text:
    Israel Smith, Respondent, v. Job Wright and Theron Losee, impleaded with Austin W. Otis and others, Appellants.
    When two mercantile firms agree to share profit arid loss upon contracts for the purchase or sale of merchandise, to he made by each firm in its own name, and to be executed with its separate funds, they are not liable as co-partners, either as between themselves or to third persons.
    As each firm, under such an agreement, is bound to make and fulfil its own contracts, there is no such union of funds or services as gives them a community of interest in the property purchased or sold. Henee, some of the essential ingredients of a partnership are wanting. Even if the effect of such an agreement were to render the firms partners in every transaction under it, still upon an executory contract made and subscribed by one of the firms in its own name, the other could not be made liable either as partners or as principals.
    Such a contract, as against the firm not subscribing it, would be void under the. statute of frauds.
    The court could not infer that the name of the firm actually signed was used on the particular transaction as the partnership name of both firms.
    Judgment at special term overruling demurrer to complaint reversed and judgment rendered for defendants.
    (Before Sandfoiíd, Mason, and Campbell, J.J.)
    May 20;
    June 21, 1851.
    This was an appeal from a judgment at special term, overruling a demurrer to the complaint. It is necessary to state the pleadings in order that the points raised by the counsel, and the decision of the court may be understood.
    The complaint is in these words :
    The plaintiff complaining shows to this court, that in the spring of the year 1847, as this plaintiff is informed and believes, the said defendants Job Wright and Theron Lose'e, then composing the firm of Wright & Losee, merchants, doing business In the city of New York, and the defendants; Austin W. Otis, William H. Otis, and Oliver Glover, composing the firm of A. W. Otis <fc Co., merchants, doing business in the same place, mutually agreed to make contracts ór agreements in the names of their respective firms, with divers persons, for the sale and delivery of flour and' other produce at a future day, with a view to realize the rise or increase in thé prices óf' produce which they then anticipated would take place in the market, and upon the express agreement that such contracts should be made for the joint account and benefit of said two firms, and the profits resulting therefrom should be equally divided between them, and the loss, if any, should be borne by the said two firms in equal proportions.
    That in pursuance of this agreement the said firm of A. W. Otis & Co., did on the eleventh day of March, 1847, for the Joint account and benefit of said two firms as aforesaid, make and enter into a contract in writing with the firm of Collomb & Iselin, merchants of the said city of New- York, which contract is in the words and figures following, to wit:
    - For the consideration of one dollar to us in hand paid, we agree to deliver to Mess. Collomb & Iselin, in all the month of June, 1847, at our option, two thousand barrels superfine flour, to be New York City Inspection, in fiat hoops, in merchantable order, to be Genesee, Ohio, or Michigan, not over four different brands in each one thousand barrels, at five dollars fifty cents per barrel, payable as delivered.
    New York, March 11,1847.
    A. W. OTIS & Co.
    Of all which the said defendants, Wright & Losee, had notice.
    That on the 15th day of May, 1847, the said Collomb & Iselin, for a valuable consideration, assigned and transferred, the said contract and all their right, title and interest therein, to A. A. Thurber of the said city of New York, who thereby became the lawful holder and owner thereof.
    That on or about the same time the said A. A. Thurber for a valuable consideration, assigned and transferred the said contract, and all his right, title and interest therein, to the firm of E. & W. Herrick, merchants of said city, who thereby became the lawful holders and owners thereof, of all which the said defendants had.notice.
    That when the said two thousand barrels of flour in the said contract mentioned, were by the terms thereof deliverable to the said E. & W. Herrick, as the holders and owners of the said contract, to wit, in all the month of June, aforesaid, the said A. W. Otis & Co., did not deliver the same or any part thereof to them, although requested so to do, by the said E.. <fc W. Herrick, and although the said E. & W. Herrick, were ready and willing to accept and receive the same, and to pay for the same at the rate or price aforesaid, nor did the said defendants, Wright & Losee, deliver the same or any part thereof—but the Said defendants wholly neglected and refused to deliver the same or any part thereof.
    And this plaintiff further says, that in. the month of June,. 1847, and on the 30th day thereof, flour of the kinds agreed to be delivered by the said contract, was worth in the city of New York, from seven dollars and twelve cents to seven dollars and twenty-five cents per barrel. Whereby the said E.. & W. Herrick sustained damages to the sum of three thousand two hundred and fifty dollars, being the difference between the' contract and the market price of said two thousand barrels of flour, and became entitled to recover that sum of money from the said defendants, as their damages by reason of non-performance of the said contract.
    And this plaintiff further shows, that on or about the fifteenth, day of March, 1849, the said A. A. Thurber, and the said E. & W. Herrick, for a valuable consideration,, assigned and transferred all their right, title and interest in the said contract to, the said plaintiff, who thereby became and now is the lawful holder and owner thereof, and who thereby became entitled to, recover the said sum of three thousand two hundred and fifty dollars from the said defendants, as the damages occasioned by the non-performance of the said contract.
    For which sum the said plaintiff prays judgment with the costs of this suit.
    The demurrer is as follows :
    Job Wright and Theron Losee, two of the- defendants in this' action, by Charles S. Roe, their attorney, demur to the amended! complaint in said action, and specify the following grounds of objections to said complaint.
    I. For that it does not appear by said complaint, how or in what manner said Job Wright and Theron Losee, are liable to the plaintiff -on the alleged contract in said complaint set forth, nor is such a case stated in such complaint as is sufficient to charge said Wright & Losee, in favor of the plaintiff under the said alleged contract.
    II. For that it does not appear by said complaint, that-E. & W. Herrick therein mentioned, offered to receive the flour mentioned in the alleged contract in said complaint set forth.
    III. For that it does not appear by said complaint, that said E. & W. Herrick demanded- the flour mentioned in said alleged contract, or tendered or offered to pay the price thereof, or were prepared to pay such price.
    IY. For that it does not appear by said complaint that the plaintiff in said action, or ¡any other person or persons, were ready or willing, or offered to receive the flour mentioned in the said alleged contract.
    Y. For that it does not ¡appear by said complaint, that the plaintiff or any other person or persons, demanded the flour mentioned in said alleged contract, or tendered or offered to pay the price thereof, or were prepared or ready to pay such price.
    YI. For that it does not appear by the said complaint, that Collomb & Iselin in the said complaint, and alleged contract named, ever demanded the flour mentioned in such alleged contract, or -offered to receive the same, or ever tendered or, offered to pay the price thereof, -or were prepared or ready or willing to receive such flour, or to pay theprice thereof. Nor does it'appear that A. W. Otis & Co., or the said Wright & Losee, did not in due time deliver to said Collomb & Iselin all the flour in said .alleged .contract mentioned.

      B. W Bonney, for defendants, Wright & Losee, insisted upon the following points and authorities.
    L The grounds of objection (causes of demurrer) to the complaint are well stated in the demurrer and in such form as to properly raise and present for decision, under the provisions of the code, the general question of the sufficiency of the statements in the complaint to enable the plaintiff, to recover. Code of 1848, § 122, 123; do. of 1849, § 144, 145; De Witt v. Swift,
      3 Howard’s Prac. R. 280; Durkee v. The Sar. & Wash. R. R. Co., 4 Howard’s Prac. R. 226.
    But if necessary the defendants will be permitted to amend their demurrer. The same objection might be taken by answer as at the trial, and, if the court is satisfied it is a valid objection, it would be worse than useless now to overrule it and permit the same question to be raised, hereafter, in another form, and then to prevail. Code of 1848, § 127,149 ; do. of 1849, 148, 173.
    II. The complaint states no sufficient cause of action against Wright & Losee. The alleged contract upon which the action is brought is clearly within the statute of frauds, and it is expressly shown by the complaint not to have been subscribed by them ; nor by any person in their name or behalf. 2 R. S. p. 135, § 3, (2d ed. p. 70;) Davis v. Shields, 26 Wendell, 341; Shindler v. Houston, 1 Comst. 251.
    III. The name “A. W. Otis & Co.” subscribed to the alleged contract on which the action is brought, did not bind the defendants Wright & Losee. They were not members of the firm of A. W. Otis & Co., nor had that firm authority to subscribe their name to any contract. It was not the effect of the alleged agreement between the two firms, nor was it the intent of the parties to that agreement, that either firm should have power to use the name of the other, or to make any contract with third parties, binding upon the other.
    IV. There is no sufficient allegation in the complaint of any demand of the flour mentioned in the supposed contract, or of any offer or readiness to accept the flour, or pay for the same.
    V. The supposed contract is to deliver to “Collomb & Iselin,” not to their order or assigns, and there is no allegation in the-complaint that defendants did not deliver or offer to deliver the whole of the flour to “ Collomb & Iselin.”
    Under the alleged contract the defendants could not be required to deliver the flour elsewhere than to Collomb & Iselin, or at their store.
    VI. The defendants Wright & Losee are entitled to judgment on the demurrer. If, however, the court shall be of opinion that the complaint is sufficient and the demurrer not well taken, the defendants will be allowed to withdraw the demurrer and answer the complaint, on payment of the costs of the appeal. Code of 1849, $ 174.

