author: By the Court—Slosson, J. Woodruff, J.

text:
    Alexander A. Nevins, Plaintiff, v. The Bay State Steamboat Company, Defendants, (cross-appeals.)
    A common carrier by steamboat and railroad, received the trunks of a traveler, without question or objection, deposited them for carriage in crates, and delivered to him checks therefor. He then presented himself at the ticket office, paid his fare, and received a passage ticket consisting of two parts, one to be surrendered to the conductor in the railroad cars, the other portion to be used and surrendered in the steamboat. On this passage ticket the following words were printed: “gF” Passengers are not allowed to carry baggage beyond $100 in value, and that personal, unless notice is given, and an extra amount paid, at the rate of the price of a ticket for every $500 in value.” On the journey one of the trunks was lost, containing wearing apparel and articles of ordinary baggage, of the value of $690, and other property of the value of $730:
    1. Held, that notwithstanding the memorandum printed on the ticket, the plaintiff is entitled to recover the value of his trunk and of such portion of the contents as is customarily known and carried as travelers' baggage, being reasonable in amount and value, although worth more than $100, and although nothing extra was paid for baggage exceeding in value that sum. In considering what amount of baggage the plaintiff might reasonably have had, the jury might take into view his residence, business, station in life, the place from which he came, and whither he was going.
    2. The carrier is not liable for jewelry in the traveler’s trunk, purchased by the latter, and intended as presents for his friends, nor for masonic regalia, nor for engravings.
    3. Nor will a jury be justified in allowing to the traveler a round sum for articles of jewelry, which he can neither describe nor identify otherwise than as “ several articles of jewelry, being presents received, $100.”
    4. A common carrier may limit his liability by express contract, but not by mere notice.
    5. Passage tickets given to passengers by railroad and steamboats, are rather tokens or vouchers that the passengers have paid their fare, and are entitled to their seats, and to be surrendered when that right is recognized, than special contracts fixing and regulating the terms of passage, amount of baggage, &c.
    6. It is not negligence in a traveler to go to a hotel in the vicinity of a steamboat landing, and send a servant to the boat for his trunks. The carrier is bound’to take care of the trunks for a reasonable time after arriving at the wharf. v
    7. No rule of-law prevents a carrier from prescribing to passengers a tariff of prices varying according to the amount and value of the baggage carried, so as to charge the passenger, having no baggage, less than one who has $100 in value. The only limitation of this right is that the charges be justly and reasonably proportioned to the value of the service rendered and the risk incurred. Per Woodruff, J.
    8. An established uniform and notorious usage of business, or an actual notice brought home to the passenger, in such form as to call on him in fairness to the carrier to disclose (when he applies for passage and pays his fare), how much baggage he desires to have carried, or in which class of passengSs he desires to be ranked and charged, would exonerate the carrier from any greater liability than such as corresponds to the classification established by him as above stated, and to the rate of compensation received. . Per Woodruff, J.
    (Before Slosson, Woodruff and Pierrepont, J. J.)
    Heard, October 11th, 1858;
    decided, February 26, 1859.

      These were cross-appeals by both plaintiff and defendants, in an action tried before Mr. Justice Pierbepoht and a jury on the 12th of May, 1858. The action was brought to recover from the defendants as common carriers, for the loss of the plaintiff’s traveling trunk and its contents, under the following circumstances, viz.: The plaintiff, on the 11th day of September, 1855, left Boston for Mew York by the Fall River route. He had with him as baggage two trunks and a carpet bag. On arriving at the railroad depot in Boston, from the hotel, the baggage was received by the baggage master, and put into the baggage crates or cars. It was checked through to Mew York, and the plaintiff received three checks, one for each article.
    After the baggage was put into the crates, he purchased and paid for his ticket through to Mew York, and took his seat in the cars. On reaching Fall River he went on board the steamboat Metropolis, owned by the defendants and connecting with the line. The baggage crates were placed on the same boat. The boat landed in the morning near the foot of Morris street, and not far from Delmonico’s hotel.
    ■ The plaintiff went to look for his baggage, but finding a great crowd and confusion on the boat he went to the hotel, and sent the porter immediately for the baggage; the porter returned with one trunk only, and the carpet bag. The smaller trunk, which contained most of his clothes and various other articles, was missing. He immediately sent the porter back with the check for that trunk, but he returned without it, saying that the baggage master told him he feared it had been stolen, as it could not be found. It turned out that the trunk had been stolen.
    It was the plaintiff’s usual traveling trunk, and had been repacked by him just before leaving the hotel in Boston, it being his intention to take it with him by land to Mew Orleans, whither he was bound, and to send the rest of the baggage to the same place by sea. v
    He locked and strapped the trunk himself, and it was not reopened to his knowledge until delivered and checked at the railroad depot in Boston.
    Among the articles contained in the trunk, besides clothing, was a variety of jewelry, the greater portion of which was intended for his own use, and not exceeding in quantity what he usually traveled with, and which he had owned for a year prior to the loss. There was also a gold watch, and a few articles which were subsequently recovered; also a silver match box, and certain masonic regalia, and jewels which he had then recently purchased; also some jewelry received as presents, which the plaintiff could not describe, which he thought worth $100, some intended for presents, and some engravings.
    He usually -traveled with his masonic regalia, and had traveled with-the identical jewelry which he claimed to have been in the trunk. The value of the entire contents of the trunk, putting the jewelry which he brought with him from Europe at cost prices, was $1,420. An inventory or list of the contents of the trunk was produced on the trial. The defense is twofold.
    1st. That the articles claimed were not personal baggage.
    2d. That by an express understanding and agreement with their, passengers, the passengers Were not allowed to carry baggage except for personal use, nor beyond $100 in value, unless notice was given, and an extra amount paid for it at the rate of the price of a ticket -for every $500 in value; that these terms and conditions were expressed in the passage ticket received by the plaintiff, and that the plaintiff never notified the defendants that the baggage in question was worth over $100 and never paid .any extra amount for baggage beyond $100 in value.
    The ticket which the plaintiff purchased at Boston, appears to have been divided into two parts, one to cover the land and the other the water conveyance; the former was given up to the conductor in the cars, and the latter to the collector of tickets on the boat.
    Upon the ticket received at Boston was the following memorandum, which was uniformly printed on all the tickets:
    “Bay State Line, Boston to New York.
    “ ¡^Spr” Passengers are not allowed to carry baggage beyond $100 in value, and that personal, unless notice is given and an extra .amount paid at the rate of the price of a ticket for every $500 in value.”
    There was no evidence that the plaintiff had read this memorandum, the defendants relying on the assumption that he must have read it, it being on his ticket, or that if he did not read it ¡then there was negligence on his part, and that he must be •chargeable with knowledge of the contents of it.

      The Judge charged the jury:
    “ That the plaintiff was entitled to recover his reasonable personal baggage put on board the boat, unless the Company was excused by a contract with him; but that the ticket was not a contract limiting the responsibility of the Company, it was only a notice.
    “ That the amount claimed as reasonable personal baggage was very large, but that in considering what amount of baggage the plaintiff might reasonably have had, the jury might take into consideration his residence, business and station in life, and the place from which he came, and whither he was going.
    “ That if the plaintiff were a poor laboring man going from Boston to New York, such an amount of jewelry as the plaintiff claimed, it would not be reasonable for the Company to suppose that he had, but that a rich person living in New Orleans, who had been traveling in Europe and was on his way home, would naturally take a larger amount. The law does not fix any precise limit to the jewelry a man may wear, and travel with, except that it must not be unreasonable in amount.
    “ That if the plaintiff was negligent in looking after his baggage when the boat reached New York, he was not entitled to recover; but that it could hardly be negligence to go to a hotel in the neighborhood, when the boat landed, to get a porter for his trunks as detailed in the evidence; that the Company was bound to keep the baggage a reasonable time until he called for it.
    “ That the plaintiff was not entitled to recover for presents intended for friends.”
    To which latter charge the plaintiff’s counsel excepted.
    “ Nor for the silver match box, unless the jury believed it reasonable personal baggage, which the Court did not.”
    To which latter charge plaintiff’s counsel duly excepted.
    “ Nor for masonic regalia.”
    To which latter charge plaintiff’s counsel duly excepted.
    “ Nor for engravings.”
    To which latter charge plaintiff’s counsel duly excepted.
    “ Also, that he was not entitled to recover for the presents received from his friends, and which he did not specify.
    “ That if the plaintiff was entitled to recover, he was. entitled to interest from the time of the loss.”

      The defendant’s counsel excepted to all and every part of the said charge except that part in which his Honor denied the plaintiff’s right to recover sundry articles; and the plaintiff’s counsel excepted to the part last mentioned.
    The jury found a verdict for the plaintiff for $690, being the assessed value of the articles which the Court instructed them were proper subjects of recovery; and computed the interest on said amount from the commencement of the action at $128.80, making, altogether, the sum of $818.80. Judgment was entered on the verdict and both parties appealed from the judgment.

