author: Hoffman, J. Bosworth, J.

text:
    Bargett et al., Plaintiffs and Respondents, v. The Orient Mutual Insurance Co., Appellants.
    1. When by the written, terms of a cargo policy, the subject insured is declared to be “ free from average," and by the printed memorandum clause “ it is agreed ” that such property “ is warranted by the assured free from average, unless general," the insurers are not liable to indemnify the assured against a general.average loss, which, as owner of the property so insured, he has been compelled to contribute-to pay.
    2. The policy must be so construed, if practicable, that effect may be given to the written words in it, according to their meaning in such contracts as settled by judicial decisions; when, giving to them that meaning, they conflict with some customary provision found in the printed part of the policy, the latter must be rejected, and the written words allowed to-prevail.
    3. It is not competent to show by parol that words written in a policy, and which have received a judicial interpretation, have acquired by the usage of trade a peculiar commercial meaning, variant from or in conflict with that which the Courts have adjudged to be their true meaning.
    (Before Bosworth and Hoffman, J. J.)
    Heard, June 11;
    decided, July 3, 1858.
    This is an appeal by the plaintiffs; (William Bargett and John Picard) from a judgment in favor of the defendants, (The Orient 'Mutual Insurance Company) dismissing their complaint.

      The action was tried before Mr. Justice Slosson and a jury, in February, 1858. It was brought to recover $665.58, which the plaintiffs had been compelled to pay by way of a general average contribution, as owners of a cargo of corn, shipped on the barque Helen Mar, on a voyage from Hew York to Belfast, and insured by a policy issued by the defendants, about December 11, 1855, to J. Wallace & Co.,- which corn had been sold and which policy had been assigned to the plaintiffs, before the loss occurred. The corn insured was valued in the policy at $5,000. The perils insured against are described by the language usual in marine policies. The material parts of the policy are as follows:
    “By the Orient Mutual Insurance Company.
    (“ Cargo)

    “J". Wallace & Co., on account of whom it may concern, in case of loss, to be paid to their order, do make insurance and cause to be insured, lost or not lost, at and from New York to Belfast, Ireland, on 4,650 bushels corn in bags, free from average, upon all kinds of lawful goods and merchandise, laden or to be laden on board the good barque Helen Mar, whereof-, is master for the present voyage.” . .

    (The foregoing words, which are printed in italics, are written, in the policy.) By a printed portion of the policy, it is provided, that “ no partial loss or particular average shall in any ease be paid, unless amounting to five per cent.”
    The printed memorandum clause forming part of the policy declares, inter alia, that “ it is also- agreed that . . grain of all kinds, . . are warranted by the assured free from average, (unless general).” . .
    On the trial it was admitted by the defendants (by a written stipulation produced and read) “that while upon the voyage referred to in the complaint and policy, on which the complaint in this action is founded, the barque Helen Mar was in great danger of becoming a total loss; and that for the safety of the barque and the freight it became necessary to cut away the mainmast; that owing to this and to other injuries to the said barque, sustained by the perils, of the seas, the master of said barque was compelled to abandon temporarily his voyage, and returned to the port of New York. That the expenses which occurred in refitting the vessel, were necessary to enable her to proceed upon her said voyage.
    “ That the expenses of refitting the said vessel to enable her to proceed upon her said voyage were $
    “ That the plaintiffs’ proportion of such expenses, made up on the principle of general average, was $665.58......
    “ That the plaintiffs were the owners of the corn referred to in the policy when the said policy was executed; and that it was executed for their account; and that they were at the commencement of this action, and now are, the owners thereof.”
    The only other evidence offered or given, or proceedings had at the trial, are as follows, viz.:
    “ Charles H. Castle, a witness, produced and sworn on the part and behalf of the plaintiffs, testified as follows:
    “ The counsel for the plaintiffs asked the witness, ‘ In December, 1855, how was the Helen Mar rated ?’
    “To this question the counsellor the defendants objected. In explanation, the counsel for the plaintiffs stated, that he proposed to prove that the Helen Mar was an A, 1, vessel; and then to show by competent testimony that the rate of insurance charged by the policy in question was as great as that fixed by the tariff of the board of underwriters at the date of the policy, for insuring corn on board the same class of vessels, in policies in which the words ‘ free of average ’ were not used, and in which general average losses were included in the risks taken by the insurers.
    “And the counsel for the plaintiffs further offered to prove by competent testimony, as follows:
    “That the words ‘free from average,’ have a peculiar commercial meaning, wholly distinct from their ordinary and popular meaning, which meaning they have acquired by a known usage of trade.
    “ That the words 1 free from average,’ by a known usage among merchants, and officers of marine insurance companies, and adjusters of losses in marine insurance cases, do not mean free from general average contribution, but only free from partial loss.

      “ That in cases of settlement and adjustment of losses, these words, when inserted in the policy in writing, have been always construed by adjusters, not to exclude contribution in cases of general average losses, but that in such cases the underwriters were liable for general average contribution.
    “ That the established rate of premium on the 11th of December, 1855, on cargoes of corn shipped in bags, in vessels of the same class as the Helen Mar, from and to the same ports, 1 free from particular average only,’ was the same rate as is charged in the policy on which this action is founded.
    “That the established rate of premium, and which was acquiesced in by defendants, in cases where insurance companies were not liable for general average contribution, was less than the rate charged in this policy.
    “To all the foregoing testimony the counsel for the defendants objected, and the Court thereupon sustained said objection, and refused to admit said testimony, or any part thereof; to which ruling and decision the counsel for the plaintiffs then and there duly excepted.
    “The counsel for the plaintiffs then rested their case, and the counsel for the defendants moved that the plaintiffs’ complaint be dismissed. The court thereupon granted said motion and dismissed said complaint.
    “ And to said ruling and decision the counsel for the plaintiffs then and there duly excepted.”
    Judgment was thereupon entered in favor of the defendants, and from that judgment the present appeal is taken.

