text:
    John H. Harbeck and another v. James Craft.
    Quere — "Whether a' denial in a sworn answer of the reception by the defendant of a notice of protest is to be deemed since the Code, equivalent to a denial in an affidavit annexed to a plea ?
    The denial, however, of the reception of a notice, which is to exclude the certificate of a notary of its due service from being read in evidence under the statute, must, in all cases, be positive and unqualified — the evidence cannot be excluded where the terms of the certificate are consistent with those of the denial.
    It seems that when an unreasonable delay in the presentment of a check is meant to be relied on as a defence, in an action against the drawer, the fact of such delay ought to be so averred as to raise a distinct issue in the answer.
    No such delay, however, is to be deemed unreasonable as between a bond fide holder and the drawer of a cheek, unless it appears that it worked an actual injury or loss to the drawer.
    The rights of a bond fide holder of a check cannot be affected by a Becret agreement between the drawer and a third person, by which the latter agreed to ■provide funds for the payment of the check.
    The drawer of an accommodation check cannot set up any other defence against a bond fide holder than would be competent to him had he delivered the check for value.
    Judgment for-plaintiff affirmed, with costs.
    (Before Oakley, Ch. J., Düek and Campbell, J.J.)
    December 7; December 23, 1854.
    Appeal by the defendant from a judgment for the plaintiff.
    "The action was by the holder of a check against the drawer, to recover the amount of the check, with interest from the time of its dishonor.
    The complaint averred the making of the check, its transfer, demand and refusal of payment, and due notice thereof to defendant.
    The answer admitted the making of the check, but denied its transfer to the plaintiffs, and averred that its true owners and holders were the firm of C. & G-. Belden, who were the real parties in interest:
    It also denied the presentment of the check for payment to the bank on which it was drawn, and denied that a notice of its nonpayment had been received by the defendant, in the following words:

      “ Fifth. — And this defendant further answering, expressly and positively denies that he ever received any notice whatever of the presentment and non-payment of the said draft or cheek until after the Í4th day of December, A. D., 1853.”
    The answer then averred that the defendant had received no consideration for the check, but had made it for the sole benefit and accommodation of one Chas. P. Huestis, to- whom he delivered it, and by whom, on or shortly before the 5th day of September, 1853, it was delivered to C. & G-. Belden, who discounted the same at an usurious rate of interest, whereby it became wholly void in law. The answer was sworn to.
    The cause was tried before Duer, J., and a jury, on the 22d of May, 1854.
    Upon the trial, the counsel for the plaintiff read in evidence the said check, the signature of which by defendant was admit ted, and which is in the words and figures following, to wit:
    ^ “ No. New-Yokk, Sept. 5, 1853.
    ¾ Bowery Bank
    m pay to Cash or Bearer,
    ^ Three Hundred and Twenty-five dollars.” g ($325) JAMES CRAFT.”
    S [Endorsed,] “HARBECK & CO.”
    The counsel for the plaintiff then offered to read in evidence the notarial certificate of the presentment of the check for payment, and of the protest thereof for non-payment, and of the service of notice thereof on defendant. The certificate was objected to by the counsel for the defendant, who insisted that such presentment and non-payment and notice could only be proved by the production and examination of witnesses on oath. The objection was overruled by the court, and the certificate was allowed to be read in evidence. To which ruling and decision the counsel for defendant excepted.
    The protest and certificate were then read in evidence; and are in the words and figures following:

      ^ No. New-Yoke, Sept. 5, 1853.
    | BOWERY BANK.
    n Pay to Cash , or Bearer
    ¾ Three Hundred and Twenty-five Dollars.
    ^ ($325.) JAMES CRAFT.
    « [Endorsed,] HARBECK & CO.
    Uhited States op America, )

    State op New-Yore, ) ss'

    On the nineteenth day of December, in the year of our Lord one thousand eight hundred and fifty-three, at the request of The Corn Exchange Bane, I, James W. Wilson, a Notary Public, duly admitted and sworn, dwelling, in the City of New York, did present the original check hereunto annexed to the Bowery Bank, to a paying teller thereof, and demanded payment thereof, which was refused.
    Whereupon, I, the said Notary, at the request aforesaid, did protest, and by these presents do publicly and solemnly protest, as well against the drawer and endorsers of the said check, as against all others whom it doth or may concern, for exchange, re-exchange, and all costs, damages and interest already incurred, and to be hereafter incurred, for want of payment of the same.
    Thus done and protested, in the City of New York aforesaid, in the presence of John Doe and Richard Roe, witnesses.
    In Testimonium Yeritatis.
    [l. a] (Signed) JAMES W. WILSON,
    Notary Public.
    United States op America, )
    State op-New Yore, j
    I, James W. Wilson, a Notary Publicf duly admitted and sworn, dwelling in the City of New York, do hereby Certify, that on the nineteenth day of December, 1853, Notice of the Protest of the before-mentioned check was served upon James Craft, in the City of New York, by delivering the same to him personally.
    [l. s.] JAMES W. WILSON.
    The counsel for the plaintiffs then called as a witness W. J. Stoutingbergh, who testified as follows:

      I am a clerk for tbe plaintiffs. I know tbe check wbicb is in suit in this case, and which is now produced to me. It is owned by the plaintiffs. On the fifth day of September, 1858, I deposited this check with the Union Bank for the plaintiffs, for collection. That bank returned it unpaid the next day, and I then presented it to the Bowery Bank myself, and it was not paid. The plaintiffs received that check from C. & G-. Belden. They gave their check for it; the one now produced to me, dated September 3d, 1853, for $879.65, is the check. It has the bank stamp of payment. It is endorsed by 0. & G. Belden. It was filled up by me, and was paid by the bank.
    The following is a copy of the said check:
    “New York, Sept. 3, 1853.
    “UNION BANK.
    “ Pay to Messrs. 0. & G. Belden or order Eight Hundred and Seventy-nine ⅛⅜ dollars.
    $879. ⅛⅞ ' “ HARBECK & 00.”
    [Endorsed] “ C. & G. BELDEN.”
    On his cross-examination, the said witness testified: The check of the defendant which is in suit, and a check of Mr. Schenck for $555.00 were received for the plaintiff’s check of September 3d, 1853. I was present at the transaction. I can’t tell when Schenck’s check was dated. I have no means of telling when it was dated. I can’t say whether it was dated that day, or dated ahead.
    ■ The plaintiffs do business -at No. 60 Wall street, in this city, in the third story. C. & G. Belden do business in the same rooms with the plaintiffs. O. & G. Belden do not follow any particular business. They are brokers. The plaintiffs are ship owners and stave merchants.
    I am not in the employ of the Beldens; but at times attend to their business for them. I do not know of whom the Beldens got this check of the defendant, which is in suit in this case.
    The plaintiffs here rested their cause.
    The counsel for the defendant then called William H. Robbins, who was sworn for the defendant, and testified that he was in August and September, 1853, a clerk in the employ of Charles P. Huestis; who is named in the defendant’s answer, in this case.

      The following question was then put to said witness, viz.:
    Q. State, if you know, the circumstances under which the check of the defendant, which is in suit in this action, was given; and what consideration; if any, was received by the said defendant therefor ?
    The counsel for said plaintiffs objected to such'question; and thereupon, upon the request of th'e counsel for said plaintiffs and of the said Judge, the counsel for the defendant stated that he offered and expected to prove by said witness, that the check was made by the defendant for the purpose of being lent, and that the same was lent by him to Huestis, solely for the benefit and accommodation of Huestis, and without any consideration therefor to said defendant: that Huestis agreed to pay and take up the said check; that Huestis had before that time borrowed other similar checks from the said defendant, and had provided for the payment thereof, by depositing money to meet the same, to the credit of the defendant’s account in the Bowery Bank; that at the time of borrowing from defendant the check now in suit, the said Huestis agreed to provide for its payment in that manner; that at the time of borrowing the check, and at the time of the maturity thereof, and for several weeks thereafter, the said Huestis was solvent and met all his obligations, and was able to have paid the check in suit to the defendant; but that shortly before the 19th day of December, A. D. 1853, he failed and became insolvent.
    The counsel for the plaintiffs objected to the giving of any such testimony, and moved the court tp exclude the same. The court granted such motion, and sustained the objection to the question so put to the witness, and refused to allow the matters so offered to be proved, to be given in evidence.
    To which ruling and decision, and every part thereof, the counsel for the defendant then and there duly excepted.
    The counsel for the defendant then moved that the complaint be dismissed, for the- reason that the check was not presented until the 19th day of December, A. v. 1853, and also for the reason that there was no sufficient or legal proof of the service on the defendant of notice .of the presentment and demand of payment of the check, or of the non-payment thereof; and also for the reason that no notice whatever of any such presentment and demand and non-payment of said check was shown, in any manner, to have been given to said defendant until the 19th day of December, A. D. 1853.
    The court denied the motion, — to which the counsel for the defendant then and there, excepted. The court also instructed the jury that there was no question of fact for them to pass upon; but that the plaintiffs were entitled to a verdict against the defendant for the amount of the check, with interest from the 19th day of December, A. D. 1853; and directed the jury to render such verdict accordingly. To all of which instructions, ruling and decision, the counsel for the defendant then and there excepted.
    The jury thereupon rendered their verdict for the said plaintiffs, for the sum of $335.75.
    Judgment was entered for the plaintiff upon this verdict for $437.60 damages, and costs on the 20th October, 1854.
    , From this judgment the defendant appealed, and the cause was heard upon a case containing the evidence and exceptions taken on the trial.

      O. P. Kirkland for the defendant; appellant,
    contended that the certificate of the notary was improperly admitted in evidence, and that the denial in the answer ought to have been held sufficient to exclude it. He also insisted that the. evidence offered'to prove that the defendant had been injured by the delay in giving notice of the non-payment of the check ought to have been received, and that for these errors in law the judgment should be reversed.