      Jeremiah Larocque, for the plaintiff.
    I. The instruction of the learned Judge to the jury, “ that the plaintiff was entitled to recover his reasonable personal baggage put on board the boat, unless the Company was excused by a contract with him, but that the ticket was not a contract limiting the responsibility of the Company; it was only a notice,” was correct. (Dorr v. The N. J. Steam Nav. Co., 1 Kern., 485.)
    1. The statements and pretensions of a carrier set up in a passage ticket delivered to a passenger as evidence when called for of the payment of his fare, never do make a contract. There is no meeting of minds. The passenger does not understand, when the ticket is delivered to him, that it possesses the attributes of a written contract, or that he is to look to it as containing the limits of the carrier's responsibility. (McCotter v. Hooker, 4 Seld., 497.)
    2. Much less could the carrier impose such restrictions in this particular case, (having already taken possession of the baggage and placed it beyond the reach of the passenger for transportation,) withput returning it to him.
    II. The instructions of the learned Judge to the jury for their guidance in determining what was reasonable personal baggage, were correct. (Hawkins v. Hoffman, 6 Hill, 586; Powell v. Myers, 26 Wend., 591; Pardee v. Drew, 25 id., 459; Orange County Bank v. Brown, 9 id., 85.)
    IH. The instructions as to what did and what did not amount to negligence in the passengers, were also correct.
    IV. The instructions of the learned Judge were erroneous as to the articles for which he charged that the plaintiff was not entitled to recover.

      1. Presents for friends are, to a greater or less extent, carried by every traveler who has been for some time absent from Ms family and friends, on his return to them.
    2. They are, therefore, within the contemplation of carriers, as articles which they impliedly contract to. carry in consideration of the payment of the passage money, in contradistinction from merchandise, samples of goods for sale, and the like, for wMch a specific contract is to be made as freight.
    3. They fairly enter into the definition of baggage, also, as given by the cases.
    4. As to amount, they are, of course, to be confined within the same reasonable limits as other baggage.
    5. It is not very clear on what principle the silver match box was excluded. A silver match box may have been as appropriate for the use of the passenger on the journey as other valuable articles, wMch were allowed in view of the plaintiff’s circumstances in life.
    6. The masonic regalia were eminently appropriate to the convenience of the plaintiff’s journey. They were the evidence of the plaintiff’s membership in that fraternity, entitling him to the hospitality, aid and protection of the brotherhood in all parts of the world.

      Daniel D. Lord, for the defendants.
    L The Judge erred in charging that plaintiff was entitled to recover unless the Company was excused by a contract with him; but that the ticket was not a contract, but only a notice. This charge was erroneous in both propositions.
    1. The ticket was a contract—it contained the mode of transportation agreed upon, viz.: Boston to New York, on the Metropolis, on day of delivery only and that bearer was entitled to berth No. 10. Also that Company would assume liability for $100 of baggage, but no more unless extra- premium paid, and that they would assume more risk at certain rates.
    It was as much a contract as any bill of lading.
    If it were in form a notice, it is not less a contract; every contract is a notice of what is agreed on each side.
    2. Even if the ticket were only a notice it is sufficient to exempt carrier from all liability for over $100.

      (a.) It was fully brought to plaintiff’s knowledge.
    He was bound to notice ticket to see that it was a genuine ticket. '
    He could not learn either the boat he was to go by or berth he was to occupy without looking at it.
    He could not look at it without seeing the terms as to baggage.
    If he neglected to read these terms he was negligent, and is not thereby protected from the effect of the notice.
    (6.) The Company had a right to impose the terms mentioned on the ticket as the conditions of assuming extra liability for baggage.
    The only cases in which it has been decided that a carrier cannot limit his liability by notice brought home to the passenger, is, where the notice was an attempt to avoid entirely all responsibility for baggage; but in all these cases it is conceded that the carrier has the right, by notice, to specify the terms on which he will assume liability. (Hollister v. Nowlen, 19 Wend., 236; Cole v. Goodwin 19 id., 257; Orange County Bank v. Brown, 9 id., 115; Gould v. Hill, 2 Hill, 624.) Judge Cowsisr held that a carrier could not, even by express agreement, exempt himself from liability for fire, because it was a common law liability, but it was not held that he could not regulate by agreement reasonable terms on which he would assume such liability.
    This case cited is not inconsistent with the principle claimed, but is overruled in Parsons v. Monteath, (13 Barb., 353;) Moore v. Evans, (14 Barb., 524;) Dorr v. New Jersey Transportation Company, (1 Kern., 490;) Holford v. Adams. (2 Duer, 480.)
    II. The Judge erred also in charging that jury might consider, in fixing amount of reasonable baggage, passenger’s residence, station, in life, whence coming and whither going; and that a rich person living in New Orleans, and returning from European travel, might take more than a poor man.
    If a rich man pays no more fare than a poor man, he is not entitled to impose any more risk on the Company than he.
    IH. The Judge erred in charging that it was not negligence to leave baggage in port, and go to a hotel. This should have been left to the jury.
    IY. The Judge did not err in charging that plaintiff was not entitled to recover the articles specified in the charge. (Orange

      Co. Bank v. Brown, 9 Wend., 115; Hawkins v. Hoffman, 6 Hill, 587.)
    No contract implied for articles usually carried on the person and not in trunks. (Pardee v. Drew, 25 Wend., 459.)
   By the Court—Slosson, J.

The question is no longer an open one in this State, whether a common carrier can, by a mere notice, though brought home to the owner of goods, limit his common law liability. Although it was at one time held that he could, it is now abundantly settled that he cannot, and the rule is not confined to the case in which the carrier attempts to excuse himself by notice from all liability whatever, but includes a partial/ limitation also, so that the proposition may be considered nq longer a debatable one, that the carrier cannot limit his liability) either in part or whole, by mere notice, though the notice bp proved to have been brought to the knowledge of the owner.

On the other hand, it is equally well settled, though this was formerly doubted, that he may limit his liability, in whole or in part, by express contract. (Orange Co. Bank v. Brown, 9 Wend., 85; Hollister v. Nowlen, 19 id., 234; Cole v. Goodwin, id., 251; Merc. Ins. Co. v. Chase, 1 E. D. Smith, 115; Dorr v. N. J. Steam Nav. Co., 1 Kern., 485.)

We do not by this intend to say that the carrier is not at liberty to prescribe reasonable rules and regulations for the conduct of his business, to which the owner of goods or the passenger will be subject, or that a notice of such rules and regulations, involving by their terms even a limitation of his common law liability, may not be so communicated to the traveler as under circumstances to justify the conclusion that he assents to them.

On the contrary, it may well be that a special contract may be predicated on the circumstances under which a notice is brought home to a party, but the circumstances must be such as would justify the conclusion, not merely that the party has knowledge of the notice and its contents, but that he assents to its terms and conditions.

The defendants rely upon the memorandum contained in the ticket received by the plaintiff at Boston, as constituting a special contract with the plaintiff, limiting their liability for baggage to $100 in value. It is impossible to hold this.

We cannot, on principle, regard such a memorandum, or any memorandum, on a passenger’s ticket, as constituting a contract between the carrier and the passenger.

These tickets are usually received and paid for in the bustle of a crowd, and it is unreasonable to suppose that the passenger reads and assents to the terms of a memorandum printed thereon; besides they are surrendered to the conductor of the cars or collector on the boat. If contracts, the plaintiff would be entitled to retain them as evidence of his right, as in the case of a bill of lading, until the safe delivery of his baggage. Such tickets are rather tokens or evidences of the right of the passengers to a seat in the cars or accommodation on the boat, from the fact of having paid the fare, and they have fulfilled all their purpose when that right is admitted by the call for and surrender of the tickets. (Quimby v. Vanderbilt, 17 N. Y. R., 306.)

The utmost that can be claimed for this memorandum is that it was a notice, and as such, even if it be admitted that the plaintiff read it, of which there is no proof, it could not, for anything that appears in this case, create a contract with him.

The price paid for his fare by the plaintiff included the price of the transportation of his baggage.

It is somewhat difficult to define the limit, as to value, within which the liability of the carrier for baggage is to be confined.

The Judge told the jury that “ the plaintiff was entitled to recover his reasonable personal baggage,” and that in considering what amount of baggage the plaintiff might reasonably have had they might take into consideration “his residence, business and station in life, and the place from which he came, and whither he was going.” The plaintiff was a commission merchant, and had just returned from Europe, and was on his way to Hew Orleans, where he resided.

In Hawkins v. Hoffman, (6 Hill’s R., 589,) the Court say that the implied undertaking to carry baggage “ has never been extended beyond ordinary baggage, or such things as a traveler usually carries with him for his personal convenience on the journey, and that the implication cannot be extended beyond such things as the traveller usually has with him as a part of his luggage.”

The Court admitted the difficulty of defining what precise articles were within the rule, since some men carry scarcely any luggage at all, while others take with them a great variety of articles for their convenience; that the articles to be allowed were not to be confined to wearing apparel, and other things usually deemed indispensible, but might well include books carried for instruction or amusement, a gun, or fishing tackle, as such articles are usually carried as baggage.

We understand the rule to be, that the jury, in determining' what baggage a traveler is entitled to recover from the carrier in t case of loss, may take into consideration what he has been in the \ habit of carrying in his travels for his personal convenience or \ use within a Reasonable limit, or what a person so circumstanced f is ordinarily in the habit of carrying. It is a question for the jury to decide, under all the circumstances.

The Judge instructed the jury that the plaintiff was not entitled to recover presents intended for friends, nor the silver match box, unless the jury believed it to be reasonable personal baggage, nor the masonic regalia, nor the engravings, nor presents received from friends, the particulars of which he could not give.

