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    KERSEY COATES, Respondent, v. THE FIRST NATIONAL BANK OF EMPORIA, et al., Appellants.

      Hquitable assignment—transactions between banks for transfer of credit, when do not constitute.—General assignment—when not void as fraud upon bankrupt act.— Contract—by what law to be construed.—Inter-State comity.

    Op and prior to August 1, 1878, the bank of E., of Kansas, was a depositor with the M. bank of Missouri, and both banks were depositors with D., L. & Co., of New York; and D., L. & Co., at that time, were indebted to the M. bank in the sum of $10,000. Upon that day, the M. bank received a duly executed written request from the bank of B., as follows: “ Remit to D., L. & Co., N. Y., $5,000,” for our account credit, and charge our account;” on the same day the M. bank mailed to D., L. & Co. a duly executed paper writing, as follows: “Pay to the order of credit the bank of E., $5,000, ” also a letter, “ Please find inclosed, for the credit of the bank of E., $5,000,” and also in the same inclosure, other like writings, in behalf of other banks, the aggregate credits asked in which exceeded the amount due from D. L., & Co. to the M. bank. Thereafter the M. bank credited account of D., L. & Co., and charged account of bank of E. with $5,000, and wrote to the bank of E.: “We remit $5,000 to D., L. & Co., N. Y., to your credit;” whereupon, bank of E. credited account of M. bank, and charged account D., L. & Co., $5,000. On August 3, the M. bank made a general assignment of its property and effects to plaintiff, who duly accepted it, and on the 4th telegraphed the fact to D., L. & Co., which telegram reached them on the 5th, two hours before the above inclosure containing requests for credits. The orders or drafts were not accepted or acted upon, and the credits therein requested were not given, and D., L. & Co. subsequently paid the amount of its said indebtedness to the M. bank, into court.

      Held, that the above transactions did not amount to an equitable assignment, and therefore, the credit asked for not having been given, that the bank of E. and the other defendants have "no right to any part of the fund in court.

      It seems, that the effect of the above transaction is to be determined by the laws of the State of New York, as the consummation of the transaction—the increase of credit—was to be effected here.

      Meld, that a claim that the assignment was repugnant to the laws of this State, and that the power to make it, under the laws of Missouri, was suspended by the bankrupt act, cannot be sustained herein
    (1) It does not appear that bankruptcy proceedings were ever instituted by or against the M. bank, and an assignment of property can be attacked, as being a fraud upon the bankrupt act, only in involuntary proceedings commenced within the period after the assignment, designated in that act, or be set up in subsequent voluntary proceedings, as a bar to the discharge of the debtor.
    (2) There were no citizens of this State, or other creditors of the M. bank, who had been conducting themselves with reference to the laws of this State, in regard to the property of said bank, found, or being within the jurisdiction of the State, to whom our laws had promised anything as fruits of such conduct, and, therefore, there are no considerations of public policy to prevent our courts from, aiding plaintiff to recover the funds in question.
    Before Sedgwick, Ch. J., Freedman and Trtjax, JJ.

      Decided April 4, 1881.
    Appeal from judgment entered upon the report of a referee.
    The facts appear in the referee’s opinion, as follows :
    J. S. Bosworth, Referee.—■“ On, and for some years prior to August 1, 1878, The First National of Emporia, Kansas, and Jenkins W. Morris (another name for “ Salina Bank,” Kansas), were depositors with the Mastín Bank, and each of these three banks, during; all this time, was a depositor with Donnell, Lawson & Co., bankers in the city of New York.
    “ On August 3, 1878, the Mastín Bank made a general assignment of all its property and effects to Kersey Coates of Jackson county, Missouri. Coates accepted the assignment, and entered at once upon the discharge of his duties, as assignee. On August 4, Coates telegraphed to Donnell, Lawson & Co. the fact of such assignment having been made, which telegram was received by the latter about 10 a. m., of August 5. There was then due from the latter to the Mastín Bank (laying out of view the validity of the claims made here by the contesting defendants) the sum of $9,786.75, as then stated by Donnell, Lawson & Co. to the plaintiff’s agent, but subsequently ascertained to be, with interest to such subsequent date, $10,028.89.
    “ The plaintiff, as such assignee, in September, 1878, brought an action in this court against Donnell, Lawson & Co., to recover the sum of $9,786.75, the amount then supposed to be owing by them. Donnell, Lawson '& Co. made a motion in that action, for leave to pay the money into court, and to be discharged from liability on so doing, on allegations that each of the defendants, by transactions between it and the Mastín Bank prior in date to the assignment, claimed to have become owners of part of the amount owing by Donnell, Lawson & Co. to the Mastín Bank; and that the claims of all of them exceeded the amount of such balance. That motion was granted by an order made December 9, 1878, and thereupon Donnell, Lawson & Co. paid into court $10,023.89. By such -order the present defendants were substituted as defendants in the action, in the place and stead of Donnell, Lawson & Co. Only two of such defendants appear in this action and make any claims to said fund.
    “ Those two defendants, being the First National Bank of Emporia, and Jenkins W. Morris, for answer to the amended complaint, among other things, allege ‘upon their information and belief, that on the said first, day of August, 1878, the said Mastín Bank, for value received, and under and in pursuance of an agreement with these defendants and each of them, for that purpose concluded on that day, duly assigned, transferred and set over, and delivered unto these defendants the whole of said sum of $9,786.75, then on deposit with said Donnell, Lawson & Co., as aforesaid; whereupon, as defendants are informed and believe, they became the lawful owners of said sum of money, and of the whole thereof, and have from thence to the present time been the sole owners thereof.’
    “The Mastín Bank did not assign to these two defendants, or either of them, on August 1, 1878, the whole or any part of the amount then owing by Donnell, Lawson & Co., to the Mastín Bank, unless the transactions to be now stated, amount to such an assignment and transfer.
    “ On August 1,1878, the Mastín Bank received from the First National Bank of Emporia, a written communication dated July 31, 1878, and which, exclusive of the heading of it, was in the words and figures, viz. :
    “ ‘ John J. Mastín, Esq., Oashier.

    ‘ Kansas City, Mo.
    “ 1 Dear Sir :—You will please remit to Donnell, Lawson & Co., 92 Broadway, New York, $5,000, for our account credit, and charge our account.
    “ ‘Respectfully,
    ‘H. C. Cross,
    ‘ President,- O.’

    “ Cross was President of the Bank of Emporia. The Mastín Bank then made a paper writing, in this form, viz. :
    “ ‘$5,000, No. 166,655.
    ‘ State of - Missouri, Mastín Bank, 1 Kansas City, Mo., August 1, 1878. j
    ‘ Pay to the order of Credit the First National Bank of Emporia, Kansas, Five Thousand Dollars.
    “ ‘To Donnell, Lawson & Co.,
    ‘ New York.
    ‘ David O. Smart,

      Vice President

      “To accompany this draft or order, the Mastín Bank, at the same time, wrote to Donnell, Lawson & Co., substantially, thus:
    “ ‘ Please find inclosed for the credit of the First National Bank of Emporia, Kansas, $5,000.’
    “This letter and draft were placed in an envelope addressed to Donnell, Lawson & Co., and mailed by the Mastín Bank, as hereinafter stated. When this draft or order and the accompanying letter had been thus drawn, the Mastín Bank charged on its books, in its account with the Emporia Bank, the $5,000, and credited, on its books, the like amount to Donnell, Lawson & Co., in its account with them. The Mastín Bank, thereupon sent a communication to the Emporia Bank by postal card (post-marked Aug. 2, 1878) in these words, viz. :
    “ ‘ Mastín Bank, . SETH E. WAB.D, President.

    ‘ John J. Ma.stin, Cashier,
    ‘ Thomas H. Mastín, Asst. Cashier.

    ‘ Kansas City, Mo., Aug. 1, ’78.
    “ ‘ Your favor of 31, received, we remit $5,000, to Donnell, Lawson & Co., New York, to your credit.’
    John J. Mastín,
    ‘“H. C. Cross, Cashier.’

      ‘ Emporia, Kansas.’
    “ On the receipt of this postal card, the Emporia Bank credited on its books $5,000, to the Mastín Bank, :and charged Donnell, Lawson & Co. the like sum.
    “ On the same first day of August, 1878, there was a transaction similar in all respects, between the Mastín Bank and Salina Bank, on the written request made by the letter of the Mastín Bank to 6 remit Five Thousand Dollars to Donnell,Lawson & Co., New York, for onr credit and charge our account with the same.’