      J. N. Platt, for the plaintiff,
    said that the certificate of the notary could not have been excluded since the statute makes such a certificate evidence of a presentment and notice in all cases, “ unless the defendant shall annex to his plea an affidavit denying the fact of his having received notice of non-payment.” (Laws of 1833, ch. 271, § 8; L. E. S., 2d ed., p. 212, § 46.) Then the only denial was the answer, nor was this such a denial as the statute requires; it did not contradict the certificate. As to the evidence offered to prove that the defendant had been injured by the delay in giving notice, it was plainly not admissible under the answer, nor were the facts offered to be proved any defence against the plaintiffs, who were bond fide holders for value.
   By the Court.

Duer, J.

My brethren concur with me that the jury upon the evidence before them were properly instructed to find a verdict for the plaintiffs. There was no disputed fact, and the law upon the facts proved entitled the plaintiffs to recover.

It is not necessary now to decide whether the denial in a sworn answer of the reception by the defendant of a notice of protest satisfies the statute which requires the denial to be made in an affidavit. Certainly, such a denial has no proper place in an answer under the code, which should be confined to a denial or averment of those facts, and of those only which are necessary to be proved, in order to maintain the action or defence. The reception of such a notice, it is plain, is not an issuable fact, for the plaintiff is not bound to aver it, and when a due service of the notice is proved, whether it was received or not by the defendant, is quite immaterial. Hence, the denial of its reception, in an answer, might very properly be stricken out as irrelevant, and whether a denial that ought not to be found in his answer at all ought to avail the defendant for any purpose may certainly be doubted.

But we may well pass over the question now, since it is very clear that the answer of this’defendant contains no denial whatever of his reception of the notice, which the complaint alleges to have been served. On the contrary, it admits by a necessary implication that the notice was received by him after the 14th of December, 1858, and is therefore entirely consistent with the certificate of the notary, which states the service to have been made on the 19th of the same month. ¥e add, that the denial of the reception of a notice of protest which is to have the effect of excluding the certificate of the notary and of imposing upon the plaintiff the necessity of proving the service, of the notice by the testimony of a witness, in our opinion, must be, in all cases, positive, unequivocal, and unqualified. A denial wbicb has no tendency to disprove the certificate is nugatory.

It has been urged, however, that the terms of the denial in the present case are, at least, a sufficient allegation that there was an unreasonable delay in the presentment of the check, and in giving notice of its dishonor, but this seems to us a very forced construction. Nor can we think that the terms of the denial were ever intended to raise such an issue. The laches of a plaintiff, when it constitutes a defence is an issuable fact, and when a defence is meant to be relied on, the existence of the fact ought to be distinctly averred. It cannot be said that there is such an averment in the answer before us; there is a possible suggestion, a remote inference, and nothing more.

But passing over this objection, that the defence of an unreasonable delay is not raised by the answer, we are satisfied that the allegation itself is founded on a mistaken view of the existing law. It may be true, as a general tule, that a check payable on demand ought to be presented for. payment at the bank on which it is drawn, if not on 'the day, yet on the day next after that on which it is dated.—(Moule v. Brown, 4 Bing., N. C. 268, 5 Scott, 694, 2 Taunt. 388, 2 Camp. 539, 10 Wend. 304; Mohawh Bank v. Broderick, 13 Wend. 133.) But it is not true that the omission so to present it, or even a delay in its presentation, of several months, if not years, ever operates of itself to discharge the drawer. The cases very clearly show that the rules that govern the presentment of a check, and notice of its dishonor, as between a holder and the drawer, are far less stringent than those that apply to the relation of a drawer and an endorser. To charge an endorser, at least the same diligence is required as in relation to bills of Exchange, (20 Wend. 192; but, as between a bond fide holder and the drawer of a dishonored check, no delay in demanding its payment is deemed to be so unreasonable as to bar a recovery by the holder, unless it appears that it worked an actual injury or loss to the drawer. Such is the rule that was laid down by the Supreme Court at an early day in Conroy v. Watson, (3 John., Ca. 258, 264,) and which, with full approval, was adopted and followed by the same court in Murray v. Indal, (6 Cow. 484,) and sucb appears now to be tbe established law in England, (Serle v. Norton, 2 Mood, and Rob. 401; Alexander v. Burchfield, 3 Scott, N. R. 585, 9 Mann. and Grang. 1067, S. C.) Hence, although in the present case there was a delay in demanding payment of the check, from the 5th of September to the 19th of the following December, we cannot say upon the evidence before us that the delay could operate to discharge the defendant— there is no evidence of a laches by which he was prejudiced.

We are thus brought to the last and most important question in the cause. Evidence to show that the defendant was prejudiced by the holder’s delay in giving notice of the non-payment of the check we are told was offered on the trial, and was rejected by the Judge. He therefore rejected evidence which it is admitted would have shown a valid defence, and for this error, were there • no other, the judgment should be reversed. It certainly appears Rom the case, that evidence tending to show that the defendant was prejudiced by the imputed laches of the plaintiffs, was offered to be given, and was rejected; but when we look at the nature of the offer and of the facts which it embraced, we are satisfied, upon "the fullest reflection, that the evidence was properly rejected. It was properly rejected not only because the answer contains no allegation, nor pretence of an allegation, that the defendant had been injured by an unreasonable delay, but because the facts offered to be proved, had the proof been admitted, would have created no bar to the plaintiffs’ recovery. In other words, were in reality no defence.

The facts offered to be proved are briefly that the defendant received no consideration for the check, but lent it to a third person, one Huestis, who promised to deposit to the defendant’s credit, in the bank upon which the check was drawn, the necessary funds for its payment. That Huestis, shortly before the 19th of December, the day on which notice of the protest of the check was served, became insolvent, and that, bad payment of the check been demanded, and notice of its non-payment been given before his insolvency, the defendant might and would have obtained security from Huestis that would have saved him from the loss, that, if the judgment stand, he must incur. To these facts another must be added, which although not distinctly offered to be proved, the offer made of necessity embraced, namely, that Huestis made no deposit of funds for the payment of the check, to the credit of the defendant, for had this deposit been made, as it could not have been withdrawn by Huestis, the defendant would have sustained no loss from his insolvency. Having the funds, he would require no security. Hence it is plainly to Huestis’s breach of promise that the defendant’s loss must be ascribed.

In considering the question whether the facts thus stated constitute a defence, it must be remembered, that it is not pretended that the plaintiffs knew or had any reason to suspect that the check was an accommodation check when they received it, and also that they received it and paid full value for it on the very day upon which it is dated. In other words, it must be remembered, that they are bond fide holders for value. And the question is, whether the rights of such a holder to enforce the payment of a check, can be defeated'by proof of a secret agreement between the drawer and a third person, and of the consequences that from the breach of the agreement resulted to the drawer? Is the holder to lose the moneys, that he advanced upon the name and credit of the drawer, because the latter was deceived and cheated by the person to whom the check was originally issued? We apprehend not. We apprehend that reason, policy and the law,- alike reject the supposition.

The holder to whom a check has been passed for value, has certainly a right to believe that it was made on a valuable consideration, and that the drawer has, or in due season will, provide funds for its payment in the bank upon which it is drawn. It is this duty that the law imposes on the drawer, and which, when he issues the check, he undertakes to perform; and we cannot believe that the innocent holder is to suffer because, without his knowledge, at the instance and for the benefit of a third person, this duty has been violated. There is doubtless an equity beween the drawer of an accommodation check and the person, to whom it is lent. As between them, tbe latter is bound to pay it; but it is an universal rule tbat tbe rights of a bolder for value of negotiable paper can never be impaired or affected by a secret equity, —an .equity of wbicb be bad no knowledge or suspicion, or in legal pbrase, actual or constructive notice. It is upon a strict adherence to this rule tbat tbe value of such paper, as negotiable, mainly depends, and hence tbe most enlightened Judges have said tbat tbe strongest reasons of public convenience and policy demand its observance. Tbe rule is at least as applicable to checks as to promissory notes and bills of exchange, and when thus applied, it follows tbat .the drawer of an accommodation check can never be permitted to set up a defence against a bolder for value, and without notice, that would not be competent and available bad be received value for tbe check when be delivered it. He can found no defence upon tbe fact, tbat as between him and tbe person to whom be delivered the check, it was without consideration. It is, however, upon this foundation tbat tbe de-fence wbicb was offered to be proved in tbe present ease, plainly rested, and I therefore retain tbe opinion, in wbicb my brethren fully concur, tbat tbe evidence offered to support tbe defence was properly excluded. There is no pretence for saying tbat bad tbe defendant received value for tbe check when be delivered it, be could now be discharged from its payment.

It may be doubted whether there is any case in wbicb tbe drawer of a check, who delivered it for value, would be exonerated from its payment by a delay in its presentment, except when it appears tbat, from the failure of the bank upon wbicb it was drawn, be sustained a loss of tbe funds tbat, but for tbe delay, would have been applied to its payment; in other words, it is doubtful whether tbe bolder, by delaying bis demand of payment, takes upon himself any other risk than tbat of tbe continued solvency of tbe drawee. But, admitting tbat other cases may be stated, in wbicb, from a delay of presentment, a drawer for value would sustain a loss tbat would operate to discharge him, it is still true tbat it is in those cases only in wbicb be would be discharged, tbat an accommodation drawer would be allowed to defeat tbe claim of a bond fide bolder. It is still true tbat a distinction in bis favor can never be raised upon a fact of which the bolder was ignorant and tbe existence ,pf wbicb be bad no reason to suspect and was not bound to presume. Checks which, being without consideration between the immediate parties, receive their first value from an usurious discount, may seem to be an exception from the doctrine that no other defence is competent to an accommodation drawer than to a drawer for value, but this is an exception created by statute, and, considered with attention, is more apparentthan real. Such checks are void in their origin; but those to which the doctrine, properly understood, applies, are valid when received by the holder, and the transaction by which he acquires his title is free from any taint of illegality. It is the doctrine thus explained and limited, which, as fully sustained by principle and by authority, we hold ourselves bound to follow.