      Wm. ¡Stanley, for the plaintiffs and appellants.
    I. The evidence offered by the plaintiffs, and rejected, was admissible.
    1. It was competent for the plaintiffs to prove that the Helen Mar was an A, 1, vessel; and that the premium charged upon the policy in question, was the established rate for insuring corn on board the same class of vessels, in policies in which the words “ free of average ” were riot used, and in which general average losses were included in the risks taken by the insurers.
    The class to which the vessel belonged, and the rate of premimnpaid, were “surrounding facts and circumstances, evidence of which is always received to aid in the interpretation of a contract. (1 Greenl. Ev., §§ 287 to 289; 1 Phillips on Ins., 3d ed., § 126, n 3; 1 Duer on Ins., p. 171, chap. 2, part 1, §§ 17 and 18; Preston, ex’r, &c., v. Greenwood, 4 Doug., 27.)
    2. It was competent for the plaintiffs to show that the words “ free from average,” by a known usage among merchants and underwriters and adjusters of losses, do not mean free from general average contributions, but only free from partial loss. (2 Parsons on Contracts, 67, 68; Dana v. Fiedler, 2 Kern., Johnson, J., p. 46; 2 Parsons on Contracts, 4, 5, m, b, c; Phillips on Ins., 3d ed., §§ 132, 145 ; Per Campbell, J., in Garrison v. Memphis Ins. Co., 19 How., 316; 1 Duer on Ins., p, 179, chap. 2, part 1, § 31.)
    In deciding upon the words “free from average," Lord Mansfield referred to the usage which had prevailed in adjusting losses, as a ground of construction. (1 Phillips on Ins., 95.)
    H. The learned Judge erred in directing that the complaint be dismissed.
    I. Construing “average” to mean “partial loss,” occasions no inconsistency nor repugnancy between the written and the printed language. On the other hand, if it is construed to include general average, the words “unless general,” in the printed part, must be stricken out.
    2. The word “average,” in the phrase “free from average,” always means particular average, or partial loss.
    This is its popular sense among underwriters, adjusters of marine losses, and merchants.
    The same usage exists among writers on insurance. (2 Arnould on Ins., 854, et seq., at 955, 1129,1130,1131,1132; Montoya and others v. The London Assurance Co., 4 Eng. L. and Eq. R., 500.).
    3. The reason for excepting average losses has no application whatever to general average losses, (2 Arnould on Ins., p. 851;: Dyson v. Rowcroft, 3 Bos. & Pul., 476, decision by Lord Advanley.)
    4. In all doubtful cases, policies of insurance are to be liberally-construed in favor of the assured, and an exception to the usual risks is to be strictly construed against the underwriters. (1 Duer on Ins., pp. 161 and 179, chap. 2, § 31.)

      5. The construction contended for by the respondent, renders the provision, “free from average,” absurd. And the “Court, in selecting among the different meanings of which the phraseology is susceptible, will avoid such as are absurd, or lead to unreasonable or inconvenient consequences.” (1 Phillips on Ins., 3d ed., § 123; 1 Duer on Ins., p. 163, chap. 2, § 8.)
    If the circumstances of the case had been such as to call for the sacrifice of the whole of the plaintiff’s corn, instead of a sacrifice of the vessel, the defendant would clearly have been liable as for a total loss. The question of general average would have had nothing to do with the case, as between the owners of the com and the underwriters. It would have been simply a total loss by jettison, one of the perils insured against, and the plaintiffs would have a right to look for their indemnity directly from the respondent. (Maggrath v. Church, 1 Caines, 215, Kent, J.; Watson v. The Mar. Ins. Co., 7 Johns., 62; Greeley v. Tremont Ins. Co., 9 Cush., 419; Forbes v. Man. Ins. Co., 1 Gray, 371.)
    The result of the respondent’s construction would'be that they would be liable in case the property insured by them was sacrificed to "save the property of others, but would not be liable in case the property of others were sacrificed to save theirs.
    If the respondents should contend that they would not be liable even in the former case, the matter would not be much helped; for then the result would be that the assured would receive no indemnity from the insurer even for a total loss, and that too of the most meritorious kind that could possibly happen.
    6. A stipulation that underwriters shall not be liable to general average contribution, in any case, is in violation of the policy upon which the doctrine of general average is founded, and will not be upheld. (2 Arnould on Ins., 877; Sturges v. Cary, 2 Curtis, 382; 2 Phillip on Ins., 1275; 1. Arnould on Ins., p. 8, § 9.)
    7. The case of Coster v. The Phoenix Insurance Co., (2 Wash. C. C., 51,) is unsound.
    The learned Judge, who decided that case, erred in saying that the word average originally meant a contribution by the owner of the ship, cargo and freight, towards a loss sustained for the general benefit of all. (See 2 Arnould on Ins., 955.)
    He erred also in saying that the written and printed clauses were inconsistent with each other, and that one or the other must give away.
    There is, however, a very important difference between that case and the present. There the stipulation was to be free from average under ten per cent. In the present case it is to be free from average to any amount. There might be a reason for an underwriter wishing to exempt himself from being called on for petty losses. But a stipulation that the underwriter would not-be liable for any amount of general áverage loss would be monstrous.