      “ Thereupon, the Mastín Bank drew an order or draft, directed to Donnell, Lawson*& Co., New York, which said: ‘ Pay to the order of credit of Salina Bank five thousand dollars,’ and wrote a letter to accompany said draft, in the same form, in substance, as the letter written to accompany the order in favor of the Emporia Bank, and put the draft or order in favor of the Salina Bank, and its accompanying letter, in a separate envelope, addressed to Donnell, Lawson & Co.
    “ These two envelopes and their contents, and two other separate envelopes (one of which contained an order directed to Donnell, Lawson & Co., in like form, to place to the credit of the State Savings Bank of St. Joseph, Missouri, $3,500, and an accompanying letter in like form, as previously stated, and the other of which envelopes contained an order, directed to Donnell, Lawson & Co., in like form, to place to the credit of Turner & Otis, defendants herein, $3,000, and an accompanying letter in like form as previously stated), were all placed in one envelope, directed to Donnell, Lawson & Co., and was mailed by the Mastín Bank, some time during August 1, 1878, and was received by Donnell, Lawson & Co., on the. fifth of August, 1878, some two hours after they received the telegram from the plaintiff, notifying them of the said assignment. Donnell, Lawson & Co. did not accept or act on either of these four orders or drafts ; they did not place anything to the credit of either of the parties named in these four orders or drafts. In what order of priority these four drafts or orders were drawn, does not appear, if I remember, accurately, the testimony.
    “ I do not deem it important to consider the question, whether the form of the two orders, in favor of the Emporia Bank and the Salina Bank, would make them bills of exchange, if they had been delivered to these two banks, as means of enabling them to realize the amounts, in cash, or credit with Donnell, Lawson & Co. They never were delivered to these banks, and were not drawn with any intent that they should be so delivered.
    “The request made by the Emporia Bank of the Mastín Bank, was to. ‘ remit to Donnell, Lawson & Co. five thousand dollars for our account credit.’ The request made by the Salina Bank was to ‘ remit five thousand dollars to Donnell, Lawson & Co., New York, for our credit.’ The substance of this is, 1 increase the amount of our credit with Donnell, Lawson & Co., five thousand dollars,’ and charge us the like amount.
    “Omitting from the so-called orders or drafts the words ‘pay to the order of,’ and they read in the one case, ‘ credit the First National Bank of Emporia, Kansas, five thousand dollars.’ The other as drawn reads, ‘pay to the order of credit of Salina Bank five thousand dollars.’ ■ The letter accompanying each order, and to be read with it, says, ‘ please find inclosed for the credit (of either bank as the case may be), $5,000.’
    “ Hence it is evident that each order and its accompanying letter consisted of private instructions from the Mastín Bank to Donnell, Lawson & Co., and amounted to a direction or request, in each case, to give a credit to the person and to the amount named in it. These instructions were unknown, so far as the evidence shows, to either the Emporia Bank or the Salina Bank. Those banks had severally requested the Mastín Bank to. increase the credit of each with Donnell, Lawson <& Co., to the amount of $5,000. The Mastín Bank undertook, in its own way, to comply with this request by sending to Donnell, Lawson & Co. the orders and accompanying letters, and thereupon notified.the two banks that they had remitted. Of course, when the Mastín Bank so wrote it had not, as matter of fact, increased the credit of either bank with Donnell, Lawson & Co., and that fact was known to the defendants.
    “ Donnell, Lawson & Co. knew nothing about the requests made of the Mastín Bank, or of its reply to such requests, and heard nothing of the matter until August 5, and then refused to give the credit, so that, as matter of fact, neither bank got any credit with Donnell, Lawson & Co., by reason of the transaction.
    “Hence, it is clear that these two banks have no right to any part of this fund, unless the transaction between them and the Mastín Bank amounts to, or operates as an equitable assignment of the debt owing by Donnell, Lawson & Co. to the Mastín Bank on August 1, 1878. The moneys received by Donnell, Lawson &Co., from, or on account of the Mastín Bank, and credited to it on account, did not come to their possession clothed with any trust; the money so received by them, on the receipt thereof, became their moneys, and it was their duty to pay the drafts or orders drawn on them by the' Mastín Bank, as they might be presented, to the extent of their indebtedness at that time to the Mastín Bank.
    “ If, in answer to the requests to remit, the- Mastín Bank had drawn and sent to each of these banks its bill of exchange or check on Donnell, Lawson & Co. for $5,000, payable to the order of such bank, such bill or check, in the hands of the payee, would not operate as an assignment of any part of the debt owing by Donnell, Lawson & Co. to the Mastín Bank (Attorney-General v. Continental Life Ins. Co., 71 JV. Y. 325).
    “In that case, the insurance company drew its check for the amount of ail adjusted loss, payable to the order of the person to whom the loss was payable. It was drawn upon an institution with which the drawer deposited its moneys, and when drawn, the drawer had to its credit a larger sum than the amount of the check. The obvious intent of the drawer, and the only-reasonable expectation the payee could have, were, that the check would be paid, when presented, out of the funds then held by the drawee belonging to the drawer ; or, to speak with more legal accuracy, in discharge of the like amount of the drawee’s indebtedness to the drawer, existing at the time of the presentment of the check before the check was presented. But, eleven days after it was drawn, a receiver of the company was appointed, and it was held that the payee of the check did not, by reason thereof, become an -equitable assignee of any part of the indebtedness of the drawee to the drawer existing when the check was drawn.
    “ Church, Ch. J., in delivering the opinion of the court, says : ‘ Banks are debtors to their ' customers for the amount of deposits. A check is a request of the customer to pay the whole or a portion of such indebtedness to the bearer or to the order of the payee. Until presented and accepted it vests no title or interest, legal or equitable, in the payee to the fund. In this case, the instruments referred to no fund; did not purport to create a lien or assignment of any fund, and the Trust Company did not even have notice of it.’
    “ The orders sent by the Mastín Bank to Donnell, Lawson & Co. were in their terms as general as those of an ordinary check. They were, in effect, ‘ pay to the order of, or credit the person named $5,000.’ diving to them the most restricted meaning of which they are susceptible, they are requests to pass to the credit of each bank $5,000. They do not indicate any account of indebtedness in respect to which they are drawn, and they do not even contain any direction or authority to Donnell, Lawson & Co. to charge the amount to any specified account.
    “Tohold that such orders operate as an equitable assignment from the time they were mailed, of a like amount of the indebtedness of Donnell, Lawson & Co. to the Mastín Bank, would create great embarrassments in transacting the kind of business in which they are engaged. The pernicious tendency of such a rule is well illustrated by the facts of this case. Suppose that the Mastín Bank had not failed, and the state of its accounts with Donnell, Lawson & Co., on the fifth of August, had been what is proved to have been, how could Donnell, Lawson & Co. ascertain what their liabilities were in respect to the four orders received on the fifth of August, at the same time, and in the same general envelope? The drafts amounted to $16,500. Their indebtedness to the Mastín Bank amounted to about $10,000. How were they to ascertain to whom the $10,000 was payable ? If each transaction is to be deemed to have been completed in Missouri, eo instante the orders were mailed, then each of the four orders took effect at the same moment of time ; and if that fact be conceded or should be established, then there would, or might be, a claim, that each was an equitable assignee, pro tanto. The defendants in this case, instead of relying upon the implied obligation of Donnell, Lawson & Co. to pay the drafts or checks of the Mastín Bank, as they might be presented, to the extent of the amount to the credit of the Mastín Bank, gave evidence tending to show an actual agreement to pay the orders which the Mastín Bank might draw on them. But the evidence, so far as it tended to show any express agreement, was an agreement to pay the checks or drafts of the Mastín Bank, when presented, to the extent of the amount then to its credit.
    “The evidence does not justify the finding of an agreement between the Mastín Bank and the Bank of Emporia, or the Salina Bank, either expressed or that can be implied, that the remittance requested should. be made by any specified means, or by any designated procedure.
    “ The request made by the Emporia Bank of the Mastín Bank was, that the latter should ‘ remit to Donnell, Lawson & Co. $5,000 for our account credit.’ Whether the Mastín Bank would as matter of choice, or as matter of necessity, would be obliged to actually remit exchange to Donnell, Lawson & Co. for the whole or a part of that amount, the Emporia Bank or the Salina Bank did not know, and could not care, provided it obtained the desired credit with Donnell, Lawson & Co. It could not, therefore, have been a just expectation of the Emporia Bank, or of the Salina Bank, that the Mastín Bank would necessarily comply with the request, by drawing upon any account it then had with Donnell, Lawson & Co., to be unaffected in its amount up to the time that the latter should hear from the Mastín Bank, by remittances to, and other drafts on Donnell, Lawson '& Co., contemporaneous with or shortly anterior in date, to the date of the transaction in question. The whole amount to the credit of the Mastín Bank on August 1, 1878, according to the course of business, might have been exhausted prior to August 5, by drafts prior in date; and the amount to its credit on August 5, may have been supplied by remittances from the Mastín Bank, received by Donnell, Lawson & Co. between August 1 and August 5. .
    “ It cannot be concluded, therefore, ‘ that on the said first day of August, 1878, the Mastín Bank under and in pursuance of an agreement with • these defendants and each of them, for that purpose concluded on that day, duly assigned, transferred, and set over unto these defendants the whole of said sum of $9,786.75, then on deposit with Donnell, Lawson & Co.’ There was no formal assignment or transfer, nor was there any agreement to make one, nor is there the slightest allusion in the correspondence between the Bank of Emporia or the Salina Bank and the Mastín Bank, or to the state of the account between the latter and Donnell, Lawson & Co., or to the fact that any account existed between them. The answer made by the Mastín Bank to the request of the Emporia Bank to 6 remit ’ $5,000, was simply: ‘we remit $5,000 to Donnell, Lawson & Co., New York, to your credit.’ What the Mastín Bank had done, which it called remitting, it did not disclose to the Banks of Emporia, or to the Salina Bank.
    “The latter could not then have approved of or adopted it, as they were ignorant of it. They were in no way affected by it, and nothing could change the state of the account between them and the Mastín Bank, except an increase by the act of the latter, of the amount of the credit of the Emporia Bank, or of the Salina Bank, with Donnell, Lawson & Co. A creditor, to create an equitable assignment to a third person, of a part of a sum owing to him by his debtor, must, at least, give to such third person an order directed to such debtor, directing him to pay a specified part of such debt to such third person, and the latter must notify the debtor thereof. The cases all hold, that to • constitute an equitable assignment, the order must specify the particular fund on which it is drawn (Att’y Gen’l v. Continental Life Insurance Co., 71 IV". Y. 325 ; Lunt y. Bank of North America, 49 Barb. 221; Hall y. City of Buffalo, 2 Abb. App. Gas. 301.) These cases, and the cases cited in them, illustrate the inflexibility of this rule. In the present case, the Mastín Bank did not deliver to the Bank of Emporia, any order on Donnell, Lawson & Co., or.any other paper affecting or purporting to relate to the accounts, or to any account between the Mastín Bank and Donnell, Lawson & Co. The communications between either of the defendants and the Mastín Bank, were simply a request by the defendant to ‘remit,’ and a reply from the Mastín Bank stating, ‘we remit.’
    “The charges and credits which either thereupon entered in its books, were only bookkeeping entries, identifying the transactions, but binding neither, and of no benefit or prejudice to either, if the requested increase of credit was not effected.
    “It seems to me quite clear, therefore, that neither of the defendants, by what took place between it and the Mastín Bank, became assignee of any part of the debt owing on August 1, 1878.
    “I understand this to be so, whether the effect of the transaction be determined by the laws of Missouri, or the laws of New York. I think its “effect is to be determined by the laws of New York. Though the request to ‘ remit ’ reached the Mastín Bank in Missouri, what it was requested to do was to be done in New York. The increase of credit was to be effected there.
    “ The action which the Mastín Bank initiated in Missouri, and described in its letter by the remark ‘we remit,’ was to be consummated in New York. It depended entirely upon what action Donnell, Lawson & Co. might take upon the request made of them by the Mastín Bank, whether the request of either defendant would be complied with or not.
    “The claims that the assignment is repugnant to the laws of the State of New York, and that the power to make it under the laws of the State of Missouri was suspended by the bankrupt act, cannot, as I think, be sustained in this action. So far as appears, no proceedings in bankruptcy were ever instituted by or against the Mastín Bank. An assignment of property can be attacked as being a fraud upon the bankrupt act, only in involuntary proceedings commenced within the period after the assignment designated in that act, or be set up in subsequent voluntary proceedings in bankruptcy, as a bar to the discharge of the debtor under that act (Mayor v. Heilman, 13 Nat. Bariltr. Reg. 440; Yon Hun v. Elkers, 15 Id. 194; Haas v. O’Brien, 16 Id. 508). Some of these cases go further than the rule above stated. There are no resident creditors, citizens of this or any other State, contesting the validity of the assignment.
    “ There do not appear to be any citizens of thin State, or other creditors of the Mas tin Bank, who have been conducting themselves with reference to the laws of this State, in regard to the property of such bank, found, or being within jurisdiction of this State, to whom those laws have impliedly promised anything as fruits of such conduct (Holmes v. Remsen, 20 Johns. 264, 266).
    “ There would seem to be no considerations of public policy which should induce our courts to refuse to aid the plaintiff to recover these funds, and distribute them according to the rights of the parties, as they may be determined by the laws of the State in which their business with each other was transacted. The defendants invoke the laws of Missouri, as they understand them, to support the claim that a transfer of the funds in suit was made to them. They deny the plaintiff’s right to this property, and claim that the validity of the transfer to him, though made and consummated in Missouri, should not be determined by the laws of Missouri.
    “It is difficult to perceive why the decision of the court of appeals in Boese v. Locke (21 Alb. L. J. 54), is not equally applicable to this case. There are isolated decisions (viz.: that of Judge McCrary in Herman Savings Institution, and that of Judge Elmer in Merchants’ National Bank v. Coates, cited by defendant’s counsel as favoring the views on which he insists, and that of Judge Blatchford in Rosenthal v. Mastín Bank, cited by plaintiff’s counsel as sustaining his views), which fail to satisfy me that the conclusion, reached is not correct. I think the fund in court should be awarded to the plaintiff, with costs.”
    Arthur, Phelps, Knevals & Ransom, attorneys, and Rastus S. Ransom, of counsel, for appellants, among other things, urged
    I. The rule settled is, that no particular form of words is necessary to constitute an equitable assignment; but there must be evidence of intention to appropriate the funds (1 Barb. 454; 16 John. 50 ; 19 Id. 342-95 ; cases cited in Voorhees Code, 8 ed. p. 112, note q ; 68 N. Y. 30). The rule established in Kimball v. Donald (supra) and Bank of Commerce v. Bogy (44 Mo. 1), is taken from Haddock v. Gandell (15 Eng. L. & E. 30), and the application to the case at bar is easy. As to the intent, the course of business between the Mastín Bank and defendants and D., L. & Co., and the latter’s agreement to pay such •orders (made when the Mastín .Bank opened its account with D., L. & Co.), and the payment of similar orders previously, must be considered, and really is conclusive (Mandeville v. Walsh, 5 Wheat. 277; Christmas v. Russell, 14 Wall. 69 ; McLoon v. Linguist, 4 Ben. 9). The particular fund need not be named in the order. Antecedent and surrounding circumstances should be . regarded (1 H. Bl. 602; 2 Cow. & H. Notes, 1399 & 1400 ; Bellinger v. Kitts, 6 Barb. 273, 278). A new contract by D., H. & Co. was not necessary to bind the fund (2 Story Eq. 1044; Exp. South, 3 Swans. 393). The orders amounted to more than the debt due from D., L. & Co., exclusive of interest, and an order drawn on the whole of a debt is an equitable assignment of that debt. It is clear that the papers in question were orders, not bills of exchange (Walker v. Mauro, 18 Mo. 564; McCain v. Weidemeyner, 25 Mo. 366). Suppose, after the mailing of these orders and their receipt by D., L. & Co., the Mastín Bank had notified them not to pay them, would they have been bound to regard that notice ? I submit that they would not. The transfer was complete. D., L. & Co. had previously been instructed by the Mastín Bank to pay such orders and had paid them, and had agreed to pay them. This agreement was for the benefit of the defendants, and their assent thereto is presumed (Rogers v. Gasnell, 58 Mo. 589 ; 2 Greenl. on Ev. § 109). The following cases are decisive upon the question under consideration: Lett v. Morris (4 Sim. 607); Bispham Eq. 221, 2 ed. ; Yeates v. Graves (1 Ves. Jr. 279, 280); Biron v. Carvalho (4 Mylne & C. 702): Hall v. City of Buffalo (1 Keyes, 193). The orders in question were accepted by D., L. & Co., because they had agreed to pay them. They had notice of them, as shown by the telegram from Salina Bank; also by the receipt of them through the mails. Hot being bills of exchange, an oral acceptance was good (McMenomy & Townsend v. Ferrers, 3 Johns. 82, 83, and the cases there cited ; Hosack v. Rogers, 6 Paige, 415 ; Hall v. City of Buffalo, 1 Keyes, 193 ; Vreeland v. Blunt, 6 Barb. 182 ; Weston v. Barker, 12 Johns. 276 ; Canfield v. Monger, 12 Id. 346 ; 2 Story Eq. Jur. §§ 972, 1039, 1040, 1041, 1042, 1044 to 1048, and to 1057). As to equitable assignment by order unaccepted, see Parker v. City Syracuse (31 N. Y. 376); Reilly v. Demestro (7 W. D. 434); Woodfalk v. Bank of America (11 Alb. L.J. 103). These orders were but banker’s checks, and in equity, as between drawer and defendants, are assignments or appropriations of so much of the fund, and the bank on which they are drawn is liable to the holder (McGrade v. German Savings Bank, 4 Mo. App. 330, 401). The mailing by the Mastín Bank to D., L. & Co. of the orders in question, completed the transfer of the fund to defendants, and their title thereto became vested, and on this we must bear in mind the mailing of the postal card by the Mastín Bank to defendants, advising them that they had remitted (1 Pars, on Cont. [6 ed.], 484, &c. ; 2 Id. 582 ; Vassar v. Camp, 11 N. Y. 441; Minnesota Oil Co. v. Collier Lead Co., 4 Dill. 431; Johnson v. Sharp, 31 Ohio, 611; Longstrass v. German Ins. Co., 48 Mo. 201; 6 Wend. 103 ; 1 Barn. & Ald. 681; 1 Mo. App. 585; 36 N. Y. 307).
    II. The plaintiff took, by the assignment to him, the assets of the Mastín Bank, subject to all liens thereon, and equities existing in favor of the creditors of the bank. This proposition will not be denied, and is amply sustained by authority.
    III. The assignment to plaintiff is void under the laws of this State. The defendants are not residents of this State nor of Missouri. They are and were residents of Kansas. They are, therefore, entitled to the same rights in regard to the effect of the assignment to plaintiff, as they would be if citizens of this State. That the assignment is void, see Wharton on Conflict of Laws, §§ 353, 348, a; Mosschman v. Cain (34 Barb. 66). The rule is universal, in all the States, that an assignment made in another State will not be held valid when-it conflicts with laws of the State where it is sought to be enforced (Story's Conflict of Laws, § 344; Bryan v. Brisbin, 26 Mo. 423 ; Kelly v. Crapo, 45 N. Y. 94; Holmes v. Remsen, 20 Johns. 264; Guillandet v. Howell, 35 N. Y. 657). The Missouri statute in regard to assignments is, to all intents and purposes, an insolvent law, and as such was suspended by the bankrupt act, and contrary to the laws of this State (Boese v. Locke, 17 Hun, 270 ; Bayley v. Greenleaf, 7 Wheat. 54, 55 ; Green v. Demoss, 10 Hump. 371; Globe Ins. Co. v. Cleveland Ins. Co., 13 Alb. L. J. 305; Claflin v. Horseman, 14 Id. 373). The case of Boese v. Locke (supra), was reversed in the court of appeals (78 N. Y. 471), but we submit that the New Jersey statute there considered is essentially different from that of Missouri. What we claim in regard to the Missouri statute is, that it created the right to make the assignment, and is, in fact, a State insolvent law, under which an insolvent debtor may distribute his property under restrictions and upon conditions not allowable under the common law, and hence was suspended by the bankrupt act. The principles laid down by the court at general term in Boese v. Locke (supra), are not questioned by the court of appeals, only that they were not applicable to that particular case.
    IY. The law of the place where the contract is made must govern, except it be an executory contract, in which case the the law of the place where the contract is to be performed, will control. The contract we are inspecting was that made between the Mastín Bank and the defendants, August 1, 1878, at Kansas City, not results that were to follow from such contract. It was a contract then and there fully executed and complete, by which the Mastín Bank intended to then and there assign to the defendants a debt due it by Dy L. & Co., and the defendants intended to accept such assignment as actual payment to them of their debt due by the Mastín Bank. When these orders were delivered by the Mastín Bank to the public mails, that constituted delivery to the defendants. Such mailing was the final act on the part of the Mastin' Bank in transferring its debt due by D., L. & Co., to defendants; and from that moment it lost all right, title and interest in the said debt. At to the effect of the mailing: see Barry v. Equitable Life Insurance Co. (59 N. Y. 594).

