power given to them, to send their process into eve'ry part of the State.

That the superior court was created a local court, with limited territorial jurisdiction, is not denied. But the legislature which created it, has assumed from time to time to exercise, and has exercised, the power of adding- to and enlarging its jurisdiction in respect and to the extent enumerated in- sections 33, 123, and 124, of the Code, and has authorized the court, in the enumerated actions, to send its process into any county in the State, and, as construed in Kerr v. Mount (supra), without regard to the defendants' residence.

It is to be presumed that the framers of the judiciary article understood the nature and extent of the then existing jurisdiction of the courts ; and that the power of the legislature over them had not been deemed inflexible. There had been added to them equity powers, and they had brought within their common law jurisdiction, a large class of cases and persons, other than such as were embraced within the original statutes.

The legislature having exercised these powers when those courts remained legislative courts, the intention of the makers of the judiciary article may reasonably have been, to leave subsequent legislation as untrammeled as it had theretofore been ; and when they gave the power to add such “further" jurisdiction, they intended to authorize some other jurisdiction than such as it already possessed, which was then, except in the person of the defendant in some actions, co-extensive with the jurisdiction of the supreme court.

Indeed, except in enlarging its territorial jurisdiction, in the exceptional actions, it is difficult to see, what “further" jurisdiction can be given to it. It already had jurisdiction over both local and transitory actions, and over all equity proceedings, with a limitation as to residence or service in the city only as to such actions as were not embraced in sections. 123 and 124 of the Code.

The court, however, in the Landers case has, by its decision, limited the term “jurisdiction" to the object, and denied its application to territory or persons of suitors ; and, therefore, that “further civil jurisdiction,” has respect to the subject matter and cause of action only. This may be so, but much of the previous legislation would seem to indicate, that jurisdiction over the person, and the cases in which it could be acquired, and the mode of acquiring it, entered largely into the views of the legislature. The argumentum ab inconvenienti, of “hauling men and women, from distant parts of the State, who had never been within the limits of the city, within its power, and subjecting them to its jurisdiction,” can have but little force in view of the same result ensuing, if the action was in the supreme court, with the same city designated as the place of trial.

Nevertheless, the Landers case is authoritative upon this court, and following it, we must hold that the summons in this case was not so served as to give this court jurisdiction over the person of the defendant, and unless the objection has been waived, it must be held to have been well taken.

The defendant appeared generally, and answered without alleging want of jurisdiction as a defense.

A voluntary appearance of a defendant was long since held to be equivalent to a personal service of the summons (Mahaney v. Penman, 1 Abb. Pr. 34), And section 139 of the Code, as amended in 1857, was probably suggested by the decision of the court of appeals in Burcle v. Eckhardt (3 N. Y. 132), that there could be no waiver.

In the recent case of McCormick v. Penn. Cent. R. R. Co. (49 N. Y. 303), it was held, that where the court has jurisdiction of the cause of action, consent may confer jurisdiction of the person ; and that such consent may be expressed by (a foreign corporation in that case) appearing by attorney, and answering generally in the action. See also, Sullivan v. Frazee, 4 Robt. 616.

In the Landers case, the objection was distinctly taken by answer, and the court say it was not waived.

The exceptions should be overruled, and judgment ordered for the plaintiffs upon the verdict.

Freed max, J., concurred.


source: Caselaw Access Project

author: By the Court.—Mottell, Ch. J.

license: Public Domain

text:
    GEORGE S. REPPLIER, Plaintiff and Appellant, v. JOHN T. BAXTER, et al., Dependants and Respondents.
    I. Collision.—Tow.—Tug-boat.
    1. Negligence by defendant; evidence of, what sufficient to cwrry the case to the jury.

      a. Where the injury complained of was caused by a bark, while being towed down the East river by a tug-boat belonging to defendants, colliding with a pier belonging to plaintiff and damaging it, evidence that there was at that point in’ the river a strong eddy setting in towards the shore, and carrying objects in its influence towards or against the pier, that the bark was being towed by a very long hawser, that she was brought within the influence of the eddy, that she could have been towed so as not to be brought within its influence, that the existence of the eddy was notorious, and that the defendants were engaged in the business of towing in the New York kar- . bor, malees a sufficient prima facie case to call for a submission to the jury.

    II. Negligence on pabt of plaintiff ; evidence of, what not
    SUFFICIENT.

      a. Evidence, brought out on cross-examination of plaintiff’s witnesses, that there were, persons on board of the bark, and a man standing at her wheel, without showing that they did some act to which the injury could be attributed, and that they were not the servants of the defendants, is insufficient.
    1. The bare fact that the bark sheared in towards the shore does not, under the circumstances, constitute such an act.
    Before Monell, Oh. J., and Freedman, J.

      Decided February 28, 1874.
    Appeal from judgment.
    The complaint alleged that the defendants were the owners of a “tug-boat,” which was employed by them in towing vessels. That in August, 1871, such tug boat was engaged in towing the bark “Louis” down the Bast river, and that by the negligence of the persons in charge of the tug boat, the bark was driven against, and suffered to come in collision with, the plaintiff’s wharf or pier, injuring it to the amount of one thousand dollars.
    The answer was substantially a general denial.
    When the plaintiff rested, the defendant moved to dismiss the complaint on the grounds: First, that it had not been shown that the injury was done by the tug boat; and, Second, that by the evidence, the tug boat was exonerated from blame.
    The motion was granted, and thereafter judgment was entered dismissing the complaint, with costs.
    The plaintiff appealed.