      Aleaxmder Hamilton, Jr., for the respondents.
    I. Under the common memorandum (printed form), the underwriters were warranted free from all partial losses on grain, unless they were in the nature of “ general average.”
    Without the written words, therefore, no partial loss on “ corn in bags ” could have been claimed from them, unless arising in “ general average.”
    II. Such being their exemption under the memorandum, the words are written in, immediately after the description of the subject insured, “free from average.”
    It is confidently submitted, under well established rules of interpretation, that this refers to “ general average ” only.
    1. By the settled rule of construction, effect must be given, if possible, to each part of the instrument, so that no part shall be rendered superfluous or unmeaning; in other words, to ascertain intention the Court must look to the consequences of different interpretations of the disputed phrase; if by one interpretation it would be superfluous, and by a different construction it would be operative, it is plainly the latter sense which should be adopted. (Duer on Ins., vol. 1, 163, § 8; id., 165, § 10.)
    2. This rule applies with special force to the written words,, as expressing the more immediate intentions of the parties to the contract. (1 Duer, 165; Robertson v. French, 4 East., 136.)
    3. Under the common memorandum (the printed form), grain of all kinds was warranted free from particular average or partial loss, unless it were a partial loss in the nature of “ general average.”

      4. The underwriter, under the printed form, being relieved from all partial losses, but remaining liable for “general average” partial losses, the words “ free from average ” were added in writing, to take away a liability that existed, and not one already provided against.
    5. To limit these written words to the case of a particular average loss, would require the addition of the words “ unless general,” and thus repeat the phrase of the memorandum, or would render them entirely superfluous and unmeaning.
    III. There is no total loss pretended; and only a partial loss in the nature of general average. The clause “ free from average,” must refer either to a partial loss or general average loss. To construe it as intending the former would be to render them entirely unnecessary; the assured having already by the memorandum warranted the underwriters against all partial losses on corn.
    The phrase “ free of average ” in a policy like this was held to exclude general average losses as far back as 1807. (Coster v. Phoenix Ins. Co., 2 Wash. C. C. R., 51.)
    IY. The construction is apparent from the policy itself; free of average obviously means average in general, the words “ whether general or particular ” .are implied.
    Such is the construction given to them in France and Italy. (Stevens and Benecke, pp. 448, 56, 57, 58.)
    Y. The parol evidence offered by the plaintiffs was inadmissible and properly rejected.
    1. If admitted the effect would have been to contradict or materially vary the terms of the policy, and that in a case where the settled rules of construction left no reasonable doubt as to the meaning. (1 Greenl. Ev., chap. 15, §§ 275, 282 and 292; 3d Kent, p. 326, note 6; The Schooner Reeside, 2 Sumner, 568.)
    2. Parol evidence is inadmissible, except to construe new terms or exceptions not judicially settled, or to explain where the meaning is doubtful.
    The phrase “free of average” is not a new term, but on the contrary one of the oldest in the policy, and has been judicially settled. (Wadsworth v. Alcott, 2 Seld., 64; 3d Duer, 264 ; 2 Comst., 235.)

      3. The testimony offered by the plaintiff to show that the rate of insurance charged by the policy in question was- as great as that fixed by the tariff of the board of underwriters, at the date of the policy, for insuring in the same class of vessels, in which the words “ free of average ” were not used, and in which general average losses were included in risks taken by insurers, was properly rejected.
    It amounted in effect to an attempt to strike these written words out of the policy, under the proof of the tariff of the board of underwriters.
    4. The testimony to show that the words “free of average” have a peculiar commercial meaning wholly distinct from their ordinary and popular meaning was properly rejected.

      a. It was not shown to be relevant in any way.

      h. The words have been judicially settled, and are almost-as old as the policy itself—parol evidence is only admissible to construe new or generic terms or expressions not judicially settled.
    5. The same objection applies to the offer to show by the usage among merchants and officers of marine insurance companies and adjusters of losses, that the words “ free from average” mean only free from partial loss, and not from general average contribution. The offer was bad in form, and properly rejected. It should have been an offer to show the uniform use and practice of underwriters in settlement of losses, under policies similar to this one, to admit claims for general average. (1 Duer, 186, cases there cited.)
    6. The construction given by adjusters is matter of opinion only and should be rejected. Opinions of witnesses as to the proper interpretation of those words in a policy that are neither foreign nor purely technical cannot be received as legal evidence. Usage must be proved by facts- and practice, not by opinions however numerous.
    This objection applies to all the offers made by the plaintiffs. (Syers v. Bridge, Doug., 529; Rogers v. Mech. Ins. Co., 1st Story, 607.)
    7. The offers to show the established rate of premium were properly rejected.
    The amount of premium paid is no evidence of the meaning of words used in the policy, which must be ascertained from the policy itself. The first offer was to show the established rate of premium, without averring that the defendants acquiesced in it. The proof, if admitted, would have been entirely irrelevant.
    The last offer to show that the established rate of premium acquiesced in by the defendants in cases where the insurers were not liable for general average contribution, was less than the rate charged in this policy, was of a character too indefinite, where the terms of the policy are as clear as in this case.
    VI. The decision of the Court below was correct, and the judgment must be affirmed, with costs.
   By the Court.

Hoffman, J.

—The term average was borrowed from the foreign law; and in that law it indicated every chance damage which happened to the merchandise or the ship. Average was such a loss. (Emer., 463, and the authors cited by him.) It excluded, from its very character, an absolute total loss. The ordinance of the marine of 1688 showed this in a plain form. (Art. 46.) Abandonment was applicable to cases of total loss. Average comprised all the minor disasters causing damage to the thing insured. (Emer., ut supra, and 468.)