      Holmes & Adams, attorneys and George H Adams„ of counsel, for respondent.
   Per Curiam.

The judgment should be affirmed, with costs, upon the opinion of the referee.


source: Caselaw Access Project

author: By the Court.—Sedgwick, Ch. J.

license: Public Domain

text:
    JAMES D. TRIMBLE, Survivor, &c., Respondent, v. JOHN MORE, Impleaded, &c., Appellant.
    I. Partnership debts.

    1. Bankruptcy, discharge of one partner.
    (as) Effect as to discharging him from partnership debts.

    1. Where an individual partner procures Ms discharge in a proceeding begun, carried on, and ended by him solely, it will not relieve him from the partnersMp debts.
    II. Bankrupt.

    1. Cancellation of judgment against.
    (a) Application for, under § 1268, Code Bin. Pro.

    1. A judgment against partners on a firm debt will not be canceled as to an individual partner upon Ms motion, founded on his individual discharge in a proceeding begun, carried on, and ended by him solely.
    Before Sedgwick, Ch. J., and Truax, J.

      Decided May 2, 1881.
    Appeal from order denying defendant’s motion, under section 1268 of the Code of Civil Procedure, that, as to him, the judgment in this action against him and another jointly, be canceled, by reason of a discharge in bankruptcy, obtained by the defendant individually.
    By the affidavits, it was shown that defendant, More, -filed an individual petition in bankruptcy, and obtained his discharge.
    It also appeared that the judgment in the action was against the defendants jointly, on a note given by them as a firm, and that at the time of the petition in bankruptcy, that firm had a large amount of assets. The motion was denied.

      William S. Connell, for appellant.

      Samuel O. Adams, for respondent.
   By the Court.—Sedgwick, Ch. J.