The plaintiff’s counsel insists that none of the articles excluded by the Judge were properly so excluded. We think the Judge ruled correctly as to these articles. It would be difficult to include them within any definition of baggage contained in the books. They certainly are not articles intended for the personal convenience of the traveler, and if presents received by him, the particulars of which he cannot give, and which may therefore be supposed not to have been used on his person, or intended for personal convenience or use, or presents intended by him for his friends, were admitted, it would be almost impossible to lay down any rule of limitation, either as to quantity or value.

As to the masonic regalia and jewels, it is clear that they were properly excluded.

The plaintiff has no reason to complain; after deducting all the items excluded by the Judge, and the articles mentioned in the inventory, which are admitted by the plaintiff to have been recovered back before this suit was brought, the verdict is still $70 more than it should have been. The mistake is doubtless owing to an inadvertence, and were we at liberty to do so, we should direct the verdict to be corrected as it ought to be, but the case does not show that a motion for a new trial was made at the Special Term, and the appeal to us is from the judgment' only. On such an appeal we can only look into the exceptions taken on the trial, and not into the question whether the verdict is sustained in whole or in part by the evidence.

The exception by the defendants’ counsel to the Judge’s charge is “ to all and every part ” of it, except that in which he denied the plaintiff’s right to recover certain articles.

The exception is too broad. It is abundantly settled that under a general exception to a charge, if any portion of it be correct, the exception must fail. We shall therefore refrain from express ing any opinion on the question of the correctness of the charge, in respect to the plaintiff’s negligence, of which a point was made on the argument, or whether the Judge did or did not properly take that question from the jury, though in saying this we do not intend to intimate any doubt as to the propriety of his so doing, under the admitted facts of the case.

For the like reason, we do not deem it necessary to say whether we should or should not wholly coincide in some of the considerations which the Judge submitted to the jury as their guide in determining what was a reasonable amount of baggage for the loss of which the passenger might hold the carrier. A point was made of this on the argument, but abandoned by counsel as not of sufficient importance to incumber the case.

Upon the exceptions properly before us, we are of opinion that the judgment should be affirmed, with costs.

Woodruff, J.

(1.) Without denying the rule that a common carrier cannot relieve himself from the responsibilities which the common law imposes upon him as a common carrier, by merely giving notice that he will not be so liable, I desire, in order to avoid misapprehension, to say that, in my judgment, the common law does not prescribe the rates or prices, or terms and conditions under which the carrier shall perform his services otherwise than that he shall carry the passenger and his baggage at a reasonable price and under regulations respecting the manner in which the business shall be done which are themselves reasonable. And the law does not .forbid the carrier’s prescribing regulations designed to protect him against unusual hazards or against imposition or fraud, nor forbid his requiring the payment of rates of passage varying according to the varying magnitude of the risks he assumes.

I know of no rule of law which prevents a carrier from prescribing to passengers a tariff of prices, according to which he will charge to the passenger who has no baggage a specific sum; to the passenger who carries baggage of the value of $100 an additional amount; to the passenger who carries baggage of the value of $500 a further sum, and so on, increasing the price for passage according to the increase in the value of the service and the hazards of loss. The only limitation of this right is the requirement that the charges be justly and reasonably proportioned to the varying value of the actual service rendered and to the risk incurred. And when it is said that the carrier receives compensation for carrying the traveler’s baggage in the price charged for passage money, this is not a denial of the carrier’s right to discriminate, and if he please, consent to carry passengers who have no baggage for a less compensation than he charges passengers with baggage; nor when it is said that the carrier who receives passage money is responsible for the safe carriage and delivery of a reasonable amount of baggage, does this proposition deny the right of the carrier to graduate his charges with reference to the actual value of the property the carriage and safety of which he insures.

Whether the carriage be by railroad or otherwise, it is obvious that carrying ' the baggage of the passengers necessarily involves an expense and risk greater or less in proportion to the quantity, and value which each passenger has. Labor, baggage cars, and the watchfulness and care requisite to the secure preservation of the property are proper subjects of compensation, and are obviously an addition to the labor and expense of carrying the person of the passenger only. The duty to carry safely involves the duty to provide secure places for the transportation and proper watchfulness and safeguards to prevent loss. These are proportioned to the value at stake and the consequent hazard, and the right to require a disclosure of the value of the goods and a proper rate of compensation obviously follows from these duties.

But the recognition of the legal right of the carrier to make the discrimination above intimated comes far short of sustaining the claim of the defendants in this case, to be exonerated on the ground that they placed on ttie passage ticket the notice given in evidence in this case.

Assuming the discrimination in respect to rates of charge to be just- and reasonable, I cannot doubt that an established, uniform and notorious usage of business, or an actual notice brought home to the passenger in such form as to call upon him in fairness to the carrier to disclose, when he applies for passage and pays his fare, how much baggage he wishes him to carry and insure, or in which class of passengers he desires to be ranked and charged, would entitle the carrier to exoneration from any greater liability than such as corresponds with the classification which he has established.

Whether when the baggage is delivered the passenger’s attention should be called to the regulation and inquiry be made respecting its value; or whether, if not at that time, it should be done on the application of the passenger for his ticket and tender of his passage money, or in what precise mode a railroad company may so conduct its business as to make it the duty of the passenger to disclose the value of his baggage and pay accordingly, it is not necessary in this case to say. Frankness, fair dealing, and a clear opportunity to act intelligently on both sides are undoubtedly reciprocally due.

' When proper notice of such a regulation is given so that the passenger is apprised thereof, or when from the uniform and notorious usage of business, he is chargeable with such notice, it is reasonable and just that he be held bound thereby: and that the carrier may require a disclosure of contents and value and charge accordingly, is not, I apprehend, doubtful, whether he be a carrier of goods or of passengers with their trunks. (See cases cited in Cole v. Goodwin, 19 Wend., 270; Orange Co. Bank v. Brown, 9 id., 114; Wyld v. Pickford, 8 Mees. & Wels., 443; Batson v. Donovan, 4 Barn. & Ald., 21; Clay v. Willan, 1 H. Black, 298; Izett v. Mountain, 4 East., 370; Mercantile Ins. Co. v. Chase, 1 E. D. Smith, 115, and cases cited; Stanton v. Leland, 4 id., 93, &c.; Holford v. Adams, 2 Duer, 471.)

I concur with my brethren in the opinion that the defendants here, having received the plaintiff’s trunks, without inquiry, objection or condition, and placed them in their baggage car, and having afterwards accepted his passage money without inquiry or condition, were not exonerated from responsibility for such property as properly falls within the denomination of a traveler’s baggage by the mere fact that the indorsement on the ticket which they delivered to the plaintiff stated that passengers are not allowed to carry baggage beyond $100 in value, and that personal, unless notice is given and an extra amount paid at the rate of the price of a ticket for every $500 in value.”

Hothing was done before or at the time when the trunks were offered to the defendants, or when the plaintiff tendered his fare, which by actual communication to him, gave him notice of any such price or condition upon which the defendants would carry him and his trunks, nor was there evidence of any other facts which can be said to have made it his duty to state the value or contents of his trunks and pay accordingly.

(2.) It seems to me proper also, to observe that so far as the charge to the jury seems to indicate that in determining for what amount of baggage the defendants were responsible the jury might take into consideration the plaintiff’s residence, business, station in life, the place from which he came and whither he was going, and whether he was a. poor man or a rich man, or where he had been traveling, the charge was not free from exception. If the liability of the defendants depended in any degree upon such considerations, it should appear that they had knowledge of these facts, or some means of knowledge, when they undertook to carry the plaintiff. But I am apprehensive that these considerations do not affect the extent of liability. If travelers practice no fraud or disguise; one may carry as much baggage as another. What is reasonable baggage may be determined independent of any such criteria; and if the claimant have that and no more the carrier is responsible for that, whether the passenger be rich or have no other worldly possessions than his traveling baggage, and whether he have traveled in Europe, or is making his first journey from the most humble birthplace.

On the other hand, if the evidence respecting the actual contents of the traveler’s trunks be contradictory and doubtful, considerations showing that his claim to a very valuable outfit was improbable, and tending to impair confidence in his testimony, might perhaps arise out of proof that he was poor, and that the articles claimed were wholly unsuited to his condition in life or his previous history, and so tend to the belief that his claim was exaggerated in respect to the amount and value of the contents of his trunk. In this construction of the charge, (if it bear that interpretation,) doubtless the considerations to which the attention of the jury was called would not be irrelevant.

Upon this branch of the case, however, my concurrence rests upon the generality of the exception taken to the charge, and on that ground I concur in the affirmance of the judgment.

. Judgment affirmed, with costs.


source: Caselaw Access Project

author: By the Court—Pierrepont, J. Woodruff, J. (Dissenting.)

license: Public Domain

text:
    Alexander M. Lawrence, Receiver, Plaintiff and Respondent, v. William Nelson and William Nelson, Jr., Defendants and Appellants.
    1. A person who takes policies from the General Mutual Insurance Company, a corporation organized under the act of May 25, 1841, (Laws of 1841, p. 229,) and the act of April 6, 1842, amending the same, (Laws of 1842, p. 138,) thereby, by force of the 6th section of the act of 1841, becomes a member of said Company.
    2. The said Company became insolvent, and a receiver of its effects was appointed, while notes given by the defendants to the Company for the premiums on policies taken by them from the Company were running to maturity. But before the receiver was appointed, losses had occurred of property insured by some of such policies, which losses had been adjusted by the Company, at sums amounting in the aggregate to $5,393.30. One loss under one policy (on the Galena), was adjusted January 9, 1854, at $3,083.45. In January, 1854, before the policies then outstanding had expired, they were canceled and surrendered by an agreement between the defendants and the Company, indorsed on such policies, by the terms of which agreement the return premiums on said policies, amounting to $2,172.87, were to be paid to the defendants “ratably out of the assets of the Company when divided.” The petition for a dissolution of the Company was presented March 10, 1854; its dissolution was decreed Sept. 9, 1854, and a receiver was appointed Dec. 26, 1854: Sdd,

    3. (1.) That the defendants must pay to the receiver their premium notes in full. (Woodruff, J., dissenting.)
    4. (2.) That they could not set off either the $2 172.87, or the $5,393.30, or the item of $3,083.45, (part of the $5,393.30.)'
    (Before Slosson, Woodruff and Pierrepont, J. J.)
    Heard, October 6, 1858;
    decided, February 26, 1859.