We have now considered all the exceptions that, it appears from the case, were taken on the trial, and as for the reasons that have been given, we deem them all to be groundless, the judgment appealed from must be affirmed with costs.

Judgment accordingly

       The court, at June term, in a subsequent case in which it was necessary to decide the question, held that such a denial in an answer is to be wholly disregarded.

        Vide, also Etting v. Brinkerhoff, (2 Hall, 465,) and Little v. Phœnix Bank, (2. Hill. 426.) The head note of the reporter in this last ease states that it -was held by the court that the holder is bound to prove affirmatively that no loss was sustained by the drawer; but this is hardly justified by the language of the opinion, and it is difficult to believe that the court meant to say that the plaintiff was bound to prove a negative, nor did any such question arise in the case. — R


source: Caselaw Access Project

author: Oakley, Ch. J.

license: Public Domain

text:
    Sepellette H. Moore and others v. William Cockcroft.
    When an award upon its face does not embrace a decision of all tbe matters contained in the submission of the parties, it is wholly void, and this whether the submission was specific or general. A promissory note given by a third person to secure the performance of an award by one of the parties, cannot be used as a security for the performance of an agreement which the arbitrator advised the parties to make, but which his award did not bind them to make.
    It appearing that the note in suit had been given for the sole purpose of securing the performance of an award, and that no valid award had been made, or, if made, had been broken by the party to secure whose performance the note was given, and that the plaintiffs were bond fide holders for value,

      Held that they were not entitled to recover, and that the complainant was properly dismissed.
    (Before Oaklet, Ch. J., Düeb and Campbell, J.J.)
    December 7th; December 23d, 1854.
    Appeal by tbe plaintiffs from a judgment dismissing tbe complaint with costs. Tbe action was by the plaintiffs, as endorsees, against tbe defendants as makers of a promissory note for $250, dated 17th May, 1851, and payable ten days after date to Hobarfc T. Moore, or order. The defence in the answer substantially was, that the note had been deposited by one Samuel Cockcroft, (at whose request it was made,) in the hands of an arbitrator, as security for his performance of an award and that the payee, H. T. Moore, without right, and fraudulently, had obtained possession of the note, and, without receiving any consideration therefor, had transferred it to the plaintiffs, who had full knowledge of the purpose for which it had been given, and of the means by which Moore had obtained its possession.
    The cause was tried before Oakley, Ch. J., and a jury, on the 19th of April, 1854: — and the following are the material facts which were established by the evidence given on the trial:
    S. Cockcroft and H. J. Moore were partners in business, and differences arising between them, by an agreement in writing dated on the 16th May, 1853, they referred all matters in dispute between them, to one D. H. Fitch, as sole arbitrator. Each was to give security to the amount of $250 for his performance of the award to be made, and accordingly Moore placed in the'hands of the arbitrator three promissory notes, payable to his order, and amounting in the aggregate to something more than $250, and Cockcroft deposited with him the note in suit, which was made by the defendant without consideration, at his request, and as his surety. All the notes so deposited, were to be delivered by the arbitrator to the party in whose favor the award should be made, in case of the refusal of the other party to comply with its provisions.
    On the 17th of May, the arbitrator made his award, which, after setting forth in figures an account of the partnership business, showing a balance of $18 in favor of Cockcroft, proceeded as follows:
    “ The amount claimed to be due from Mr. Cockcroft by Mr. Moore, has not been taken into account, on account of Mr. Cock-croft’s denial.
    “ According to an agreement entered into at the commencement of Mr. Moore’s connection with the business, I find that Mr. Moore bought out Mr. Cockcroft’s entire stock, consisting of doors, sash, &c., and that the business thereafter was to be conducted under the name of Mr. Moore, and was to be under his entire control. Mr. Cockcroft agreed to give his services and the use of bis machinery to Mr. Moore for the consideration of one-balf of the net profits of Mr. Moore’s business, at No. 10 South Seventh street, showing that every thing appertaining to the business, except such machinery as Mr. Cockcroft gave, as above stated, belongs entirely and unqualifiedly to Mr. Moore.
    “ I accordingly award to Mr. Moore the stock on hand, May 3d, as shown by agreement of inventory. All debts due the concern; as also, the moulding machine. I also award to Mr. Cockcroft eighteen dollars, as his share or balance of the profits, being due from Mr. Moore.
    “D. H. EITCH.
    “WILLIAMSBURG, MAY 17th, 1851.”
    At the foot of the award there was this additional memorandum, bearing no date, but signed by the arbitrator:
    “ I further note and decide, that if Mr. Cockcroft wants the • moulding machine and the stock now on hand at No. 10 South Seventh street, he (Mr. C.) shall have the same delivered into his possession at Williamsburg, safe and sound, on condition that he shall pay into the hands of Mr. Moore, the sum of three hundred and fifty dollars.
    “D. H. EITCH.”
    And on the back of the award there was the following endorsement, the signatures to which were proved:
    “May 19th, 1851.
    “Accepted, and Cockcroft keeps the machine and stock on hand.”
    “S. Cockroft.”
    “H. T. Moore.”
    On the 20th of May, the arbitrator delivered to H. T. Moore the notes which Moore had placed in his hands, and also the note in suit, deposited by Cockcroft, and he received from Moore a bond of indemnity in the penalty of $1,000, executed by Moore, and by Anthony Boynton and Joseph Boynton, two of the plaintiffs.

      Upon tbe whole evidence, tbe counsel for tbe defendant moved that the complaint be dismissed, upon tbe ground that tbe award proved was not valid; or if valid, that no violation of it bad been shown.
    Tbe Judge then asked tbe plaintiff’s counsel whether be proposed to give any further evidence, and in reply, tbe counsel offered to prove that after tbe award was published, tbe defendant, with full knowledge thereof, by himself or bis agents, and together with S. Cockcroft, wrongfully took and detained from tbe possession of Moore, the stock and moulding mentioned in tbe award. Tbe evidence was objected to, and was rejected by tbe court, and tbe counsel excepted to tbe decision.
    Tbe motion for dismissing tbe complaint was then granted, and' tbe counsel for tbe plaintiffs again excepted.
    Tbe cause was now beard upon a bill of exceptions, containing tbe evidence given on tbe trial and tbe exceptions then taken.

      L. B. Pert, for tbe plaintiffs,
    moved for a reversal of tbe judgment and a new trial, upon tbe grounds that tbe award to a common intent was certain and final, and therefore valid; (1 Caines R. 314; 14 John.- 96 ; 5 Wend. 268 ; 2 Petersdorf ⅛ Ab. 193, 196,) that a breach of it by S. Cockcroft bad been sufficiently proved, and that tbe further evidence offered on the part of tbe plaintiff ought to have been received. He also contended that tbe presumption of law was that tbe defendant bad received value for tbe note when be delivered it to S. Cockcroft, who was consequently a lona fide holder; and that, as this presumption bad not been contradicted by any proof upon tbe trial, S. Cockcroft was tbe only person who was competent to impeach the title of tbe plaintiff. If tbe note was given for value, tbe-defendant was bound to pay it to tbe persons having its possession as endorsees, and bad no right to inquire into tbe means by which they bad acquired its possession. He cited on this point, 1 Barb. 36; 2 Caines Ca. 66; Story on Prom. Notes. §§ 181-191; on Bills, §§ 193, 194.

      W. W. Niles, for tbe defendant,
    said that it was plain that tbe defendant signed tbe note merely as a surety, and be could not be bound by an award, which, as it did not settle nor pass upon all tbe matters in dispute, was void upon its face. He also insisted tbat if tbe award were valid, no breach of it bad been shown, and tbat the evidence offered for tbat purpose was properly rejected. . He cited, 10 John. R. 188, 587; 14 id. 96; Watson on Awards, 195.
   By the Court.

Oakley, Ch. J.

My brethren fully concur with me in tbe opinion, tbat I could not do otherwise than dismiss tbe complaint, and, consequently, tbat tbe judgment which followed must be affirmed.

There is no ground whatever fbr tbe presumption, tbat S. Cockcroft was a bolder of tbe note for value. It is true tbat tbe note was delivered to him by tbe defendant, but be bad no property in it, either at this time or at any subsequent period, nor was tbe delivery meant to give him any. Tbe note was payable, not to him, but to H. T. Moore or order, and consequently it was only from Moore’s endorsement, tbat any third person could derive a title. It is certain tbat tbe note was not endorsed by Moore when it was placed by Cockcroft as a security in tbe hands of tbe arbitrator. It was not endorsed at all until Moore bad obtained its possession from tbe arbitrator, and was then endorsed, not to Cockcroft, but to tbe plaintiffs. At no time, therefore, was S. Cockcroft, in any sense, tbe owner of tbe note, and we think tbat both tbe form and terms of tbe note, and tbe terms and conditions upon which it wjis deposited with tbe arbitrator, are sufficient evidence tbat it was made by tbe defendant merely as a surety for Cockcroft, and for bis sole accommodation. No proof, therefore, of a want of a valuable consideration as between him and tbe defendant was necessary to be given. It was implied in tbe very nature of tbe transaction. Tbe note was meant to be available to Moore only, and not to him unless be should acquire a title, by a subsequent breach of duty on the part of Cockcroft. Tbe only question therefore is, whether Moore became rightfully entitled to tbe possession of tbe note so as to enable him to pass a title to tbe plaintiffs. It is certain, tbat if Moore was not so entitled, tbe plaintiffs cannot be entitled to recover, since it cannot be pretended tbat they have any claim to protection as holders for value and without notice. There is no proof tbat tbe note was transferred to them upon a valuable consideration, and bad this proof been given, there is abundant evidence to charge them with notice of all the material facts affecting the title of Moore. The indemnity bond, in the execution of which two of them united, furnishes this evidence. It proves that they knew for what purpose the note was given, and by what means-Moore obtained its possession. If he had no right to claim its possession, in judgment of law, they knew that he had not. The cause must therefore be determined now exactly upon the same grounds that it must have been had the action been brought in the name of Moore himself.