      Mann & Parsons, attorneys, and John E. Parsons, of counsel for appellant, urged:—I.
    The tide was strong flood at the time, running, therefore, to the eastward. The tug was towing the bark to the westward ; and her object undoubtedly was by keeping as near as possible to the ends of the piers, to get the benefit of the eddy, and to avoid the adverse tide. Though it was the bark which struck the pier, if it was in consequence of the act of the tug, the tug and her owners would be responsible ; the bark might also be responsible, but there could be no question of the liability of the tug (The New York v. Rea, 18 How. U. S. 223 ; Sproul v. Hemmingway, 14 Pick. 1; Cushing v. The John Fraser, 21 How. U. S. 184 ; Sturgis v. Boyer, 24 Id. 110; The Express, 1 Blatchf. 365; S. C., 6 N. Y. Leg. Obs. 401; The R. B. Forbs, 1 Sprague, 328 ; The Hector, 4 Blatchf. C. Ct. 199; The Workman, 1 Lowell Dec. [Mass.] 504). In the case of The Relief, Ole. 104, it was held that for a steam-tug to run along near to ends of the piers is culpable, and of itself constitutes negligence.
    II. If the testimony left the question of negligence in doubt, the case should have been submitted to the jury (Wolfkiel v. Sixth-Ave. R. R., 38 N. Y. 49; Dickens v. N. Y. Central R. R., Id. 23 ; Keller v. N. Y. Central R. R., 24 How. 172).
    III. The nonsuit was improperly ordered, and the judgment should be reversed with a new trial; costs to abide the event.
    Beébe, Donohue & Cooke, attorneys, and Erastus Cooke, of counsel for respondents, argued :—!.
    The mere fact that a collision occurred between the vessel in tow and the plaintiff’s pier is not sufficient to maintain the action against the owners of the tug. Negligence will not be presumed, but must be proved. The plaintiff is required to make proof of some improper act or omission of the tug, and to prove that such act or omission caused the injury. Terry v. N. Y. Cent. R. R. Co., 22 Barb. 574 ; Lannen v. Albany Gas Light Co., 46 Id. 264 ; Shieden v. Hudson R. R. Co., 29 Id. 226 ; Lehman Brooklyn City, Id. 234.
    II. The collision was not caused by the tug, but from the management of the bark. It is demonstrable that had the bark left itself to the control of the tug, the collision would have been averted. But there was a man at the wheel on board the bark, and the vessel could not have taken the direction she did at a right angle with the hawser without holding her helm to the starboard. It was then the fault of the bark and not of the tug that the injury occurred, and for that fault the tug boat was not responsible.
    III. The tug was the servant and under the control of the bark. The presumption, is, there being no proof to the contrary, that she obeyed the directions of the pilot of the bark, and in such case resort must be had to the master and not to the servant (Smith v. The Creole, 2 Wall. Jr. 511).
    There was absolutely no evidence to charge the defendants with negligence, and the plaintiff was properly nonsuited.
   By the Court.—Mottell, Ch. J.

The bark which came in contact with the plaintiff’s pier, was at the time in tow by the defendant’s tug boat. It was therefore necessary-for the plaintiff to show that the injury was caused by the tug.

The bark was attached to the tug by a hawser from seventy-five to ninety feet long. She was being towed down the river. A pier immediately above the plaintiff’s, projected into the river some hundred feet beyond the plaintiff’s. An eddy runs along the ends of the piers, setting in towards the shore, and carrying- objects, within its influence, towards or against the piers. In towing the bark, the tug, as it was alleged, negligently brought it within the influence of the eddy, and it was drifted against the plaintiff’s pier.

It is clear, I think, that if the negligent act of the tug in not keeping farther from the eddy, caused the bark to collide with the pier, the tug was the immediate and responsible cause of the collision, and the only question upon the first ground of the motion to dismiss the complaint, is, whether there was sufficient evidence of negligence to go to the jury.

I think there was. The defendants were engaged in the business of towing in the New York harbor. The eddy was notorious. The parties in charge of the tug must be presumed to have known of its existence, and of its influence upon vessels. They were towing the bark by a very long hawser, which impaired the control over the tow. The tug should have been kept away from the influence of the eddy, or the bark should have been more under the control of the tug. When the tug and bark had passed the upper pier, the latter was brought within the power of the eddy, and it was then too late for the tug to prevent the injury.

This evidence made a prima facie case for the plaintiff.

But it was claimed by the respondent, that the cross examination of the plaintiff s witness disclosed facts exonerating the defendants, and establishing that the immediate cause of the collision was mismanagement on board the bark.

Such doubtless would justify the decision below, if the persons in charge of the bark were not the servants of the defendants. But I have not found any "evidence to predicate such a conclusion. It was testified that there were persons on the bark, and that a man stood at the wheel. But it did not appear that such persons, or any of them, did any act to which the injury could be attributed.

The evidence, therefore, was w7holly insufficient to. cast the responsibility upon persons on the bark.

That was a substantial defense, and the burden of proof was upon the defendant.

I think the dismissal of the complaint was erroneons.

The judgment should be reversed and a new trial granted, with costs to the appellant, to .abide the event.

Freedmax, J., concurred.


author: By the Court.—Mohell, Ch.j.

text:
    REINHOLD BOEKLEN, Plaintiff and Appellant, v. JOHN A. HARDENBURGH, Impleaded, &c., Defendant and Respondent.
    n. Partnership.—What Does Not Constitute.
    1. A mere community of interest will not constitute a partnership;
    there must also be an agreement to share in profit and loss. a. Therefore where one owns an- interest in a certain patent, to develop which certain work was performed, that fact does not necessarily of itself make him a partner with the other owner, and liable solely as partner for the work.
    2. Charge in respect to this question.—When in answer to the ques-
    tion asked the court by jury, “ Whether the fact that the defendant owned an interest in this adventure for which the work was performed, made him liable ? ” the court charged that the fact that he owned an interest in the patent to develop which the work was performed, did not necessarily of itself make him a partner with the other owner, and liable for the work ; but that if the jury found that an actual partnership existed, or that he had held himself out or allowed himself to be held out as a partner, then the plaintiff would be entitled to recover.
    Held,
    there was no error in the charge.
    Before Monell, Ch. J., and Freedman, J.

      Decided February 28, 1874.
    Appeal from a judgment and an order denying a motion for a new trial.
    The complaint alleged the partnership of the defendants in the business of building docks, and that they employed the plaintiff to make drawings and calculations of estimates in such business.
    The defendant Hardenburgh denied generally.