      This is an appeal by the defendants from a judgment entered against them upon the report of E. P. Cowles, Esq., as Referee.
    The action was commenced by Mortimer Livingston, Receiver of the General Mutual Insurance Company, as plaintiff, against William Nelson and William Nelson, Jr., as defendants. Pending the suit, Mr. Livingston died, and Alexander M. Lawrence was appointed Receiver in his stead, and by order subsequent thereto, the action was continued in the name of Mr. Lawrence, Receiver, as plaintiff.
    The complaint states the appointment of Mr. Livingston as Receiver, and his title as such to the property and effects of the Company, and that as such Receiver he became possessed of six several promissory notes, made and delivered by the defendants to the said Insurance Company, amounting in the aggregate to the principal sum of $2,422.50, describes them and prays judgment for the amount thereof with interest.
    The answer admits the making of 'the notes, and alleges that they were given to said Insurance Company as premium notes for insurances effected by them with said Insurance Company; that upon several of the policies so effected losses were sustained, which said Company acknowledged, to the amount of §5,898.30; that this sum is wholly unpaid; that before the notes (described in the complaint) matured, the said Company became insolvent and ceased to insure, and canceled the policies for which said notes were given, and that there remained unearned of the premiums for which the notes were given, the sum of §2,172.87, which sum, by the canceling of the policies, the defendants became entitled to have, and demand from said Company, which two sums amount to $7,566.17 ; and that when said Company took said notes, it was insolvent and knew that fact; denies being indebted to the Receiver, and claims a balance due to them from said Company of §5,143.67, besides interest, and prays judgment for that sum.
    The said Insurance Company was incorporated by the act of May 25, 1841, (p. 229 of Laws of 1841,) and its powers and the rights and liabilities of its members are prescribed by that act, and the act of April 6 1 842, (p.,138 of the Laws of 1842.)
    Section 4 of the act of 1841 designates seven persons as Commissioners, and declares it to be their duty “ to open books to receive applications for insurance to be effected by said Company, and as soon as applications amounting to $500,000 shall be received, said Commissioners shall give notice to those persons who have made such applications, of a meeting for the election of thirty-two Trustees; and every person having so made application for insurance, shall be entitled to vote at said election, and the persons chosen at said election shall be Trustees of said Company for the ensuing year.”
    Section 5 provides for dividing the Trustees so elected into four classes of eight each; one class to expire in one, one in two, one in three, and one in four years, and for filling vacancies.
    Section 6 of the act of 1841, declares that “ every person having taken a policy during the preceding year directly in his own name, Or in the name of his firm, and every person holding in his own name or in the name of his firm, a certificate of the Company, not discharged by payment of losses, shall be deemed a member of said Company, and entitled to vote at all elections. Every person who shall become a member of this corporation by effecting insurance therein, shall, the - first time he effects insurance, and before he receives his policy, pay the rates that shall be fixed upon and determined by the Trustees; and no premium so paid shall ever be withdrawn from said Company, but shall be liable to all the losses and expenses incurred by this Company during the continuance of its charter.”
    The 7th section prescribes the nature of the securities in which the Company may invest its premiums; and the 8th provides for the annual election of Trustees after the first election, the notice to be given, and the manner of conducting it.
    The 9th section' of the act of 1841, as amended by the act of 1842, declares that “the officers of the said Company shall, within one month after the expiration of one year from the day, on which they shall have issued their first policy,' and within the first month of each subsequent year, cause an estimate to be made, as near as may be, of the profits of the said Company during the preceding yearand after prescribing the mode of making such estimate of profits and its effect, further declares that “ the said officers shall thereupon credit on the books of said Company each person or firm who shall have paid any premiums to said Company during the preceding year, with such a. portion of the said net balance * "' * ■* as the amount of earned premiums paid by such person or firm during such year, and not returned, shall be of the whole amount of earned premiums received by said Company during said year, (less return premium,) and shall issue to such person or .firm a certificate declaring him or them, and his or their executors, administrators or assigns, to be entitled to a portion of the invested funds of the said Company, equal to the amount so credited to him or them, and also to the receipt annually, out of the interest or income derived by said Company from the investments of said profits, of an interest not exceeding six per centum per annum, which certificate shall contain a proviso that the amount named therein is liable for any- future loss by said Company.” * *
    The notes in suit" were not given upon policies issued upon applications for insurance made under the 4th section of the act of 1841, but were given for premiums upon policies issued to the defendants in and according to its ordinary course of business.
    The case contained an admission or stipulation, signed by the defendants’ attorney, as follows, viz.:
    ■ “ It is hereby admitted, for the purposes of this trial, that the General Mutual Insurance Company, in making the yearly estimate of net profits, under the provisions of their charter, credited each dealer with such proportion of the net, as the amount of earned premiums received from him was of the whole amount of earned premiums received by the Company during the year, without regard to the fact that the business of such dealer with the Company, for the year, had resulted in a loss to them; and further, that in making such'estimate, the premiums and premium notes were in all cases placed and credited to the Company, as earnings, and the return premiums were placed with the losses and expenses, and deducted therefrom to ascertain the net profits for the year.
    “I admit the above, at the request of the plaintiff’s counsel, but do not admit the relevancy of the testimony, or the correctness of the practice of the Company.
    “March 25th, 1858."
    The Referee found, as matters of fact:
    “ 1st. That said Company, on the 10th of March, 1854,' filed their petition for a voluntary dissolution under the statute for that purpose made and provided; and that subsequently, and on the 9th of September, 1854, said Company was dissolved by decree of the Court; and on the 26th day of December, 1854, by an order of the Supreme Court, made on that day, Mortimer Livingston was appointed the Receiver under the statute aforesaid, and as such became vested with the assets of said Company, and among them were the notes hereinafter mentioned. That said Mortimer Livingston having departed this life on the 24th of August, 1857, Alexander M. Lawrence was, by an order of said Supreme Court, made, on the 5th day of November, 1857, duly appointed the successor of said Mortimer Livingston, as such Receiver; that by an order of this court, made, on the 29th of December, 1857, this suit, which had been.commenced by said Mortimer Livingston, as such Receiver, was continued in the name of said Alexander M. Lawrence.
    “ 2d. That this action was brought originally by said Mortimer Livingston, as •such Receiver, under .the authority of an order of the Supreme Court, made on the 10th day of April, 1855, to recover the amount, with interest due by said defendants on the following promissory notes, made and given by them to the said General Mutual Insurance Company, viz.:
    1 Note for §560 00, dated Nov. 15, 1853, due Nov. 18, 1854.
    2 “ “ -321 25, “ Aug. 17, 1853, “ Aug. 20, 1854.
    3 “ “ 280 00, • “ Oct. 7, 1853,- “ Oct. 10, 1854.
    4 “ “ 420 00, “ Nov. 11, 1853, “ Nov. 14, 1854.
    5 “ “ 360 00, “ Nov. 18, 1853, “ Nov. 21, 1854.
    6 “ “ 481 25, “ Dec. 15, 1853, “ Dec. 18, 1854.
    “That the said defendants are indebted to the said Receiver in the sum of $2,422.50 for principal, together with interest thereon, from the dates on which they respectively became due as aforesaid.
    “ 3d. That the said promissory notes were given for the premiums of insurance on certain policies made and executed to said defendants by the said General Mutual Insurance Company, That said policies, in the latter part of January, 1854, were canceled and surrendered before they expired, under an agreement to that effect indorsed on said' policies, whereby the return premiums on said policies were to be paid to said defendants “rata-
      bly out of the assets of the Company when divided,” as by reference to said policies and the agreement indorsed thereon will more fully appear, and that said return premiums, amount in the 'aggregate to the sum of $2,172.87, on which such sum the said defendants are entitled to a dividend, with other creditors, out of the assets of said Company. . . .
    “ 4th; That the said defendants suffered a loss under the policy issued to them on the ship “ Galena,” amounting to $3,083.45, which loss was adjusted, and due and payable on the 9th day of January, 1854, and another loss on the policy on ship “ Vicks, burg,” amounting to $2,253.45, adjusted on the 18th day of March, 1854, and another loss on the ship St. Louis, amounting to $56.40, adjusted on the 16th of February, 1854, which said losses amount in the aggregate to the sum of $5,393,30.”
    (On the trial, when the testimony was closed, and both parties had rested, “ the defendants’ counsel claimed that the said notes, which are the subject of this suit, passed into the hands of the Receiver, subject to the equitable right of the defendants to offset against, and to have applied to the discharge of the same the sum of $3,083.45, the adjusted loss due upon the ‘ Galena,’ on the 9th day of January, 1854; and that inasmuch as such offset would exhaust the whole of the plaintiff’s claim upon said notes, leaving a balance in favor of the defendants, the defendants were entitled to judgment against the plaintiff for such balance, together with their other claims against said Company; to be paid pro rata out of the assets of the Company.”)