The 397th section of the Code of Commerce follows out this •definition with marked exactness. It speaks of the term avaries thus: “ All extraordinary expenses incurred for the ship and the cargo conjointly or separately ; all damage happening to the vessel or goods from the time of their lading and departure until their arrival and discharge are reputed averages. There are two classes of averages, gross or common (general), and simple or particular averages.”

In entire conformity with this description in the foreign law, there has grown up into English mercantile language and English mercantile law a two-fold meaning of the term average. The distinction is, between a particular and a general average. The first is that loss which falls solely upon a particular subject; the second is that damage or liability which falls upon property in question, by reason of an injury to something else.

Molloy does however define the term as used in the mercantile law to be, the contribution made proportionably, by others, to those who have their goods east into the sea, for general safety. It is made he says, “ after the rate of every man’s ave-ridge, or goods carried.” (De jure Maratimo, ch. 6, 5.)

Cowell’s Interpreter, quoted by Mr. Stevens, adopts a similar meaning for the phrase. (Step. & Ben. on Average, Boston Ed., 1883, p. 56.) “ What we term general average is the only case entitled to the appellation of average. A particular loss is no average at all.” (1 Rob. Ad. Rep., 293.)

But at page 39 he says, “ By the continental law all losses not total are said to be average losses, and so the Courts in this country use the term.”

Particular average and general average, are terms pervading the whole mercantile law, and decisions of England and this country. Particular average is the damage or loss, short of total, falling directly upon a particular property. General average is the liability or claim falling upon that property, from the loss of or damage to something else.

Average then, in its generic sense, and used simpliciter, is a loss, injury or deduction, not amounting to a total loss, and then when the parties to a policy agree that goods insured shall be free from average, they agree that the liability of the insurers shall only arise when a total loss shall occur.

This is the plain import and legal effect of the clause in writing in the first part of the policy in question. The insurance is made “ on 4,650 bushels of corn in bags, free from average.”

But then we find the clause, that in no case shall the insurers be liable for a partial loss, unless it exceed five per cent. So they would be liable under this clause for any such loss exceeding such rate. Yet the first clause exempts them from it.

Again, in the memorandum clause we have the provision 11 that grain of all kinds shall be free from average unless general.”

I think it clear that this clause supersedes entirely the clause as to a partial loss over five per cent. It is a qualification as to particular articles of the general provision, and com is one of such articles.

And then it follows, that the case is to be determined by a comparison of this clause in the memorandum, with the first written clause in the policy. In substance the contract reads thus; We agree to insure this particular parcel of corn shipped on board the Helen Mar, from any loss which shall be total in its nature, but not from any partial loss or other damage which it may be subjected to; and then we agree to insure any grain laden by you on board the Helen Mar, from a. total loss, and also from any damage you may sustain by reason of a loss creating a case for contribution or general average.

I am not able to reconcile these provisions. The question is, which must give way ?

That question is fully settled. The written words control the printed formula of a policy wherever there is a discrepancy. Mr. Duer states the rule to be that the inconsistent printed clause must be so limited or modified as to render it consistent with the written; or, if by no construction they can be reconciled must be wholly rejected.” (Duer on Ins., vol. 1,166, citing Emer., and Lord Ellerbororgh in Robertson v. French, 4 East., 136.)

The parol evidence offered in this case was we think correctly rejected. The phrase has no uncertain or ambiguous mean- - ing. The question simply is, does the written clause remain unaffected by the printed formula.

The judgment should be affirmed, with costs of the appeal.

Bosworth, J.

—An insurance upon articles declared by the policy to be “free from average,” or which, by the terms of the policy, “ are warranted by the assured free from average,” is, in effect, an insurance against their total loss only; according to the meaning of the words, “total loss,” as used in the law of insurance, applicable to memorandum articles. (Maggrath v. Church, 1 Caines’ Rep., 196; Neilson v. Columbian Ins. Co., 3 id., 108; Saltus v. Ocean Ins. Co., 14 J. R., 138; Marcardier v. Chesapeake Ins. Co., 8 Crunch, 39; Coster v. The Phoenix Ins. Co., 2 Wash. C. C. R., 51; Morean v. United States Ins. Co., 1 Wheat., 219.)

By the terms of the printed part of the policy, the defendants would not have been liable for any partial loss, whether in the nature of a general average loss or otherwise, were it not for the qualifying words, “ unless general.”

These have the effect to make the insurance company liable for all general average losses chargeable upon the cargo insured.

The words “free from average,” inserted in the policy, in writing, should be so construed, if practicable, that effect maybe given to them, according to their meaning in such contracts, as settled by judicial exposition. When, giving them that meaning, they conflict with some customary provision in the printed part of the policy, the latter must be rejected and the written provision be allowed to prevail.

The insertion in writing of the words, “free from average,” is equivalent to a declaration of the parties, embodied in and made part of their contract, to this effect: We agree, with respect to the com in question, that no claim shall be made upon the insurance company for, any loss or damage which is partial only, whether it be in the nature of a general .average loss, or a partial injury of the corn itself.

We think therefore that, the Judge at the trial proceeded upon a correct view of the law.

Independent of other objections to the evidence offered, to show the meaning of the words “ free from average,” it is sufficient to say that evidenceof such a character is not admissible, for the purpose of attaching to those words, when forming part of a written contract, a meaning in conflict with, or variant from that given to them by adjudged cases; by which their meaning, in precisely such contracts has been determined and was a point in judgment.

No usage can exist or be proved by which the liabilities of parties to a written contract will be greater or less, than the settled law of the state has adjudged them to be, on a contract in the terms of the one-sought to=be affected by such evidence.