      J. H. Rodman, for plaintiff,
    contended that the demurrer was frivolous, and that the judgment at special term should be affirmed with the costs of both hearings. The contract, he said, was clearly binding upon the firm of A. W. Otis & Co., and that the appellants were properly charged as copartners with that firm, and as such were equally liable, at law, and in equity. It was immaterial in what name the contract was made, or the general business of the firms as copartners was carried on, provided the name was one which they had agreed to use' as a partnership name, and this was so, whether the contract was liable to be affected by the statute of frauds, or not.
    He cited Story on Agency, § 270, note; and 2 Smith’s Lead. Cases, 212, note to Thompson v. Davenport.
   By the Court.

Sandford, J.

By the agreement" set forth in the complaint, two separate firms, transacting mercantile business, were to operate separately, and in their respective names, in the sale of flour and other produce. Such operations were to be for the joint account and benefit of the two firms ; which is explained in the agreement itself to mean, that the two firms should share equally in the profits and loss arising from their separate dealings, in this particular branch of their general business. Each firm was to contract, as it did in all its other business, in its own name and without any control from the other. On the fulfilment of a contract, made, for example, by A. W. Otis & Co., and their receipt of the price, Wright & Losee would not, under this agreement, be part owners of the fund so received. They would have no share, right or interest in it, and they could not arrest it by injunction, in the hands of Otis & Co., even if they were to establish that the latter were insolvent and owed to them either profits in the contract thus closed, or in other like transactions, or in both.

There was no union of funds contemplated by the agreement. Each firm was to make and fulfil its own contracts': There was no union of services, because it might so happen that one of the firms would be unable, or deem it unwise, to make any contracts at all; and yet, in the absence of bad faith, it would participate in the profits, and would certainly be liable to share the losses, of the contracts made by the other firm.

The whole effect of the agreement was to bind two distinct mercantile houses, acting in their own names, separately and independently of each other, to share the profits and losses, when they should be ascertained, arising from one particular department of their trade. We'think that this did not consti-' tute the two firms copartners in the contracts, which the respective separate firms made in the transaction, of that portion of their business.

It is very clear, that there was no intention in these firms to create such a relation between themselves. In the absence of such intention, and of a community of interest in the property out of which the profits are to arise, no partnership will be created between the parties and third persons, if the whole transaction is clearly susceptible of a different interpretation, or excludes some of the essential ingredients of a partnership. (Story on Part. § 30.) We have noticed some of the circumstances which lead to a different interpretation of this agreement. The ground upon which a participation in the profits of a trade is held to make parties liable to third persons, though they never intended to be partners as between themselves, as it was advanced by De Grey, Ch. J., in 2 W. Bl. 1000, and was adopted by the Supreme Court of this State in Dol v. Halsey, 16 John. 34, is entirely wanting in this case. Hence Wright & Losee could not, by the terms of this agreement, take any of the fund on which the creditors of Otis & Co. relied for payment. We have already said they have no right or interest in such fund. Their right to profits, received by Otis & Co., under the agreement, would make them creditors of that firm, with no advantage over other creditors, and with the disadvantage of a liability to counter claims for losses, or for profits, in their own contracts for the sale of produce.

When closely analysed, the case is not different from that of one who should agree to pay to a merchant a stipulated sum and agree to share his losses, in consideration that he should account to the former for half of the profits of his business for pne year. Here each party agreed thus to account and share, in consideration of the like agreement of the .other. They were pot partners between themselves, and we see no good reason why they should be deemed partners as to third persons.

If we were to assume that the effect .of the agreement was to make Wright & Losee partners with Otis <fe Go. in the contracts of the latter for produce, there is a further difficulty in the way of the plaintiff. The investment npon which the suit is brought, is an .executory contract, for the sale of goods to the .amount of eleven thousand dollars, and unless subscribed by Wright & Losee, the parties sought to be charged, it is void by the statute of frauds. The complainant do.es not aver that Otis ,& Co., who subscribed .the contract in their own name, were the agents of Wright & Losee; and if such an averment had been made, it would not have aided the case. We have decided in a case now before us, (Fenly v. Stewart and Tunnicliff,) that on a similar executory, contract, subscribed by A. W. Otis & Co., in their own name, the defendants in that suit could not be charged, although it was proved that Otis & Co. were their agents in making the contract.

The plaintiff, not relying upon the ordinary principle of agency, argues that the .contract in question is subscribed by Wright & Losee because, pro hac vice, they ai'e members of the firm of A. W. Otis & Co., in whose name it is subscribed. That it is immaterial in what name the contract is made, or the general business of the partnership is carried' on, provided the partners agree to nse that name.

There can be no doubt of the latter proposition, and it is equally true that the signature of the copartnership name to a contract not under seal, is a subscription of it by all the partners, within the meaning of the statute of frauds. But it is very essential, and so the plaintiff’s point assumes, that there shall be a copartnership name which the partners have agreed tp use as suph. Now this complaint states no such name, nor any such agreement establishing it. Who composed the firm of A. W. Otis & Co. ? The complaint answers the question by its statement, that it was composed of the two Otises and the defendant, Clover—but does not state that those persons, together with. Wright and L.osee, composed that firm. Nor does it allege that the two firms described in it, agreed to transact business under the name of either the one, or the other. It is claimed by the plaintiff that the complaint shows the formation of a partnership by all the persons composing these two distinct firms, but it is entirely silent as to the name or style which they assumed for the dealings of such new partnership.

The court cannot remedy this by inference ; and if it could, it would be absurd to infer that the five partners agreed that their new firm should have two names, viz. Wright & Losee, and A. W. Otis & Co., and that when either Wright or Losee made a contract, the firm name should be “ Wright & Losee,” and should be so subscribed and used, and when either of the other three contracted, the firm name should be “ A. W. Otis & Co.” throughout the transaction. No other inference would meet the difficulty, and we have neither the right nor the inclination to adopt the one suggested.

The plaintiff has therefore failed to show that the contract in question was subscribed by Wright & Losee, and it cannot be enforced against them. The judgment at the special term must be reversed, and a judgment entered in favor of the defendants on the demurrer to the complaint.


source: Caselaw Access Project

author: Sandford, J. Duer, J.

license: Public Domain

text:
    George W. Thatcher, Respondent, v. The Bank of the State of New York, Appellants.
    When funds are deposited with a bank to be applied to the payment of an accepted bill payable at the bank, the presumption of law is, that the funds belonged to the acceptor, as it was his duty to provide them.
    Henee, unless this presumption is contradicted by proof, the acceptor is the only person who can maintain an action against the bank, for its neglect in not applying the funds deposited to the payment of the bill.
    A bank is not liable for the neglect of an officer, unless it appears that the officer acted as the agent of the bank in the particular transaction, which is the subject of complaint.
    To make it the duty of a bank to apply moneys deposited to the payment of a bill or note of the depositor, the assent of the bank to receive the deposit, must be shown.
    It is only in relation to its own dealers or customers that this assent of the bank can be implied.

      A bank is not bound to receive on deposit the funds of every man who offers them for that purpose. It has a right to select its dealers, and the cashier is the proper officer to make the selection.
    Hence, the bank is not liable for the proper application of a deposit made by a stranger, unless the assent of the cashier to receive the money as that of a dealer, is proved. Even when a bank is bound to receive a deposit, to render the bank liable for its application, it must be made with its proper officer.
    When there is a receiving as well as a paying teller, the former alone has any authority from the bank, by virtue of his office, to receive deposits.
    A paying teller, on receiving the funds of a stranger upon a promise to apply them in the payment of a bill or note, acts as the agent of the party, not of the bank, and consequently the bank is not liable for any breach or neglect of his assumed duty.
    Held, upon these grounds, that the plaintiff was not entitled to recover. Judgment in his favor at special term was accordingly reversed, and a new trial ordered.
    (Before Sandford, Doer, and Campbell, J.J.)

    (June 12.
    June 27.)