The note was placed in the hands of the arbitrator as a security for Cockcroft’s performance of the award which the arbitrator was authorized to make. Hence it was not to be delivered to Moore unless a valid award should be made, with the terms of which Cockcroft should'refuse to comply. If no valid award was made, or if made, no breach of it by Cockcroft shown, the arbitrator’s delivery of the note to Moore was a breach of trust, and its possession by Moore, and its transfer to the plaintiffs wrongful and fraudulent. The plaintiffs have no title to the note, and the defendant is not liable to them or to anj^ one for its payment.

Was, then, the paper made and signed by the arbitrator a valid award?

It is an elementary and familiar rule, that an award must embrace all the matters contained in the submission, and that there must be a positive adjudication upon each. It is true that where the submission is not specific, but general, of all matters in difference or dispute, the award is valid, if it embraces all the matters of which the arbitrators had notice; but, on the other hand, it is wholly void when it appears either on the face of the award or from intrinsic proof that the arbitrators had notice of any matter covered by the submission which they failed to decide. (Watson on Arbit. p. 121, and cases there cited.)

The submission in the case before us was of all matters in dispute. It appears upon the face of the award, that certain moneys were claimed by Moore to be due to him from Cockcroft, and that the claim was disputed. It was therefore covered by the submission, but we think it also appears upon the face of the award ihq,t it was not passed upon by the arbitrator. The language of the arbitrator is, that this claim was not “ taken into account," by which we understand him to mean, not that it was rejected by him or abandoned by Moore, but that he made no determination in respect to its validity. If the award, as made, had been acquiesced in and fully executed by the parties, and Moore had then brought an action to enforce his claim, we apprehend that the award would have been no bar to his recovery. His counsel would have said, and the court would have held, that the award, by its terms, left his demand open and undetermined ; and if such is its true construction, it is a necessary conclusion that it is absolutely void — void upon its face.

Let it be admitted, however, that the award may not unreasonably be construed as implying a rejection by the arbitrator of the claims of Moore, and was therefore valid. How has it been shown that Cockcroft failed to comply with any of its provisions ? The only provision it contains in favor of Moore, is that which awards to him the stock on hand and the moulding machine; but if the award is valid this provision executed itself, and required no act on the part of Cockcroft, or of any other person, to give it effect. If the award is valid,-it vested in Moore an immediate and absolute title to the stock and machine —a title which Cockcroft, by no subsequent act, could divest or impair. Hence, the award, if valid, contained no provision that was, or from its nature could, be violated by Cockcroft.

But we are told that the plaintiffs offered to show such a violation, by offering to .prove that the defendant and Cockcroft wrongfully took the stock and machine from the possession of Moore, and unlawfully detained them, and consequently that the rejection of this evidence was a manifest error. We do not think so. We are elearly of opinion that the offer made was properly rejected. It admitted in terms that Moore was in the actual possession of the stock and machine when the award was made and published. Hence, if the award is valid, he was, by force of it, in possession as sole and absolute owner, and as the acts offered to be proved did not and could not affect his title, it is plain that they were not a breach of the award, but were a naked trespass, for which the defendant, and all who acted under or with him, are responsible to Moore in damages. But it is absurd to suppose that the recovery of such damages could be sought and enforced even by Moore himself, in an action upon the note of tbe defendant, and still more absurd to suppose tbat in sucb an action they could be recovered by tbe plaintiffs, by whom tbe damages were not sustained, and wbo, by tbe mere transfer of tbe note, could acquire no right to demand tbeir payment.

Nor is this tbe only reason that justifies tbe rejection of tbe evidence tbat was offered. There is another equally conclusive. It is tbat all tbat part of tbe award which relates to tbe stock and machine was superseded by tbe subsequent agreement of tbe parties.

We do not consider tbe memorandum at tbe foot of tbe award as a part of tbe award, or as in itself an award. If the award, which was completed and signed before the memorandum was made, embraced all tbe matters in dispute, it seems to us that the powers of-tbe arbitrator were exhausted, but if we suppose tbat it was competent to him to make an addition to tbe award before it was published, tbe memorandum is not sucb an addition; it is not a part of the award, for it decides nothing, and enjoins nothing, but is simply an expression of bis opinion, or, more correctly, a proposition made by him to the parties, which depended for its effect entirely upon tbeir subsequent agreement and assent. Without tbeir assent it was a nullity. It is true, tbeir acceptance on tbe back of tbeir award is evidence of tbeir assent. But what does this acceptance prove ? This, and no more than this: that Cockcroft agreed to purchase, and Moore agreed to sell to him, tbe stock and machine for a stipulated price, not tbat an award was made, binding Cockcroft to take tbe goods and pay tbe price; there was no sucb award.

If Cockcroft, as is alleged, has broken his agreement, if be has taken tbe goods, and refuses to pay for them, tbe remedy of Moore is against him in an action for tbe recovery of tbe goods, or tbeir value, or to compel tbe payment of tbe price; but be has not tbe shadow of a right to charge tbe defendant with the payment of a noté tbat was given for a widely different purpose, and for a purpose that has wholly failed. The note was given to secure tbe performance of an award, not tbe performance of an agreement. It was given to secure tbe payment of a debt tbat tbe award might create, and not to secure tbe payment of a debt that Cockcroft in the future exercise of bis own will might choose to incur.

It is needless to go further in this discussion. It follows necessarily from tbe observations I have made, that tbe arbitrator violated bis duty by delivering to Moore tbe note in suit, and that Moore by its delivery acquired no right to enforce its payment, and has passed none to tbe plaintiff. As tbe contingency never happened upon which alone tbe note was to be delivered to Moore, it is wholly void, and ought to be cancelled or surrendered to tbe maker.

My brethren are of opinion that upon tbe evidence given upon tbe trial, I should have been fully justified in directing tbe jury to find a verdict for tbe defendant, but bis counsel asked only for a dismissal of tbe complaint, and tbe plaintiffs have certainly no right to complain of tbe judgment as less conclusive than that which might justly have been rendered. It must therefore be affirmed, with costs.

Judgment affirmed.