      The testimony as to actual partnership, or as to whether the defendants held themselves out to the plaintiff as partners was conflicting.
    Smith, the co-defendant and alleged copartner of Hardenburgh was the owner of a “ patent” for covering piles, in which Hardenburgh was interested. The patent was used in the business of building docks.
    The question of partnership was left to the jury, who retired to deliberate. Returning to the court room they asked the court for instructions on the following points :
    1. Whether the advancing of money by Harden-burgh for the enterprise, made him a partner of Smith ; and, 2d. Whether the fact that Hardenburgh owned an interest in the adventure for which this work was performed, made him liable.
    By the Court.—The fact that Hardenburgh owned an interest in the patent to develop which this work was performed, does not necessarily of itself make him a partner of Smith, and liable to the plaintiff.
    But if you find that a partnership agreement actually existed, or that Hardenburgh held himself out or allowed himself to be held out as Smith’s partner, then the plaintiff is entitled to recover.
    Plaintiff’s counsel then duly excepted to such part of the judge’s instruction as applied to the second of the said questions.
    The jury, found a verdict in favor of the defendant. A motion for a new trial was denied.
    The plaintiff appealed from the judgment and order.

      Foulke & Malocsay, attorneys, and of counsel for appellant, urged:—I.
    The court erred in charging the jury, that the fact that Hardenburgh owned an interest in the adventure for which this work was performed did not necessarily make Mm a partner of Smith and liable to the plaintiff. “ Interest, in contracts is the right of property which a man has in a thing. In practice, interest means concern, advantage, benefit. Such a relation to the matter in issue as creates a liability to pecuniary gain or loss from the event of the suit” (Bouv. L. Dic. “Interest”). Defendant owning an interest in the patent had a right to share in the profits of the adventure. Such a right is sufficient to constitute one a partner as to third persons, even though expressly agreed that it should not be so as between themselves (Manhattan Brass & Man. Co. v. Sears, 45 N. Y. 799, and authorities cited). “When a party who renders services or advances money to •another for the prosecution of a particular business, looks beyond the personal responsibility of the latter to the creation of an interest in the resulting property or its proceeds, the transaction will be regarded as a partnership” (Vaugh v. Carver, 1 Smith Lead. Cas. pt. II. p. 1311, and authorities cited).
    II. The instruction of the court upon the question put by the jury, had a decided influence on their verdict.
    III. The judgment ought to be reversed, and a new trial ordered.

      Conners & Lyman, attorneys, and of counsel for respondent, urged:—I.
    The law is well established that a person who is not a partner by estoppel in pais, is not liable to third persons for the acts of his co-owners unless he and they are really partners inter se (1 Lindley on Part. 3 ed. 44, and cases there cited). But the jury have found that there was no partnership by estoppel, and that no partnership agreement actually existed.
    II. Hardenburgh was simply a co-owner, with Smith, of the patent. This, of itself, did not necessarily make them partners (Exp. Macmillan, 24 L. T. N. S.
      143 ; Cox v. Hickman, 9 Q. B. If. J3. 47: 1 Li-ndley on ' Part. 3 ed. 40-45).
    III. The judgment and order should be affirmed, with costs.
   By the Court.—Mohell, Ch.j.

It is nqt clear that in the question put by the jury, and in the answer given to it by the court, the same subject was referred to. The jury alluded to an interest in the “adventure,” and the court to an interest in the “patent.” There was some evidence which would seem to have authorized either.

But it is apparent, I think, that the jury desired to be instructed as to the legal effect of an interest in that which constituted the business; whether it was the adventure or the patent, is not, therefore, very material.

The learned justice instructed.the jury that an interest in the patent, to develop which the work was performed, did not necessarily of itself make Hardenburgh a partner.

As a proposition of law, I think the instruction was correct. A mere community of interest was not sufficient to create a partnership (Porter v. McClure, 15Wend. 187; Alger v. Raymond, 7 Bosw. 418, 423 Sage v. Sherman, 2 N. Y. 417, 427). There must also be an agreement to share in the profits and loss.

The part ownership of the defendant in the patent, did not necessarily, make him a partner, and the effect standing by itself, of such evidence, was correctly stated to the jury.

In concluding his instructions the learned justice charged the jury that if they found a partnership actually existed, or the defendant held himself out, or allowed himself to be held out, as a partner, he was liable.

This left it for the jury to determine the only question at issue.

No exception was taken to the charge, and the verdict was supported by the evidence.

I think the judgment and order should be affirmed, with costs.

Freedman, J., concurred.


author: By the Court.—Mohell, Ch. J.

text:
    D. FREEMAN POOLE, et al., Plaintiffs, v. ANN ELIZA KERMIT, et. al., Defendants.
    I. Vessels.—Lien on, under Statute Laws.—Act of 1862,
    Chapter 482.
    1. Oonstituüonality of the act of 1862. a. That act, so far as it attempts to give a lien on vessels for money due on a maritime contract, is unconstitutional.

    1. This, although there may be no maritime lien in rem for the money due on the contract.
    5. But in respect to demands not in their nature maritime, the courts can proceed and enforce their collection under the act referred to.
    II. Contract Maritime, What Constitutes.
    1. Where work was done and materials supplied for repairing and furnishing for sea a domestic vessel in and to the State of New York, and owned by persons residing in that state, the work being done and materials furnished while the vessel was lying in the port of New York ; but she was a sea-going vessel engaged in foreign commerce,
    Held,
    That the work was done and materials supplied under a maritime contract, and no lien could be obtained, or proceedings had in a State court, under the law of 1862. a. This, although the work was done and materials supplied at the home port of the vessel.
    HI. Conflict of Decisions Between the United States Courts and the Court of Appeals.

      1. The inferior courts of this State are bound to to follow the deci-
    sions of the court of appeals.

      a. This, although the decision of the court of appeals is subject to review in the supreme court of the United States.
    1. The fact of such power of review being vested in the supreme court of the United States does not abate the authority of the court of last resort in this State, over inferior tribunals.
    2. The court of last resort in this State having laid down and estab-
    lished the propositions contained under the first and second general divisions of this head-note, this court is bound to follow its decisions, although the United States courts have decided directly to the contrary.
    IV. Bond Given on Attachment Issued under said Act on 1862.—When no Recovery can be had thereon.
    1. When the attachment proceeding is void, there is no force in the suggestion that the action,being upon the bond, is inpersonam and not in rem.

    Before Monell, Ch. J., and Freedman, J.