The case of Crompton v. Conkling (15 Nat. Bankr. Reg. 417), requires us to hold that, in a case like the present, the individual discharged in a proceeding begun, carried on, and ended by him solely, is not relieved, by force of his discharge, from the partnership debts.

Order affirmed, with $10 costs, disbursements to be taxed by the clerk.

Truax, J., concurred.


author: By the Court.—Freedman, J.

text:
    VICTOIRE SEVESTRE, Respondent, v. THE MAYOR, &c., OF THE CITY OF NEW YORK, Appellants.
    I. Negligence.

    1. Municipal Corporations.
    (a) Notice to, when not necessary to charge it.

    1. Where the corporation is itself, by its agents, engaged in doing the work, in respect whereof negligence in leaving it not properly guarded is alleged, it is not necessary to show either express or implied notice of its unsafe condition.
    H. Highway, intei'ference with.

    1. Nuisance, when interference is not.

      (a) It is not, when done pursuant to lawful authority.
    III. Negligence.

    1. Excavations.

      (a) Non-providing lights or watchman at night.

    1. If the place was, at the time of the workmen quitting work at night and leaving it, well and sufficiently guarded by barricades, neither the fact that it was left without lights, nor that no watchman was left in charge, will constitute negligence.

    1. Barricades, removal of. Where the place is left well and sufficiently guarded by barricades, the party malcing the excavation is not responsible for their removal by the mischievous or wrongful acts of third persons, of which he had no notice, though no watchman was employed for the special duty of standing guard.

      Before Sedg-Wick, Ch. J., Freedman and Tbuax, JJ.

      Decided May 2, 1881.
    Appeal from judgment of $3,374.48, entered in favor of the plaintiff upon the verdict of a jury.
    The plaintiff, a lady residing in West Twentieth street, in this city, between Seventh and Eighth avenues, while walking, on the evening of January 31, 1878, in company with her daughter, toward the east side of the city, along the south side of Twentieth street, in attempting to cross Seventh avenue, fell into a cut or trench on Seventh avenue, which extended •along the east side of said avenue for a considerable distance.

      William Q. Whitney, counsel for the corporation, and David J. Dean, of counsel for appellants, in support of the propositions:
    That the defendants are not responsible for the removal of the barricade or its consequences ; that an “ omission to watch the barrier after it was put up, is not such negligence on the part of the corporation as will sustain a recovery by the plaintiff that “if the place was well and sufficiently guarded by barricades, lights were unnecessary, and to omit them would not be negligence,” cited Parker v. Cohoes (74 N. Y. 610; 10 Hun, 531); Dougherty v. Inhabitants of Waltham (4 Gray, 596); McGinity v. Mayor of New York (5 Duer, 674); Griffin v. Mayor of New York (9 N. Y. 456).

      Richard O'Gorman, attorney, and of counsel, for respondent, urged:
    I. As to the direct responsibility of defendants, the attention of the court is respectfully directed to a clear exposition of the law on the subject, to be found in McDermot v. Kingston (6 Abb. N. C. 246, 250, 253).
    II. The question whether either the foreman or the night-watchman were guilty of negligence which contributed to the accident, was clearly for the jury. On this subject defendants relied below on Parker v. Cohoes, &c., 74 N. Y. 610; affirming S. C., 10 Hun, 531. The case is not in point, and the distinction between it and the case at bar is well marked. In Parker v. Cohoes, the defendants were water commissioners, and in the performance of their duties, as such, they caused a certain street to be obstructed. At the close of the day they put up barriers extending across the street, and shown to be sufficient to give notice to citizens of the danger of attempting to pass. Soon after-wards one of the barriers was removed by some person without the plaintiff’s knowledge, and the plaintiff drove his carriage through the opening and was injured. It was proved in that case that the barricade, if left as constructed, would have excluded all passers from the street. Defendants there had no reason to anticipate wrongful acts on the part of others, and hence were not required to guard against them. The case at bar is wholly different in all its features. There is no evidence here that the barricade, if put up at all, was sufficient to give notice to citizens of the danger. There was every reason to anticipate that the barrier would be removed. The watchman was well aware that the danger of the removal of the barrier at this point was imminent and incessant up to .twelve, o’clock at night. Mischievous boys were in the habit of knocking the barrier down. The barricades were very often disturbed in this way. On the very night in question he had chased, such boys away from the barrier, but despite of this knowledge that the barrier was likely to be removed, and this place rendered surely dangerous, and likely to become at any moment the scene of grievous injury to citizens, he leaves it wholly unguarded, and betakes himself to the other side of the avenue for shelter, leaving the plaintiff to walk, without any notice or protection, into an open cutting nearly five feet deep. If this is not gross and reckless negligence, it is hard to say what is. There can be no hard and fast rule laid down in any decision as to kind and amount of care required in all cases. Bach case must depend on its own peculiar circumstance, and the kind and measure of preparation which prudence requires, will be different in each case. But, surely, it may be regarded as certain that if there is good reason to apprehend any special danger to the citizen, special care should be used to avert it. Here the night is dark, foggy, muddy—just the sort of night when such an accident might be expected to occur—and Wall, the “night-watchman,” instead of being more than usually vigilant to protect others, concentrates all his attention upon tender care of himself. The rule of law as to corporate responsibility in such cases is not, indeed, that corporations are guarantors for the absolute safety of all travelers, but that they are bound to do for the safety of travelers all that careful and prudent men should do, having regard to all the circumstances of the case, and the kind of danger to be apprehended. If a barricade is needed, a barricade should be put up ; if lights are needed at a dangerous place, they should be there. If there is reason to expect that the light would become extinguished, or the barricade be removed in the night, proper precautions should be taken against such extinguishment or removal. A lamp with no light in it, and a barricade not in the place where it is needed, are no protection. These views are supported by the following cases : Storrs v. Utica (17 N. Y. 104); Hutson v. Mayor (9 Id. 163); Davenport v. Ruckman. (37 Id. 568); McCarthy v. Syracuse (46 Id. 197). See also, specially, Weed v. Balston (76 Id. 332), stating the corporate liability on a state of facts very similar to that of the case at bar.
    III. The other cases cited by defendant are not in point. Gorham v. Trustees of Cooperstown, 59 N. Y. 660: a sleigh, struck a piece of wood hidden in the snow; how long it had been there did not appear ; there was no notice to the defendants. Griffith v. Mayor, &c., 9 N. Y. 456: the circumstances did not show notice to the city of the existence of the obstruction. McGinty v. Mayor, 4 Duer, 674: a person walking on sidewalk put his foot on a coal-cover, which turned over with him, and he was hurt. The chain, which had secured the cover, was found to be broken, but no evidence when or how long. No notice to the city.
    These cases have no likeness to the case at bar.
   By the Court.—Freedman, J.

At the trial, the-proof showed that the cut had existed for some time-before the accident, and that the purpose for which it had been dug was to put in Croton w&ter pipes. The work, under the statutes applicable, was presumably done by the defendants through the department of public works, and as no defense has been set up in the answer to the effect that in fact it was done by independent contractors, it must be held, for the purposes of this case, that it was done by the defendants themselves.

It was, therefore, not necessary for the plaintiff to prove express or implied notice to the defendants of the existence of the cut as a nuisance. On the other hand, the cut was not a nuisance per se, because it was. made pursuant to lawful authority. But as the defendants were directly engaged in the prosecution of the work, they must be held answerable for negligent performance causing injury. True, they were not insurers of the safety of all persons who, during the progress of the work, had occasion to pass upon, along, or across, the said avenue, but they were bound to exercise proper care and precaution, with the view off rendering the passage of all such persons safe. What constituted such care and precaution must necessarily be determined upon the peculiar facts of the case, for negligence is always relative as to time, place, person and surrounding circumstances. Protection to persons using .ordinary care and prudence on their part, is all that is required, and if that is sufficient under all the circumstances, it matters not what means are employed .to that end.

The defendants, at the trial, principally relied for their exoneration upon the fact that, at the close of ■each day’s work, inclusive of the evening of the accident, the requisite protection was provided by the erection of a substantial and sufficient barricade along the side of the out. The plaintiff, on the other hand, gave •proof showing that, at the time of the accident, there was no barricade at or near the spot where she fell into the cut. The question of the existence of the barricade at the precise time and place was, therefore, a question for the jury, and so was the question as to its character and sufficiency.

But if, under all the circumstances of the case, including the nature and extent of the excavation, the character of the locality, the state of travel upon the avenue and the intersecting streets, the character of the barricade and the manner of its construction, and the dangers to which it might be reasonably expected to be exposed if left unguarded by watchmen, the barricade as actually put up at the close of each day’s work, including the evening in question, was a sufficient protection to persons using ordinary care and prudence on their part, then the defendants cannot be held responsible for its removal by the mischievous ■or wrongful acts of third persons of which they had no notice, though no watchman was employed for the special duty of standing guard, and they were entitled to have the jury instructed to this effect. They were also entitled to have the jury instructed, as they requested, that if the place was well and sufficiently guarded by barricades, lights were unnecessary, and to omit them would not be negligence. There are cases in which it is said, in general terms, that dangerous points in the highway should be barricaded and lighted ; but such language was so employed to declare the rule that dangerous places in the public highway should be well and sufficiently guarded. If well and sufficiently guarded by barricades, lights are unnecessary, and then to omit them is not negligence.

The foregoing views were enforced in Parker v. City of Cohoes (10 Hun, 531; affirmed by the court of appeals, in 74 N. Y. 610); and under the decision of that case, the refusal of the learned judge below to instruct the jury upon the points referred to, as requested, constituted error.

The case of McDermett v. City of Kingston (6 Abb. N. C. 246), relied on by the respondent, was reversed by the general term, as appears from the report in 19 Hun, 198.

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

Sedgwick, Ch. J., and Truax, J., concurred.


text:
    URIAH HERRMAN, et al., Plaintiffs, v. JAMES R. MAXWELL, et al., Defendants.
    I. Pledge.
    1. Increase of pledged property is pledged with it.

      (a) Stock ; dividends on pledged stock.
    1. Title to them is in the pledgee.
    1. Non-transfer on the hooks.

    Does not prevent the passing of the legal and equitable title as between the parties.

      (6) Pledgor of stock not transferred on the books of thb
    COMPANY.
    1. Trustee of pledgee as to nominal title.
    1. Pledgor receiving dividends.