text:
    The New York Fire Marine Insurance Company v. Marshall O. Roberts.
    The assured in a policy against marine risks by electing not to commence the risks, may put an end to the contract, and entitle himself to a return of the premium, but he cannot put an end to the contract merely by serving a notice upon the underwriters of his intention to do so.
    When the risks are so commenced that by the terms of the policy the underwriters would be liable for a total loss, they are entitled to retain or recover the premium.
    An insurance upon shipments by steamers generally, cannot be limited to shipments in steamers in which the assured is interested, although such only were contemplated by him when he effected the policy.
    Judgmentfor plaintiffs affirmed, with costs.
    (Before Oaklet, Ch. J., Ddee and Campbell, J.J.)
    Dec. 12; Dec. 23, 1854.
    Appeal by tbe defendant from a judgment entered on tbe report of a referee, for tbe sum, including interest and costs, of $1,397.96.
    Tbe action was brought on a promissory note of $1,250.25, against the defendant as maker. The note was dated December 3, 1850; was payable eight months after date, to the defendants’ own order, and was endorsed by him to the plaintiffs.
    The only defence' set up in the answer was, that the note was given to secure the payment of premiums that might thereafter accrue and become due upon an open policy of insurance which the defendant effected with the plaintiffs, and that at the maturity of the note the whole amount of the premiums earned was $140.89, and no more, which sum the defendant was ready and willing to pay.
    In October, 1853, the cause was referred by the consent of the parties to Benjamin W. Bonney, Esq., as sole referee, who on the 19th April following, made the following report:—
    I, the subscriber, referee, to whom, by a rule or order made in the above cause, and dated the twenty-ninth day of October, 1853, this action was referred, to hear and determine the same, and to report to this court,
    Do certify and report, that I have been attended upon this reference by the attorneys and counsel for the parties, plaintiffs and defendant, and having read the pleadings in the action, and heard the allegations and proofs of said parties respectively, and the arguments of their respective counsel, and having duly considered the same, I find and report as matter of fact, that on the third day of December, one thousand eight hundred and fifty, the plaintiffs made and issued to the defendant their open policy of insurance of that date, whereby the plaintiffs made insurance, and caused to be insured to the defendant, on account of whom it might concern, (in case of loss to be paid to him,) the sum of fifty thousand dollars, on specie, gold, gold dust and bullion, at and from San Francisco, per steamer to Panama, thence overland to place of reshipment, and thence per steamer to New York. Shipments to be made after the twentieth day of October, 1850, and to come consigned to the defendant and Greorge Law, or either' of them, and the plaintiffs not to be liable for more than ten thousand dollars, at any one time, per any one steamer. That the promissory note in the complaint mentioned and set forth was a “premium note,” made and given by the defendant to the. plaintiffs, for and to secure the payment of the premium of insurance, at and after the rate of two and one half per cent.' upon said sum of fifty thousand dollars, mentioned in said policy of insurance, and so insured as aforesaid; and one dollar and twenty-fire cents for such policy of insurance; and was made or given for no other purpose or consideration. That at the time of the issuing of said policy, and of the making of said note, it was understood and agreed, by and between the plaintiffs and the defendant, and was and is the usage and custom in like cases in the city of New York, that said note should be held by the plaintiffs as security for the payment of said premium of insurance, or of so much thereof as should be earned, or as the plaintiffs should be entitled to receive upon and for the amount of specie, gold, gold dust and bullion which should be shipped, and for which the plaintiffs should become insurers, in pursuance of the terms of said policy. That after the twentieth day of October, one thousand eight hundred and fifty, there was shipped from San Francisco, for New York, specie, gold, gold dust and bullion, consigned to the defendant and George Law, or one of them, to the amount of thirty-six thousand seven hundred and sixty-nine dollars and nineteen cents, which was covered by the said insurance ; and upon and for which the plaintiffs were entitled to receive such premium of insurance, amounting to nine hundred and nineteen dollars and twenty-three cents. That all said specie, gold, gold dust and bullion, shipped as aforesaid, arrived at New York, and was there received by said defendant and George Law, or one of them, before the seventh day of June, one thousand eight hundred and fifty-one. That no other specie, gold, gold dust or bullion, has, since the twentieth day of October, one thousand eight hundred and fifty, been shipped from San Francisco to or for New York, consigned to said defendant and George Law, or either of them, which was covered by such insurance. That in the month of June, 1851, (and after the said seventh day of June, 1851,) the defendant was willing and desirous to cancel and surrender the said policy of insurance; and the plaintiffs were willing and desirous to have such policy cancelled and surrendered ; and proceedings were then had and taken by and between said parties, for cancelling said policy, and adjusting and settling the amount of premium which plaintiffs were entitled to receive, upon, for, or under the same; but such policy was not delivered up to the plaintiffs, for the reason that the same was lost or mislaid; and the amount of premium to wbicb tbe plaintiffs were so entitled was not tben adjusted or settled; but the parties disagreed as to the amount of such premium; and that since the said seventh day of June, 1851, the plaintiffs have been subject to no risk or liability, and have earned or become entitled to no further premium upon, under, or by reason of the said policy of insurance.
    And I do farther find and report, as matter of law, upon the facts found as above stated, that there is now due to the plaintiffs upon said promissory note the sum of nine hundred and twenty dollars and forty-eight cents, with interest thereon from the sixth day of August, 1851, amounting, in the aggregate, at the date of this report, to the sum of one thousand and ninety-four dollars and twenty-seven cents. And that upon the filing of this report, judgment be entered in favor of the plaintiffs against the defendant for the last mentioned sum, ($1,094.27,) and for plaintiffs’ costs of this action.
    Dated, New York, 17th April, 1854.
    B. "W. BONNEy, Referee.
    In addition to the facts so found by the referee, it was proved upon the trial before him, as appeared by his report of the evidence, that when' the policy was effected, the defendant and G-eorge law were the owners of a line of steamers navigating the Pacific, from San Francisco to Panama, and were also interested in a line of steamers on the Atlantic, from Chagres to New York, and that they effected an insurance with the plaintiffs, in order to cover shipments of gold, gold dust, bullion, &c., which they expected to be made to them by those lines. That on the 1st of April, 1851, the defendant and George Law ceased to.be the owners of the steamers on the Pacific line, having transferred the same to the Pacific Mail Steamship Company, and that notice was then given to the plaintiffs that the defendant would no longer use the policy, and wished the same to be cancelled, and that from that time no returns of shipments were made to the plaintiffs. The premiums earned to the 1st April, amounted only to $457.85.

      W. M. Evarts, for the defendant,
    now contended that it was only for this sum of $457.85, with interest, that the report of the referee ought to have been given, and that the judgment ought to be reduced accordingly. He insisted that the insurance was terminated by the change of the ownership of the steamers on the Pacific, on the 1st of April, and by the notice then given to the plaintiffs that the defendant would no longer use the policy. The referee erred in supposing that the assent of the Company was necessary to discontinue the insurance.- The defendant had a right to discontinue it, by giving a proper notice whenever he pleased.

      G. A. Peabody, for the plaintiffs, contra,
    insisted that if there was any error in the report of the referee it was in his not ordering judgment for the whole amount of the note, since there was no satisfactory proof that the contract had ever been discontinued.
   By the Court.

Oakley, Ch. J.

There is one respect in which an insurance against marine risks seems to be distinguished from all other contracts. Even when the policy has been signed and delivered, and the premium paid or secured to be paid, the contract may be dissolved at the election of one of the parties without the consent or knowledge of the other. It is to the assured alone, however, that this privilege belongs, and it is only in one mode that it can be exercised by him. He has not an unlimited discretion to annul the contract when and how he pleases. The, contract can only be dissolved so as to exonerate him from the payment of the premium, or entitle him to demand its return, by his electing not to commence the voyage or adventure to which the insurance relates. If a ship insured to Havre sails for Liverpool, or goods insured to one port are shipped for another, or are not shipped at all, the contract is at an end, and the underwriters lose their premium. But if the voyage or adventure insured is not abandoned nor broken up, the assured cannot put an end to the contract by a mere declaration and notice of his intentions. He cannot dissolve the contract because he is dissatisfied with its terms, and prefers to become his own insurer, or believes he can effect a new insurance covering the same risks at a lower rate of premium. Where the risks described in the policy are so commenced that by the terms of the insurance the underwriters would be liable for a loss, they are entitled to retain or reeoyer the premium, unless it is proved that before the risks commenced or terminated they had consented to dissolve the contract; and we apprehend that these rules are just as applicable where the policy covers successive risks, as where it is confined to a single voyage, although when the risks are not merely successive, but distinct and independent, so that the premium may be apportioned, the non-inception of a portion of the risks will doubtless warrant a proportionate return or diminution of the premium.

It is not denied in the case before us that shipments, such as are described in the policy, were made to the defendant and Law between the 1st of April, 1851, and the 7th of the following June, and that the premiums on these added to the premiums before earned amounted to the full sum that the referee reported to be due. The argument, therefore, for the defendant rests entirely on the truth of the assertion that the insurance was terminated on the 1st of April. — First, By the change which then took place in the ownership of the 'steamers by which shipments covered by the policy were expected to be made, and second, By the notice then given to the plaintiffs that the defendant would no longer use the policy. It is manifest that neither of these grounds was considered to be tenable by the referee, and as we are entirely of the same opinion, we can see no reason for disturbing his report.

We cannot say that the change in the ownership of the steamers made any change in the rights or contract of the parties, without giving a construction to the policy that its terms plainly forbid. It is very probable that the defendant, when he effected the insurance, believed that all the shipments he meant to cover would be made in the steamers in which he was interested, and. of which,.it seems, he was the agent; but if he intended to limit the insurance to shipments so made, it is an intention that the policy ought to have expressed, and, if its expression was omitted by accident or mistake, we have no power upon the pleadings and evidence before us to supply the defect. The answer does not seek a reform of the policy, npr does the evidence show that it could be reformed. We must, therefore, construe it as it is. By its terms it covers every shipment made to the defendant or Law; by a steamer on the route described, without any reference whatever to the ownership of the vessel, so that had a loss happened of a shipment so made in a steamer, in which the defendant had no interest whatever, it cannot be doubted that the plaintiffs would have been responsible for the payment — an intention not to be collected from the terms of the policy, however probable in itself, would have been no defence. Hence, as the plaintiffs assumed the risks of all the shipments described in the policy that should be made to the defendant or Law until the sum mentioned in the policy should be exhausted, they are entitled to the premium upon all that were in fact made.

Now as to the notice that is alleged to have been given to the plaintiffs, the silence of the referee renders it probable that he deemed the evidence insufficient to establish the fact, and upon looking into the evidence, we are not surprised that he arrived at this conclusion. But admitting the notice, as stated, to have been given on the 2d April, as there is no proof that its terms were then assented to by the plaintiffs, it was, as has already been shown, wholly ineffectual. It was not in the power of the defendant to discontinue the insurance, in other words, rescind the contract, without discontinuing the risks that the insurance covered. Until shipments were made to the full amount of the sum mentioned in the policy, ($50,000,) it was only by the consent of both parties that the contract could be rescinded. The referee has found that this mutual consent was not given until the month of June, nor until after the 9th of that month, and we cannot say that his finding is against evidence or the weight of evidence. Hence, as the insurance remained in force until, after the day mentioned, it is a necessary consequence, and is not denied to be so, that the plaintiffs became entitled, as premiums earned, to the full sum reported by the referee, and for which, with interest, this judgment has been tendered.

The judgment is therefore affirmed, with costs.