      Decided February 28, 1874.
    ' Verdict subject to the opinion of the court at general term.
    The action was upon a. bond given to release a vessel from an attachment.
    It was admitted on the trial that the plaintiffs performed work and furnished materials, for repairing and furnishing for sea the ship Edith. That such work, &c., was done at the city and port of New York. That said ship was a domestic vessel in and to the State of New York, and belonged to persons residing in that State. That thereafter, the plaintiffs caused a specification of their alleged' lien upon said vessel, for said work and materials, under the act of the legislature passed April 24, 1862, to be filed in the office of the clerk of the city and county of New York; afterwards the plaintiffs presented their application, in due form, properly verified, and in compliance in all things with

      the terms of said act, for an attachment against said vessel to a justice of the supreme court of the State of Yew York. Said justice did thereupon issue in the form prescribed by said act a warrant to the sheriff of the city and county of Yew York, commanding Mm to attach, seize and safely keep the said ship “Edith,” her tackle, apparel and furniture, and said vessel, her tackle, apparel and furniture were in pursuance thereof attached by said sheriff. Ann Eliza Kermit, claiming to be the owner of said vessel, afterward applied to a justice of the said supreme court and presented to said justice and delivered to the plaintiffs a bond, wMch, after reciting the issuing of said attachment, and that the defendant Kermit, the owner of the ship, had applied for an order to discharge the attachment, was upon the following Conditions: “That if the above named obligors will pay the amount of any and all claims and demands which shall be established to be due to the said D. Freeman Poole, A. Judson Buck-man and John E. Leech, and to have been a subsisting lien upon such ship, pursuant to the provisions of said act at the time of the exhibiting the same, then this obligation to be void, otherwise to remain in full force and effect.” Thereupon the said justice ordered the discharge of the attachment. The plaintiffs demanded of the obligors the amount of their said demand, which the defendants refused to pay.
    The particulars and accounts of the claim of the plaintiffs, as set forth in the complaint, were due to the plaintiffs at the time of presenting their claim to the justice. The ship “Edith” was a sea-going vessel, engaged in foreign commerce. The said bond was given solely for the pursose of obtaining her release from the custody of the sheriff. The claim of the plaintiffs was for materials furnished and work done to the ship in repairing her and fitting her for sea.
    Upon these facts the court directed a verdict for the plaintiffs, subject to the opinion of the court at general term.
    The plaintiffs now move for judgment.

      Beébe, Wilson & Hobbs, attorneys, and of counsel for plaintiffs, argued:—I.
    The law under which the attachment, against the ship “Edith” was issued, in its application to this case is not unconstitutional, but is a valid enactment. 1. The ship was a domestic vessel, and the supplies and materials, for which the plaintiffs claimed a lien, were furnished to her in her home port, and in July, 1870, such a contract, though maritime, was not the subject of a. maritime lien (McGuire v. Card, 31 How. U. S. 348). 3. Since the revocation of the 12th admiralty rule of the supreme court of the United States, in January, 1872, the lien of the material-man is restored upon domestic vessels; but such revocation is not in its effect retroactive (The Circassian, 5 Am. L. T. 482).. 3. In respect to all con-1* tracts, not the basis of maritime liens, though they be maritime contracts, the legislatures of the several States may declare such liens as are deemed proper, and adopt all needful regulations for the enforcement of the same, not amounting to a regulation of commerce (The Belfast, 7 Wall. 629 ; Leon v. Galceran, 11 Id. 185). 4. It is claimed that the court of appeals in the case of The Josephine, 39 N. Y. 19 ; and Brookman v. Hammell, 43 Id. 554, has declared against the validity of the law as applied to all maritime contracts, whether they are subject of maritime liens or not ; but the decisions in the courts of the United States cited in these cases, and on which the court of appeals bases its decisions, do not go to any such length; on the contrary, they all make a distinction between contracts simply maritime and contracts which are the subject of maritime liens ; the law is upheld as to the former and pronounced invalid as to the latter.

      II. If it should be found that there is a conflict of opinion between the court of appeals and the supreme court of tibe United States, we still insist, that the latter, being the superior tribunal for the determination of all constitutional questions, ought to be followed. .
    III. The legislature undoubtedly has the constitutional right to declare that labor performed upon a vessel, materials or supplies furnished to her, shall constitute a lien upon her, and fix the term or time for which it shall exist, and there is no authoritative adjudication which holds that it has not such right. The lien and mode of enforcing it, are two distinct rights,-and the one does not necessarily depend upon the other.
    The lien may be constitutional, and the mode of enforcing it unconstitutional.
    It has been held that it cannot be enforced by a proceeding in rem.

    The present suit is not a proceeding in rem / it is an action in personam to enforce the obligation of a bond conditioned to pay, not a certain sum, provided the attachment issued against the vessel is held to have been legally issued, but such sum as shall be established “to be due the plaintiffs, and to have been a subsisting lien on the ship' ‘ Edith.’ ”
    IV. The plaintiff should have judgment upon the verdict.

      Vose & McDaniel, attorneys, and Everett P. Wheeler, of counsel for defendants, urged :—I.
    The act in question is unconstitutional and void so far as it undertakes to give a lien for supplies furnished to sea-going vessels, and enforce that lien by proceeding in rem against the ship.
    This has been distinctly^adjudged by the court of appeals, and those decisions cannot be questioned here. The only tribunal competent to review them is the supreme court o£ the United States (Brookman v. Hamill, 43 N. Y. 554; The Josephine, 39 Id. 19).
    In the former case a suit had been brought on the bond. In the latter the appeal was from an order vacating the attachment.
    II. These decisions have been followed in the United States district court (Sedgwick v. The Edith, opinion submitted herewith).

    III. The various decisions of the United States supreme. court are stated at length in the opinions already referred to. It can hardly be necessary to restate here the grounds upon which the cases already referred to proceed. But the importance of the question, perhaps, justifies such a statement.
    It is well settled that in all cases to which admiralty jurisdiction is. applicable at all, it is exclusive, saving only such remedies as are given by the common law (The Moses Taylor, 4 Wall. 411; The Hine v. Tre vor, Id. 555).
    It is equally well settled that the contract for supplies furnished to a sea-going vessel in a home port is a maritime contract, and that courts of admiralty have jurisdiction over such contracts by a proceeding in personam; and, if their rules of practice allow, by a proceeding in rem (The St. Lawrence, 1 Black, 522 ; The Potomac, 2 Id. 581; The General Smith, 4 Wheat. 438 ; Peyroux v. Howard, 7 Pet. 324).
    And the supreme court of the United States have twice, by rule of court, allowed process in rem to issue in such cases wherever a lien is given by the local law (Rule 12 of 1844, 3 How. U. S. vi ; revived in 1872, 13 Wall. xiv.
    The question of process is of course subordinate to the question of jurisdiction. If a court of admiralty has jurisdiction of the contract, the mode of enforcing that jurisdiction is matter of practice to be determined by Congrbss or by the supreme court.