    This was an appeal from a judgment rendered against the defendants at special term.
    The complaint charged that the plaintiff on the 6th May, 1850, at St. Louis in Missouri, drew a bill of exchange dated on that day, on one Daniel Thatcher, of Bridgeport in Connecticut. That the bill was for $2,500, payable 90 days after date, to the order of Messrs. Waterman & Ryan, at the Bank of the State of New York, in the City of New York. That it was accepted by Thatcher, was endorsed by the payees Waterman & Ryan to the Perpetual Insurance Company of St. Louis, and by that company to the American Exchange Bank in the City of New York, and while in the possession of that bank became due on the 5th October, 1850. The complaint then averred that funds were left by the plaintiff or. his agents with the paying teller of the Bank of the State of New York, at the office of that bank, and in the usual manner of transacting such business in the banks of New York, sufficient for, and for the purpose of being applied to the payment of the above draft, and that these funds were accepted by the bank, through its paying teller, for the purpose of paying the draft on the day that it fell due, and before it was presented for payment. It then averred that the draft was duly presented for payment, and that in consequence of the neglect of the bank to make such payment it was duly protested, and that by reason of the premises the plaintiff had sustained damage to the amount of $276 90, for which sum, with interest, he prayed judgment.
    The answer of the defendants put at issue all the material averments in the complant, and contained also the following allegations:—
    These defendants further deny that the said Daniel Thatcher, the acceptor of said bill, kept any account with these defendants, or had any money to his credit with them, on the said 5th day of October, 1850, which these defendants ought to or could apply to the payment of the said bill of exchange.
    The defendants, on information and belief, say, that on or about the said 5th day of October, 1850, some person or persons, to these defendants unknown, left with the party who performs the duties of paying teller of these defendants, a certified check for $2,500, and requested him to pay an acceptance of Daniel Thatcher for that amount, payable at the Bank of the State of New York, on the 5th day of October, 1850. These defendants further answering, on information and belief, admit that the said party took the said check, but they deny that in receiving said check, he acted in behalf of these defendants, and that it was any part of his business and duties, as paying teller, to receive such check and pay such acceptance, and they deny that in receiving such check, he acted as their servant or agent, but on the contrary they aver, that he undertook in that behalf to become the agent and servant of the party or parties handing said check; and they deny all liability for the nonfeasance, misfeasance, or malfeasance of such person in that behalf, and these defendants utterly deny all liability for the nonpayment of any negotiable or other paper made payable at their banking house, unless the money to meet the same is deposited with them, and they deny that the mere receipt of money by a party performing the duties of paying teller, and a promise by him to a specific appropriation of it, forms any consideration for any contract on the part of these defendants, and they also deny that the receipt of the said check, and the promise to pay the said acceptance, were within the duties of the officer of this institution known as the paying teller, or' that it is in the usual course of business, to deposit moneys with said teller, but on the contrary they aver, that the proper receiving officer of the Bank is the receiving teller, and they aver that no money was deposited with him to pay the said acceptance.
    These defendants, on information and belief, deny that the said acceptance was duly presented on the 5th day of October, 1850, for payment at their banking house, and payment of the same refused, or that the said acceptance was duly protested for non-payment. And these defendants further answering, say, that as to the damages of the said plaintiff, these defendants have no knowledge, information, or belief, or information sufficient to form a belief, in order to enable them to admit or deny the same. These defendants deny the right of the plaintiff to recover any sum of money, or the sum mentioned in the complaint of said plaintiff, by reason of the facts stated therein, or from any other cause.
    To this answer the plaintiff replied as follows :—
    The plaintiff, for reply to the answer of the defendants, The Bank of the State of New York, in this cause, says, that he denies the allegation in the said answer, which denies that the said Daniel Thatcher, the acceptor of said bill, kept any account with the said defendants, or had any money to his credit with them, on the said 5th day of October, 1850, which the said defendants ought to, or could apply to the payment of the said bill of exchange. And the plaintiff, further, for reply, says, that he denies that the said paying teller undertook to become the agent or servant of the party or parties handing said check.
    And the plaintiff further, for reply, says, that he insists that the receipt of money by a party performing the duties of paying teller at a bank, and the receipt of such money by him, in the bank, during bank hours, for the purpose of paying a bill of exchange or note made payable at such bank, is within the ordinary scope of the business of such bank, and of such paying teller in such bank, and such receipt renders it obligatory upon such bank to pay such bill or note, when presented for payment.
    And the plaintiff, further for reply, says, that the receipt of said check .as stated in the defendants' answer, and the promise to pay the said acceptance, were within the duties of the officer of the said- defendants’ bank, known as the paying teller, and that it is in the usual course of business to deposit moneys with said teller to pay acceptances made payable at said bank, and that it is always understood to be, and is in fact, the transaction of the bank, unless some express agreement is entered into to the contrary.
    The issues thus joined were tried before Chief Justice Oakley, at a Special Term, on the 26th day of May, 1851.
    The plaintiff’s counsel, to maintain the action, called—

      Henry P. George, who testified as follows : I received the bill mentioned in the pleading, from Mr. Rodgers, the notary of the American Exchange Bank, and presented it to a person for payment, at the desk of the paying teller of the bank of the State of New York, on the 5th of October, 1850, after 3 o’clock,, the usual time of the presentment of bills and notes by notaries. He said there were no funds to pay it. The bill was protested for non-payment on that day. I deposited notices of protest for non-payment, in the post-office, on the 6th of October, enclosed, directed to S. A. Ranlett, Secretary, St. Louis.
    On cross-examination, the witness testified, that he was the clerk of Mr. Rodgers, and not a notary public. That he did not present the bill to the paying teller of the bank of the State of New York. We always present them from a quarter to half past three o’clock, P. M.
    The plaintiff’s counsel then called—

      Laurisson Riggs, who testified : that Ranlett was the secretary of the St. Louis Perpetual Insurance Company, and he knew the signature on the bill to be his; that company kept an account with the American Exchange Bank. Dealing in bills of exchange, is a branch of its business ; the bill is endorsed in the usual manner.
    Plaintiff's counsel then called—

      Theodore W. Pihclcney, who testified: that in October, 1850, he was the Note Teller of the American Exchange Bank. The bill of exchange was given by him to Mr. Cole, the runner, about half-past one o’clock; I made a mark (identifying it) which indicates that it had been given to the runner and returned not good. I held it until 3 P. M., and then gave it to the notary, (I rarely ever give notes or bills to the notary before three o'clock.) It is customary to leave funds with the paying teller, when the note is payable at a bank, and the party keeps no account there.
    The plaintiff further called—

      Daniel Cole, who testified: that he was the runner of the American Exchange Bank, on the 5th of October, 1850 ; that he received the bill on that day, and if he presented it, presented it before three o’clock, but cannot say that he presented it. He always presents them to the paying teller. He had a great many bills always to present.
    The plaintiff’s counsel further called—

      Ralph H. Post, who testified, that on the 5th of October, 1850, he was in the employ of E.- D. Morgan & Co. as clerk, and attended to their banking business ; that he had been so employed for about four years. Between ten and half-past ten o'clock, he handed to the paying teller of the bank of the State of New York, a certified check of E. D. Morgan & Co., for $2,500, (admitted by the counsel for the defendants to be the same as cash,) and asked him to pay with it an acceptance of Daniel Thatcher’s, due on that day, which witness expected would be, in that day. He made me no answer. I have before left checks at that bank, to take up paper accepted by D. Thatcher, and have always left them with the paying toller. Witness has been in the habit of leaving checks and funds with other paying tellers, to take up paper, and never knew an instance of a protest in such cases. Witness has always been in the habit of leaving a check at the place where notes are payable, with the first or paying teller; no teller ever refused to take the funds.
    On cross-examination, the witness testified, that he afterwards went to the paying teller, to receive the check.
    Defendants admitted that plaintiff had paid 10 per cent, damages on the bill, and that such were the proper damages by the Missouri statute.
    The plaintiff’s counsel then rested.
    The defendants’ counsel then called—

      Reuben. Withers, who testified, that he is the cashier of the defendants’ bank ; that the duties of the paying teller were to pay checks, bills and notes, payable at the bank, of parties who have accounts there ; to receive the exchanges, and settle the accounts with other banks ; Daniel Thatcher kept no account with the bank.
    On cross-examination, the witness testified, that the paying teller and all the clerks of the bank give bonds for the faithful performance of their duties ; that the paying teller had not, to his knowledge, except in a few instances, received money to pay notes, bills of exchange, &c., when the parties keep no account; when the money is left to pay bills or notes, payable there, of parties keeping no account there, it is the custom to leave the same with the paying teller.
    The counsel for defendants then called—

      Luther B. Whitmore, who testified that he was the paying teller of the defendants’ bank ; that the runner of the American Exchange Bank did not present the bill to him, to his knowledge, that he did not recollect the fact.
    On cross-examination, he testified :
    That he was rarely in the bank after half-past three o’clock ; that he has been paying teller since October 1st, 1850, and had never been paying teller in any other bank; that a certified check of the amount of $2,500 was left with him, but remembers nothing positive about the circumstances ; has given bonds for the faithful performance of his duties; that he has received moneys for parties who do not keep an account with the bank, as a favor to them, to pay notes payable at the bank ; he has refused to take moneys to pay notes ; he does not recollect any thing in regard to this case ; there is no rule about it; some persons pressing him very hard, he takes their money ; of those who keep their accounts with the bank, he knows whether they have funds there or not. He certifies notes and bills, made payable at the bank by persons who have accounts, if they have the money there. He certifies the notes or bills without any new order ; some parties pay their paper payable at the bank by checks ; others do not.
    On re-examination, the witness testified, that when parties not keeping an account with the bank, leave money or a certified check with him, to pay paper made payable at the bank, he puts the funds in the drawer, and they are not' mixed with the funds of the bank.
    The certificate of the notary of the protest of the bill for nonpayment and of the service of the notice of protest for nonpayment, were here offered in evidence and objected to by defendants’ counsel, on the ground that it appears in evidence that the presentment of the bill for payment, and the service of the notice of protest for non-payment were made by the clerk of the notary, and not by the notary ; the said certificates are in the usual form, and may be referred to as a part of this case.
    The counsel for the defence rested ; and the testimony being closed, moved the court for a dismissal of the complaint.
    1st. Because the paying teller was, by the receipt of the money from E. D. Morgan & Co., for the purpose of paying the acceptance of Daniel Thatcher, their agent and not the agent of the defendants, and that it was not in his power to bind the. bank, out of the sphere of his peculiar occupation.
    2d. Because the bill of exchange was not protested by a notary public, and that no damages were due upon, such bill which, the drawer was bound to pay. That in paying such damages he paid in his own wrong, and was not' entitled to recover therefor.
    But the Judge overruled the objection, refused to dismiss the complaint, and directed the jury to find a verdict for the plaintiff for $250 and interest; to which ruling, refusal, and direction, the counsel for the defendants excepted.
    The jury found a verdict for the plaintiff for $258 75, and the judge directed judgment thereon, with liberty to the defendants to appeal, without security.