       The doctrine of the Italian jurists is, that the assured can never put an end to the contract by his own choice or act, and that it is only where the non-inception of the risks is owing to force or accident that he is excused from the payment of the premium; hut this doctrine is peculiar to Italy. — (Casariges, Dis. 1, N. 82, 585, Benecke 133, 2 Emerigon 181.) — R.


author: Campbell, J.

text:
    Thomas E. Davis and Cortlandt Palmer v. Oscar H. Sturtevant and others.
    Reasonable counsel fees may properly be allowed to tbe aggrieved party, under sections 21 and 29 of the Revised Statute “ of Proceedings, as for contempts,” (2 R. S. p. 534.)
    The words “ costs and expenses,” have the same meaning in each of these sections, and refer to the same proceedings. They mean the costs and expenses incurred by the aggrieved party in prosecuting the attachment.
    Hence, if the costs and expenses included in a fine imposed by the court under section 21, are paid to the aggrieved party, his acceptance of the payment is a bar to his recovery of costs and expenses, in an action under section 29, upon a bond given for the appearance of the defendant upon the return of an attachment.
    If such payment is accepted after a judgment for costs and expenses in an action upon the bond, the court will permit an execution to be issued only for the costs of the action.
    Judgment for plaintiffs. Execution-limited to costs of action.
    (Before Oakley, Ch. J., Duer and Campbell, J.J.)
    December 12; December 23, 1854.
    This was an action to recover $500, tbe penalty of a bond given by the defendant Sturtevant and the other defendants as his sureties, upon his arrest under an attachment issued against him by this court, for his contempt in disobeying an injunction, (vide 1 Duer, 451.)
    The prosecution of the bond had been ordered by the court, and the action was brought by the plaintiffs as assignees of the sheriff, under the provisions of the Revised Statutes. (2 R. S. p. 589, §§ 27, 28, 29.)
    The bond was conditioned for the appearance of the defendant Sturtevant before the court on the 11th of February, 1853, the day on which the attachment was returnable.
    The complaint set forth the attachment, the bond, the breach of its condition by the non-appearance of Sturtevant, and the order of the court for its prosecution, and averred that the costs and expenses of the plaintiffs in prosecuting the attachment amounted to the sum of $500 and upwards, for which sum, with interest, it demanded judgment.
    The defence, in the answer, substantially was, that this court . bad no jurisdiction to issue tbe attachment, and that the same, and all the proceedings theron, including the bond given by the defendants, were, therefore, wholly void.
    The cause was tried before OaMey, Ch. J., and a jury, on the 3d of June, 1853.
    On the trial, the attachment, orders of the court, bond, &c., having been duly proved, a witness on the part of the plaintiffs swore that their costs and expenses in prosecuting the attachment, including .fees paid to counsel, exceeded the sum of $500.
    The counsel for the defendants insisted that counsel fees ought not to be allowed as expenses, and that the evidence in relation thereto ought to be excluded.
    The court overruled the motion, and the counsel excepted to the decision.
    The counsel for the defendants then proved, that in the course of the proceedings upon the attachment against Sturtevant, the court had directed' a reference to Wm. Kent, Esq., to ascertain and-report what sum ought to be allowed to the plaintiffs for their costs and expenses, including reasonable counsel fees in prosecuting the attachment, and he produced and read in evidence the report made by the referee.
    The report stated that the referee in making it had taken into consideration the pendency of twenty-six other cases in which motions for attachments had been made, and proceedings had thereon similar to the motions and proceedings now before him, The questions of law, and the arguments thereon, being in all the cases essentially the same; and that he had proceeded on the principle of ascertaining the aggregate amount of costs, expenses,.. and counsel fees in all the cases, and of assigning to each case am equal and proportionable share of this aggregate amount..
    The report then, after setting forth in detail the different items of costs, expenses, and counsel fees, stated, that computed together they formed the sum of $2,340.98, and’that the share thereof chargeable to the defendant Sturtevant was $102.20.
    The counsel for the defendants then moved that the complaint should be dismissed, upon the following among other grounds: namely, that the costs and expenses of the plaintiffs in the prosecution of the attachment had been fixed and settled by the reference, and by the final order of the court imposing a punishment upon tbe defendant Sturtevant for tbe contempt of wbicb be bad been adjudged to be guilty. {People v. Compton; 1 Duer, 571-72, note a.)

    Tbe other grounds of tbe motion it is not deemed necessary to state, since they were all in effect overruled by tbe decision of tbe court in tbe case of People v. the Mayor, 1 Duer. 453.
    Tbe motion was denied, and tbe counsel for tbe defendants excepted.
    Tbe Chief Justice charged tbe jury in substance, that tbe plaintiffs, as tbe aggrieved party, were entitled under the provisions of the Revised Statutes to recover their costs and expenses in prosecuting tbe attachment, and that in bis opinion reasonable •counsel fees to two counsel might justly be allowed to them as a part of those expenses. That the evidence proved that large counsel fees bad in fact been paid, and that in fixing tbe sum to be allowed, tbe jury were not bound by tbe estimate made by tbe referee, but might form their judgment upon tbe whole evidence that bad been given. Tbe "jury rendered a verdict for tbe plaintiffs for $500. Tbe verdict was taken subject to tbe opinion of tbe court at General Term, with power to tbe court to modify tbe same, or direct a nonsuit to be- entered. Judgment in tbe mean time to be suspended.

      H. Hilton, for tbe plaintiffs,
    now moved for judgment upon tbe verdict.

      D. D. Field,, for tbe defendants,
    insisted that the complaint ought to have been dismissed upon tbe trial, and that the Judge erred in instructing tbe jury that counsel fees were chargeable as expenses, and that the amount reported by tbe referee was not tbe proper measure of damages.
    It was stated upon tbe argument by tbe counsel for tbe defendants, and admitted by tbe counsel for tbe plaintiffs, that since the judgment of this court in tbe People v. Compton and others, including tbe defendant Sturtevant, bad been affirmed by the Court of Appeals, tbe whole fine of $352.20 imposed upon him by this court bad been paid by him, and that $102.20 of that amount bad been paid to and received by tbe plaintiffs for their costs and expenses in prosecuting tbe attachment, and upon these facts tbe counsel for tbe defendants insisted tbat tbe payment so made ought to be regarded as a satisfaction of tbe verdict tbat bad been given, and be therefore moved tbe court, tbat should judgment be rendered for tbe plaintiffs, it should be accompanied by an order restraining them from issuing an execution thereon for any sum beyond tbe amount of tbe costs tbat might be taxed for them in this action.
    Tbe counsel for tbe plaintiff opposed tbe motion, but, as tbe facts were not disputed, be consented tbat it should be considered and determined by tbe judges in tbe same manner, as if regularly brought before them upon affidavits and notice.
   By the Court.

Campbell, J.

We are all of opinion tbat tbe exceptions taken on the trial cannot be sustained. We think tbat tbe jury were rightly instructed, and, upon tbe evidence before them, were fully justified in rendering a verdict for tbe plaintiffs for tbe sum demanded'by tbe complaint.

Tbe right of tbe plaintiff to be allowed counsel fees as a part of these expenses, was in effect determined by this court in delivering its judgment in tbe People v. Compton and others, and as this judgment has been affirmed by tbe Court of Appeals, we think it must now be considered as settled, tbat reasonable counsel fees form a part of tbe expenses to which, in proceedings for a contempt under tbe statute, an aggrieved party, at whose instance an attachment is issued, and by whom it is prosecuted to judgment, is justly entitled.

Tbe report of tbe referee, and tbe final order of tbe court thereon, were not offered or received in evidence as creating a bar to a recovery, and it is certain tbat under'tbe pleadings they could not have been admitted for tbat purpose. No such defence was, or could have been, set up in tbe answer, for not only was this action commenced, but tbe answer was put in before tbe referee made bis report, and even before a reference was directed. Hence, if these facts constituted a defence at all, which we are far from saying, they were a defence which tbe defendants bad no right to set up, except by a supplementary answer in tbe nature of a plea puis darrein continuance, nor I apprehend except upon tbe condition of paying all tbe costs tbat bad previously accrued.

Tbe report of the referee was therefore offered in evidence, not to defeat the recovery of damages, but as furnishing a rule by which the jury in estimating the damages ought to be governed. The Judge held that the. jury were not bound to follow the estimate of the referee, but were at liberty to form their own judgment upon the whole evidence before them, and in this opinion, which he retains, his brethren entirely concur. The jury might well have inferred from the testimony that had" been given, that more than $500 had been expended in counsel fees by the plaintiffs in the. proceedings against the defendant Sturtevant alone, without reference to. .the attachments against other persons, which it appeared from the report of the referee had been issued, and upon this view of the evidence the jury were folly justified in rendering their verdict for the whole sum demanded by the complaint.

■ The motion on the part of the plaintiffs for judgment on the verdict, is therefore granted.

We pass now to the motion that was. made upon the hearing for- relieving the defendant Sturtevant, and the other defendants, his sureties,.from- the effect of the judgment we have rendered, except as to the costs of the action. All objections to the regularity of this motion were very properly waived by the counsel for the plaintiffs, and it by no means follows from any observations that' have been made, that it may not be, and ought not to be, granted.

I shall proceed to state our views in relation to it, and the conclusions at which we have arrived.

The 21st section of the statute, regulating “ Proceeding as for contempts,-” &c;, (2 E. S. p. 538,) provides that, “ if an actual loss or injury shall -have been produced to any party by the misconduct alleged,” (that is, the misconduct charged as a contempt,) “a fine shall' be imposed sufficient to indemnify such party, and to satisfy his costs -and' expenses, which shall be paid over to him on the order of the court.” And the 29th section of the statute, in referring, to the action, by an aggrieved party, upon a bond given by adefendant, upon his arrest under an attachment, says, “that the measure of the damages to be assessed'in such action, shall be the extent of the loss or injury sustained by such aggrieved party by reason of the misconduct for' which the attachment was issued, and his costs and expenses in prosecuting such attachment. (2 R. S. 539.) Upon comparing these sections, we think it cannot be doubted that the words, “ costs and expenses,” are to be understood in each, exactly, in the same sense, and refer, exactly, to the same proceedings; in other words, that the “ costs and expenses” which are to be included in a fine imposed by the court, are the same which are recoverable by an aggrieved party in an action upon the bond, being in each case the “ costs and expenses” incurred by the party in prosecuting the attachment, — -just as the “ loss or injury” to which each section refers is the same loss and injury and sustained by the same party. The last clause in section 21, which has not yet been quoted, but which immediately follows that which has been quoted, and must be read in connection with it, is in these words, “ and in such case, the payment and acceptance of such fine, shall be an absolute bar to any action by such aggrieved party to recover damages for such injury or loss.” Now, although this clause is silent as to “ costs and expenses,” we are fully convinced that the principle which it declares is just as applicable to them as to the sum to be paid to the aggrieved party, as a compensation for the loss or injury sustained by him. It is just as applicable, because the entire clause is in truth no more than a special application of one of the plainest rules of natural justice as well as positive law, namely, that no person can be entitled to receive a double satisfaction for the same demand.