The judgment must be affirmed.

Judgment -affirmed.


source: Caselaw Access Project

author: Pierrepont, J.

license: Public Domain

text:
    Charles Enoch and another, Plaintiffs and Respondents, v. William C. Wehrkamp, Defendant and Appellant.
    1. An agent to receive consignments of goods for his principal and sell them, and who is indebted to his principal for moneys received on sales of goods sold, has no lien upon goods subsequently consigned for expenses paid on account thereof, unless such expenses exceed the amount of such indebtedness.
    2. The lien of an agent and factor on the goods of his principal for specific expenses, does not exist, when the general balance of account is against him.
    (Before Bosworth, Hoffman, and Pierrepont, J. J.)
    Heard, June 11th;
    decided, July 3d, 1858.
    This is an appeal by the defendant, from a judgment in favor of the plaintiffs entered on a verdict against the defendant, at a trial before Mr. Justice Slosson and a jury, on the 18th of May, 1858.
    This action, is Replevin for fourteen cases of sample fancy goods. The plaintiffs are commission merchants in Paris, and made an agreement with the defendant and one Young, who had formed a copartnership under the firm of Wehrkamp & Young, in Hew York, by which the latter were to act as their agents in Hew York, to receive orders for goods, make sales, &c. The goods in question were consigned by the plaintiffs to Wehrkamp & Young, under this agreement, and afterwards at Wehrkamp’s solicitation, the agency was transferred to him solely. Afterwards, on the 6th of May, 1857, the plaintiffs revoked the agency, and demanded the goods.
    On the 1st of January, 1857, the plaintiffs rendered to Wehrkamp & Young their account current to that time, showing a balance due to the plaintiffs of fr. 7,437 95c., which Wehrkamp & Young duly admitted to be correct. This balance Wehrkamp duly assumed as his individual debt. The defendant as such agent had paid expenses on the goods in question amounting to $462.90, and on that account claimed a particular lien, and that the plaintiff was not entitled to the goods until that sum was repaid. The Court charged that if the balance of account was in favor of the plaintiffs, th¿j^ were'entitled to A ver diet for the goods. To this the defendant excepted. The plaintiffs had a verdict and from the judgment entered thereon the defendant appealed.

      C. Bainbridge Smith, for the defendant, appellant.
    I. The defendant, as agent of the plaintiffs, having paid the sum of $462.90 upon the goods in question for duties alone, besides insurance and other charges and expenses thereon, had a particular lien upon them for those advances. (Story on Agency, §§ 354, 375; 2 Kent’s Com., 640, 5 ed.; Chitty on Contracts, 481, note; 3 Chitty Com. Law, 541; Schmidt v. Blood, 9 Wend. R., 268; Bradford v. Kimberly, 3 J. C. R., 431; id., 1 Am. L. C., p. 723; Holbrook v. Wight, 24 Wend. R., 169 ; Knapp v. Alvord, 10 Paige R., 205; Brooks v. Bryce, 21 Wend., 14.)
    1. There are two kinds of lien,, namely, particular and general. (Id.)
    2. A particular lien is a right to retain the property of another on account of labor employed or money expended on that same property. A general lien is a right to retain the property of another on account of a general balance due from1 the owner. (Id.; Whitaker on Liens, p. 7; 2 Kent’s Com., 5 ed-., 640.)
    II. The action at bar being one of tort, the question whether the plaintiffs could set off their alleged general account or indebtedness against the defendant’s particular lien, could neither be pleaded nor litigated therein.
    1. The right of setting off one account against the other did not exist at common law, and is derived from the statute, and admissible only in actions ex contractu. (2 R. S., 354, § 18, sub. 1; Barb. Law of Set-Off, 105; Chitty on Contracts, 730; Bouv. Law Dic., Tit. Set-Off.)
    2. It was clearly an error on the part of the Court in allowing the plaintiffs to set off their general indebtedness against the defendant, if any existed, in extinguishment of his particular lien on the goods in question; for a set-off cannot be pleaded in actions ex delicto, such as tort, trespass, detinue, case or replevin. (Id.; Laycock v. Tufnell, 2 Chit. R., 531; 18 E. C. L. R., 409; Buller’s N. P., 181; Montagu on Set-Off, 18; Osborn v. Etheridge, 13 Wend., 339; 3 Chitty’s Com. Law, 671.)

      III. The defendant having had a lien upon the goods, the plaintiffs were not entitled to them before that lien was satisfied. (Cross on Liens, 14, 46; 18 Law Lib., N. S., 29; Whitaker on Liens, 4, 6; Pennock v. Harrison, 3 M. & W., 532; Clarke v. Fell, 1 N. & M., 244.)
    1. The statutes of set-off do not apply to actions of tort. (Cases cited; Downer v. Eggleston, 15 Wend. R., 55, 56.)