      “ The said Referee did further decide and determine as matters of law:

      “ 1st. He overruled the claim- made by defendants’ counsel, that the said notes passed into the hands of the Receiver, subject to the equitable right of the defendants to offset against and to have applied to the discharge of the same the sum of $3,083.45, the adjusted loss due upon the ‘ Galena,’ on the 9th day of January, 1854.
    “ 2d. He further decided as matter of law, that the plaintiff was entitled to recover the full amount of the notes set forth in the complaint, and accordingly rendered judgment in favor of the plaintiff for the sum of $3,022.69, the amount of said note and interest.

      “ To which decision and judgment, and particularly so much thereof as decides that the defendants are not entitled to offset against the plaintiff’s notes; the said adjusted loss on the ship ‘ Galena,’ the defendants by their counsel duly excepted.”
    From the judgment entered upon the report of the referee, the defendants appealed to the General Term.

      A. C. Morris, for appellants (the defendants).
    I. The referee should have allowed the offset of the loss on the Galena.
    The petition for the dissolution of the Company was filed March 10th, 1854.

      The order for the dissolution of the Company and the appointment of a Receiver, was not made until September 9th, 1854.
    ■ Conceding that the order for the dissolution, &c., relates back to the time of filing the petition, still the Receiver’s rights to the assets did not attach until March 10th, 1854.
    The defendants’ notes, none of which were due until several months afterward, passed into the hands of the Receiver with the other assets. At this time the Company was indebted to the defendants in the sum of $3,083.45,- for.the loss on the Galena, which -was then due and payable.
    Although the notes of the defendants were not due, they had an equitable right to anticipate their payment and have them offset against the loss on the Galena. (Keep v. Lord, 2 Duer, 78; Hicks v. McGorty, id., 298; Lindsay v. Jackson, 2 Paige, 581; Receiver of Middle District Bank, 1 id., 585; Miller v. Receiver of Franklin Bank, id., 444; Holbrook v. Receiver of American Ins. Co., 6 id., 228; Bradley v. Angel, 3 Comst., 475.)
    The Receiver took the notes subject .to this, equitable right. Under the authority of the above cases the defendants were entitled to an injunction at any time before the notes fell due to prevent their transfer to bona fide holders for value without notice. This is the only object of an injunction. Where the notes are not transferred, but suit is brought upon them by the original ■ holder after 'they become due, the offset may be made under the statute.
    In the present case the notes all fell, due in the hands of the Receiver, and he is in no better position, in regard to them than the Company itself would have been if it had not become insolvent.
    The statute defining the duties of receivers expressly recognizes the right of offset in cases like the present.
    “ Such receivers shall have all the power and authority conferred by law upon trustees to whom an assignment of the estate of the insolvent debtors may be made pursuant to the provision of the 5th chapter of the second part of the Revised Statutes.” (2 R. S., 469, § 68.)
    “The said trustees shall have power to sue" in their own names, or otherwise, and recover all the estate, debts, and things in action belonging or due to such debtor, &c., &c., and no setoff shall be allowed in any such suit for any debt unless it was owing to such creditor by such debtor before the first publication of the notice required in the first article,” &c. (2 R. S., 41, § 7,) and § 39 [36] p. 47, expressly allows a setoff of mutual debts by such Trustees.
    EE. There can be no reasonable objection to a judgment in favor of the defendants for the residue of their claims:
    Claim for loss on Gralena,............ .............$3,083 45
    Deduct notes,................. .............2,422 50
    Balance due defendants,............ ............. $660 95
    Add loss on Vicksburg,............. .............2,253 45
    “ “ “ St. Louis,............. ............. 56 40
    Return premiums, ........'......... ............. 2,172 87
    $5,143 67
    Add difference of interest
    If the defendants take judgment against the Receiver for this balance, no prejudice can result to any person interested in the assets. A judgment against a Receiver merely adjusts the amount of the’claim as against the insolvent corporation. In a suit against a Receiver it is not necessary for him to protect himself against a deficiency of assets by such pleas as executors, before the Revised Statutes, were compelled to interpose. As the executor under the present, law is protected by the Surrogate, so is a Receiver by the Court that appoints Mm. ÍFhe judgment merely adjusts the amount due as between the party .and the corporation. No execution can issue upon such a judgment against the Receiver personally, and a levy upon assets would undoubtedly result in punishment for contempt of Court.
    HI. Upon each of the policies upon which a return of premium is claimed is an indorsement as follows:
    “It is agreed to return premium of..............allowed under this policy to. be paid ratably out of the assets of the Company when divided. This policy is hereby canceled from .........., 1854.”'
    By reference to the body of the 'policies it will be perceived that each policy contains a provision allowing the assured 'to cancel at hM option. The indorsement is printed and appears to be a general form, adopted by the Company to apprise its dealers, as they brought in their policies to be canceled, that the Company was going into liquidation and that it was paying out no money. How the Referee could have tortured this indorsement into an agreement by the defendants to allow “ the amount of "their. notes to go to help to make up the fund from which they were to.be paid their return premiums ” is inconceivable.
    TV. The Referee has entirely misconstrued the charter of the General Mutual Insurance Company. (See Charter, Laws 1841, 229; Amended, Laws 1842, 138.) :
    The notes sued upon are not subscription notes, but ordinary premium notes, the distinction between which has always been well understood by the Mutual Insurance Companies and their dealers. The distinction is shown in the admission of the plaintiff’s counsel and is clearly pointed out in' Brouwer v. Hill, (1 Sandf. S. C. R., 644,) also Merchants Insurance Company v. Rey, (id., 184.)

      Alexander Hamilton, Jr., for respondent (the plaintiff).
    1. The act incorporating the General Mutual Insurance Company, (Sess. Laws of 1841, 229, and Laws of 1842, 138,)' established peculiar relations affecting the question.
    Every insurer, a dealer .with the Company, became a member or corporator interested in the premiums paid by all other dealers and corporators. (Sess. Laws of 1841, Chap. 252, §§ 6, 9.)

      II. The earnings of the Company, being the premiums received from all the dealers, as well as the income derived from investment of premiums, were placed in a common stock or fund; and from this common fund the losses and expenses for the year were deducted, and out of the balance, if any, of profits, a dividend was declared to each dealer ratably according to the amount of earned premiums paid by him. (Sess. Laws of 1842, Chap. 132, § 1.)
    Thus each dealer or insurer was not only a corporator, but interested in all the premiums paid by others, as well to pay his losses as to entitle him to profits.
    The community of interest under this charter can be illustrated in this way:
    A. B.’s earned premium amounts to $500.
    The loss under his policy amounts to $500.
    No profit has been 'made in- the dealing with him.
    From the yearly statement it appears the total amount of earned premiums was......................$100,000
    The total amount of losses and expenses was.......\. 50,000
    Surplus of profits,................................ $50,000
    Now, under the charter, A. B. is entitled to such a part of the $50,000 of profits as the earned premiums he paid bore to the whole amount of earned premiums; $500 being the ¥| „ part of $100,000, A. B. would be entitled to the part of $50,000, or a certificate of $250. He receives, in other words, a share of $250, in the aggregate profits to which he contributed nothing.
    The dealers with the Company were in fact guarantors of each other, and in this consisted the “ mutuality ” of the plan.
    It was a quaqi-partnership.
    IH. To allow the setoff as claimed by the defendants, would be to pay his loss on the Galena in full to the extent of the amount of the notes offset against the loss,, to the injury of the other creditors of the fund.
    IY. To deduct the notes of solvent parties from their losses is to pay the claim in frill "pro tanto,” though the Company has passed into the hands of a Receiver, who can declare a dividend of forty per cent only; and to pay this dividend must look to these parties as contributing to the fund.

      V. Among creditors equality is equity, and the statute relating to “ voluntary dissolution ” expressly provides for such equality among all the creditors. (2 R. S., 4 ed., 712.)

      A fortiori, should such equality be established here, where the charter entitled every dealer to a participation in the premiums paid by all other dealers. (Herckenrath v. Am. Mut. Ins. Co., 3 Barb. Ch. R., 63.)
    VI. The Receiver is bound to collect' in all the assets, and until they are collected it is not known whether any dividend will be made or not. The Receiver represents the rights and interests of all the other creditors, who are to be protected against every attempt to obtain an undue'advantage or preference on, the part of any one of them.
    VII. The notes, in this case, so far as they were given for policies other than those upon which losses áre claimed, are distinct and unconnected demands, and therefore come within the principle established by the Chancellor in 6 Paige, 232.
    Eo case in the courts of this State present this question of equitable offset as depending upon the comparative equities of the general creditors and the particular creditor seeking the offset.
    In Pennsylvania, however, this point has been expressly raised and decided. (Hillier v. Alleghany Co. Mut. Co., 3 Barr., 470; Long v. Mut. Ins. Co., 6 id., 421.)
    I do not claim that the Receiver stands in any better position as against these defendants than the Company, if plaintiffs, and insolvent, would. If, being insolvent,. the Company had been willing and had attempted to allow this setoff, the other creditors could have interfered and prevented.
    The right and duty to refuse this setoff lie in the very constitution of the Company, and the resulting rights and obligations between the dealers.
    • The report of the Referee is correct, and the judgment entered thereon.should be affirmed with costs.