    Becomes trustee as to them for the pledgee.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided May 2, 1881.
    By their complaint the plaintiffs alleged :
    That in December, 1877, they received from the firm of Netter & Co., bankers and brokers, a certificate representing two hundred shares of the capital stock of theU. S. Express Co., issued to A. C. Vogdes, with the usual blank power of attorney indorsed thereon, and that in good faith and without notice of any adverse claim thereto, they loaned to said Netter & Co. a sum exceeding the value of said stock, upon the credit thereof; that the loan became due shortly thereafter, but was not paid; that thereupon plain tiffs were about to sell or transfer to themselves said stock, but before so selling or transferring they received an order from Netter & Co. to deliver the stock to defendants, and a notice from defendants that they were the owners thereof; that defendants requested them not to sell the stock, representing that they would redeem it at full value; that relying thereon, plaintiffs retained the same ; that defendants thereafter collected and received the dividends, amounting to $400, and refused to pay them over to the plaintiffs on demand.
    At the trial the facts were proved as alleged, except that plaintiffs failed to establish any agreement or representation on the part of defendants to redeem the stock.
    Instead, the plaintiffs simply told defendants that they would not dispose of the stock for the present, until defendants should decide what to do.
    This was in deference to defendants’ notice, and to the order of Netter & Co. to deliver the stock to defendants.
    When the plaintiff rested, the defendants’ counsel moved to dismiss the complaint on the following grounds, viz. :
    1. That there was no specific and agreed pledge of the dividends, either by defendants to Netter & Co., or by Netter & Co. to plaintiffs, proved to have been made.
    2. That plaintiffs are not entitled to recover under the allegation set forth in the 4th section of the complaint.
    3. That as to the dividends, plaintiffs did not stand in the position of bona fide holders, or owners for value without notice, within the equity rule laid down as to shares of stock, that the more negligent of two innocent parties must suffer : for plaintiffs, before the declaration or payment of the dividends, had received notice as to the stock itself, and all of it, that defendants were the owners ; all subsequent occurrences took place with their full knowledge of these facts.
    4. That no contract is set forth in the complaint such as could be enforced, it lacking consideration, and being therefore void under the statute of frauds.
    5. That the corn plaint does not state facts sufficient to constitute a cause of action.
    6. That upon all the facts proven the plaintiffs are not entitled to recover.
    The motion was denied and defendants’ counsel duly excepted.
    The defendants offered no evidence, and the court thereupon, on motion of plaintiffs’ counsel, directed a verdict for the plaintiffs for $460, to which direction defendants’ counsel duly excepted.
    Finally, defendants’ exceptions were ordered to be heard at general term in the first instance, and the entry of judgment was suspended.

      Man & Parsons, attorneys, and Will. Man, of counsel, for the plaintiffs.

      George H. Fletcher, attorney, and of counsel, for the defendants.
   By the Court.—Freedman, J.

The position of the defendants towards the plaintiffs, at the time of the collection by them of the dividends, was the same as if the stock of the defendants had been voluntarily pledged by them to the plaintiffs for the debt of Setter & Co. for a larger amount, and the precise question presented for determination therefore is, whether, as between pledgor .and pledgee, a pledge of stock per se includes a pledge of the dividends which may be declared during the life of the pledge. It has been settled, by repeated adjudications, that, as between the parties, the delivery of the certificate, with blank-assignment and power indorsed, passes the entire title, legal and equitable, in the shares, notwithstanding that, by the terms of the charter or by-laws of the corporation, the stock is declared to be transferable only on its books ; that such provisions are intended solely for the protection of the corporation, and can be waived or asserted at its pleasure ; and that no effect is given to them except for the protection of the corporation (McNeil v. Tenth National Bank, 46 N. Y. 325 ; Leitch v. Wells, 48 Id. 585). This being so, and it being elementary law that the increase of property pledged is pledged with the property, the result is that while the plaintiffs, by omitting to register the transfer of the stock to them upon the books of the corporation, occupied in that respect a condition analogous to that of the holder of an unrecorded deed of land, they nevertheless possessed against the defendants a perfect title to the shares represented by the certificate in their possession and indorsed to them in blank (McNeil v. Tenth National Bank), and Netter & Co., and subsequently the defendants, who claim under Netter & Co., became trustees of the plaintiffs as to the nominal title (Johnson v. Underhill, 52 N. Y. 203). If, while this relation existed, the defendants collected dividends on the shares so pledged under a claim of beneficial interest in said shares, they became trustees as to such dividends, for the plaintiffs. They cannot deny plaintiffs’ title, nor can they be treated as adverse claimants, as in Peckham v. Van Wagenen (45 Super. Ct. 328), since affirmed by the court of appeals. The dividends follow the legal title in such a case as between the parties, for, until the corporation is wound up, all there is of a share is a right to future profits or dividends. So it has even been held that under a contract for the sale of stock which amounts to a sale in presentí, and charges the purchaser with interest on the purchase-money from the time of the sale to the time of the delivery, the vendor becomes a quasi trustee for the purchaser from the time of the sale, and the purchaser is entitled to all dividends accruing between the sale and the delivery (Currie v. White, 45 N. Y. 822).

I am therefore of the opinion that the rule as to past dividends applicable to executory contracts for the sale of stock, as laid down in Spear v. Hart (3 Robt. 420), does not apply to the present case; that the case at bar is to be governed by the principles of Bradley v. Root (5 Paige, 632), which is noticed and distinguished in Patrick v. Metcalf (37 N. Y. 332); and that consequently, and especially as the debt of Netter & Co. exceeded the value of the stock pledged, the plaintiffs are entitled to recover from the defendants the dividends collected by the latter.

True, there is an embarrassing feature, inasmuch as it does not clearly appear how the defendants were enabled to collect the said dividends, and from whom they were collected. Prom- the condition of the certifi•cate delivered to the plaintiffs, it would seem that the shares stood in the name of A. C. Yogdes on the books of the company. But whatever the fact may have been in these respects, it is sufficient to know that the defendants in some way collected moneys which they knew did not belong to them, but belonged to the shares of which the plaintiffs held both the possession and the legal title, and that the defendants never were in a position to disturb such possession or to deny such title.

The conclusion arrived at, was reached without xelying on the case of Hill v. Newichawanick Co. (48 How. Pr. 427), on which the plaintiffs laid great stress. In my judgment, the point here involved was not decided by that case. Under the facts of that case the dividends did pass to the pledgee, not by operation of law, but by the consent of the pledgor. This fails to clearly appear in the opinion rendered at special term, but it does appear from the opinion of the general term, reported in 8 Hun, 459.

The defendants’ exceptions should be overruled and judgment ordered for plaintiffs on the verdict, with costs.

Sedgwick, Ch. J., and Truax, J., concurred.


text:
    PHILIP D. ARMOUR and others, Appellants, v. THE TRANSATLANTIC FIRE INSURANCE COMPANY, Respondent.
    I. Insubance.
    1. MATERIAL REPRESENTATIONS.

      (a) What constitute.
    1. Existing insurance. A representation that the existing insurance is less than it really is, is a material one.
    2. Board, rate of premium. A representation that the rate charged by the board of underwriters of the city where the property to be insured is situate—such city being at a distance from the place where the insurance is effected.—is less than it really is, the insuring company treating the regular board rate as important, and delivering its policy on the express agreement that it should be null and void in case the rate was higher than represented, is material.
    2. Effect of, on policy. .
    Such representations render the policy of no effect, under the operation of one of its clauses, which provides that any omission to make known any facts material to the risk . . . or any misrepresentation whatever, either in a written application or otherwise, should render the policy void.
    3. Agent for assured for purposes of notification.
    1. One who is employed by a party to place a large line of insurance on his property at a rate much less than that charged by the board of underwriters at the place where the property is situated, and who has placed a portion with a company, is, while he continues to be engaged in the endeavor to place the whole line, the agent of the party employing him for the purposes of notification by the insuring company, although he may have delivered over the policy to the principal.
    1. Notice to such agent; effect of.

    A notice to him by the company, upon discovering the falsity of representations made, to return the policy, and his promise to do so (no premium having been paid), is effective to cancel the policy, under a clause in it to the effect that it might be terminated at any time, at the option of the company, on giving notice to that effect.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided May 2, 1881.
    In November, 1878, Armour & Co. employed John Cameron, of Chicago, an insurance agent, to place a large line of insurance on their warehouses and stock in Chicago. Cameron informed Armour & Co. that he would employ John P. Dickinson, an insurance broker of New York, to place $80,000 of insurance on their buildings. Cameron had in December, 1878, placed insurance in non-board companies of Chicago to the amount of $200,000, at 75 cents on the $100, on the stock, but none on the buildings. Cameron employed Dickinson on the usual terms, twelve and a half per cent., promising Dickinson a good business from Armour & Co. if he attended to their interests. Cameron then informed Armour & Co. that he had employed Dickinson. Cameron also inclosed to Dickinson a list of the names of the companies and amount insured by each company, and plans of the risk, adding “$200,-000 have already been placed here in the three sections at three-quarter per cent.” hi either the list nor the letter explained to Dickinson that the $200,000 was not on the “risk,” i. e., the buildings, but on the stock. There was no insurance on the buildings. Dickinson called upon defendant about January 3, 1879, and asked for $8,000 insurance : $2,000 on section A., $3,000 on section B. and $3,000 on section C.
    He represented that there was already $200,000 insurance on the buildings, and that the “board rate” was % per cent.
    The defendant said it had Chicago agents and would telegraph them as to the rate; which it did, and the reply was that the “board rate” was 1M per cent. Dickinson said that that was impossible, that the rate on the stock was 1M per cent., but only % per cent, on the building. The defendant then, on the 6th of January, delivered the policy upon the express condition that if the" “board rate” was notM per cent, as stated, the policy should be void. On January 9 the defendant, having learned by letter from its Chicago agents that the “ board rate” on the building, as fixed by the Chicago Board of Underwriters, was 1M per cent., notified Dickinson to return the policy, which he agreed to do, but did not do. Dickinson was still engaged in placing the $80,000 on the risk for plaintiff. On January 25 the building was injured by fire. Dickinson then notified Cameron to return the policy in suit, which was not done. Plaintiffs then made and presented proofs of loss, which defendant declined to receive, or the premium, on the ground that it was not on the risk.
    Plaintiffs then brought suit.
    The company defended upon the grounds :
    1. That misrepresentation by the plaintiffs as to the1' board rate of insurance being 75 cents on $100 when it was $1.25, vitiated the policy.
    2. That the misrepresentation, that there was $200,-• 000 already on the building, when, in fact, there was none, vitiated the policy.
    3. Also, that the notice to plaintiffs’ agents that defendants desired the policy recalled, or that they recalled the policy, vitiated the policy.
    At the trial the defendant, at the close of the whole case, moved for the direction of a verdict upon each of these grounds, and the court dismissed the plaintiffs’' complaint.
    Judgment having been entered, the plaintiffs appealed.