      But no State court con have jurisdiction over a proceeding in rem to enforce a contract of which courts of admiralty havé jurisdiction.
    The remedy given by the statute of 1862 is in name and nature a proceeding in rem. It is entitled “ In the matter of the ship Edith.” No personal judgment is or can be rendered in it. It is in all respects similar to a libel in rem in admiralty. Such a remedy cannot be given by any State tribunal to enforce maritime contracts.
    IV. The general term should order final judgment for the defendant. The whole cage appears upon the record; only questions of law are involved, and the verdict is subject to the opinion of the court at general term (Code, §265; Oneida Bank v. Ontario Bank, 21 N. Y. 490, 503 ; Chittenden v. Empire Stone Dressing Co., 6 Buer, 30).
   By the Court.—Mohell, Ch. J.

The current and weight of authority in this State is, that the act of 1862, “ to provide for the collection of demands against ships and' vessels,” is unconstitutional only as to claims founded upon maritime contracts. In respect to demands which are not in their nature maritime, the State courts can proceed and enforce their collection under the act referred to.

This limitation of the act is authoritatively decided by the court of appeals, in Sheppard v. Steele (43 N. Y. 52), and in Brookman Hamill (Id. 554). The earlier case of Bird v. The Josephine (39 Id.19), which failed to recognize the distinction, is explained by the court in Brookman v. Hamill, and found not to conflict with more recent adjudications.

The ground upon which the act is declared to be unconstitutional is, that in respect to maritime contracts, the States have granted to the Federal courts exclusive jurisdiction, thus divesting the State tribunals of all jurisdiction, in such cases, to proceed in rem.

The question, therefore, in cases arising under the act, must always be, whether the demand arises under a maritime contract. That will determine the validity or invalidity of the State law.

A distinction, attempted in some of the cases, collected and reviewed, in Brookman v. Hamill {supra), between mere maritime contracts, and such as create a maritime' lien in rem, is repudiated by the latter case ; and it is held to be immaterial whether the admiralty courts do or do not proceed in ren ; the test being the nature of the claim, whether maritime or otherwise, and not the mode of enforcing it.

The ship in question was a sea-going vessel, engaged in foreign commerce. She was “ domesticated,” when the work was done, in the port of New York, and was there repaired and fitted for sea.

This, under the decisions in this State, was a maritime claim. In re The Josephine (supra), the claim was for supplies furnished. In Brookman v. Hamill, it was for wharfage of the vessel. Over such claims, as our courts have held, courts of admiralty have exclusive jurisdiction.

The case of The Belfast (7 Wall. 624), holding that a maritime claim does not arise upon a contract for material and supplies furnished, to a vessel in her home port, is examined in Brookman v. Hamill, and the remark of the learned justice in the “ Belfast” case, is applied only to cases in which the contract is not maritime, and not as intending to decide, that claims for supplies, &c., if furnished at the home port, were not of a maritime nature.

A similar criticism, in effect, was later made by the same court, in Vose v. Cockcroft (44 N. Y. 415, 420 ; see also Sheppard v. Steele, ubi sup).

But the courts of the United States still adhere to the views expressed in The Belfast, and they refuse to recognize, as the subjects of admiralty lien or contract, materials and supplies furnished to a vessel, while in her home port (Leon v. Galceran, 11 Wall. 185). A singular phase, a part of the history of this case, and as exhibiting this conflict of views, between the Federal and State courts, is the result of a proceeding in rem, in the district court of the United States, growing out of the same claim, The ship, upon which the plaintiffs performed the work, was libeled and sold, under a decree of that court. The plaintiffs, claiming a lien upon the proceeds, for their work and materials, petitioned the court to be paid their claim. But the court, following The Belfast (sup.), and Leon v. Galceran (sup.), held, that a maritime lien did not arise on a contract for materials and supplies furnished to a vessel in her home port, even though such contract might be a maritime contract. Judge Blatcheord, in his opinion, says: “It is also a principle recognized by the federal courts, that, in respect to a maritime contract for materials and supplies furnished to a vessel in her home port, a State may lawfully create such liens.

The learned district judge also recognized the differerent principle established by our State courts, in The Josephine (supra), and Brookman v. Hamill (supra), where, as we have seen, it is held, “ that all State legislation providing for the enforcement of a maritime claim or contract, in any other manner than by a common law remedy, infringes on the exclusive jurisdiction of the Federal courts, and violates the constitution of the United States.”

But the learned judge, after holding that the contract in the present case, being one for labor and materials, furnished by shipwrights, in making repairs to a vessel on the water, was a maritime contract, held it to be of no consequence whether, under the decisions of the State courts, and their interoretation of the State law, the contract was or not one which the admiralty' court would enforce by a proceeding in rem against the vessel; or the proceedings in rem against the ship as far as they were authorized by the State law, they were wholly void or not.

As .a - final result of the plaintiffs’ petition in the district court, it was held, that they had no maritime lien upon the vessel; and, therefore, were not entitled to participate in the proceeds.

The decree of the district court, containing the foregoing decision, has since, on appeal to the circuit court of the United States, been, in all respects, affirmed.

Nevertheless, it may be regarded as settled in this State, that contracts for work and materials for a seagoing vessel are maritime contracts, to enforce which, by a proceeding in rem, the courts of admiralty have exclusive jurisdiction. And, therefore, as to such contracts, the act of 1862 is unconstitutional.

There is ho force in the suggestion of the plaintiff’s counsel, that the action being upon the bond it is in personam, and not in rem. This objection is covered by the case of Vose v. Cockcroft (sup.), which, like this, was an action upon the bond ; and the court say, if the attachment proceeding is void, the bond falls with it.

Notwithstanding the conflict existing between our own and the Federal courts, I feel bound by our own decisions.

The power to review such decisions, which is vested in the supreme court of the United States, does not abate the authority of the court of last resort in the State, over inferior tribunals; and therefore, notwithstanding the Federal courts have gone further, to sustain a State law, than our own courts have seen fit to go, we must abide by our own decisions.