      A. W. Clason, for the bank.
    Even were it possible to admit that the bank is liable at all, the plaintiff has no right to maintain this action. No privity is shown to exist between him and the bank. It is not proved that the moneys -deposited belonged to him, and, in the absence of such proof, the presumption is, that they belonged to the acceptor. But'we do not wish the decision of the court to be placed upon this narrow ground. Our position is, that the bank is not chargeable with a neglect of duty, in not paying the draft of the plaintiff, for the conclusive reason, that no such duty is shown to have been imposed or assumed. The alleged deposit was made with the paying teller, who, as the servant of the bank, has a certain sphere of action, within the limits of which alone can he bind his employers, and, certainly, the receipt of checks from non-dealers is not within those.limits. The very name of his office imports its duties. He is to pay out the funds of the bank to those who show a title to receive them ; but, as the agent of the bank, he has no right either to receive or to pay out the funds of a third person, between whom and the bank no privity, or relation whatever, is shown to exist. The moneys received by him from a third person were kept separately, and never became the funds of the bank, and that receipt by him was neither an act of duty to the bank nor to a customer, but simply an act of personal favor to an individual and a stranger. Thus,- his receipt of the check, of $2,500, from E. D. Morgan and Co., was an act of favor to them; and in thus receiving it, and promising to apply it to the payment of the draft of the plaintiff, he acted as their agent, and, in no sense, as the agent of the bank'. In the course of his argument, the counsel referred to the Onondaga Co. Bank v. Bates, 3 Hill, 53 ; and, -v. Lydig, 7 Hill, 91.

      E. Terry, for plaintiff—contra—insisted
    that the Chief Justice upon the trial had properly directed the jury to find a verdict for the plaintiff, since the damages which he claimed were, in judgment of law, sustained by him in consequence of the negligence of the bank. When a bill or note is payable at a bank, it is the duty of the maker or acceptor to leave with the bank sufficient funds for meeting it; and, if he does so, he is discharged from all liability. Consequently when such funds are received by an officer of a bank upon an understanding to apply them to the payment of the bill or note, the transaction is, in judgment of law, a transaction of the bank. It is the bank that receives the money and assumes the duty. When a bank does not wish a paying teller to take such funds, it is its duty to prohibit him from receiving them, and to give notice of the prohibition to the public; otherwise the public has a right to believe that his acts are sanctioned by the bank, and the law will, therefore, imply that this sanction is given. The counsel cited The Bank of Vergennes v. Warren, 7 Hill, 91: Commercial

      Bank of Buffalo v. Kortright, 22 Wend. 348; Lovett v. Steam Saw Mill, 6 Paige, 54; Story on Bills, § 356, note 12, p. 453.

       Affirmed in the Court of Appeals, December, 1852.

   By the Court.

Sandford, J.

The action is founded wholly upon the neglect of the bank to pay the bill of exchange drawn by the plaintiff, and it was incumbent on him to establish, that the bank had assumed, or become liable to perform, such a duty in his behalf.

The complaint alleges that the plaintiff, or his agents, left funds with the paying teller for the purpose of paying the bill; but there is no proof of that statement. It does not appear, who furnished the funds, and inasmuch as it was presumptively the acceptor’s duty to provide them, we certainly are not at liberty, in the absence of proof, to infer, that they were furnished by the drawer. As the case stands, the money was delivered to the teller in behalf of the acceptor, and if the bank assumed any duty in the premises, it was to him, and he alone was entitled to an action for its neglect. There was no' privity whatever between the bank and the drawer, the bank owed no duty to him, and if he can maintain this suit for damages, so can each of the endorsers to the extent of their damages and disbursements, growing out of the protest of the bill. The proper course, on the plaintiff’s case as proved, was for the acceptor to pay the protested bill, and then bring his action against the bank.

Assuming, however, that the drawer left the money and can maintain a* suit, how does the case stand ? Was the paying teller the agent of the bank, or of the drawer of the bill, in receiving the money in question ? It appears that in this bank there were a cashier, a paying teller, and a receiving teller. Now we know and may assume (as was done I Hill, 94) .that the cashier is the principal executive officer of the bank. A bank is not bound to receive on deposit, or to keep, the funds, of every man who offers money for that purpose. It may select its dealers- and refuse such as it pleases. For the purposes of this selection, the cashier appears to be the proper officer. The bank pays for its dealers who have funds to their credit, such bills and notes, accepted or drawn by them, as are payable at the-bank. The latter circumstance is deemed an order of the depo sitor for the payment of the bill or note out of his funds deposited. But it is only in respect of its dealers, persons keeping an account with the bank, that this course of business exists or can exist.

A person may, no doubt, become a dealer, by a deposit mad'e> on the day his draft or note falls due, though never before in the bank, but his deposit must be made with the proper officer of the institution and with the requisite assent to his becoming such dealer.

In this instance, there is, in the first place, no- pretence that the cashier, or any officer of the bank except the paying teller, ever assented in any manner to the plaintiff’s making, a dteposi't, or becoming a- dealer with the bank. The first step toward establishing a duty of the bank toward the plaintiff is therefore wanting.

Let us suppose this difficulty obviated, the next step is to show» a deposit properly made, that is, that the money was left with an agent of the bank authorized to receive it. The person who» left the money knew that the agent who received it was the paying teller, and not the receiving teller of the bank, and it cannot be said he was ignorant of the fact that there were two such officers. Indeed, there was no such idea advanced at the trial. Now the very names of these two agents indicate to> every one the proper and widely different functions of each. The one is to pay out the money of the bank ; the other is to receive moneys for the bank. Dealers always pay their money to the receiving teller. When they draw money from the bank,, or their notes or bills are presented made payable at the bank, the paying teller pays the amount to them, or to the holders of such notes or bills.

But we are not left to the inference derived from the names of these agents. The answer states that the proper receiving-officer of the bank is the receiving teller, and, that it was not within the duties of the paying teller to receive the money left in this instance, or to assume to pay the plaintiff’s bill with it, and that it is not in the usual course of business to deposit moneys with the paying teller. The reply does not traverse the allegation as to the receiving teller being the proper receiving officer of the bank, but it alleges that the receiving of money by the paying teller, in the hank, during bank hours, is within the ordinary scope of the business of the paying teller and of the bank, and that his receipt and promise in the instance before us, were within his duties and bound the bank.

The proof entirely failed to make out these allegations. It was shown that in several instances, these same parties had left funds with the paying teller in the same way that these were left, but there was no proof that it was his proper function to receive them, or that it was in the usual course of business, for him to receive funds in behalf of the bank. On the contrary, both the cashier and paying teller clearly prove, that it is no part of his duty or business to receive moneys for the bank ; and the teller testifies that when he does receive money for parties who do not keep an account in the bank, in order to pay notes they have drawn payable there, it is as a favor to such parties; he sometimes refuses, sometimes when pressed very hard he takes it for them, and he then keeps it separate from the money of the bank.

It is true the cashier appears to have known in a few instances, that the paying teller thus received money to pay notes and bills, and did not forbid it; but we cannot infer from this an assent of the bank that he should, in their behalf, receive money for that purpose. His duties as their agent were clearly defined, and the cashier’s knowledge that he occasionally, while in the bank, acted for others, does not show that the bank adopted those acts.

So far from the proof showing that, in this transaction, the paying teller' was the agent of the bank, it clearly shows that he was the agent of the party who left the money. The bank had nothing to do with the affair, nor was it intended that it should have. The drawer, it seems, was in the habit of drawing bills payable at this bank, but he kept no account or money there, and his sole object in this operation appears to have been to give a sort of currency to his bills because, payable at a New York bank. If he had opened an account with the defendants’ bank, and kept funds there, the bank would have had the usual benefit of its dealings with depositors, and his bills would have been paid, of course, on presentment. The paying teller, and his substitute in his temporary absence, know as to those who keep accounts in the bank, and pay accordingly. But the drawer and acceptor chose to run the risk of meeting the bill at the proper moment, at the counter of this bank ; and their transaction was simply for their agent to come to the bank on the day the bill fell due, and wait there in front of the paying teller’s desk until the holder of the bill came in and presented it. The money would then be handed by their agent to the holder, and the latter would take it away. The bank derived, and could derive, no possible benefit from such a transaction ; it was never intended that it should ; and the bank was as ignorant of its occurrence, as if it had been done outside of its building, instead of in its office. To avoid the trouble of waiting with the money at the bank counter for the bill to be brought in for payment, these parties resorted to the expedient of asking the paying teller to take the money they had brought, and when the bill came in, to hand it to the holder. He sometimes assented as a favor to them. There was no intention or expectation that the money should go into the hands of the bank, or be mingled with its funds. It was handed to the paying teller, because from his position' in the bank, the bill would necessarily be presented to him for payment, and if he would take the money and retain it till the bill came in, it would save the time and attendance of the agent of the drawer and acceptor. The same expedient has been adopted in reference to bills payable at another bank, as shown by the evidence, and it may be general in this city ; but it cannot alter the relation of the parties in the transaction. The paying teller, in such cases, becomes the agent of the parties who leave the money with him, and the bank is not responsible for his conduct in regard to it.