      D. M. Porter, attorney, and of counsel for appellants., urged :
    Plaintiffs had no notice of the request to return the policy until after the fire. By the terms off the policy the insurance could x ‘ only be terminated at any time at the option of the company on giving notice' to that effect.” The language here is not as strong as in the case of Osgood v. Glover, 7 Daly, 367, which can be found at page 375, and in that case it was held insufficient, the court saying: “The policy was never ' canceled, which can be done only by the mutual consent of the insurer and the assured.”
    II. The case of Grace v. American Central Ins. Co (Insur. Jour, for October, 1875, p. 71; S. C., 16 Blatchf,. 433),is distinguishable from the case at bar. 1st. Because a notice was given to the agent, and he had agreed to return the policy. 2d. There was. no proof that the agent was the insurance company’s agent. In the case at bar there was no notice given that the policy would be revoked, but simply a request to the broker to get it back ; in other words, to act as the agent of the defendant. And there is proof that he was the agent of the defendant because the defendant paid him by allowing him to deduct his commission, and on the question of usage the supreme court of the United States has over and over again held the other way. See authorities hereinafter cited.
    III. There was a mutual account between the broker, Dickenson, and the defendant; it delivered the policy to him, with a receipt for the premium paid, and the defendant trusted him for the premium. That constituted him the defendant’s agent. 3d. The defendant’s request to Dickenson to get the policy back, which request was not made, as we have shown, until after the policy had been received by the plaintiffs, was simply asking Dickenson to act as the defendant’s agent in procuring its return (Partridge v. Commercial Fire Ins. Co., 17 Hun, 95 ; Sprague v. Holland Purchase Ins. Co., 69 N. Y. 128 ; Van Schaick v. Niagara Fire Ins. Co., 68 Id. 434; Train v. Holland Purchase Co., 62 Id. 598 ; Richmond v. Niagara Fire Ins. Co., 79 N. Y. 230). The latter part of the eighth clause of the policy did not extend the agency of the broker beyond the delivery of the policy to the plaintiffs. Such clause must “be construed most strongly against those using the language and issuing the policy” (Reynolds v. Commerce Fire Ins. Co., 47 N. Y. 597, 604; McMasters v. Insurance Co. of North America, 55 Id. 222). The defendant could only terminate the policy by giving an unequivocal notice that the policy was revoked (Quick v. Wheeler, 78 N. Y. 300; Osgood v. Glover, supra). The request was not communicated to the plaintiffs until after the loss and after the defendant’s liability had become fixed. By delivering the policy to the insured a credit was given for the premium (Washoe Tool Man’f’g Co. v. Hibernia Fire Ins. Co., 66 N. Y. 613; Boehen v. Williamsburgh City Ins. Co., 35 Id. 131).
    IV. The allegation of the defendant that requesting Dickinson to get the policy back because defendant could write it, at the time defendant so made the request, at a better rate, to wit: $1.25 in place of 75c., canceled the policy, is erroneous for the following reasons: Because Dickinson was the agent of the defendant, as he was paid by the defendant, by a course of usage allowing him to receive the entire premiums and deduct his commissions therefrom, paying the residue over to the insurance company. The insurance company fixed a certain price or premium at which insurance would be effected ; the plaintiff paid that price on the amount to which they wished to insure their property, to wit: $8,000, and out of the price of premium for such insurance the defendant allowed the broker to deduct the amount of his commissions ; or in other words, the plaintiffs having paid, or agreed to pay, the full amount demanded by the defendant for such insurance, the defendant paid to, or allowed the broker to deduct from the face of such premiums, whatever sum was agreed upon between such broker and the insurance company, as his commissions.
    V. The testimony as to the conversation at the time the policy was delivered by the defendant to the broker, that if the board rate was more than' 75c. the policy should be returned, is inoperative, because “delivery of a deed or agreement as an escrow, can only be made to a stranger. If made to the party, or his agent, the delivery is absolute, and the instrument takes effect presently, as the deed or agreement of the party making the delivery” (Worrell v. Munn, 11 N. Y. 229). If intended as parol evidence of conditions qualifying the delivery, being contrary to the terms of the instrument, it does not constitute a defense (Ashton v. Mechanics’ Mutual Ins. Co. of Troy, 4. Hill, 329, 330 ; Worrell v. Munn, supra; White v. Ashton, 51 N. Y. 280 ; Riley v. City of Brooklyn, 46 Id. 444; Wilson v. Dean, 74 Id. 531). Again, the fact was true that the rate was 75 cents, and the broker testified that the rate on the stock in the building, and on the building, is the same. If the defendant claims there is any evidence to the contrary it created a disputed question of fact, which ought to have been submitted to the jury (Train v. Holland Purchase Ins. Co., supra ; Stone v. Flower, 47 N. Y. 566). It was an immaterial statement, being a mere expression of opinion of price (Chandler v. Lopus, 1 Smith L. Cas. 299, 238 ; Ellis v. Andrews, 56 N. Y. 83; Chester v. Comstock, 6 Robt. 1 ; affirmed, 40 N. Y 575, note ; Furman v. Titus, 40 Super. Ct. 284). Again, the defendant did not rely upon the broker Dickinson’s alleged statement, but inquired of its own .agent in Chicago, prior to delivering the policy to plaintiffs.
    VI. There is no proof of any fraud applicable to either of the alleged defenses. Fraud, by the terms of the policy, could only vitiate it; but even if the statement of Dickenson had been false in such case it would have been a mistake on his part and not fraud. “ Fraud eannot be predicated without intent to deceive” (Chester v. Comstock, 6 Robt. 1; Ormrod v. Huth, 14 Mees. & W. 651; Marsh v. Falker, 40 N. Y. 562, 565, and cases there cited ; Sprague v. Holland Purchase Ins. Co., supra). Again, if the defendant desired to rescind upon the ground of fraud it should have acted promptly and not wait until the contract was completed and its liability fixed after the loss on its policy. In any event, the plaintiffs were entitled to a direction of a verdict in their favor; otherwise the question was a question of fact for the jury. It was error to take it away from the j ury.
    VII. Proving that it was a general custom to notify the agent that the company elected to terminate the policy was erroneous. Usage cannot be shown to unmake a contract nor to prevent the effect of the well settled rules of law, and especially as the plaintiffs were citizens of Chicago, Illinois, and were not shown to have been informed of any usage. A local usage cannot affect the plaintiffs, "without proof that they had knowledge of it (Higgins v. Moore, 34 N. Y. 425 ; Bradley v. Wheeler, 44 Id. 500 ; Barnard v. Kellogg, supra). Not only the existence of such usage, but whether knowledge of it exists in any particular case, is a question of fact for the jury (Hill v. Hibernia Ins. Co., 10 Hun, 26 ; Fisher v. Sargent, 10 Cush. 250; Winsor v. Deloway, 4 Metc. 221). “Usage cannot make a contract where there is none, nor prevent the effect of the settled rules of law ” (National Bank v. Burkhardt, 10 Otto, 686, 692 ; Partridge v. Insurance Company, 15 Wall. 573; Barnard v. Kellogg, 10 Id. 390 ; Blivin v. New England Screw Co., 23 How. U. S. 433 ; Collender v. Dinsmore, 55 N. Y. 200 ; Adams v. Goddard, 48 Me. 212; Thompson v. Riggs, 5 Wall. 674; Dykers v. Allen, 7 Hill, 497).

      Kaufman & Sanders, attorneys, and Lewis Sanders, of counsel, for respondent, argued :
    I. Misrepresentation as to amount of insurance on the risk, represented at $200,000, while it was only $28,000. By the terms of the policy, “any omission to make known every fact mateijal to the risk, or any misrepresentation whatever, avoids the policy.” Untrue representations which affect the mind of the insurer in issuing the policy, avoid the policy (Valton v. National Loan Fund Life Assur. Soc., 4 Abb. App. Dec. 437; Gates v. Mad. Co. Mut. Ins. Co., 2 N. Y. 49 ; Bunett v. Sarat. Co. Mut. Fire Ins. Co., 5 Hill, 188).
    II. The misrepresentation as to the Chicago rate—• that it was 75 cents on the $100 instead of $1.25. This' misrepresentation avoided the policy (authorities cited, supra).

    III. By the terms of the policy: “ The insurance may also be terminated at any time, at the option of the company, on giving notice to that effect.” [As no premium had been paid, none could be refunded.] “It is a part of this contract, that any person other than the assured, who may have procured this insurance to be taken by this company, shall be deemed to be the agent of the assured named in this policy, and not of this company, under any circumstances whatever, or in any transaction relating to this insurance.” In the case at bar, Mr. Dickinson was not only the agent of plaintiffs in procuring this policy, but he continued to act as such agent until the fire, in the vain attempt to place $80,000 of insurance on- the buildings of plaintiffs at a rate two-fifths less than that established by the board of underwriters of Chicago, and was, subsequent to the fire, engaged in furnishing the plaintiffs’ proofs of loss. Independent of the terms of the policy, this notice to Dickinson of the election of the defendant to terminate the policy was valid, in accordance with a uniform usage and custom existing in New York for the last twenty-five years. “That custom is to notify a broker if you recall a policy. The broker who places the risk. You give notice to the broker that you want the policy returned.” In Standard Oil Co. v. Triumph Ins. Co. (64 N. Y. 85), a case on all fours with the case at bar, notice was given by the defendant’s agents in New York to the brokers, who had procured the policy for the assured, and who were, like Dickinson here, engaged in keeping upon the plaintiff’s property a large line of insurance, that they had received instructions from the defendant to» raise the rate of insurance from five to six per cent. Evidence of a usage among insurance brokers in New York and Brooklyn was then offered by the defendant, showing that where the broker procuring the risk was notified that the rate would be raised, and the broker failed to produce the policy for indorsement of the increased rate, that the risk was off and the policy canceled. The plaintiffs’ objection to this evidence was overruled, and the ruling of the court below sustained by the court of appeals. It is the notification by the defendant to the plaintiffs’ agent, Dickinson, of its election to cancel the policy, that terminates the risks, and not the return of the policy (Grace v. Insurance Co., Insur. Jour.).

   By the Court.—Freedman, J.