      2. In. cases of lien, the whole property on which it exists, being considered as a pledge, may be detained until the lien is discharged. (Whitaker on Liens, pp. 4, 6.)
    3. The right of lien, and right of set-off may be co-existent, yet the latter cannot be pleaded in answer to the lien without a specific agreement between the parties to that effect. In such case, in order to extinguish the debt for which the lien arises, the set-off must be construed as a payment; but without such specific agreement, the party claiming the lien cannot be deprived of it, however much he may be indebted to the owner of the property in question. (Cross on Liens, p. -14; 18 Law Lib., N". S., p. 29.)
    4. There is no pretence that the plaintiffs overpaid, or offered to satisfy the defendant’s lien in any other manner than by setting off their pretended general indebtedness against -him.
    5. The defendant, when a demand of the goods was made of him, refused to deliver them up, but on what ground he placed his refusal, if any, does not appear. “ A party having a lien does not waive it by omitting to mention it when a demand is made.” (White v. Gainer, 2 Bing., 23; id., 9 E. C. L. R., 302; Owen v. Knight, 4 Bing., 54; id., 33 E. C. L. R., 279; Scarf v. Morgan, 4 M. & W., 273 ; Cross on Liens, 46; Everett v. Coffin, 6 Wend. R., 603,)

      Jer. Larocque, for the plaintiffs (respondents).
    I.' The charge was correct
    1. The factor who pays charges for his principal in the factor-age business, with money of his principal in -his hands, arising from the same factorage business, in judgment of law, pays them with the money of his principal.

      2. The balance of account arising from the factorage business is, in fact, the precise thing for which the factor has a lien.
    3. The question would be a different one if the-principal should seek to discharge the lien by a cross indebtedness not arising in the same business. (Smith’s Mercantile Law, 340; Law Lib. N. S., p. 202; 2 Kent’s Com., 640; Weldon v. Gould, 3 Esp. N. P., 268; Bryce v. Brooks, 26 Wend., 376; Cross on Lien, 260, 277; 18 Law Lib. N. S., 172, 182.)
    II. If the first point is well taken, the refusal to charge that the defendant was entitled to a verdict was of course correct.
   By the Court.

Pierrepont, J.

—It is admitted that the §462.90 was paid by the defendant? But it clearly appears from the evidence in the case, which was properly submitted to the jury, that the defendant paid these charges of $462.90, while debtor to the plaintiff, in a larger sum on general account. The defendant had no particular" or other lien upon the goods of the plaintiffs, on account of having paid the charges and duties upon them, he having, at the time, money of the plaintiffs in his hands to a larger amount. It makes no difference that the plaintiffs did not advance the money for this specific purpose. The defendant had the plaintiffs’ money, and, in presumption of law, he used it to pay these charges, and on no principle can he be said to have acquired a lien upon the goods in question which the plaintiff was bound to discharge before taking the property.

The case was properly submitted to the jury, and their verdict is clearly in accordance with the law and the evidence.

Judgment affirmed, with costs,


author: Bosworth, J.

text:
    John A. Clussman, Plaintiff and Respondent, v. Isaac H. H. Merkel, Defendant and Appellant.
    1. An attorney at law may consent that a judgment obtained by the plaintiff, -his client, upon the defendant’s failure to answer, be vacated and the defendant allowed to answer; on a state of facts on which the Court, according to its customary practice, would make an order to that effect.
    2. Such a consent and the failure of the defendant before judgment recovered are not alone sufficient evidence of negligence which will defeat an action brought by the attorney to recover for his services as such attorney in the suit, in which such consent was given.
    3. In an action, -by an attorney to recover for his services in such a suit, it is erroneous to permit the plaintiff to prove, as evidence, the opinions of a witness, that it was not the purpose of opening such default, to enable the defendant against whom judgment had been recovered by default, to put his property out of his hands.
    4. An attorney, when he consents to vacate a regular judgment, without the knowledge of his client, acts at the peril of being held responsible for any loss which may be shown to have necessarily resulted from that act, and which would have been avoided if his client had been advised of the recovery of the judgment and of the application to vacate it, by his then knowing and being able to disclose facts which would have induced the Court according to its customary practice to require security to be given for the payment of such sum as might be recovered, as a condition to opening the default, and staying proceedings on the judgment recovered thereon.
    5. A referee cannot receive evidence against the objection and exception of a party, and reserve to himself the power of retaining or rejecting it at the conclusion of the proceedings.
    6. In such an action, it is not erroneous to reject evidence that at the time of vacating the default, the judgment debtor had property out of which the judgment could have been collected, when no evidence has been given of such negligence of the attorney in opening the default, as will affect his right to recover for his services, and when such fact with the other evidence given or offered to prove negligence is insufficient, to establish prima fade.

    7. Opinions of witnesses, as to the value of the services of an attorney or counsel in a particular suit, are incompetent as evidence, when they are ignorant of the services actually rendered.
    The orderly method of proof is to show the services actually performed and the circumstances under which they were performed; and their value by persons acquainted with such services and having a knowledge of the prices usually paid (when they are not fixed by law).
    (Before Bosworth, Hoffman and Piebrepont, J. J.)
    Heard, June 15;
    decided, July 3, 1858.

      This is an appeal by the defendant from a judgment, entered against him on the report of a referee. The action is brought by the plaintiff as assignee of John B. Stevens, attorney and counsellor at law, to recover for professional services rendered by the latter for the present defendant, Isaac H. Merkel, in- a suit in which Merkel was plaintiff and one John Adair was defendant.
    The defense to this action is, that by reason of the negligence and unprofessional conduct of Mr. Stevens, his services in the suit of Merkel v. Adair were of no value, but on the contrary, Merkel was damaged thereby to $300 in amount.
    The suit of Merkel v. Adair was for medical services rendered by the former for the latter, and was commenced in the Supreme Court, August 11, 1853. The amount claimed in that suit was $300. Judgment was rendered in it by default September 16, 1853, for $347.11. Stevens, on being presented by Adair’s attorney with an affidavit, that the omission to answer was by his mistake; that Adair had a defense, and in good faith intended to defend; and with an affidavit of merits; and an offer of Adair to plead immediately, consented without consulting Merkel, to open the default and accept a plea; the judgment to stand as security: Adair put in an answer on the 29th of September, 1853, in which he set up the defense that Merkel was unskillful and incompetent—from habits of gross intoxication—from attending to the duties of a physician; and making a counter-claim of $500.
    In December, 1855, a judgment was obtained in that action, for $318.84 damages, and $240.91 costs. An execution was issued on it, and returned unsatisfied.
    - The negligence and unprofessional conduct charged upon Mr. Stevens in that action, and set up as a defense to the present one, consists (1st,) in his voluntarily opening the default in the suit of Merkel v. Adair, and omitting to docket the judgment got by default; (2d,) in not moving for a reference of that action immediately after issue was joined therein, and (3d,) for a dilatory prosecution of the reference, after that cause was referred. Adair, at the time the judgment against him by default was entered, was in business in Brooklyn, but that judgment was not docketed in that county.