The case of the Manhattan Company v. Lydig (4 John. R. 377), was like this in principle. There the party, instead of delivering his money to the receiving teller of the bank, handed it, from time to time, to the bank’s book-keeper to deposit it for him. The book-keeper kept part of the money, but by false entries in the dealer’s pass-book and in the books of the bank, concealed the abstraction from both. Sometimes in a pressure of business,, this book-keeper assisted the receiving teller, and sometimes supplied his place in his absence, but none of the money in controversy was delivered to him on those occasions. The Supreme Court decided that the book-keeper, in receiving these moneys, was the agent of the party, and not of the bank, and that the bank was not liable for that portion which did not come to the hands of the receiving teller, or of the person temporarily supplying his place in the bank, or which did not otherwise come into the coffers of the bank.

On the case made at the trial, the plaintiff was not entitled to recover.

The judgment at special term is therefore reversed, and a new trial ordered, with costs to abide the event.

Duer, J.

I assent to every position contained in the opinion just delivered, but we are not to be understood, as saying, that a bank, in a case like the present, may not be rendered liable, by proper evidence of such a general usage, as is alleg-ed, both in the complaint and in the reply. The case, however, clearly shows, that no evidence of such a usage was given upon the trial, that could, with any propriety, be submitted to a jury. Without further evidence, the plaintiff, upon the next trial, must be non-suited.


author: Duer, J.

text:
    James Birckhead and Nathaniel D. Carlisle, survivor of Stanton Parker, jun., v. Wm. Brown, Geo. Brown, John A. Brown, James Brown, Stuart Brown & Samuel Nicholson.
    The doctrine that the law will not suffer the same question to be twice agitated between the same parties, but holds them to be concluded by its prior determination in a court of competent jurisdiction, is not limited, in its application, to •cases in which the cause of action in the successive suits is exactly the same, •and the decision, in the prior, proceeded exclusively upon a question of fact.
    The sound and salutary doctrine of “res judicata” has a much wider range of application.
    'The general proposition, dedueible from a full examination of the authorities, is, that as between the parties and privies a prior judgment is conclusive as to every •question it embraced and determined, and upon which, in a subsequent suit, the right of the plaintiff to recover, or the validity of a "defence is found to depend. '
    When the prior determination of the question does not appear from the record of the judgment, it may be shown by extrinsic proof. The former judgment if erroneous, may be reversed, but so long as it remains in force the parties are estopped from denying either the/<zcis or the law upon which it proceeded.
    There were some exceptions from the rule in real actions, but none have ever been allowed in personal, unless it appeared from the record that the prior judgment was given upon faults in pleading, or other questions of form, not affecting the merits.
    Nor is the application of the rule to be barred by additional evidence, in the second suit, provided the same evidence might have been given in the former.
    Held, that a prior judgment of the supreme court, in a suit between the same parties, in which the principal question upon which the right of the plaintiffs to recover depended, was determined against them, was a bar to the maintenance of the present action, although the cause of action was not strictly identical, and the question to be determined was purely a question of law.
    Held, also, that the opinions of the judges might be resorted to as evidence of the grounds of the judgment.
    Judgment for defendants, if plaintiffs should desire to turn the Case into a special verdict; otherwise, a new trial ordered with costs to abide the event.
    (Before Sandford, Duer, and Campbell, J. J.)
    (June 2;
    28 June, 1851.)

    This was an action of assumpsit against the defendants as partners, composing the firm of Brown, Brothers & Co. It was tried before Mr. Justice Yanderpool on the 29th June, Í848; and after the evidence on both sides had been given, the jury, by consent, found a verdict for the plaintiffs for the sum of $40,000, subject to adjustment, and subject to the decision of the court upon a case to be made by the plaintiffs, with liberty to either party to turn the same into a bill of exceptions or special verdict.
    The cause now came On to be heard upon the case so made. The plaintiffs claimed to recover, upon the grounds that the defendants, by certain letters of credit set forth in the case, had undertaken and agreed that certain bills of exchange, not exceeding in amount ¿615,000 sterling, to be drawn and negotiated at Rio de Janeiro, by one James Demarest, on account of Smith
      & Town, of New York, at any time before the 9th of December, 1836. should be accepted and paid at maturity, by the house of W. & J. Brown & Co., of Liverpool, upon whom the same were to be drawn ; that the plaintiffs, relying upon this undertaking, had on the 20th of August, 1836, purchased at Rio de Janeiro, the bills of Demarest, drawn by him upon W. & J. Brown & Co., according to the terms of the letters of credit, to the amount of ¿68000 sterling; that these bills had been duly presented for acceptance and payment, but that W. & J. Brown & Co. had refused to accept the same, or to pay them at maturity, although at the time of such refusal, the credit of ¿615,000 was not exhausted, there being then a balance of such credit amounting to ¿64200, not covered by previous acceptances, which W. & J. Brown & Co. ought to have applied to the payment of the said bills ratably, or in the order of their presentment. That the bills, in consequence, were returned dishonored to Rio, and had there, with interest and expenses, been taken up by 'the plaintiffs, as endorsers, from the holders. It was insisted on the part of the plaintiffs, that all these facts were fully established by the evidence, and that they were therefore entitled to judgment upon the verdict, which, in order to cover interest, commissions, and expenses, ought to be adjusted at the sum of $55,465 72.
    On the part of the defendants, it was denied :—
    1st. That the letters of credit granted by the defendants were evidence of any contract whatever, between them and the plaintiffs.
    2d. That it appeared from the proofs in the case, that the plaintiffs had purchased the bills in question, from Demarest, in reliance upon the alleged undertaking of the defendants.
    3d. That the unexhausted balance of the credit of ¿615,000 was applicable in whole, or in part, to the bills now on hand, the same being applicable, if at all, to the payment of other unaccepted bills, amounting to ¿65000, previously drawn by Demarest, and previously offered for acceptance. Nearly the whole of the evidence, which was very voluminous, that was given upon the trial, related to the questions above stated, and it was to those chiefly, that the arguments of counsel were now confined, but as the judgment of the court proceeded upon another and distinct ground, both the evidence and the arguments are omitted.
    The defendants proved upon the trial, that the plaintiffs, in July, 1839, commenced a suit against them in this court, upon certain other bills of exchange, drawn under the same letters of credit upon which this action is founded, and by their declaration in that suit, claimed to recover against the defendants the amount of the bills then declared upon, by reason of the liability of the defendants under their letters of credit. That issue was joined in that suit, and that upon the trial the jury found a special verdict, upon which this court rendered judgment in favor of the plaintiffs for a part of their demand ; that upon a writ of error in the supreme court, the judgment of this court was reversed, and a judgment then entered for the defendants, and that this judgment of the supreme court was subsequently affirmed in the court of errors.
    These facts were proved by the production of the proper records. The counsel for the plaintiffs, however, objected to the admissibility of the evidence, and it was received, subject to their objection.

      Wm. M. Evarts and Daniel Lord, for plaintiffs, now contended that:—
    I. The former judgments in the supreme court and in the court of errors do not control the decision of this cause by force of their authority, and upon the maxim, that it is the duty of judges stare decisis.

    1. It appears from the report of the case (2 Denio, 315), that the court of errors was equally divided. Such a division operates only as a formal affirmance of the judgment below. It terminates the particular suit, but expresses no opinion upon the law of the case, and cannot, therefore, be cited as an authority upon either side of the controverted point. (Bridge v. Johnston, 5 Wend. 342, 371 ; Elting v. Bank of U. States, 11 Wheat. 59, 78 ; Supervisors of Albany v. Dow, 7 Hill 584, and note.)
    2. The authority of the judgment in the supreme court is removed by the result in the court of errors, which does not affirm it in opinion. The presumption that such judgment was the law of the state, which would have existed had not the opinion of the superior tribunal been consulted, is destroyed by the result in the court of last appeal, such result being, in effect, a refusal to pronounce the decision of the supreme court the law of the case, and a declaration that the question is still an open one.
    3. The superior court is now of equal authority with the supreme court, the appeal being direct from both to the court of appeals. The former decision of the supreme court can, therefore, command in this court only the respect which its intrinsic reason should receive, and is no longer controlling. It stands no better than the former judgment of this court.
    The case at bar differs from that before the courts in the' former cause. .
    II. The judgments in the supreme court and court of errors, in the former suit between the same parties, do not render the matter of this suit “ res judicata.”
    1. The judgment in that suit was upon a special verdict, and decides only that upon the finding of the jury in that cause the plaintiffs were not entitled to recover. An inspection of the records will show that neither the causes of action, nor the proofs, are the same in that suit as in the case at bar. As to 3 Denio, 238, Bouchaud v. Diaz, “ it is an extreme case,” and it is corrected by Schnoeppel v. Corning, 5 Denio, 236 ; Carter v. Bloodgood’s Executors, 3 Sand. Ch. R. 275, and Campbell v. Butts, 3 Comst. 173.
    2. The pendency of the former suit could not have been pleaded in abatement in this suit, and this is the true test of the identity of the causes of action in the two suits.
    3. The decision of a court and its reasons for a decision are not to be confounded. The former appears upon the record, the latter, if expressed at all, in the opinions delivered.
    The record in the former suit discloses not an identity, but diversity of causes of action.
    The opinion of the supreme court may render it probable that the same judgment would be given by it in this, as in that suit, yet it cannot be legally or logically affirmed, that notwithstanding the diversities in the causes, the judgment of that court, even, would be the same.
    The court of errors as a court, delivered no opinion and formed none, there being no preponderance of its judgment one way or the other. (Yates v. Lansing, 9 J. R. 415-416 ; Hanford v. Artcher, 4 Hill 276.)
    4. The actual diversity of the causes of action certainly requires an argument to show their legal or logical identity. This is precisely the effort to bring a new case within the authority of a former one, whether between the same or other parties, and concedes the point, for “ simile non est idem.”