Applying the construction that we have given to the statutory provisions in the case before us, it seems a necessary consequence that the motion that has been made on behalf of the defendants, ought to be granted. The defendant Sturtevant has paid the whole fine imposed upon him, and the plaintiffs have accepted payment of all that portion of the fine which was awarded to them by the court as and for their “ costs and expenses” in prosecuting the attachment, and which, in the judgment of the court, were all that Sturtevant could justly be required to pay. So far as he was concerned, the sum so awarded was meant to be a full satisfaction to the plaintiffs. Had these facts occurred before the present action was commenced, we do not doubt that they would have constituted a full defence, and, according to the law that formerly prevailed, a payment that, if made before judgment, would be a good defence, if made after judgment would be a ground for relief upon an “ audita, querela," and, consequently, as the law now stands, a ground for relief upon motion, the defence and the relief resting exactly upon the same principle, namely, that the payment was a satisfaction of the demand.for which the action was brought. It is to be observed that by the words of the statute, it is not the imposition, but the acceptance of a fine, that creates a bar to a recovery by action. Hence the plaintiffs, even after the judgment or final order of this court was affirmed by the Court of Appeals, had their election to accept the payment of their costs and expenses as included in the fine, or to seek their recovery by a continuance of this action. They made their election by accepting payment of that part of the fine which the court had directed to be paid to them, and by this election we must hold that they are bound; we must hold that all the costs and expenses to which they are entitled, and for the recovery of which this action was brought, have been paid to them.

Our decision, therefore, is, that the execution to be issued upon the judgment, to be entered, must be limited to the costs that the judgment shall include, and that when these costs, whether without, or under an execution, shall have been paid, the judgment must be satisfied of record.


author: Duer, J.

text:
    James H. BENEDICT and another v. Cyrus W. Field and others.
    The brokers of the defendants, by a'sale-note duly signed, sold on their account to the plaintiffs 50 casks Musprat’s bleaching powders at the market price, ruling for No. 1 quality at the time of delivery. Six months for Leggett & Bros’, paper, without recourse. The powders to arrive per Emma Field, and to be taken from the wharf on delivery. The powders arrived, but before their arrival Leggett & Bro’s. failed in business, and the defendants, for that reason, refused to accept their notes and deliver the powders.

      Held — That the defendants were justified in their refusal. That the contract was executory, and that the insolvency of Leggett & Bros, created a failure of the consideration upon which the promise of the defendants was founded, and released them from the obligation of performance.

      Held — That the complaint was therefore properly dismissed.
    (Before Oakley, Ch. I., Doer and Campbell, J.J.)
    December 15; Dec. 23, 1854.

      Appeal by plaintiffs from a judgment dismissing tbe complaint.
    The action was brought to recover damages for the breach of a contract of sale.
    The complaint alleged that on the 25th October, 1858, the defendants, by their brokers, sold to the plaintiffs, to arrive per ship “ Emma Field,” 50 casks Musprat’s bleaching powders, at the market price ruling for No. 1 quality at the time of delivery, and agreed to accept in payment therefor the notes of Leggett & Bros., at six months, without recourse. That on the 7th of November the ship arrived with the powders, and that the plaintiffs then tendered the notes of Leggett & Bros, to the defendants, and demanded from them the delivery of the bleaching powders, but that the defendants refused to accept the notes and deliver the powders, and that the plaintiffs had thereby sustained damages to the amount of $1,500, for which sum, besides costs, judgment was demanded.
    The answer admitted the contract set forth in the complaint, and set up as a defence, that before the arrival of the “ Emma,” the firm of Leggett & Bros, had failed in business, and stopped payment, and that the defendants for that reason had declined to accept their paper and deliver the powders.
    The cause was tried on the 28d June, 1854, before Bosworth, J., and a jury.
    The following sale-note was produced and read on the trial, and its execution by Sergeant & Hunt, as the brokers of the defendants, admitted:
    “New York, Oct. 25, 1853.
    “ Sold, for account of Messrs. Cyrus W. Field & Co., to Messrs. James H. Benedict & Go., 50 casks Musprat’s bleaching powders, at the market price ruling for No. 1 quality at the time of delivery. Six months for Leggett & Bros’, paper, without recourse. The powders to arrive per “ Emma Field,” and to be taken from the wharf on delivery.
    “ Bill of lading dated 29 Sept.
    “ Sergeant & Hunt, Brokers,
    “No. Ill Wall street.” '

      The following facts were also admitted, or proved upon the trial: that when the contract was made both parties supposed the firm of Leggett & Bros, to be solvent — that the firm failed on the 4th of November, 1858, and before the arrival of the Emma— that on the 21st November the price to be paid for the bleaching powders, according to the terms of the contract, was $1,412.89 — • that on that day the plaintiffs tendered to the defendants two notes of Leggett & Bros., dated the 10th October, 1853, payable six months after date to their own order, and endorsed by them, and amounting together to the sum of $1,318.99, which notes the defendants declined to accept in payment for the powders, for the reasons which they had given in a letter addressed • by them to the plaintiffs on the 14th of November — that in the letter of the 14th November, which was produced and read, the defendants informed the plaintiffs, that by reason of the failure of Leg-gett & Bros., they must decline to receive their notes for the bleaching powders mentioned in the sale-note .of Sergeant & Hunt, and that on the 21st November, the defendants addressed and caused to be delivered to the plaintiffs another letter, which was read, and is in the words following:
    ' “ New York, Nov. 21, 1853.
    “Present — Messrs. James H. Benedict & Co. •

      “ Gentlemen — The ship Emma Field has arrived with the bleaching powders mentioned in our letter to you of the 14th "inst.
    “We are ready, and hereby offer to deliver, and hereby tender to you fifty casks, at the market price, for first quality, payable in notes satisfactory or for cash.
    “ If you decline, we shall consider the matter at an end, and dispose of the articles to some one else.
    “We remain, yours, truly,
    . “C.W. Field & Co.”
    •When the testimony was closed, the counsel for the defendants moved to dismiss the complaint. The judge granted the motion, and the counsel for the plaintiffs excepted to his decision. Leave was given to the plaintiffs to appeal without security from the judgment to be entered on the dismissal of the complaint.

      W. H. Scott for tbe plaintiffs, appellants,
    insisted, upon several grounds, that tbe judgment ought to be reversed, and a new trial be granted. He argued that the contract set forth in tbe sale-note, altbougb to be completed in futuro and defeasible by the non-arrival of tbe vessel with tbe powders, was still a sale, transferring the title and right of property eo instanti to tbe plaintiffs. (2 Kent’s Oom. 7 ed. 492; Smith’s Mer. Law, 567, note; Olephant v. Baker, 5 Denio, 379.) That at any rate the title of the plaintiffs to the powders became absolute when they arrived, and that the plaintiffs,- upon a tender of the notes of Leggett & Bros., might then have maintained trover for their value. (2 Brad. Com. 448 ; Scoly v. Opre, 2 Taunt. 352, note.) Tbe counsel further insisted, that by tbe very terms of tbe contract the defendants agreed to take the notes of Leggett & Bros., subject to tbe risk of their future depreciation, and that having assumed this risk, tbe failure of Leggett <& Bros, could not absolve them from the performance of their agreement. It was only by this construction that any effect could be given to the words “ without recourseand if tbe question as to tbe intention of tbe parties was at all doubtful, it should have been left to tbe determination of tbe jury. In support of this branch of his argument, tbe counsel cited numerous cases, and particularly Smith v. Spies, 2 Watt, 477; Graves v. Friend, 5 Sand. 570 ; Broad v. Cook, 15 John. 241; Porter v. Talcott,' 1 Cow. 358; Toby v. Barker, 2 Amer. Lead. Ca. 187. The counsel also contended that a sufficient tender of tbe notes of Leggett & Bros, bad been shown, and if not, that tbe letters of tbe defendants were conclusive proof that a tender was waived.

      D. D. Field, for tbe defendants,
    argued that the contract between tbe parties was made under a mistake of facts respecting tbe solvency of Leggett & Bros, and therefore was never binding on tbe defendants; and that, admitting it to have been binding when made, tbe defendants bad a right to rescind it when tbe failure of Leggett <& Bros, occurred, on tbe principle on which stoppage in transitu is allowed. (21 Wend. 471; 2 Kent’s Com. 473.) He also contended that tbe tender proved was insufficient, tbe notes tendered being less in amount than tbe price to be paid.
   By the Court.

Duer, J.

The contract between the parties in this case, as evidenced by the sale-note, was very plainly an agreement to sell, and not a sale: it was not executed,'' but execu-tory. It is quite true that in many cases a sale of goods may operate by force of the language of the agreement, as an immediate transfer of the right of property, although the goods are not delivered, and the price remains unpaid: but this is only when by the terms of the agreement, the sale is immediate and absolute, so that the buyer, upon tender of the price, mayat once demand possession of the goods, and the seller, upon tender of the goods, the payment of the price, When the sale, however, is not absolute, but conditional, and the delivery of the goods depends upon a contingency, all the cases and authorities show, that until the contingency happens, no title whatever passes to the buyer, but the goods remain the sole property and at the sole risk of the seller. And this, where such is the nature of the contract, is so manifestly the intention of the parties, that it would be strange, indeed, had a different construction ever prevailed. In the case before us, not only the delivery of the goods but the amount of the price to be paid for them, depended on a contingency, namely, the market value of bleaching powders of the quality described at the time of their arrival.