      On the trial the plaintiff put to A. H. Sidell, an attorney and counsellor at law, and a witness on his part, this question:

      “Q. According to your knowledge, information or belief, was that default opened for the purpose of enabling the defendant to ■ put his property out of his hands ?
    “Objected to by defendant as immaterial and incompetent. The referee decides to receive the answer subject to objection, reserving the right to strike the same out, and defendant excepted,
    “ A., It was not; nothing was said about it.”
    John Adair was sworn as a witness for the defendant, and was asked:
    “ Q. Were you possessed of any property, real or personal, in August or September, 1853, and if so, of what did it consist ?
    “ Objected to. Objection sustained. Defendant excepts.
    “ The defendant offered to prove that in the months of August, September, October, and November, 1853, the witness Adair was possessed of sufficient personal property to pay the claim on judgment by default against him in the suit of Merkel, and that no attempt was made by Mr. Stevens to secure said claim, by the issuing of execution or otherwise, upon that judgment, and that subsequently he became insolvent.
    “ Objected to. Objection sustained, and defendant excepts.
    “ The defendant called as a witness,
    “Daniel T. Walden, who testified: ‘I am an attorney and counsellor at law, and have been for twelve years.’
    “ Q. Look at exhibit A, (bill of particulars and affidavits of Merkel,1 as to witnesses, and as to items,) and state what, in your opinion, would be a fair and reasonable charge as attorney and counsel for plaintiff in obtaining the judgment therein mentioned.
    “ Objected to by plaintiff’s counsel on the ground that it does not appear the witness knows the parties. The papers produced do not show the length of the suit, the various services, the various attendances before the referee, the various times the cause was on the calendar before it was referred, the length of the meetings before the referee, the precise questions argued, how many consultations were had with the client, the length, extent, and importance of them, and a variety of other matters" which could only appear by proof, and not by exhibits. That attorney’s services are not to be estimated by a general sum to be fixed; that no estimate can be fixed without a knowledge of the particular services, and a calculation made. Objection sustained, and defendant excepted.
    “ Q. What would be a fair counsel fee when your client’s reputation was attacked in a suit which lasted for a period of eight months, and where there were twenty or twenty-five attendances before referee, including various and many interviews with your client, and that in a case fiercely litigated.
    “Objected to by defendant. Objection overruled, and defendant excepted. :
    “ A. It depends on the extent the reputation was attacked, the source of attack, and the means sought to attack, and the value. I should say $100 was a fair fee, if the attorney was counsel.”
    Some of the other proceedings occuring at the trial, are stated in the opinion of the Court.
    The referee reported in favor of the plaintiff $225 damages, (with interest thereon from the 8th of March, 1856, the commencement of this suit,) in all $242.32, and from the judgment entered thereon, this appeal is taken. The printed case contains no statement of the facts found by the referee, nor of his conclusions of law.

      Wm. B. Stafford, for appellant (the defendant).

      A. B. Dyett, for respondent (the plaintiff).
   By the Court;

Bosworth, J.

— Stevens as attorney of Merkel, had authority,, on a state of facts on which the Court on motion would have vacated the default and judgment, and allowed Adair to answer, to waive the judgment and default, without compelling Adair to make a motion to the Court for that purpose. (1 Wend., 108; Hopping v. Quin, 12 id., 517.)

In the latter case, an attorney who. refused to waive a regular default, on the defaulted party offering to do what the practice of the court in such cases required, was compelled to pay the costs of a motion to open it, although the moving party was made to pay the costs of the default. The mere fact, that the default was opened, without first obtaining the consent of Merkel does not of itself, exempt Merkel from liability to Stevens, as his attorney, for the costs of the action.

It would be more discreet for an attorney, before giving such a consent, to confer with his client. If the client knew and could state facts tending to show that, by vacating the judgment unconditionally he would be in danger of losing his claim, and that it would be secure if the judgment was to stand as security for such sum as might ultimately be recovered, he might, with propriety refuse to consent that the defendant be permitted to answer except upon the terms that the judgment should stand as security. In the case of Merkel v. Adair, by the terms of the consent given, the judgment recovered was to stand as security, for any sum that might be recovered in that action.

If an attorney waives such a default without consulting or obtaining the consent of his client, and upon the facts then existing and known to the client, and which upon such a consultation it may be justly inferred he would have communicated to the latter, the attorney might expect that the Court, according to its customary practice would impose terms which would make -the collection, of whatever sum might be ultimately recovered, reasonably safe; I think he acts at his peril in waiving it, and should be held responsible for any loss directly and naturally resulting from such action on his part.

But the mere fact that the opposite party fails before judgment is recovered, is not of itself, and alone, sufficient evidence of such negligence in the attorney, by whose consent the default and judgment were waived, as will disentitle him to recover for either prior or subsequent services in the action.