      F. B. Cutting and G. Wood, for defendants,
    Insisted, that the judgment against the plaintiffs in the former suit had created an estoppel from which they could not be released ; the suits were founded upon the same bills of credit and involved the same question, and, in principle, were identical. The only difference between them was in the bills of exchange that were declared upon, but the liability of the defendants, if it exist at all, arises not upon the bills of exchange, but wholly upon the letters of credit, that is, upon the contract of guaranty, which these letters are alleged to have created. The supreme court, and in effect the court of errors, has said that the letters are no evidence of such a contract. This court is now required to say that they are, and upon that ground to' render judgment for the plaintiffs. That is, to make between the same parties a directly hostile decision, upon the same question. It was not believed that such a request would be complied with.
    Even if the judgments in the former suit had not created an estoppel, that of the supreme court was a precedent, which it was hot doubted that this court would regard as obligatory. The counsel cited Birckhead v. Brown, 3 Hill. 634; Gardiner v. Buchbee, 3 Cow. 120; Bouchaud v. Diaz, 3 Denio, 375; Botts v. Stow, 5 Conn. 550; Hopkins v. Lee, 8 Wheat. 109; 1 Greenleaf on Ev. § 531; Cow. and Hill’s notes, 827.

       Vide Doty v. Brown, 4 Coms, p. 71, not reported, when this opinion was delivered.

   By the Court.

Duer, J.

The questions first to be considered are, whether the plaintiffs are not precluded from asserting their present claim by the judgment of the supreme court in the former suit, and whether, upon the supposition that the judgment of the supreme court has not created an estoppel, it ought not still to be regarded by us, upon the salutary principle that it is the duty of judges stare decisis,” as a precedent of controlling authority. These questions are preliminary in their nature, and if either of them must be determined in favor of the defendants, it will be needless to examine those which chiefly occupied the attention of the counsel upon the hearing, and, which, if this were the original suit, we should be compelled to decide.

The truth of the proposition, that the law will not suffer the same question to be twice agitated between the same parties, but holds them to be concluded when it has once been determined by a court of competent jurisdiction, and the judgment so rendered is still in force, is not denied, but it has been strenuously contended, that the doctrine is only applicable, when the cause of action, in the successive suits, is identical, and the decision in the prior has proceeded upon a question of fact, not of law. And upon both these grounds it is insisted that the present case is either an exception from the general rule, or is not within its purview. . The cause of action in the former suit, it is said, was the refusal of W. & J. Brown & Co. to apply the unexhausted balance of the credit to the payment, pro rata, of the bills for ¿65,000 ; whereas, in the present, it is the refusal to apply the same balance to the payment ratably of the subsequently drawn bills for ¿68,000 ; and as the facts in the former suit were found by a special verdict, it is further alleged, that the question for the decision of the court, and upon which its judgment was founded, was necessarily and purely a question of law.

The position, that in order to raise an estoppel by a prior-judgment, the cause of action in the second suit, must, in all respects, be the same, as in the first, we feel no difficulty or doubt in rejecting. It is not indeed absolutely novel, but it is repugnant to the reasons of public policy embodied in the maxim, “ Interest reipublim ut sit finis litium,” upon which the doctrine of the conclusiveness of a judgment is founded; and so far from being sustained by authority, it is contradicted by many decisions. The decisions clearly show that the identity which the law requires, is widely different from that upon which the learned counsel for the plaintiffs insisted, and in proof of this, we shall refer to a few of the leading cases. In Kitchen v. Campbell, (1 Wilson, 308) which is more fully reported by Sir W. Blaclcstone, under the title of Fletcher v. Campbell (2 Black. 827), the action was brought by the assignee of a bankrupt against a judgment creditor, who had sold goods, alleged to be those of the bankrupt, under an execution, and the plaintiff claimed to recover the proceeds of the sale as money had and received to his use, upon the-ground that an act of bankruptcy had been committed before the sale, which, by relation, vested in him the title to the goods, as assignee. It appeared in evidence, that the plaintiff had brought an action of trover against the sheriff of London and the defendant, for the goods levied on under the execution, and that in this suit a verdict and judgment had been rendered for the defendants, and the question was, whether this judgment was a bar to the plaintiff’s recovery. Here, neither the cause of action, nor the sum sought to be recovered, was identical. The first action was founded upon a tort, the second, upon an implied assumpsit. The measure of damages in the first, had the plaintiff succeeded, would have been the actual value of the goods; in the second, he could recover no more than the sum received by the defendant; but the court, after the argument, was of opinion that these circumstances created no distinction which would prevent the application of the general rule, and that the prior judgment was an absolute bar. The ground of the decision was, that the right of the plaintiff to recover, depended in each suit upon the same question, namely, in whom the property of the goods was vested, at the time of the sale, and that it having been once determined that the goods were not those of the assignee, he was necessarily estopped from claiming the proceeds. Lord C. J. De Grey, in delivering -the judgment of the court, admitted that in order to “ preclude a plaintiff who has failed from bringing a second suit, there must be a certain identity in the cause of action,” but he remarked that whatever may be the form of the action, the cause of action is deemed to be the same, whenever the plaintiff relies substantially upon the same evidence to establish his claim, and in Martin v. Kennedy (2 Bo. & Pull. 71), Lord Eldon adopts this as the proper and sole test of the identity, which the law requires.

The able and lucid opinion of Lord Ellenborough, in Outram v. Morewood, (3 East. 346,) exhausts the learning of estoppel as "applicable to the particular case. It was an action of trespass, guare clausum fregit, and the defendants, admitting the entry, justified under a title to enter the close in question, for the purpose of digging coal. The plaintiffs replied, that the same title had been set up by the defendants, in a former suit by the plaintiff, for a prior trespass, and that upon the issue taken upon the title, in that suit, a verdict had been found against the defendants, and averred that by this verdict, and the judgment thereon, “ the defendants were estopped from setting up the same defence.” To this replication the defendants demurred, evidently upon the ground, that as the causes of action were distinct, they were not concluded by the prior judgment; but the court of king’s bench, by a unanimous decision, overruled the demurrer, and gave judgment for the plaintiff. Lord Ellenborough, in his opinion, examines and analyses the cases, from the time of the year-books, and remarked that the finding upon title in trespass, not only operates as a bar to a future recovery of damages for the same trespass, but also by way of estoppel to any action, for any injury to the same supposed right of possession ; and hence, as the plaintiff would have been eoncludedj had the issue upon the title been found against him, it was a necessary consequence, that the defendants were concluded by the verdict and judgment in his favor. He further observed, that there is an important distinction between those cases, in which a judgment operates as a bar to a future suit for the same thing, and those in which it operates as an estoppel; in the first class, the judgment itself raises the bar, in the second, it is the matter alleged by the party, and upon which the judgment proceeded, that creates the estoppel.