In all cases of a sale of gpods when by force of the terms of the contract an immediate title vests in the buyer, the goods are from that time solely at his, risk, and hence if the argument for the plaintiffs were well founded, it would follow that had the bleaching powders which they bought, been totally lost at sea, they as owners must alone have borne the loss, and would have been bound to have paid the defendants in the notes of Leggett & Bros., even had the credit of that firm been such that a payment in their notes would have been equivalent to a payment in cash. It was, however, admitted by the counsel for the plaintiffs that the non-arrival of the powders would have defeated the contract, and that by the known and invariable construction of a sale of goods to arrive, the goods until arrival, are at the sole risk of the seller — and this admission of the counsel, it seems manifest to us, was fatal to his argument, that the contract of sale in this case operated per se as a transfer of the property. As it is certain that until their arrival, the bleaching powders were at the sole risk of tbe defendants, it is equally so, that until tben they were the sole owners, and it is a necessary consequence that until then the plaintiffs were the sole owners of the notes that the defendants were to receive in payment. Whether it is not also a necessary consequence, that the notes until then were at their risk — that is, that until then they took upon themselves the risk that circumstances might happen to render the notes worthless before the time for their delivery in payment arrived — is the question that remains to be considered; and this, stated in a somewhat different form, we consider to be the true and only question in the cause.

The question in the form that we adopt is, did the known and declared insolvency of the firm of Leggett and Bros, before the arrival of the goods, release the defendants from their obligation to perform their agreement, or were they still bound to deliver the powders to the plaintiffs, and accept in payment the notes that were tendered ?

It is needless to inquire what would have been the effect of the failure of Leggett & Bros., had it taken place' after the arrival of the ship, and before a delivery of the goods had been demanded, since although the exact time of their arrival is left in some uncertainty, it is admitted that it took place some days after the failure of that firm was known and declared. If the defendants were bound to part with their property, and accept in payment the notes of an insolvent firm, that obligation arose, either from the peculiar words of the contract of sale, or from a general rule applicable to every contract of sale with a provision that the notes of a third person shall be received in payment.

There is scarcely a pretence for saying that the obligation in this cas_e arose from the peculiar words of the contract, for the words “without recourse” which are all that are relied on as having this effect, were plainly introduced for a different purpose and bear a different meaning. It is not doubted that the defendants by agreeing to accept in payment the notes of Leggett & Bros., agreed that when the notes were delivered the plaintiffs should no longer be responsible as buyers, even should the notes not be collected. It is to the period of the delivery of the notes that the words “ without recourse” yefer, and they were introduced to show that not only the acceptance of the notes was to discharge the plaintiffs from all responsibility as buyers, but that they were not to be liable upon the notes themselves as endorsers, that- is, were either not to endorse the notes at all, or so endorse them as to be exempt from liability.

¥e come, then, to the general question, whether a party who agrees to accept in payment the notes of--a third person is-bound to receive them, although when the day for 'their acceptance arrives, from the declared insolvency of the maker, they are known to be worthless ? Is- the risk of suck an insolvency, occurring between the date of his .agreement and the tender of the notes, cast upon him ? Is this the necessary, or reasonable, interpretation of his agreement?

We- should have no difficulty in answering these questions upon principle, but the necessity of such an answer is superseded by a series of decisions which we regard as settling - the law in favor of the.defendants.

The earliest case is that of Roget v. Merritt & Clapp, (2 Caines. 119,) which in all its material circumstances is not distinguishable from the present.' The action was brought to recover damages for the non-delivery of 220 barrels of’flour, which the defendants, through the intervention of a broker, had sold to the plaintiff; .the sale, by the terms of the sale-note, was for the note of one Lyons, endorsed by one Palmer, plainly meaning that the note described was to be received in payment. There was no delivery of the flour or note when the contract was signed; but the defendants on the following day informed. the broker that they were ready on their part to complete the sale. After the lapse of some days, the broker acting for the plaintiff demanded from the defendants the delivery of the flour, and tendered to them the note which they had agreed to accept. They refused to accept the note, and make the delivery, on the ground, that in the interval Lyons, the maker of the note, had failed and was insolvent. It was insisted by the counsel for the plaintiff that the sale was completed when the sale-note was given, and that the right of property in the flour then vested in the plaintiff, and that of the note in the defendants, who, as owners, must sustain any loss resulting from the insolvency of the maker. The court, however, held that the contract was executory, and that the insolvency of Lyons created a failure of the consideration upon wbicb tbe promise of tbe defendants was founded, which discharged them from its performance; and in delivering tbe judgment of tbe court, Spencer, J., laid it down as a general rule, sustained alike by reason and by authority, “ that when upon a sale of goods there is an agreement to accept notes in payment, if before the delivery of the goods purchased the notes turn out not to be good, a tender of them will not be considered as a payment.” We have stated that this case is scarcely distinguishable from the present, but in reality it was much stronger, for as the sale was not conditional, but absolute, there was much plausibility in the argument that it operated as an immediate transfer of the property.

It might, however, be inferred from the marginal note of the reporter that the decision of the court proceeded mainly on the ground that there was no positive evidence that the defendants had agreed to take the notes of Lyons in payment; but in looking into the case itself it is manifest that such was the nature and legal effect of the agreement which the sale-note contained, and that no other construction could reasonably be given to it. We are satisfied that the judgment of the court was not founded upon any such distinction, and it is certain that none such is to be found in the cases which are next to be cited.

The first of these is Marble v. Hatfield, (2 John. R. 454.) The plaintiff had sold to the defendant a number of cattle, and had received in part payment a bank note which proved to be forged, and the action was brought on the original contract to recover the sum represented by the note as a portion of the price that remained unpaid. The court held that the plaintiff was entitled to recover, and in delivering his opinion, Savage, Ch. J., cites with marked approbation the decision in Roget v. Merritt, as furnishing a rule applicable to the case under consideration, and which the court held itself bound to follow. As the note in this case was forged, we do not lay much stress upon the decision as a direct authority, since it must be admitted that in no case can the delivery of a forged note operate as a payment; but no such circumstance is to be found in the case next to be cited, and which, it will be seen, was decided upon a principle that renders it not merely an applicable, but controlling authority.

We refer to the decision of the Court of Errors, in Lightbody v. The Ontario Bank, (18 Wend. 101, S. C. 11 Wend. 9,) which, as a decision of the court of last resort, may be truly said to have established the law, which it declares.

The plaintiff had received from the Ontario Bank, in payment of a check, a note for $500 of the Franklin Bank of this city, which, it was afterwards discovered; both parties being at the time ignorant of the fact, had failed', and been closed by an injunction, on the very morning of the day on which the check was paid. The question was by which of the parties the loss of the note should be borne. The counsel for the defendant distinctly admitted,both in the court below and in the Court of Errors, that had the note been that of an individual, who was insolvent when it was transferred,, the plaintiff would have been entitled to recover, and they rested their whole- argument upon the distinction, which they asserted to exist, between the notes of private persons and those of an incorporated bank. The latter, they contended, as forming a part of the circulating medium of the country, bear, in all respects, the character and attributes of money, and they insisted, and relied on authorities to show, that it was settled law that money, whether coined or paper, is taken, in all cases, at the risk of the party to whom it is paid. The Supreme Court, however, overruled the- distinction, and rendered judgment for the plaintiff, and their judgment was unanimously affirmed in the Court of Errors.

The leading opinion in the Court of Errors was delivered by Chancellor Walworth, and in the course of it he stated, that it was a maxim of the law applicable to all similar cases, that the loss-must be borne by the party who was the owner of the notes or paper received, at the time the loss happened, if both parties were ignorant of the fact when they made their contract. (13 Wend. p. 105.) And this maxim, it is manifest, embraces all the material facts in the case before us. Here both the parties believed the firm of -Leggett & Brothers to be solvent when they made their contract, and the defendants agreed to accept the notes of the firm in payment. The plaintiffs, we have shown, remained the owners of these notes, when from the declared insolvency of Leggett & Brothers they lost their value. The consequence is inevitable, if the maxim laid down by the Chancellor be law, that tbe plaintiffs alone must bear tbe loss wbicb tbe failure of tbe makers of tbe notes occasioned.

There are one or two further observations which this decision of tbe Supreme Court and of tbe Court of Errors, in Lightbody v. The Ontario Bank, forcibly suggests.

Tbe decision is a complete answer to tbe objection founded on tbe marginal note of tbe reporter, that may possibly be made to tbe authority of that in Roget v. Merritt, since tbe reception of a bank note is in all cases an absolute payment, and tbe person by whom it is received, if tbe bank is then solvent, takes upon himself tbe sole risk of its collection.

Tbe note, the amount of wbicb tbe plaintiff was held entitled to recover from tbe Ontario Bank, bad been accepted by him, and tbe decision therefore goes beyond that in Roget v. Merritt, and beyond tbe case before us. It proves that if tbe defendants bad delivered tbe powders which they agreed to sell, and bad accepted in payment tbe notes of Leggett & Brothers, both parties being then ignorant of tbe insolvency of tbe makers, they would have been justified in returning tbe notes, and would have been entitled in an action against tbe plaintiffs, to recover tbe market value of the powders, when delivered. A fortiori, were they justified in refusing to deliver them.

It is undisputed and familiar law, that where tbe sellers of goods agree to accept in payment tbe notes of tbe buyer, payable on a future day, if before tbe delivery of tbe goods is completed, tbe buyer becomes insolvent, tbe seller may stop tbe delivery and rescind tbe contract. It is an implied condition in every such contract, that tbe maker of tbe notes shall continue to be solvent when the time, for their acceptance arrives, and we think that the law ought now to be considered as settled, that tbe same condition is to be implied, when by tbe terms of the contract the notes to be accepted, and accepted as an absolute payment, are tbe notes of a third person and not of tbe buyer.

Tbe complaint was, therefore, properly dismissed, and tbe judgment thereon must be affirmed, with costs.