The plaintiffs, on three blocks covering twelve acres of ground in Chicago, 111., owned quite an extensive establishment, which was known as Armour & Co.’s property. Ora-the first block stood the ice-house, on the second the packing-house, and on the third the waréhouseThere were fire-walls between the several buildings, but they were all connected by tramways, and on the procurement of the policy in suit they were spoken of as one risk. The warehouse was divided into sections called A, B, and C.

The policy in suit, dated January 6; 1879, purported to insure Armour & Co. against loss or damage by fire for one year to the amount of $8,000 on the three sections into which the warehouse was divided, including certain fixtures and utensils, but covering no-stock or merchandise.

At the trial there was no conflict as to the circumstances under which the policy was obtained, and the evidence clearly established the following facts : ■

The policjr was procured for the plaintiffs by a -broker, John P. Dickinson, who had been employed by the plaintiffs to effect a large line of insurance upon their property, and who throughout acted in the matter as the agent of the plaintiffs. Moreover, the policy in question expressly provided, as part of the contract, that any person other than the assured, who might procure the insurance to be taken by the company, should be deemed the agent of the assured, and not of the company, under any circumstances whatever, or in any transaction relating to the insurance. The policy was issued by the defendant in reliance upon Dickinson’ s representations that the rate of insurance charged by the board of underwriters of Chicago was 75 cents on $100 on the buildings, and $1.25 on the stock contained therein, and that there was already an insurance of $200,000 on the risk, viz. : the buildings known as Armour & Co.’s property. Both representations were material, to the risk to be assumed by the defendant. The representation as tó the amount of insurance already on the buildings was material, because, if true, the defendant, in case of loss, could be held for only its proportionate share ; and the representation as to the regular board-rate was in fact treated by the defendant as so important that the policy was delivered to Dickinson upon the express agreement that it should be null and void in case the said rate was higher. Both representations turned out to be false. Instead of $200,000 prior insurance, there was but $28,000 existing on all the buildings at the time of the issuing of the policy, and the board-rate was $1.25 on the buildings. By its terms, therefore, which, among other things, provided, that any omission to make known every fact material to the risk, or any misrepresentation whatever, either in a written application or otherwise, should render the policy void, the policy ceased to exist. But the defendant did not stop here. As soon as it was ascertained that the board-rate was in fact $1.25, Dickinson was notified to return the policy. ■ The testimony bearing upon this point, as a whole, leaves no doubt that it was a distinct notice to return, and that Dickinson promised to comply with it, though he did not do so. No premium had been paid, and consequently none was to be refunded. Under these circumstances, I am inclined to think that the notice was effective to cancel the policy, even independent of the custom which was shown to exist in New York, that where the broker who procured the risk is notified that the rate will be raised, and he fails to produce the policy for indorsement of the increased rate, the risk is off and the policy canceled. The policy in question expressly provided that the insurance might be terminated at any time, at the option of the company, on giving notice to that effect. Dickinson had not only been the agent of the plaintiffs in procuring the policy, but, at the time the notice was given to him and for some time thereafter, he continued to act as agent for the plaintiffs in the attempt to place $80,000 of insurance on the buildings of the plaintiffs, at a rate two-fifths less than that established by the board of underwriters of Chicago. To show the fact of the continuation of this agency, the letter of Dickinson, of January 28, 1879, was properly received in evidence.'

I can see no merit in any of the exceptions taken, and am of the opinion that the judgment should be affirmed, with costs.

Sedgwick, Ch. J., concurred.


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    JOHN R. VOORHIS, Appellant, v. STEPHEN B. FRENCH, et al., Impleaded, &c., Respondents.

      Additional allowance—upon what subject matter may be estimated.—• Order taken by default—when appeal from will lie.

    In an action to restrain defendants, as police commissioners, from entertaining, determining, or adjudicating a certain claim to the office of police commissioner until competent adjudication be had, to which office plaintiff claims to be entitled, the value of the subject matter cannot be so estimated as to permit the calculation of a percentage for an allowance, under section 3,253, Code of Civil-Procedure.
    Notice that an allowance will be applied for, will not be implied in the notice of trial, in a case where the court has not power to grant an allowance, consequently an order granting an allowance in such a case may be appealed from, though taken by default.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided June 6, 1881.
    Appeal from such part of an order dismissing complaint as granted to defendants an extra allowance.
    The facts appear in the opinion.

      Chauncey 8. Truax, for appellant.

      Willard Bartlett and Elihu Boot, for respondents.
   By the Court.—Sedgwick, Ch. J.

The action was brought to restrain the defendants, as police commissioners, from entertaining, receiving evidence upon, determining or adjudicating any claim or title to the office of commissioner of police, which might be made by defendant Smith, to the possession of or enjoyment of said office in the place or stead of the plaintiff, who claimed to be rightfully entitled to the office, until there had been a competent adjudication as to the title of the office.

The defendants gave notice of trial. The notice did not refer to any intended application for an allowance. After this notice plaintiff made default on the cause being regularly called, and his default was entered. In the order of default, an . extra allowance was granted.

The provision as to allowance under the Civil Code of Procedure is the same as under the former Code.

By section 3,253, in a difficult and extraordinary case, the court may award not exceeding five per centum upon the sum recovered or claimed, or the value of the-subject matter involved.” This does not comprise the present case. The subject matter of the action could not have such a value of it estimated as to permit a calculation of a percentage. The court had not power, in such a case, to grant an allowance.

It is claimed that as the order was granted by default, it is not appealable ; and it has been' uniformly held, that where a judgment has been given or an order made on default, after notice, there can be no appeal. The cases in which this has been held, put it always upon the ground that the party has had notice of the thing to be claimed against him, and that it is right to uphold what he has not appeared to oppose. This principle will not apply to a case where no notice has been given. It is the practice to apply for an allowance upon 'a trial of a cause without special notice. The general notice of trial is sufficient, in cases where the law and practice provide for an allowance. It cannot be deemed, however, that such a notice can be implied in the notice of trial, when it is not a case for an allowance, in the sense that the court has no power to grant one.

This conclusion is supported by the decision of the general term of the supreme court in Wilkinson v. Tiffany (4 Abb. Pr. 99), that when the special term makes, upon default, an order which it had no authority to make, the party prejudiced may move at special term to set aside the order for irregularity, or may appeal from the order to the general term. The excess of authority in that case was, that the special term had given a percentage of an amount claimed by the plaintiff, when in fact he had recovered much less than he claimed.

That part of the order which is appealed from should be reversed, with $10 costs, and. disbursements to be taxed.

Freedman, J., concurred.


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    M. L. EVANS, Respondent, v. SAMUEL L. HARRIS, Appellant.

      Attorney—when not precluded under General Buie 5, from executing undertaking.

    An attorney, who has not practiced as such for some time, e. g., for one year, and is engaged in another vocation, under General Rule 5, is not precluded, by the fact that he is an attorney, from executing an undertaking in an action.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided June 6, 1881.
    Appeal from order denying defendant’s motion to vacate attachment, on the ground that one of plaintiff’s sureties was an attorney.

      L. B. Bunnell, for appellant.

      Edgerton & Havens, for respondent, urged :
    I. At most the execution of the undertaking by Hartwell was a mere irregularity, and would not affect the jurisdiction of the court or warrant the court in vacating the attachment (Wilmont v. Meserole, 48 How. Pr. 430 ; S. C., 16 Abb. Pr. N. S. 309 ; Kissam v. Marshall, 10 Abb. Pr. 424). The courts make the rules,, and they can suspend or modify them as circumstances may require (Martine v. Lowenstien, 68 N. Y. 456.)
    II. Hartwell, under the circumstances, would have been qualified as bail; semble, that he could also join, in an undertaking (Wheeler v. Wilcox, 7 Abb. Pr. 73).
    III. If any defect existed it was a mere irregularity,, and the proper subject of an amendment (Code Civ. Pro. §§ 723, 724, 729, 730 ; Irwin v. Judd, 20 Hun, 562 ; Holmes v. McDowell, 15 Hun, 585 ; affi’d 76 N. Y. 596 Kissam v. Marshall, 10 Abb. Pr. 424 ; In re Heler, 41 How. Pr. 213 ; 2 Wait Pr. 151).
   By the Court.—Sedgwick, Ch. J.

Rule 5 of the General Rules provides that in no case “ shall an attorney or counselor be surety on any undertaking or bond required by law.” So far as bail was concerned, this was declaratory of a long existing rule. The existing rule was not, however, applied to the case of attorneys who had retired from practice for a long time (The King v. Inney, 2 East, 182; Bill v. Gate, 1 Taunt. 162). The reason of the prohibition did not apply to such a case. It was not intended to apply a rule of a larger scope to undertakings. In this case it appeared that the surety, although at one time an attorney, had altogether left practice for some time, and was engaged in another vocation. The time was more than a year. There is no occasion to disturb the judgment of the court below, that the time, under the circumstances, was sufficient to bring the case within the limitation of the rule above referred to.

Order affirmed with $10 costs, and disbursements to be taxed.

Freedman, J., concurred.


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    MARY C. WHEELER, Respondent, v. THOMAS F. TRACY, Appellant.

      Discretion—appeal from erroneous conditions in order denying motion for judgment on answer as frivolous.

    An appeal lies from that part of an order imposing a condition, when the party is entitled to his order as a matter of right. B. g., where the answer, after attempting to put in issue allegations of the complaint, makes, in sufficient form, a defense founded on fraud, and a motion for judgment is made thereon as frivolous, and an order is granted denying the motion, upon condition that an amended answer, containing only the defense of fraud, be served, an appeal lies from that part of the order constituting the condition.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided June 6, 1881.
    Appeal from part of an order denying motion for judgment on answer as frivolous.

      Deane & Chamberlin, for appellant, urged:
    The plaintiff moves to dismiss this appeal, because it is taken from only a part—the conditional part—of the order. In answer to this:—First. The Code (§ 1800) expressly permits an appeal from a, specific part of an order. Second. An order denying a motion for judgment on an answer as frivolous is not appealable (Code, § 537).
    In the case of Tribune Association v. Smith (8 J. & S. 81), it was held by this court that ‘1 the part of the order appealed from could not be taken from its relation to the rest of the order, and the defendant should have appealed from the whole.” In that case, however, the order, which gave leave to amend on payment of costs, was discretionary, and the leave granted was a favor, and the court had power to impose the terms. But this order was one which the court was compelled to grant as an absolute right, and in granting to the defendant this right, it had. no power or authority to limit it in any manner, nor to couple it with any conditions whatever. Where an order i& discretionary, or is granted as a matter of favor, the court may impose a condition, but where there is no discretion and no favor, and the order is granted as a matter of right, the court has no power to impose any conditions whatever (Anderson v. Rome, W. & O. R. R., 54 N. Y. 334, 343).
    Therefore, the defendant has the right to appeal, from that part of this order which, under the form of a condition, is virtually a separate and independent order, nullifying the part to which the defendant was entitled, and which the court granted.