The cases in our own courts, and particularly Gardiner v. Buchbee (3 Cow. 120), Burt v. Sternbugh (4 Cow. 559), and Bouchaud v. Diaz (3 Denio 238), entirely correspond with those that have been quoted. Gardiner v. Buchbee came before- the supreme court, upon a writ of error to the common pleas of this city. The action was on a promissory note, and the defence was, that the note had been given in part payment for a vessel sold by the plaintiff to the defendant and others, and that in consequence of the fraud of the plaintiff in the sale, there was an entire failure of the consideration. Upon the trial, the defendant, to establish his defence, offered to prove that the plaintiff had impleaded the defendant in the marine court of this city, .upon another promissory note, for the same amount as that in suit, and for the same consideration ; and that upon the trial of that case the fraud of the plaintiff was the only question at issue, and that the court, upon the ground that the sale was fraudulent, had given judgment for the defendant. The evidence was admitted, and by the record of the judgment in the marine court, and extrinsic proof, the facts offered to be proved were established, but the judge charged the jury that the facts so proved, although entitled to their consideration as evidence, were not a bar to the plaintiff’s demand, and to this direction the defendant excepted. The jury found a verdict for the plaintiff, upon which the court of common pleas, overruling the exception taken on the trial, rendered judgment in his favor. The supreme court, however, was of opinion that the exception was well taken, and that the judge ought to have charged the jury that if they were satisfied, from the extrinsic proof, that the question of fraud had been passed upon in the marine court, the record was conclusive against the plaintiff’s right to recover. The judgment of the common pleas was therefore reversed. In delivering th.e opinion of the court, Hr. J. Woodworth stated that “ the> 1'aw is well settled that the judgment of a court, having jurisdiction directly upon the point, is as a plea in bar, or as evidence, conclusive between the parties upon the same matter, when directly in question in another suit.” And it was upon this principle, thus broadly stated, that the actual decision was founded. Burt v. Sternbugh was decided in a great measure upon the authority of Outram v. Morewood, and, in principle, is not distinguishable. The action was trespass quare clausum fregit, and upon the trial the defendant offered to prove that the premises in question were not within the patent under which the plaintiff derived his title ; consequently, that he had no right to maintain the suit. To the admission of this evidence the plaintiff objected, on the ground that in a former suit brought by him, for a different trespass upon the same premises, the same question had been raised by the defendant, and had been determined against him ; and the judge, being of opinion that by the judgment in the former suit, the defendant was estopped from opening again the question thus determined, excluded the evidence. The supreme court affirmed his decision, and refused a new trial. Bouchaud, Executor, &c., v. Diaz, is the most recent case, and bears the closest analogy to the present. The plaintiff’s testator and the defendant were co-sureties for one Castro upon two custom-house bonds, and the plaintiff, as executor, having satisfied one of the bonds, brought this action to recover from the defendant, as a co-surety, one half of the sum he had paid. The defence was, that with the consent of the plaintiff the defendant had been released from his obligation as surety by the secretary of the treasury, and in support of his defence, the defendant gave in evidence a judgment record, from which it appeared that the plaintiff sued the defendant for contribution in this court, the other bond being set forth in the declaration in that suit as a part of the ground of action, that the defendant had pleaded the release and consent of the plaintiff in bar, that to this plea the plaintiff had demurred, and that upon the issue joined upon the demurrer the court had rendered judgment for the defendant. The plaintiff objected to the introduction of this evidence upon the ground that the bonds were not the same in both suits, in other words, that the cause of action was not the same in each; but the circuit judge overruled the objection, and held that the prior judgment was, under the circumstances, a bar to the action, and upon a motion for a new trial the supreme court affirmed-his decision. Chief Justice Bronson, in giving the decision of the court, expressed himself with his usual brevity, clearness, and force. He remarked that as different bonds were mentioned in the declarations in the two suits, it was true that there was some difference between the cases as to the proof necessary to be given by the plaintiff to sustain the action, but that, so far as related to the principal question in controversy, namely, the right of the plaintiff to demand and the duty of the defendant to make contribution, the cases were precisely alike, and hence, that the prior judgment was a conclusive bar to any new litigation of the same matter.

It must be remarked that as the judgment which was held to be a bar, was given upon a demurrer, the whole controversy in the first suit, the facts being thus admitted, must have turned upon questions of law, namely, the construction and legal effect of the release and consent set forth in the plea. And it appears from the report, that the sheriff's counsel had contended that these circumstances created a distinction which destroyed the effect of the judgment as a bar.

But the chief justice replied, that it could make no difference in principle, whether the facts upon which the court proceeded were proved by witnesses, or admitted by the parties; the judgment was in both eases equally conclusive.

It is needless to refer to any other cases, and the necessary inference from the review that has been made, may be stated in few words. It is, that as between the parties and privies a judgment is conclusive, as to every question upon which the right of the plaintiff to recover, or the validity of a defence in another suit, is found to depend, and upon the determination of which it appears from the record, or is shown by extrinsic proof, that the judgment was, in reality, founded. The judgment, if erroneous, may be reversed, but so long as it remains in force, the parties are estopped from denying either the facts, or the law, upon which it proceeded.

The application of the doctrine thus established to the present case, is obvious and decisive.- The plaintiffs sought to recover in the former suit, upon the allegation that the letters of credit, delivered by the defendants to Demarest, combined with the fact, that the bills drawn by him were purchased by the plaintiffs upon the faith of the letters, were evidence of a valid agreement upon the part of the defendants, that the bills so drawn and presented should be accepted and paid by W. & J. Brown & Co., the drawees, and that the refusal of the drawees to accept and pay the bills, rendered the defendants immediately liable to the plaintiffs to the extent of the balance of the credit, then unexhausted. It was, not the breach but the existence of this agreement, that was the principal question in controversy, and it was upon the determination of this question in favor of the defendants, that the judgment of the supreme court was certainly founded. The case would have been widely different, had all the bills mentioned in the declaration in the former suit been drawn at 90 days’ sight, and the judgment of the court had proceeded upon the ground that such bills were not within the terms of the agreement; but the bill for £1000 was at 60 days’ sight, and was clearly embraced by the agreement, had such an agreement been proved ; and hence in the supreme court, the question whether there was any such privity of contract between the parties as rendered the defendants liable, was that upon which the right of the plaintiffs to recover depended, and upon which alone, the opinion of the court shows, that its judgment proceeded. The present action is founded upon the same alleged contract, and the same facts are relied upon to prove its existence, and to enable the plaintiffs to recover, we arc required to decide in their favor, the very question which the supreme court has determined against them. To such a request, without a manifest violation of the principles that have been settled by former' decisions, we cannot accede, but must hold that the judgment of the supreme court, in & suit between the same parties, in which the same question was directly at issue, is a conclusive bar to the present action. That there was no such contract, as is alleged, is emphatically “ res judicata.'

It has, however, been contended that in the present case additional facts have been proved, which vary it materially from the special verdict, upon which the judgment of the supreme court was founded ; and, that, had the same evidence been given in the former suit, it is an open question, whether a different judgment would not have been rendered ; and it is insisted, that by this variance between the cases, the effect of the prior judgment, as an estoppel, is wholly destroyed. This argument has, however, failed to convince us ; we are forced to dissent, both from its premises and its conclusion. In our judgment no additional facts have been proved, which are at all material, as bearing upon the vital question of the privity of contract, and certainly none, which, had they been given in evidence in the former suit, could have led to a different result. It is impossible to read the opinion of Chief Justice Bronson, without being satisfied that had all the facts which appear in this ease been embraced in the special verdict, the judgment upon the verdict would have been exactly the same that was actually rendered. But were it otherwise, were it admitted that the cumulative evidence that has now been given would have enabled the plaintiffs to recover in the former suit, it is certain that the effect of the actual judgment as a bar to the present action would not be altered. All the additional facts that have been given in evidence in this suit existed, and for aught that appears, were known to the plaintiffs when the former action was brought to trial; and if they were, in. truth, as material as is now asserted, they ought then to have been proved. The party against whom a judgment has been rendered cannot get rid of its effect as an estoppel by the allegation of his own neglect, since, in the language of Chancellor Kent, it is a sound and salutary principle that every person is bound to take care of his own rights and vindicate them in due season (Le Guen v. Gouveneur & Kemble, 1 John. Cas. 502). Hence it has long been settled, that if a defendant, having the means of defence in his power, neglects to use them, and suffers a. recovery to- be had against him in a competent tribunal, he is for ever precluded (2 Burr. 1109; 7 Tenn. R. 269; 2 H. Black. 414), and the law would be inconsistent and unjust if the same rule was not just as applicable to a plaintiff, who has suffered a judgment to pass against him from his omission to produce the evidence that would have enabled! him to recover. We agree with Chancellor Walworth, that the; law is not chargeable with this inconsistency, but that when the same question is at issue between the parties in two successive actions, a judgment rendered for the defendant in the first, is an absolute bar to a recovery by the plaintiff in the second,, although the evidence in the second, had it been given in the first, would have entitled him to recover. (Miller v. Marnice, 6 Hill 122.)

It remains next to consider whether although the judgment of the supreme court involves a determination of the question, upon which the right of the plaintiffs to maintain this action depends, it is yet necessary to hold that it cannot operate as an> estoppel, because the question, as arising upon a special verdict, was necessarily decided by the court, as an unmixed question of law. If we understand correctly the proposition for which the learned counsel for the' plaintiffs contended, it is that an estoppel, created by a judgment, is limited in all cases to the facts upon which the judgment was founded, and consequently, that when it clearly appears that the facts are not contested, but the controversy relates exclusively to questions of law, a ¡prior judgment is no bar to a subsequent action. We were not referred upon the hearing to any decisions whatever in support of this proposition, nor upon a diligent search have we found any in the books, nor indeed any trace of the distinction which it supposes to exist. We were told, it is true, that the distinction was not -only recognised but adopted by Vice Chancellor Sandford, in Carter v. Bloodgood’s Executors (3 Sand. Ch. R. 295), but we cannot think that the observations of the vice chancellor in that case, have any application to the present. It is true, that the question upon which the right of the complainant to a decree depended, was involved and had been determined in the prior suit, but not only were the parties in the two suits not exactly the same, but the second, which is decisive, related to different property. Here not only are the question and the parties the same as in the former suit, but this action is founded upon the same supposed contract, and the plaintiffs seek to recover, upon the same title, the same sum of money. And so far as respects the right of the plaintiffs to demand its payment, and the duty of the defendants to make it (we use the very words of Oh. J. Bronson, in Bouchaud v. Diaz,) the two cases are precisely alike. It cannot, therefore, be justly said that the vice chancellor, in Carter v. Bloodgood’s Executors, &c., adopted the distinction upon which the plaintiffs now rely. He founded his observations distinctly upon the fact, that the suit before him related to different property, and even -upon the question whether the prior decree, notwithstanding this difference, operated as an estoppel, expressed himself with hesitation and doubt. He deemed it needless to discuss the. question, and evidently did not mean to commit himself by a positive opinion.