Until either the Federal or the State courts recede from their present position in respect to this question, parties having similar causes of action, will be confined to their common law remedies. They cannot obtain, in either court, as the decisions now stand, a remedy in rein.

The verdict must be set aside, and judgment absolute, with costs, rendered for the defendants.

Freedman, J., concurred


author: By the Court.—Monell, Ch. J.

text:
    CHARLES GUIDET v. MAYOR, &c., OF NEW YORK.
    I. Reargument, Motion eor. — Ground on which it may be Granted.
    1. That an important point in the case was not considered by a previous general term, is one of the grounds on which a motion for a reargument may be granted by a subsequent general term. But
    the facts must be undisputed, and it must appear that the point presents a fair question for discussion, and it must also clearly appear that the first general term did not consider the point at all.

      a. Where the point is discussed and considered in the opinion of the first general term, the fact that the conclusion arrived at in reference to it is not stated in the body of the opinion is immaterial when the final decision arrived at necessarily involves and decides the point.
    H. General Term Decision.—Effect oe.
    1. It is the law-qf the court, and should be recognized and followed by all subsequent general terms, until modified or reversed by the court of last resort.

    Before Monede, Ch. J., and Freedman, J.

      Decided February 28, 1874.
    The appeal was decided in December, 1873, affirming a judgment dismissing the complaint.

      The action was upon a contract for work to be performed, which required the plaintiff to obtain an inspector’s and water purveyor’s certificates.
    The complaint was dismissed on the ground, that the plaintiff had failed to produce such certificates, or excuse their non-production.
    This motion is on the ground, that of the two points insisted on by the plaintiff at the general term, namely: 1. That the certificates were not a condition precedent; and, 2. If they were, they were waived by the defendants ;—the latter was overlooked and not passed upon by the court.

      J. W. Edmonds, for the motion.

      Mr. Dean, opposed.

         * Note.—For principal case see vol. 87, Superior Court Deports.

   By the Court.—Monell, Ch. J.

The court, in the written opinion which has been furnished us upon this motion, after disposing of the first point, proceeded to say: “unless, therefore, the plaintiff produced on the trial the certificates of the inspectors and water purveyor, provided for in the contract, or has satisfactorily accounted for or excused their production, the ruling below,” was correct.

The court then proceeded to examine the question at some length whether there was a waiver of the inspector’ s certificate, and without apparently reaching any expressed conclusion on that point, say, “But the non-production of a certificate from the water purveyor is not accounted for, and would be a fatal objection to the plaintiff’s right of recovery.” And after discussing the necessity of producing such certificate, the opinion concludes with “the judgment should be affirmed.”

Among the grounds for a motion to reargue an appeal, is,'that some important point in the case was not considered by the court.

In snch a case, it may be proper for the court upon the motion, to examine the point, so far, at least, as to see that it presents a fair question for discussion; and then, if it appears that the previous general term has entirely overlooked the point, the motion, in the discretion of this court, may be granted.

But the facts must be undisputed, and it must clearly appear that the first court did” not consider the point at all, before another genera,! term could feel authorized to listen to a reargument.

It would be unseemly for one general term to sit in review of the decision of a previous general term. When a decision is once pronounced by that branch of the court, it should become the law of the court; and be recognized and followed by all subsequent general terms', until modified or reversed by the court of ' last resort. • A different or less effect given to such decisions would unsettle the law, and produce the utmost confusion.

It clearly appears in this case, that the point alluded to was examined and considered by the first general term. In the opinion of a majority of the court, it is discussed, in its several aspects, at considerable length, and in the dissenting opinion of one of the members of the court, it is fully discussed, and is made the sole ground of dissent.

But as we understood the learned counsel-for the plaintiff, he does not allege that the points were not discussed in the opinion, but that the opinion does not dispose of them, one way or the other. In other words, that the opinion does not say that there was or was not a waiver.

The omission complained of was probably a mere oversight, and if of any importance, was cured by the decision affirming the judgment; such decision covering and deciding, adversely to the plaintiff, all the questions raised on the appeal.

If it appears, therefore, as it does distinctly in this case, that the point was examined and considered by the court, we need look only to the decision.

The reasons assigned by the court for its decision are secondary to the decision itself ; and however unsound they may be, the decision will not be disturbed, if, for other and different reasons,- it is correct.

The decision, therefore, covers all grounds, and as well, the new one, taken, I believe, for the, first time, on this motion, that, under the evidence, the question of waiver should have been submitted to the jury.

We see no reason for reviewing the former decision, and the plaintiff must appeal to another court to have corrected, the errors he alleges this court has committed.

The motion is denied, with costs.


author: By the Court.—Freedman, J.

text:
    JAMES HOOPER, Plaintiff and Respondent, v. ORLANDO W. DE LONG and EDWARD A. BOURY, Defendants and Appellants.
    The note that was the subject of this action was made by defendants, and indorsed by the payees, and subsequently by the plaintiff, as an accommodation note, and the plaintiff procured the same to be discounted at a usurious rate of interest, and transmitted the proceeds thereof to the prior indorsers, for whose accommodation the note was made. When the note fell due and was protested, the plaintiff paid to the person who had discounted it, and took up the same, and brought this action against the makers. The referee before whom the action was tried, decided that the note in the hands of plaintiff, after its payment by him as indorser, was not affected -with usury, and could be enforced against the makers (substantially assuming the fact of the same having been discounted at a usurious rate of interest).

      Held, by the general term, that the plaintiff, having procured the note to be discounted at a usurious rate 'of interest, and being a mere accommodation indorser, before the paper had a legal inception, that when he paid the note at its maturity, paid the same in his own wrong, and acquired thereby no greater rights than the person who had purchased and discounted the same at a usurious rate of interest, and the note could not be inforce d against the makers-by the plaintiff.
    Before Monell, Ch. J., and Freedmabt, J.