       This judgment, on an appeal from it to the Court of Appeals, was affirmed.

   By the Court—Pierrepont, J.

The act incorporating the General Mutual Insurance Company provided that every person' on obtaining a policy and paying the premium became a corporator interested in the premiums paid by all the-other corporators; and in section 6 (Laws of 1841, p. 229), provides that “every person who shall become a member of this corporation by effecting, insurance therein, shall, the first time he effects insurance and before he receives his policy pay the "rates that shall be fixed upon and decided by the trustees; and no premium so paid shall ever be withdrawn from said Company, but shall be liable to all losses and expenses incurred by this Company during the continuance of its charter.”

Each dealer was therefore a corporator and interested in all the premiums paid by others. The earnings of" the Company were the premiums paid in by all the dealers and the income derived from the investment of these premiums, which was all placed in a common fund, and after paying the annual losses and expenses, á dividend of the balance was declared to each dealer pro rata, according to the earned premiums paid by him.

. It appears by a stipulation or admission found in the case, “that the General Mutual Insurance Company, in making the yearly estimate of net profits, under the provisions of their charter, credited each dealer with such proportion of the net, as the amount of earned premiums received from him was of the whole amount of earned premiums received by the Company during the year, without regard to the fact that the business of such dealer with the Company, for the year, had resulted in a loss to them; and further, that in making such estimate, the premiums and premium notes were in all case's placed and credited to the Company, as earnings, and the return premiums were placed with".the losses and expenses, and deducted therefrom to ascertain the net profits for the year.”

Under this charter, a dealer with this Company might receive a large annual profit though the Company made nothing by dealing with him: for example, the earned premium of A. is $>1,000 and the loss under his policy is $1,000, the Company thus receive no more of A. than they pay him for his losses, and of course nothing is made by the dealing with- him; but the total earned premiums for the year are-$100,000 and the losses are but $10,-000, leaving a surplus of $90,000 of profits. A. is entitled to such part of this $90,000 as the premium he paid bears to $100,000 —that is, A. receives $900 of these profits toward which he has contributed nothing; thus each dealer was interested in the earned premiums of every other dealer, and the corporators were mutual guarantors of each other. In fact, a kind of partnership firm was formed, under an act of incorporation by which each member, being bound to pay his premium, was entitled to profits realized in proportion to his premium paid. Before the notes upon which this action is brought went into the Receiver’s hands, the Company owed the defendants, for loss on the ship Galena, $3,083.45, -which the defendants seek to offset. Ordinarily, if an insurance company holds a person’s note, and at the same time owes the maker for a loss, an offset can be made, and the Receiver stands in no better position than the corporation whose assets he received. But the corporation, in this case, is not like an ordinary chartered company dealing with strangers; the peculiar relations of the corporators towards each other- aré voluntary, and the obligations are mutual, and. it is entirely equitable that each should share losses when they happen in the same proportion' as he was entitled to profits when made, and such is the fair interpretation of -this contract. Each member must pay what he owes the corporation, and each will be entitled to his pro rata dividend of the assets. (Hillier v. Alleghany Co. Mut. Ins. Co., 3 Barr., 470; Long v. Mut. Ins. Co., 6 id., 421; White v. Haight, 16 N. Y., 310; Bangs v. Gray, 2 Kern., 477.)

The policies for which the notes were.given were canceled by written agreement, and it- was stipulated by the defendants that the return premiums were to" be paid ratably out of the assets of the Company when divided, and we see no reason why the defendant should not be held to that agreement.

The judgment should be affirmed,- with costs.

Woodruff, J. (Dissenting.)

I regret that I am not able to concur in the decision made in this case, - except as to the amount due to the defendants for return premiums.

It was conceded by the plaintiff’s counsel, that, in respect to the defendants’ claim to setoff the' amount of his loss by the ship Galena, (which. was adjusted before the proceedings- were taken- by which the Insurance Company was adjudged insolvent,) the plaintiff, as Receiver; stood in -the same situation as the Company itself would, had this action been prosecuted by them, (being in fact insolvent,) to recover the amount of the notes for which the action is brought. (2 R. S., 464, § 42; id., 469, §§ 68-74; id., 41, § 7, and 47, § 39 [§ 36;] Holbrook v. Receivers, &c., 6 Paige, 220; Lindsay v. Jackson, 2 id., 581.)

I cannot concur in the conclusion, that the insolvency of the Company defeats the defendants’ right to set off his claim for this loss, or that the defendants have to go into any calculation with the other corporators, in the nature of an accounting between copartners. If by making a set-off he gains any advantage over others having claims against the Company, so as to have his claim paid in full, he gains just what always happens when any other corporation, or an individual, becomes insolvent; those who are both debtors and creditors of the insolvent can make the setoff, while other creditors take such dividend as they can get.

The reasoning which is supposed to exclude this set-off will apply equally to all Mutual Insurance Companies, and embraces all who effect insurance with them upon the mutual plan. It is recognizing a new species of partnership heretofore not known in this State, and it involves this result. To-day a dealer sustains a loss, and the Company holding his notes to a corresponding amount, the right of set off is clear; to-morrow the Company becomes insolvent and the right of set off is gone; the note must be paid in full, and the dealer must take his chance of payment for his loss by awaiting the dividends which may be made of the assets of the Company.

In my judgment the Company in respect to its right to collect the note, and its obligation to pay the loss, is to be regarded as an artificial person to whom the same rules would apply as to an insolvent natural person.

Besides, if this idea of copartnership is to prevail, it is conceded that this 'peculiar result does not arise until insolvency happens, and if the reasoning is carried out to its legitimate result, it should follow that the rights of the parties should await the final accounting, and be then adjusted. It would then appear how much, and how much only, the defendants should be required to pay. Surely they ought not to be required to pay their notes in full when they are clearly entitled to something in return. The rule should be applied equally in favor of both parties, if applied for the benefit of one. The mutual accounting, if it is to be had, ought to embrace claims against the defendants as weH as claims in their favor.. To make the defendants pay their note in full, and compel them to await the final accounting before their clnim for a loss is paid, is to treat the parties as partners in respect to the Company’s liability to them, and not as partners in respect to their liability to the Company.

I think the judgment should be reversed and a new trial .ordered.

Judgment affirmed, with.costs.


author: By the Court—Bosworth, Ch. J.

text:
    James Bunten, Plaintiff and Respondent, v. The Orient Mutual Insurance Company, Appellants.
    1. Where, on the trial of a cause, the jury are instructed in respect to the rule of law which they are to apply, as requested by the defendants, and a verdict passes against them, and they move for a new trial on the ground that the verdict is contrary to evidence; the defendants have a right on such motion, for all the purposes of the motion itself, to insist that such instruction is correct.
    2. If, on a fair application of the rule, as charged, the verdict is contrary to evidence, it will be set aside and a new trial be granted.
    3. In such a case, it is erroneous to refuse a new trial, on the ground that the plaintiff has some equity disclosed by the evidence which entitles him to retain the verdict; especially when the pleadings neither intimate its nature or existence, nor an intention to assert and enforce it.
    4. Where the question is whether an agent, (not having, by the papers which created him such agent and defined his powers, any authority to alter a policy which had been issued by his.principal,) “was permitted to alter policies in respect to dates of sailing, from time to time, so that that became the customary usage and course of business;” the evidence must show, in order to bind the principal, at least- several cases in which the agent, without asking the sanction of his acts by the principal, had made alterations of a like nature on which the principal had acted, and in which he had acquiesced when such alterations came to his knowledge; or it must tend to prove that although communicated by the agent they were acquiesced in, as acts which he was competent to perform, and as binding on his principal; or that he was held out to the public as authorized, to do such acts.
    (Before Bosworth, Ch. J.,, and Slosson and Woodruff, J. J.)
    Heard, October 22d, 1858;
    decided, February 26, 1859.

      This is an appeal by the defendants from an order made by Mr. Justice Hoffman", denying a motion for a new trial, made upon the ground that the verdict in favor of the plaintiff was against the weight of evidence.
    ■ The main facts from which the controversy arises are as follows:
    The defendants, a Marine Insurance Company in Hew York, employed McLimont as their agent in Quebec, under a letter of authority dated December 14th, 1854.
    The agent, McLimont, did not issue policies to parties ; they were always issued "by the Company, in Hew York, upon his returns of risks agreed to by him.
    The plaintiff, in the first week of October, 1855, made an application in writing to McLimont for insurance on the cargo of the Azoff, to which he agreed, and the material parts of which were transmitted by him, on the 16th of October, to the Company.
    The plaintiff’s agent testified that he then stated to McLimont that the ship would be likely to get away by the 10th, but that he was not certain to a day; that McLimont agreed to the insurance, the ship to sail at any time before Hovember, and that the premium would be charged according to the standard. And that on the 11th of October he instructed McLimont to have the policy specify the 15th of October as the day of sailing.
    On 20th October 1855, a policy in accordance with the “ return ” of -the risk was forwarded to the agent of the Company.
    The policy was received by the agent on the 23d or 24th of October, and sent by him to plaintiff; the same day the policy was received, the latter called upon the agent, requesting'him to alter the date of" sailing, which the agent did, by changing that date from the 10th .to the 15th of October, 1855.
    The policy, as issued, contained a warranty that the vessel should sail on the 10th of October. This warranty was changed to the 15th of October, in the manner above stated. The defendants insist that' it was so changed without their sanction or knowledge. The vessel did not sail until after the 10th of October.
    . The extension beyond the 10th of October, required an additional premium of one per cent, and this was known to the plaintiff.
    Ho alteration was made in the premium in the policy, which remained at three, per cent.'