      Samuel It. Taylor, attorney, and Charles C. Bull, of counsel, for respondent.
   By the Court.—Sedgwick, Ch. J.

The answer in this case, after attempting to put in issue several allegations of the complaint, made, in sufficient form, a defense based upon alleged fraudulent representations of the plaintiff. The plaintiff moved for judgment on the answer as frivolous. The order-made on the motion was, that the motion be denied, on condition that the defendant servean amended answer, which should contain only that part of the original answer which alleged fraud.

The defendant appealed from that part of the order which constituted the so-called condition. I am of opinion that the appeal lies, because the defendant was entitled to have the motion denied unconditionally. The effect of striking out the condition will be, to .give the defendant what he is entitled to, as matter of right, and not of discretion. If it had been matter of discretion, appealing from a condition would result in giving as an absolute right, something that has not that character.

It seems to be clear that the motion should have been denied, because, with the defense of fraud standing in the answer, the plaintiff was not entitled to judgment.

Order reversed with $10 costs, and disbursements to be taxed.

Freedman, J., concurred.


author: By the Court.—Freedman; J.

text:
    ROBERT A. GUNN, Respondent, v. CHARLES BURGHART, Appellant.

      Measure of damages—when market ‘value, and when cost of manufacture, &a.

    In the case of manufactured goods, evidence of the cost of production, and of other facts tending to show actual value, is only admissible to furnish measure of damages for conversion, &c., when there is no market rate.
    In this case, the plaintiff having shown the sale of several hundred copies of the book in question, and thereby established a market value, —Held, that evidence offered by defendant, tending to show the small scientific value of the work, and the cost of production, was inadmissible.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided June 6, 1881.
    Appeal from judgment entered upon the verdict of a jury, and from order denying defendant’s motion for a new trial upon the minutes.
    The facts appear in the opinion of the court.

      Samuel Mullen, attorney, and Henry WeTile, of counsel, for appellant.

      Joseph G. Gay, for respondent.
   By the Court.—Freedman; J.

The testimony clearly established a case of conversion, and the jury found accordingly. The true measure of damages in such a case, is at least the market value of the goods at the time of the conversion, with interest thereon, and such market value consists of the price at which the goods can be replaced for money in the market (Wehle v. Haviland, 69 N. Y. 448). This, in the case of manufactured goods, does not mean the cost of manufacture, but the wholesale market rate, as manufactured articles, when there is such a rate. It is only when market value cannot be directly shown, that proof of the cost of production and of other facts and circumstances-from which the actual value may be deduced, is of any materiality, and then the value thus established is' deemed to be the market value.

In the case at bar the plaintiff showed, circumstantially, that the books in question had a market value , that the wholesale rate was $2.25 per copy, less 25 percent. discount, and that from five to six hundred; copies had been sold at that fate to various booksellers-whom he named. As this testimony had reference to-actual sales in the market, it was the best evidence the-case was capable of. The defendant did not contradict-this testimony, but sought to show, in mitigation, as he claimed, the small scientific value of the books and what it would cost to reproduce'- the same number he had converted. As the case stood, the proposed evidence was properly rejected.

Upon full examination, I can find no ground for reversal. The case was fairly submitted to the jury. and their verdict is within the range of the testimony which could be- properly considered.

The judgment and order should be affirmed, with costs.

Sedgwick, Ch. J., concurred.


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    EDWARD de NOBELE, et al., Curateurs of the Estate of JOHN PFEFFER & CO., Respondents, v. STEPHEN LEE, et al., Appellants.

      Pleading—motion to malee definite and certain—necessary allegations in complaint of personal representatives, appointed by court of foreign country.— Code Civil Procedure, § 532.
    Where plaintiffs claim the right to maintain their action in a representative capacity conferred on them by a foreign tribunal, and that the cause of action passed to them by virtue of such appointment, and by the operation of the laws of a foreign country, the complaint should fully and definitely state the nature of the proceedings and of the judgment or determination by which they were so appointed; the title of the court, and the place where it was located or held its sittings; and its j urisdiction to entertain the proceedings. Whether section 532 of the Code of Civil Procedure,—which enacts that in pleading the judgment of a court of special jurisdiction, the jurisdiction may be pleaded as a fact,—applies to courts of other States and foreign countries, gucere.

    Before Sedgwick, Ch. J., and Freedman, J.

      Decided June 6, 1881.
    Appéal from order denying defendant’s motion to have the allegations contained in the first paragraph of the complaint made more definite and certain.
    L Childs & Hull, for appellants.

      Moarts, Southmayd & Choate, attorneys, and Joseph JET. Choate, of counsel, for respondents.
   By the Court.—Freedman, J.

Whether section 161 of the Code applied to foreign judgments or judgments of another State, has been doubted (Hollister v. Hollister, 10 How. 532; McLaughlin v. Nichols, 13 Abb. Pr. 244), and as section 532 of the Code of Civil Procedure is simply a re-enactment of section 161 of the preceding Code, the doubt .equally attaches to that.

I do not deem it necessary, however, to decide the question, as there are other considerations for which the motion should have prevailed to some extent at least.

The plaintiffs’ cause of action is not on a foreign judgment against the defendants. The plaintiffs claim the right to maintain the action in some representative capacity conferred on them by some foreign tribunal, and that the present cause of action, if any, passed to them by virtue of their appointment and by virtue of the operation of the laws of a foreign country. Their allegation is :

That heretofore and on or about the tenth day of November, eighteen bundled and eighty, the plaintiffs were by the proper courts of Belgium appointed cnrateurs of the estate of the firm of John Pfeffer & Co., who were then and had theretofore been residing and doing business in Ghent, in said Belgium, such courts having jurisdiction of the said firm of John Pfeffer & Co., and of the matter of the appointment of curateurs of their estate, and such appointment as curateurs as aforesaid was thereupon duly accepted by the said plaintiffs, and that the plaintiffs, as such curateurs, on or about the said tenth day of November, eighteen hundred and eighty, became and have ever since been and now are vested with all the assets and estate of such firm of John Pfeifer & Co., including all claims and demands of whatsoever nature due or owing to them, and including the claims and demands in favor of said John Pfeifer & Co. against the defendants hereinafter mentioned.”

This is not a sufficient statement of the nature of the proceeding in the course of which the appointment was made, nor of the nature of the judgment or determination by which the appointment was conferred, nor of the title of the court that gave the judgment or made the determination, nor of the place where the said court was located or held its sittings, nor of the jurisdiction of the said court to entertain the proceeding which terminated in the appointment. These matters, under the peculiar circumstances of the case, constitute traversable facts as to which the defendants may well claim definite information before answering. Their claim in these respects is a substantial right, and to this extent their motion should have been granted.

The order should be reversed with costs, and defendants’ motion granted in conformity with the foregoing views.

Sedgwick, Ch. J., concurred.


text:
    CHARLES JAUDON, Respondent, v. ROBERT E. RANDALL, Appellant.

      ■Novation.

    In order to constitute a contract of novation, it is necessary that the original indebtedness be extinguished; thus, where A. promises orally to pay the debt of B. with funds of B. in his possession, the creditor to whom such promise is made, cannot enforce the same, unless it appear that B.’s indebtedness was released or extinguished, no new consideration passing between the parties.

      Before Sedgwick, Ch. J., and Freedman, J.

      Decided June 6, 1881.
    Appeal from judgment in favor of the plaintiff entered upon the verdict of a jury, and from order denying defendant’s motion, made upon the judge’s minutes, for a new trial.
    The facts appear in the opinion of the court.

      Edward 8. Fowler, attorney, and Abel E. Black-mar, of counsel, for appellant.

      Adolphus B. Pape, for respondent.
   By the Court.—Freedman, J.

In June, 1878, one John A. Blewitt was indebted to the plaintiff in the sum of $100, and at the same time the defendant had in his hands the sum of $240, belonging to Blewitt. While this was the situation, the plaintiff, the defendant, and Blewitt, on July 8, 1878, met on board the steamer Egypt, on which the defendant and Blewitt were about to start for Europe, and Blewitt then directed the defendant to pay plaintiff the amount of $100, due to the plaintiff, out of the moneys which the defendant held for him, the said Blewitt. The defendant consented, and promised that, as he had not the money with him, he would remit the amount to the plaintiff from Paris, with which promise the plaintiff declared himself satisfied. The defendant and Blewitt then went to Paris, and, while there, Blewitt instructed the defendant not to send the money to the plaintiff, as he, Blewitt, wanted it to get home with. The defendant accordingly paid the money over to Blewitt, and, having done so, declined to fulfill his promise to the plaintiff. This action is brought to enforce defendant’s promise, evidently on the theory that it constituted a contract of novation. Under the pleadings the plaintiff was bound to establish a promise binding in law, and ' to overcome' the two-fold objection raised throughout the trial, that there was no consideration, and that the promise was void under the statute because not in writing. He was bound to show that it was agreed between himself, the defendant and Blewitt, that Blewitt’s debt should be extinguished, and that he, the plaintiff, should look only to the defendant for payment upon the new promise, and that Blewitt’s debt was extinguished accordingly. The plaintiff’s version of the conversation had on board of the steamer was, perhaps, sufficient on these points to entitle the plaintiff to go to the jury, but as the version given by the defendant and Blewitt was opposed to it, it became important that the jury should be fully advised as to what the plaintiff had to establish before he could recover. Instead of instructing them in conformity with the foregoing views, the learned judge who presided at the trial charged them that the question of a release was out of the case, and that the only question was whether the defendant promised, with the consent of Blewitt, to pay $100 to the plaintiff out of funds in his hands belonging to Blewitt, and sufficient for that purpose. This was clearly error, which entitles the defendant to a new trial. The cases cited by the plaintiff, which appear like the one at bar, are really distinguishable, for in every one of them the promise made by the defendant was based on a valuable consideration then passing between the parties, usually a fund placed into the hands of the defendant, in consideration of which he promised to pay the plaintiff. In the present case, nothing passed between the three parties to the conversation except what can be found in the alleged agreement, and hence, if there was any consideration for defendant’s promise, it must rest upon the agreement on the part of the plaintiff to release or extinguish Blewitt’s debt, and that he did release or extinguish it;

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

Sedgwick, Ch. J., concurred.