      Decided February 28, 1874.
    Appeal from judgment.
    The action was tried by a referee who made the following findings:
    PACTS.
    “ The defendants were copartners in business at the city of New York from June 1, to December, 1869, under the firm name and style of De Long & Co. On or about September 20, 1869, the defendant De Long, in the said firm name, made and executed the promissory note mentioned in the complaint, bearing date on the day and year, and at the place last mentioned, whereby the defendants promised to pay, ninety days after date, to the order of themselves, seventeen hundred and ninety-eight dollars and sixty-four cents, at the office of the said defendants, No. 12 Cedar street, in the city of New York.
    “The defendant De Long indorsed the said note in the said firm name of the defendants, and delivered it so indorsed to the firm of John P. Boyle & Co., on or about the day and year, and at the place last mentioned.
    “The said John P. Boyle & Co., on or about October 11, 1869,- at the city of New York, indorsed the said note and delivered it so indorsed to the plaintiff, at the city of Baltimore, who carried on business without any partner, under the name and style of James Hooper & Co.
    “ The plaintiff in his said style of J. Hooper & Co., at Baltimore, Maryland, on or about October 12, 1869, and before the maturity of said note, indorsed the same at the request and for the accommodation of John P. Boyle & Co., and delivered the same so indorsed to J: Hopkins, who paid therefore to the said Hooper the sum of $1,756, reserving a discount thereon of $42.64.
    “ The said Hooper, on October 13, 1869, paid the whole of the said sum of $1,756 to the said John P. Boyle & Co.
    “The said note was so made and indorsed by the defendant De Long, without the knowledge or consent of the defendant Boury, for the accommodation of the the said John P. Boyle & Co., but the plaintiff had no knowledge thereof.
    “ The said note had no valid inception or business character before it was discounted by the said HopJcins.

    “The said note was duly protested for non-payment at maturity, and the plaintiff, on receipt of notice of protest, paid the whole amount thereof to the said Hopkins, who then delivered the said note to the plaintiff, who then became, and ever since has been, the holder and owner thereof.
    “ The interest on the said note, from its maturity to the date of my report, is the sum of eighty-nine dollars and seventeen cents.
    “ I do further report as my
    CONCLUSIONS OF LAW :
    “ 1st. That the law of the State of Hew York governs as to the validity of the said note, and as to the-application of the defense of usury thereto.
    “2nd. That the plaintiff having indorsed the said note before maturity, lawfully paid the amount thereof to the holder, after protóst, on his own liability as indorser.
    “3rd. That there was no obligation resting on the plaintiff to defend against the said note, nor to wait for an action to be brought against him after the maturity of the note, and before he paid the same, nor to interpose the defense of usury.
    “4th. That the plaintiff not having any knowledge that the said note was made by De Long, without the knowledge and consent of his partner, the defendant Boury and the defendants being in fact partners at the time the said note was made, carrying on business under the firm name of De Long & Co., they, the defendants, are liable on the said note as partners and makers.
    “ 5th. That the said note is not affected with usury in the hands of the plaintiff.
    “6th. That the plaintiff have judgment against the defendants for one thousand eight hundred and eighty-seven dollars and eighty-one cents, the amount of the said note and interest, besides the costs of the action.” <&c.
    The defendants excepted to every one of the foregoing findings of fact, except the finding that the note had no valid inception or business character before it was discounted by Hopkins, and. to every one of the conclusions of law except the first.
    Judgment having been entered upon the report, the defendants appealed.

      John T. McGowan, for appellants, urged:—I.
    An accommodation note, as between the original parties, has no validity ; it.is only when it comes into the hands of a Iona fide holder that it can be enforced. The phrase “ bona fide holder” involves two essential facts: the first, that value has been paid; and the second, that the transferee, at the time of receiving the paper, was ignorant of its origin.
    II. The plaintiff was apprised of the character of this note in the very letter which enclosed it. It was borrowed from .De Long by Boyle & Co., to enable them to raise money with which to meet their note of one thousand eight hundred and five dollars and forty-seven cents, payable to the order of De Long & Co., and which was then held by the American Exchange Hational Bank, and about falling due. Plaintiff received it for the purpose of selling or negotiating it; and the more readily to dispose of it he indorsed it, not for the defendants or at their request, but for the accommodation of John P. Boyle & Co., and the exact sum of money which plaintiff received as the proceeds of the note from Hopkins, was remitted by plaintiff to John P. Boyle & Co.
    III. The note in suit having therefore been made without consideration, and for the accommodation of John P. Boyle & Co., and having been discounted for the plaintiff by Hopkins at an usurious rate of interest, and the plaintiff having been a party to that transaction, and the proceeds of the note having passed through his hands, he is to be considered as the person making the discount and charging the usurious interest, and is not entitled to recover as an innocent or bona fide holder of the note.
    IY. The plaintiff became the owner and holder of the note after it became due and was protested. He paid Hopkins the face of it on December 24, two days after it had been protested, and received it on that day from him. Plaintiff paid the amount of the note to Hopkins in Ms own wrong. In paying the note he discharged a mere moral obligation, and he acquired no greater rights than Hopkins possessed, although plaintiff was an indorser. In the hands of Hopkins there was a complete defense. Ho one can become a bona

      fide holder of a promissory note so as to shut out a valid defense by the maker when such holder takes it after it is past due (Newell v. Gregg, 51 Barb. 363, and cases cited ; American Ex. Bank v. Corliss, 46 Id. 19; Devlin v. Brady, 36 N. Y. 531 ; Chester v. Dorr, 41 Id. 379).

      E. T. Bell and George Bell, for respondent, held :—
    I. The capacity in which the plaintiff received the note in suit was that of an indorser. He took up the note on his liability as indorser, and now looks to the maker • to recover the amount paid. He did not become the owner of the note after maturity, as the appellant claims, in such a manner as to let in defenses available against one who takes after maturity. The plaintiff took up the note for the account of the payee and the maker.
    II. Further, the plaintiff was an innocent indorser, without knowledge or notice of the character of the note. It was represented to him to be business paper in the hands of J. P. Boyle & Co.
    III. .The question in this case then, is whether an accommodation maker can set up the defense of usury against an indorser without notice, who has taken up the note upon protest thereof. The maker is liable to such indorser either on the note or for money paid on his account (Brown v. Mott, 7 Johns. 361). The plaintiff is entitled to récover against the defendants who are sureties (Edw, on Bills, .333), for J. P. Boyle & Co. because they (defendants), being such sureties, allowed the plaintiff to pay the note. If the defendants had notified plaintiff of any defenses and requested him not to pay the note but to defend against it, these defendants might'set up such defense against the. plaintiff. But as in this case the defendants did not so notify the plaintiff of any defense, but allowed him to pay the note, they were guilty of laches and are bound to repay plaintiff the sum paid by him.
    IV. The defendants being sureties for J. P. Boyle & Co., cannot set up any defense not available by said J. P. Boyle & Co., and are bound by the representation of J. P. Boyle & Co. (Holmes v. Williams, 10 Paige, 326).
    Y. Tire defense of usury has not been made out. The evidence is not clear. This is a defense which must be proved absolutely and as laid (Griggs v. Howe, 31 Barb. 100).
   By the Court.—Freedman, J.