      The cargo insured was totally lost October 29th, 1855. The defendants refused to receive any premium on this risk, when the returns of premiums received by the agent were made by him to them in the fall of 1855, after the loss was known.
    It appeared that John Dean, one of and in behalf of the firm of Dean & Co., applied in Eew York to the defendants, on the 21st of September, 1855,' for a policy on the hull of the Azoff. A policy was then agreed to be issued for $5,000 on her hull, and the day of her sailing was left in blank on the margin of the application, to be filled when that fact was ascertained, and the premium to be paid was to be according to the risk, as affected by the time of sailing, in accordance with the established rates of the Company. The insurance was to be void unless the vessel sailed before the 10th of Eovember. Mr. Dean testified, that “ on the 21st of October, I think, and certainly before the 24th, I called upon Mr. Ogden (the Vice-President), and told him that the vessel went to sea on the 15th, and I think he marked it on the application, and the policy was then made out and delivered.”
    It appeared that Charles Irving, the Secretary of the Company, conducted the correspondence with McLimont, the agent, in •respect to issuing the policy on the risk taken by him, and did not know that Mr. Dean had told any officer of the 'Company on what day the vessel sailed.
    Some details of evidence are stated in the opinion of the Court, delivered at General Term. .
    . The action was tried before Mr. Justice Woodruff and a jury, on the 21st of January, 1858. He charged the jury as follows:
    “I do not understand that there is any controversy between the counsel for these parties as to rules of law. It is true that a material alteration, without the sanction of the Company or their agent, avoids it; and if it was altered without authority, then the defendants are not bound by the policy; and I charge you now, as a matter of law, that an alteration of the date of sailing in this policy, was a material alteration.
    “ The inquiry, then, is, whether this Company or their authorized agent did insure this plaintiff under the policy as altered. It appears, by the deposition of McLimont, that oh the 14th of December, 1854, the defendants gave to McLimont their letter of authority to act for them in Quebec. '
    “ It further appears that he acted under this letter. In this condition of things, it seems that the Company complained that he exceeded his instructions, and this led to the letter of the 22d February, 1855.
    “ If the case stood upon that alone, it would be a restriction of the original authority; but McLimont states that he came to New York, and that this restriction was withdrawn. The Vice-President says that this last letter was not withdrawn; McLimont says that it was revoked; but McLimont goes further, and says that the revocation was made clear by the letter of the 7th of July, 1855. Under the letters and instructions produced, the agent, McLimont, had authority to bind the defendants by a contract to insure in October, 1855. The tariff of rates was sub-, mitted to Bunten. He testifies that he then expected the vessel would sail on the 10th, but could not tell on what precise day she would be ready. McLimont does not, I think, negative the idea that Bunten told him this. Now if the agent had authority, before' the 10th day of October, to bind the defendants, by an agreement to insure, with a warranty to sail on the 10th, then he had authority to bind them by such an agreement on the 11th, with a warranty to sail on the 15th; and had the plaintiff come here relying on a contract .of that kind, the Court would have held them, and, if necessary, would have required them to execute a policy in conformity with such a contract. But the plaintiff comes here with another case. His complaint is upon the policy itself as altered. It appears that the agent altered the policy which, the Company issued, by changing the date of sailing. The plaintiff therefore claims that the agent had authority to make such alteration. In my view, the plaintiff’s right to recover depends upon the question whether the agent had authority to alter this written instrument. The plaintiff does no; claim that the agent had originally an authority to make a policy, or to alter policies, which the Company issued. The question, then, depends on this, whether McLimont was permitted.to alter policies in respect to dates of sailing, from- time to time, and the Company sanctioned it, so that that became the customary usage and course of business. If that be so, then he is to be deemed to have authority to make the alteration in this instance. The plaintiff or his agent had a right to act upon the presumption of authority, if such had been the course of business, under the sanction of the Company. McLimont states that he did alter policies in that very particular, and that the Company sanctioned it. The Secretary, mentions that some alterations were reported to the Company and sanctioned. There is nothing to suggest á doubt that if Mr. Bunten had gone to the Company on the 11th of 'October, and asked an extension, they would have granted it. How it depends on the construction of the language of the witnesses, Ogden and Irving, and you must decide between McLimont and them; and this case, as before remarked, turns upon the question' whether McLimont had authority to make the alteration.”
    The jury brought in a verdict for the plaintiff for $4,961.92.
    The defendants moved for a new trial, which was denied. The following opinion was delivered in support of that decision:
    Hoffmae", J. Upon the evidence in the case, there are certain important points made out tending to support the verdict upon principles of equity merely.
    The agent of the plaintiff met McLimont, the agent of the defendants, on the 11th day of October, and told Mm the vessel was in the river, and he ought to fix the time of sailing as of the 15th day of October. The warranty was to sail on the 10th, application having been made the end of September or beginning of October.
    McLimont did not transmit the materials of the application to make the policy from Quebec to Hew York, until the 16th day of October.'
    On the 20th day of October, the policy was sent from Hew York and received about the 23d. It was sent .shortly after to the plaintiff’s agent. He noticed the warranty as being of the 10th day of October, and immediately took it to the defendants’ agent, who made the alteration to the 15th.
    On the 21st day of October, probably, certainly before the 24th, the Company in Hew York had notice that the vessel had not sailed till the 15th. that date being filled up in the vessel’s policy.

      It is true, that one of the officers of the Company made out the policy and forwarded it; another got the information as to the time of sailing. But nothing could be more dangerous than to act upon a rule which would make any such distinction, which would not make the Company responsible for the knowledge of every officer within whose province it was to deal with the particular matter.
    The loss took place about the 29th day of October, at sea.
    The learned Judge, on the trial, intimates an opinion that the defendants could have been compelled to execute a policy with the alteration to the 15th, had there been a contract on the 11-th, with a warranty to sail on the 15th. But the case turned, he thought, upon the question whether the agent had authority to make the alteration of- the written instrument. That question he left to the jury upon the evidence as to a custom for the agent to make, and the Company to ratify such an alteration. It is contended that the jury found in support of such a custom without a shadow of evidence,- indeed, explicitly against it.
    If the decision of the motion for a new trial rested upon this question, I should feel very great doubt whether the yerdict could be sustained. But justice has, in my opinion, been done, and upon the case as fully disclosed by the whole evidence, I cannot but think that an amendment of the pleading might have been allowed'to the effect, that the Company with knowledge of the actual time of sailing of the vessel authorized or permitted the delivery of the policy. On such a case made, it strikes me the verdict would be both just and conformable to the pleadings.
    I understand that- on such a motion as the present, on a case, the Court may be governed by such considerations.
    Motion denied, without costs.
    From the order denying the motion for a new trial, the defendants appealed to the" General Term.

      Alexander Hamilton, Jr., for appellants.
    The plaintiff was bound to prove, and the jury must have found as a fact, under the ruling of the Court, that policies, before the transaction in question, were altered by the agent in respect to dates of sailing, with the knowledge of the Company, “ as a customary usage and course of business.” It was not sufficient that in certain cases alterations were .sanctioned, and in others rejected; such a state of things could not establish a “ customary usage,” nor justify the presumption of authority to be derived from it. Such a course of business must, of course, have preceded the transaction in question.
    The contract was avoided when the policy was altered between the agent and the plaintiff, as both then knew the vessel had sailed on the 15th and not on the 10th.
    A man of ordinary prudence, would and should have required some evidence of the' agent’s authority. Nothing of the kind was done.
    In regard to the equitable grounds upon which the new trial was denied by the Special Term, it is to be remembered that the defendants did not come prepared upon any such point; the " sole issue presented by the pleadings being whether the alteration ■of the policy was valid and authorized or not.
    It was a surprise upon the counsel and party, and was introduced at the close of the trial.

      William Stanley, for respondent, contended, inter alia, that,
    I. The circumstances under which the alteration in the day of sailing was made, show perfect good faith on the part of the plaintiff, and on the part of Mr. McLimont, the defendants’ agent, and no fraud of any kind on the part of either plaintiff or defendants’ agentas pretended. The defense is technical and inequitable.
    II. McLimont was authorized to make the alteration in the policy.
    His written instructions were a sufficient authority fór the purpose. (See letter of 14th Dec., 1854.)
    It is clear that this letter authorized McLimont to enter into a binding contract, on behalf of the defendants, to insure the plaintiff’s cargo' upon the terms and conditions stated in the policy, as altered. When the contract was thus completed, the filling out and execution of the policy was a mere form; it did not change in any respect the rights or obligations of either of the parties. In the absence, then, of an express restriction, it would be absurd to say that an agent, who had full authority to settle all the terms and conditions upon which the policy should be made out, was not authorized to make the slightest alteration in the policy itself.