It seems to us that the novelty of the proposition that we have been urged to adept, and its entire destitution of authority, are aloné conclusive reasons for its rejection. If the important distinction which the proposition asserts in reality existed, we are convinced that it would not only have been mentioned by text writers and recognised by judges, but, from the frequent recurrence of cases to which it is applicable, would have been established by repeated decisions. If it be true, that an estoppel created by a judgment," is limited to facts admitted or proved, it follows that no judgment founded upon a demurrer or special verdict, can be an absolute bar. It will not preclude the part)r against whom it is rendered from claiming the same right, or setting up the same defence in a subsequent suit. He will have the right to say, I admit the facts upon which my adversary then relied, and now relies, but the law arising upon these facts is in my favor, and the judgment, which declared it to be otherwise, is erroneous. It may deserve some consideration as an authority, but has no force as an estoppel. We cannot believe that, such is or ever has been the law.

Judgments turning exclusively upon questions of law form a very large proportion of all that are rendered in contested suits, and if these are to constitute an exception to the general rule, the common law doctrine of estoppel will be robbed of its principal value, and a wide inlet be opened to all those mischiefs of interminable and oppressive litigation, which it was designed to prevent. It is needless, however, to dwell upon the unreasonableness of such an exception. It is sufficient to say, that liad it been sanctioned by the law, there would have been conclusive evidence of the fact, and none such has been adduced. On the other hand, the general rule, which has prevailed without question from the earliest period of the law, is laid down by Lord Coke in the most comprehensive terms, and Bouchaud v. Diaz may be justly referred to as an express decision. According to Lord Coke, it was resolved by the “ Judges of the King's Bench, in Ferrar’s case (8 Rep. I), that when one is barred in any suit or action, by judgment on demurrer, confession, verdict, &c„ he is barred as to that or the like action, of the like nature, for the same thing for ever.” The terms of the rule plainly embrace the ease before us, as a second action of the like nature, with the first, and for the same thing, and they show that it is the judgment itself, whatever may be its form, and without any regard to the nature of the question in controversy, that creates; the estoppel. Lord Coke does indeed proceed to state, that in real actions there are several apparent exceptions to the general rule, but he adds that in personal, the bar which a final judgment creates is perpetual, and as Lord Chief Justice De Grey interprets his language (2 Black. 8B0) universal. Cases in which the first judgment was given only for faults in pleadings or other matters of form, not at all affecting the merits, are, however, excepted, as Chief Justice De Grey, in Kitchens v. Campbell, distinctly admits. But we understand the same learned judge to say, that when the first judgment was rendered on a special verdict, and the same facts are necessarily given in evidence in the second action, it is a ease to which the general rule emphatically applies. The estoppel is then certain and perpetual.

We have already seen that the judgment which the supreme court, in Bouchaud v. Diaz, held to be an estoppel, was given on a demurrer, and it is worthy of remark that it was the estoppel alone which, in that case, prevented the plaintiff’s recovery. Upon the evidence, independent of the record, the opinion of the court was evidently in his favor. It was not denied, upon the hearing, by the learned counsel for the plaintiffs, that a judgment upon a general demurrer works an estoppel as to the law, as well as to the facts of the case, but if there is any distinc tion, in this respect, between a judgment upon a demurrer and upon a special verdict, it is a distinction which we have failed to seize, and are unable to state. Whether the facts are admit ted by the parties or found by the jury, the question which is» raised for the decision of the court, and upon which its judgment proceeds, is equally and exclusively a question of law.

It must be admitted that several and distinct questions of law, questions affecting as well the validity of a defence as the right of the plaintiff to recover, may arise upon a special verdict, and in such cases it cannot be ascertained from the record alone upon what grounds the judgment proceeded. In other words, what were the precise questions that the court meant to determine. But when the plaintiff demurs to a special plea, and judgment 5s given for the defendant, there is the same difficulty, since it <eannot then be known from the record alone, whether the judgment was founded upon the sufficiency of the plea, or the insufficiency of the declaration. The reply to the objection is the same in both cases. In this state the law was settled by the decision of the Court of Error, in Wood v. Jackson (8 Wend. 1-49,18 Wend. 107), that when the record fails to disclose the grounds of the judgment, parol evidence, to show what were the questions raised upon the trial and passed upon by the jury, may be admitted, and the effect of the judgment, as an estoppel, be thus established. In our opinion, extrinsic proof may, with the same propriety, be admitted to explain the judgment of the court, as the verdict of the jury, and the reasons given by the court upon the delivery of the judgment, furnish the necessary evidence.

For the reasons that have now been given we must adhere to the opinion that a prior judgment binds the parties as an estoppel upon every question which it in fact determined, and precludes them from denying, in any subsequent action, either the facts, or the law, upon which it proceeded. As the principal question upon which the right of the plaintiffs to recover depends, was in the former suit determined against them, we hold it to be a necessary consequence that the judgment, thus rendered, estops them from maintaining the present action.

Had our researches and reflections led us to a different result, we should still be constrained to say, that according to our views of the course we are bound to follow, the judgment of the supreme court ought to control our own. If as res judicata it has not ousted our jurisdiction, yet, as a precedent, it must control our action. As it was affirmed in the court of errors only by an equally divided vote, it may not have settled the law, so far as the court of appeals is concerned ; but we cannot agree that this decision in the court of errors has lessened in any degree the weight of the authority that properly belongs to it, as an unanimous decision of the supreme court, in the exercise of its own appellate powers. Indeed, the counsel, who last addressed us on the part of the plaintiffs, was so sensible of this, that he frankly stated that, unless he could demonstrate to our entire satisfaction that the judgment of the supreme court was erroneous and unjust, he could not reasonably expect from us an opposite decision. The arguments of the learned counsel and his associate were forcible in themselves, and were urged with their usual ability, but they have failed to produce in our minds that clear and full conviction that could alone justify us in rejecting and setting aside the opinion of the supreme court, in the former suit, by holding that -in this the plaintiffs are entitled to recover. Regarding the question as exceedingly doubtful, w6 cannot say that the defendants are liable for the breach of a contract, which the supreme court upon mature deliberation, and substantially upon the same evidence, has declared never to have existed.

Under a system of jurisprudence which clothes those by whom the law is to be declared, with so large a. discretion as our own, it is only by their scrupulous adherence to the decisions of their predecessors that even a resemblance of stability and certainty, in the administration of justice, can be attained or preserved, and hence, it is only where the error in prior decisions is manifest and grave, the violation of principle plain and undeniable, that the obligation of judges “ stare decisis” ceases to exist. It cannot be said that - the case before us falls within this category. Certainly, the judgment of the supreme court is not liable to the imputation of manifest error. The question which it decided in favor of the defendants is considered by ns as, in no ordinary degree, difficult and doubtful, and the whole history of this litigation proves it to be so ; and we, therefore, think that we should depart, and widely depart, from the line- of our duty, should- we refuse to yield to the authority by which it has been determined.

We must therefore hold, conforming our decision to that of the supreme court, that it is not a conclusion of law from the facts in evidence, that the defendants undertook, and promised, that the bills drawn and negotiated by Demarest, at Rio, should be accepted and paid by the house in Liverpool, and consequently that they are not liable for any portion of the damages, which the plaintiffs allege they have sustained, and now seek to recover.

It is proper to add a few words upon another part of the case, in order to re-pel an inference that might otherwise be drawn from our silence. Even upon the supposition that there was a valid agreement, such as is declared upon, on the part of the defendants, that the bills drawn by Demarest should be accepted and paid ; we are not to be understood as saying that the plaintiff would be entitled to recover in the present suit. The question would still remain, whether, when the bills mentioned in the declaration, were presented for payment, there was an unexhausted balance of the credit of ¿615,000, which ought then to have been applied to their satisfaction. The sum of ¿67200 part of the credit was at that time not covered by any previously accepted bills, but if this balance was applicable to the payment of the outstanding bills for ¿65000, and by the acts, and with the consent of the parties, the plaintiffs, Demarest, and W. & J. Brown & Co., was so to be appropriated, the subsequently drawn bills for ¿68000 were rightfully protested, and the refusal to pay them has created no liability, on the part of the defendants. If W. & J. Brown & Co. had rendered themselves directly liable to the extent of the balance of the credit to the holders of the bills’for ¿65000, it seems to be a necessary consequence that the defendants cannot be liable to the plaintiffs in the present action. Upon these questions which fairly arise upon the evidence, we decline to express any opinion, since as we reject the hypothesis of a privity of contract, between the parties to this suit, we are not bound to consider them, but as they may possibly become a subject of discussion in the Court of Appeals, it seemed necessary to explain the grounds of our own reserve.

If the parties elect to turn the case into a special verdict, judgment thereon must be entered for the defendants, with costs : otherwise, there must be a new trial, with costs to abide the event.