Upon the evidence given, I think, Adair would have been ' allowed to open the judgment and to answer: whether any other terms would have been imposed, than that the judgment should be permitted to stand as security, or whether even those terms would have been imposed, it is unnecessary to express any opinion now. The position insisted on at the trial was, that the attorney, as between himself and his client, had no right, under any circumstances, to waive the judgment and default, without the consent of the client. If an unconditional vacating of the judgment would not, per se, be negligence disentitling an attorney to recover for subsequent services; an omission to docket the judgment which, was allowed (on waiving the default) to stand as security for such sum as might be recovered, would not be.

It was erroneous to permit the witness Sidell to testify whether, according to his knowledge, information or belief that default was opened for the purpose of enabling Adair to put his property out of his hands.”

If the fact, of such a purpose was relevant, or material, it could not be established by evidence consisting of the conclusions of the witness, based on “ information ” he had received, nor by his belief that such a purpose existed, or influenced Adair. Such evidence accepts the judgment or opinion of the witness as competent evidence, without a disclosure being made, of the nature of the information or the grounds of belief, on which his opinion or conclusion rests. Facts and circumstances must be proved and the referee or jury must determine whether they establish the particular fact in issue, to which, as evidence they are directed.

The referee received this evidence against exception and objection, assuming, that he had the power; and to exercise the power, to determine subsequently whether he would strike it from the case or retain it. The evidence appears in the case as settled; and the conclusion must be that he has retained it, and acted upon it, in determining the issues referred to him.

Evidence that Adair had property, from which the judgment recovered against him by default, could have been collected, would have been competent, if negligence, or a clear violation of duty, in opening it, had been proved. But if the fact of negligence was not established, the rejection of such evidence was not erroneous.

The evidence offered and excluded would not of itself and alone tend to prove negligence. It formed no part of the offer that, Adair was reputed to be or was in fact embarrassed or in debt when the default was opened. There was nothing included in the offer tending to show any more reason for supposing then, that he would fail, or be embarrassed before the action could be tried, than that any other person in the community would.

There was no error in overruling the question put to Mr. Walden. The facts on which he was asked to state his opinion; what “ would be a fair and reasonable charge as attorney and counsel for plaintiff in obtaining the judgment therein mentioned,” did not include all which it was necessary to consider, in forming such an opinion. It did not include, or indicate all of the services proved to have been actually rendered.

An answer to the question; “what would be a fair counsel fee when your client’s reputation was attacked in a suit which lasted for a period of eight months, and where there were twenty or twenty-five attendances before referee, including various and many interviews with your client, and that in a case fiercely litigated,” was improperly received.

The answer does not obviate the objection. The answer was; “ it depends on the extent the reputation was attacked, the source of attack, and the means sought to attack, and the value. I should say $100 was a fair fee, if the attorney was counsel.”

To what extent the reputation must be attacked, what must be the source of attack, and what the means used to attack, to make the services worth, in the opinion of the witness, $100, it would ’ be difficult to conjecture, either from the question or the answer, or from a careful study of both.

One assumption embraced in the question is, that the services, the value of which the witness was to estimate, included “various and many interviews ” between the attorney and his client. How various and numerous they were, how long either of them continued, or to what they related, formed no part of the premises, on which the witness was asked to give a valuation to the services. Under such a question, a witness might estimate for more interviews than occurred, and for interviews relating to matters of difficulty, when they were not of that character, and for interviews consuming much time, when they were in fact brief or casual.

It may not be out of place to observe that the course of examination at the trial was not adapted to secure a determination of the issues influenced by proper considerations only.

Whether the action of Merkel v. Adair was or was not a referrible one, and whether Merkel’s attorney should have moved promptly in it for an order of reference, is a question of law, and of practice, which the referee should have determined, on the pleadings; or upon the pleadings and on the facts proved, as to the matters to be investigated on the trial of it.

Some witnesses express the opinion that the Court would have ordered it referred to a referee, as a matter of course, and that Merkel’s attorney should have moved promptly for such an order.

Others testify that they should have resisted such a motion, if made by Adair, and insisted on a trial by jury: one that, in his opinion, a prudent attorney, under any circumstances, should not have had it referred.

Attorneys and counsel were examined and testified, as experts, as to the law in relation to referrible cases, and whether in this case the attorney should, as a matter of course, and of duty, have moved for a reference, and whether he had or had not a right, in the discharge of his legal and proper duty, to open the default. These opinions upon matters of law, and of established practice in judicial proceedings, and of the rights and duties of an attorney $s between himself and his client, were proved, and as to many points without objection, as competent matters to be submitted to a referee or jury, in deciding the issues of Met joined in this action.

If tried before a Court and jury, it would be the province and duty of the Court, to declare the law and practice of the Courts, so far as it might be necessary or proper for the jury to be informed of either, to enable them to decide the questions of fact. They are not matters, as to which it is proper to take, as evidence, the opinions of witnesses. The orderly course of proceeding on a trial before a referee, is the same.

When the services actually performed, and the circumstances under which they were performed have been shown, the proper proof of their value is obvious. It is by the evidence of those acquainted with such services, and having knowledge of their value, or of the usual and customary charges, where they are-not fixed by law.

When the evidence of facts alleged to constitute negligence has been given, it is for the Court to declare whether a supposed' state of facts, if found to be proved, is sufficient to establish it; whether the alleged negligence relates to the waiver of a regular proceeding, or to a course of action alleged to- be culpably- dilatory, and actually prejudicial.

The judgment should be reversed; report of referee set aside, rule of reference discharged, and a new trial granted, with costs to abide the event. Ordered accordingly.