      The contract made by the agent would have been'complete and binding, though no policy had ever been issued. (Tayloe v. Merchants' Fire Ins. Co., 9 How. U. S. R., 405; Perkins v. Washington Ins Co., 4 Cow., 645; McCulloch v. The Eagle Ins. Co., 1 Pick., 280, per Parker, Ch. J.)
    III. The policy, being valid as originally drawn, notwithstanding the alteration, there was evidence in the case from which the defendants will be held to have waived the condition as to the vessel’s sailing on the 10th.
    1. The acts of the officers of the Company at New York were evidence of such waiver. (See last page of opinion of Hoffman, J.)
    2. There was a clear waiver by the agent, McLimont; and he had sufficient authority for that purpose.
    IY. The verdict can be sustained without the aid of the policy, upon the original contract to insure, made by McLimont with the plaintiff, on the 11th of October.
    The learned Judge, in his charge, says: “ If the agent- had authority, before the 10th day of October, to bind the defendants by an agreement to insure, with a warranty to sail on the 10th, then he had authority to bind them by such an agreement on the 11th, with a warranty to sail on 'the 15th. And had the plaintiff come here relying on a contract of that kind, the Court would have held them, and if necessary, would have required them to execute a policy in conformity with such a contract. But the plaintiff comes here with another case. This complaint is upon the policy itself, as altered.”
    The learned Judge erred in saying that the plaintiff came with another case. There was no difference in substance between the original contract made by the agent, and the contract evidenced by the policy. The latter was only a more formal expression of the former.
    If the complaint was not sufficient as it stood, the Judge should have ordered it to be amended so as to conform to the facts proved. (Code, § 173.) And this court will now order it to be so amended, or will treat it as having been amended. (Bowdoin v. Coleman, 3 Abb., 431; Bate v. Graham, 1 Kern., 242.)
   By the Court—Bosworth, Ch. J.

The Judge, before whom this action was tried, instructed the jury, inter alia, that the plaintiff’s “complaint is upon the policy, as altered. That the plaintiff’s right to recover depends upon the question whether the agent had authority to alter this written instrument. The plaintiff does not claim that the agent had, originally, any authority * * * to alter policies which the Company issued. The question, then, depends on this, whether McLimont was permitted to alter policies in respect to dates of sailing, from time to time, and the Company sanctioned it, so that that became the customary usage and course of business.”

“ This case, as before stated, turns upon the question, whether McLimont had authority to make the alteration.”

If the evidence given does not justify the inference, or conclusion that “ McLimont was permitted to alter policies, in respect to dates of sailing, from time to time, and the Company sanctioned it, so that that became the customary usage and course of business,” the verdict should be set aside and a new trial granted. The rights of suitors cannot be protected, unless the party against whom a verdict has been rendered, can, on a, motion to set it aside as contrary to law and evidence, be secured a just and firm application of the rule which, at the trial, he insists the jury should be instructed to apply, and which, in conformity to what he claims to be the law, they are instructed to apply to the facts they may find.

If, on a fair application of the law, which the jury were instructed to obey, he was entitled to a verdict, the verdict, if against him, should be set aside. If the law, as he insisted it should be stated in the charge of the Judge to the jury, had been stated differently, it would have been his right to except to the ruling, and if erroneous, his exception would secure to him a new trial.

Assuming it to be true that the instructions given were proper, and such as the defendants, on the trial of this action had a right to demand, and that, under the instructions given, the verdict of the jury should have been in their favor, and the verdict rendered against them is clearly against evidence, yet if a new trial be refused, on the idea that the plaintiff has some equity superior to the defendants’ clear legal right, they are remediless. An appeal to the Court of Appeals can be of no service. The jury were correctly instructed as to the law, and that Court will not inquire whether there was any evidence to warrant the verdict. If it be supposed that the plaintiff ought to recover on some equitable grounds, notwithstanding the right of the defendants to a verdict in this action, on the pleadings, as they stand, and on the evidence given at the trial, which has been had, and assuming the law to be, as the Judge in his charge instructed the jury it was, the defendants should at least have a chance to litigate this supposed equitable right in some action in which it is asserted prior to the trial, and upon pleadings which at least intimate the existence and nature of the supposed equitable right, and an intention to assert and enforce it.

We think, therefore, that unless the evidence warranted a verdict in favor of the plaintiff, upon the only .question submitted to the jury, a question on the proper determination of which, as they were instructed, the, right of. the plaintiff to recover alone depended, the verdict should be set aside and a new trial granted. ■ g

That the policy had been altered, after it had been issued by the defendants and delivered to the plaintiff, and that it had been so altered without any authority from the Company, and without their consent, and without any knowledge thereof on their part until a claim for a loss was presented under such policy, was set. up in their answer, as a defense, and such allegations were at issue upon the pleadings.

The letter of the 14th of December, 1854, authorized the agent to take risks upon “cargoes of lumber (from) Quebec to Great Britain and Continent of Europe,” at a “tariff of rates ” which he had presented to the Company and which the latter had approved. The letter of the 7th of July, 1855, in clear terms denies to kim the power to take other risks. Those rates, on vessels or cargoes- sailing before the 10th of October were 3 per cent, and after the 10th and on or before the 15th were 3-| per cent, and on and after the 15th and before the 25th, 4 per cent. So the agent testifies. The Secretary of the Company testifies that it was 4 per cent after the 10th until the 20th.

The policy in question, in and by which, as originally issuéd, the vessel was warranted to sail on the 10th of October, 1855,' states the sum insured to be $4,510, the premium $135.30, and the policy $1.25, or, in other words, insures at the rate of 3 per cent.

By the contract as altered, the vessel was warranted to sail on the 15th, and might and did sail after the 10th. And by its terms, as thus altered,-the Company took the risk and agreed to be responsible for the losses against which it insured, at 8 per cent. The written authority of the agent, by its terms, declares that, “ on all risks and amounts on risks, other than the amounts and risks which you are therein, (viz.: in the letter of December 14, 1854,) authorized to take, you are hot empowered to bind us, but they must first be submitted to us for our approval and sanction.”

His written authority, it is quite clear, did not authorize him to make such a contract, as the written policy, as altered by him, is, at the rate of premium therein expressed.

Was he allowed to make such alterations in policies that had been issued by the Company, and did the Company, knowing that he had done so, acquiesce in such acts, so that that became the customary usage and course of business ?

The agent swears that he was, and specifies as instances the ship Eleanor, from Quebec to Great Britain; the ship Tchernaya, and the ship Caledonia, from Ristigouch to Great Britain.

The alterations made in the policies of those three vessels were communicated by the agent to the Company. In the case of the Eleanor, the day of sailing was altered and an additional premium charged, and the Company sanctioned it.

In the case of the Tchernaya, the policy, as issued, was on the vessel, and included launching. In the case of the Caledonia, the time to sail was enlarged twenty-four hours.

There is no proof of a single case where such an alteration was made, and there was a subsequent loss, followed by payment by the Company of the sum insured, without the fact of such alteration having been made, being previously communicated to the Company and approved by them.

The evidence shows that the Company frequently assumed to decline risks which he had taken or proposed to.take; as withholding a policy on the Caledonia, until informed that she sailed before the 10th of August, 1855, unless an increased premium was paid. So in reducing the amount insured on Wm. McLimont’s policy, and increasing the rate (September 12, 1855); so in declining an alteration in the policy of the “Northern Belle,” (August 3,1855,) so in declining a risk on the “ Earitan,” (October 6; 1855,) so in “ declining the Splendid and refusing to sanction extension of Lucien,” by letter of the 19th of November, 1855, a date prior to the time when the defendants are shown'to have had notice or reason to suspect that the policy in question had been altered.

The officers of the Insurance Company deny, in their testimony, that the agent was ever allowed to alter policies so as to bind the Company, without their sanction of the act, or that any case occurred in which he altered the time of sailing specified in a policy after it was issued, and that they acquiesced in it, or paid a loss under it, when the fact of such alteration had not been previously communicated and expressly approved.

The policy in question is the first policy which the insured is proved to have effected with this Company. His son, who applied for it in his behalf to the agent, had no previous acquaintance with him, and had never seen him until he made such application-

The applicant did not, therefore,- rely upon the sanction by the defendants of previous similar act's of the agent, in respect to policies issued by them to the insured, in asking the alteration and in relying upon the altered policy as an authorized contract of the defendants:

To justify a jury in-finding the affirmative of the question which was submitted to them as the turning point in the controversy, the evidence should show, if not a succession, at least several cases, in which the agent, without asking the sanction of his acts by the Company, had made alterations of a like nature, on which the Company had acted and in which they had acquiesced when such alterations came to their knowledge without having been previously communicated by the agent, or the evidence should be such as would tend to prove that, although communicated by the agent, they were acquiesced in as acts, which he was competent to perform, and as binding on the Company.

Evidence short of this cannot justify the conclusion that the agent did alter policies, from time to time, with the sanction of the Company, so that the exercise of such authority by him “became the customary usage and course of business.”

And we think it may be safely affirmed that the agent, in no instance prior to this, was permitted to alter, or to the knowledge of the Company had altered a policy that had been issued by the Company to the insured, so that it became in terms a contract which, originally, he had no power to make. If, as altered, the risk was increased, and by the rules of the Company entitled them to a larger premium than that for which, by the policy, they agreed to be liable, there should at least be some evidence that such an alteration had been sanctioned either expressly by the Company, or by their acquiescence in it.'

This action is brought upon the policy, as being, as it now reads, a valid contract of the Company. The agent never had authority to make such a contract, and clearly he had no authority to alter a written contract of the Company and conyert it into a contract which he had no power to make, if .none had been executed by the Company.

A new trial should be granted, with costs to abide the event.

Ordered accordingly.