The learned referee did not in express terms find that the retention of the sum of forty-two dollars and sixty-four cents by Hopkins for discounting the note was usurious. He decided the case upon the theory that even if it was usury, and although the note had in point of fact no valid inception or business character before it was discounted by Hopkins, the plaintiff, as indorser before maturity, was under no obligation to the defendants as makers to set up the claim of usury, and that consequently he had a right to take up the note, after pro-' test, and having thus taken it up, he could maintain an action thereon in which the defendants were not at liberty to interpose the defense of usury. In this the referee erred. There was evidence upon which the referee might have based a finding of usury ; and if there was usury, Hopkins could not have recovered on the note, either against the plaintiff or the defendants ; and this being so, the plaintiff could not, by merely taking up the note, create a cause of action against the defendants. True, the plaintiff might nevertheless recover, upon proof that the defendants induced him by representations that the note was a business note, and that it would be paid by them as such, to take it up, and that in reliance upon such representations, and in ignorance of the true state of affairs, he did take it up. As an estoppel in pads may be urged against the defense of usury (Mason v. Anthony, 3 Keyes, 609), such proof would operate as such estoppel. But there is no finding to this effect, and the evidence at large points strongly to the conclusion that the plaintiff, at the time he indorsed the note, and induced Hopkins to discount it, well' knew the true character of the paper.

If, therefore, with knowledge of its infirmity, plaintiff procured the note to be discounted at a usurious rate of interest, he, as a mere accomodation indorser before the paper had a legal inception, could not deprive the makers, who had made the note solely for the accommodation of the first indorsers, Boyle & Co., of their defense of usury; and when he paid the amount to Hopkins, he paid it in his own wrong, and acquiesced thereby no greater rights than Hopkins possessed. Brown v. Mott (7 Johns. 361), was not a case of usury, and is not in point.

The theory of the referee being inapplicable to the facts, as far as they were found, and the court at general term being unable to determine that in point of fact there was no usury, when the referee had assumed that there was, and had based his decision upon such assumption, especially as the case discloses evidence upon which the referee might have made a finding to that effect, a new trial must necessarily be ordered. This being so, it is unnecessary to. notice the other questions discussed on the argument.

The judgment should be reversed, the order of ref- • erence vacated, and a new trial ordered, with costs to appellants, to abide the event.

Monell, Oh. J., concurred.


text:
    ALFRED P. ARNOLD, et al., Plaintiffs and Respondents, v. CHRISTOPHER KEYES, Impleaded, &c., Defendant and Appellant.
    This action was upon a promissory note brought against maker and indorser. After the action had been commenced, the plaintiffs sold and assigned the cause of action, and afterwards the action was continued for the interest and benefit of the assignee. •

      Held, that the action in no wise abated by the assignment and transfer of plaintiffs’ interest, and that its continuance in the name of the plaintiffs was in all respects proper and regular.
    Before Monell, Ch. J., and Freedman, J.

      Decided February 28, 1874.
    The action was brought against Christopher Keyes, as maker, and Patrick Flannery, as indorser of a promissory note. Both defendants were served with the summons and complaint on July 31, 1873. The time to answer, having been extended by the court, expired September 11, 1873, when the plaintiffs took judgment by default against both defendants. On September 19, 1873, the default was opened as to the defendant Keyes, and the latter thereupon interposed an answer containing a general denial. Still later, he was permitted to set up, by way of supplemental answer, that since the commencement of the action his co-defendant, Flannery, had paid the full amount of plaintiff’s claim, with interest and cost.
    The action was tried before the court and a jury, and the trial resulted in a verdict for the plaintiff. Judgment having been entered, the defendant Keyes appealed.

      A. B. Johnson, for appellant.

      Carlisle Norwood, Jr., for respondents.
   By the Court.—Freedman, J.

Upon the trial it appeared, among other things, before plaintiffs rested, that after the commencement of the action, and after the recovery by default of the judgment of September 11, the plaintiffs sold and assigned said judgment to Mr. O’Conor, receiving full valué therefor, and that ever since that time the action was continued in point of fact for the benefit of said O’ Conor. This fact neither showed, nor did it tend to show, payment. The appellant then proved, by the testimony of his co-defendant Flannery, that after the recovery of the judgment by default against both defendants, the said Flannery conveyed certain property, and that, on the acceptance of the title thereto, the purchaser retained about one thousand five hundred dollars, as security for the payment of said judgment, but that he, the said Flannery, did not authorize the purchaser to pay the money so retained, or any part thereof, in satisfaction of the judgment. Although this testimony would not have authorized a verdict for Keyes on the ground of the the payment of the note by Flannery, the questions relating to such payment, and to the alleged existence of collusion between O’Conor and Flannery, were nevertheless submitted to the j ury under a charge to which the appellant took no exception, and determined by the jury against the appellant.

The only question, therefore, which is involved in the appeal, indeed, the only one raised by appellant’s points, arises upon the exception taken to the refusal of the court to dismiss the complaint. The motion for a dismissal was made on the ground that the original plaintiffs had parted with their interest, and that consequently they had no longer any right to carry on the action. The assignment appears to have been absolute in fact. It transferred not only the judgment, but also the debt which had been merged in the judgment, and constituted the assignee the only party in interest. As such, the assignee had a right, when the judgment was opened and Keyes allowed to come in and defend, to carry on the suit in the name of the original plaintiffs. Section 121 of the Code expressly provides, that no action shall abate by the transfer of any interest, if the cause of action survive or continue, and that in case of any other transfer of interest except such as may arise from the death, marriage, or other disability of a party, the action shall be continued in the name of the original party, or the court may allow the person to whom the transfer is made, to be substituted in the action. This" section leaves it optional with the transferee to be made a party or not. If he does not apply for substitution, he may continue the action in the name of the original party.

The judgment should be affirmed, with costs.

Monell, Ch. J., concurred.