author: Duer, J.

text:
    The Howard Insurance Company v. Halsey and others.
    Where a mortgagor conveys a part of the mortgaged premises to a purchaser1, the residue of the premises is the primary fund for the .satisfaction of the mortgage.
    When lands embraced in a mortgage are subsequently sold in separate parcels to different purchasers at different times, the respective parcels are chargeable with the mortgage debt in the inverse order of their alienation.
    The mortgagee, who has a knowledge of the facts, is not permitted to disregard or disturb these equities between a mortgagor and purchaser, or between successive purchasers.
    If the mortgagee, with notice of such equities, of with notice of such facts as make it his duty to inquire, release from his mortgage the lands primarily liable for the debt, the lands previously conveyed by the mortgagor are dis- ' charged from the mortgage to the extent of the then value of the premises thus released.
    The recording of his deed by a grantee from the mortgagor is no notice to the mortgagee of the existence of such deed.
    Searches made by a solicitor with a view to foreclose a mortgage, which proceeding was abandoned after a bill was prepared, but before it was filed, are not evidence of notice to tbe mortgagee of the facts which they disclosed.
    Where a release of mortgaged premises described a part of the lands released by reference to a deed to the releasee, and that deed contains a description bound-
    , ing the land upon “ land now or late of W.” and “ along said W.’s land," it was
      held, to be notice to 'the mortgagee that W. was or had been the owner of such adjoining lands. And it being proved that such adjoining lands, being a part of the mortgaged premises, had been sold and conveyed by the mortgagor to W. long before the execution of the releaseit was held, that the mortgagee was chargeable with notice of such conveyance, and must account for the value of the released premises in discharge of the mortgage debt as between himself and W.’b grantees.
    (Before Doer, Mason, and Campbell, J. J.)
    March 18;
    May 10, 1851.
    This was a suit to foreclose a mortgage, commenced by bill ip the supreme court. The facts appearing in the case were as follows:
    Stephen A. Halsey and wife, on the 17th of April, 1887,. mortgaged to the plaintiffs about 292 acres of land in the town of Greenburgh, Westchester county, to secure the payment of $6000 on the 1st January, 1888, with interest, from date. Halsey and wife, the mortgagors, on the 10th May, 1888, conveyed 92 acres of the mortgaged premises to the defendant, George Wildes, by a warranty deed with full covenants. The 92 acres were conveyed as if free from incumbrances, and Wildes, until after this suit was commenced, had no notice of the existence of the mortgage. The deed to Wildes was duly recorded, January 19th, 1839.
    On the 31st of January, 1842, Halsey conveyed the residue of the mortgaged premises to John Hunt and John Redfield, in trust for the benefit of creditors. Halsey, on the 12th of June, 1846, paid to the plaintiffs $4000, on account of the principal of the debt secured by the mortgage, and $489.61 on account of the interest; and they thereupon released to John Hunt, the grantee of Halsey, the residue of the mortgaged premises, not embraced in the .conveyance to Wildes. At this time, the land released to Hunt was of a value more than sufficient to satisfy the whole debt secured by the mortgage. The premises thus released were conveyed by Hunt to William Paulding, by a deed dated February 25th, 1846, and recorded June 13th, 1846.
    Ou the 29th December, 1843, Wildes and wife conveyed the 92 acres, (conveyed as above to Wildes by Halsey,) to the defendants, Griffin, Havens, and Townsend, on certain trusts, for the benefit of the defendants, The Governor and Company of the Bank of England, and this conveyance was duly recorded on the 3d day of August, 1844. Previous to the execution of the release by the plaintiffs to Hunt, one John J. Storms had gone into the possession of the 92 acres conveyed by Halsey to Wildes, as tenant under the defendants, Griffin, Havensrand Townsend, and remained in possession until the year 1849.
    For the purpose of establishing notice to the plaintiffs of the conveyance to Wildes at the time when the release was given, it was further proved by the defendants, that the 92 acres, from the time of the original conveyance by Halsey to Wildes, in 1837, had been generally known and designated in the vicinity as the George Wildes’ farm. It had also been so designated by Stephen Archer, who was in possession during all the time that Wildes owned it, previous to Storms going into possession, and who gave out that he was in possession under Wildes. It was also proved, that, in 1842, the plaintiff employed Messrs. George W. and George T. Strong, as their solicitors and counsel, to foreclose this mortgage; that searches were accordingly made preparatory to the foreclosure, and that the result of that investigation was, that the names of George Wildes and Agnes his. wife, were inserted as defendants in the drafts of the bill of foreclosure and in the notice of lis pendens. When matters had proceeded-thus far, the proceedings were discontinued by direction of Mr. Havens, the president of the Howard Insurance Company.
    The release executed by the plaintiffs to Hunt, in-describing parcel No. 3, thereby released, after giving its boundaries, proceeds thus: “ Being part of the same premises, conveyed to William Paulding, of the city of New York, counsellor at law, by the said John Hunt and Mary, hi£ wife, by deed, bearing date the twenty-fifth day of February, now last past, andi are therein described as parcels 1, '3, and 4, (one, three, and four).” In the conveyance to Paulding, parcel No. 1, (which is one of those released,) is described as beginning at the northeasterly corner thereof, on the south side of the New York and Albany post road, “ adjoining land nozo or late of Greorge Wildes, ” and running thence southerly in three different courses along said Wildes’ land. And on the map annexed to the deed signed by Hunt, the premises in question are laid down as “ land of Geo. Wildes, Esq.’’
    The defendants, The Bank of England, Wildes, Griffin, Havens and Townsend, answered the bill, setting up that the mortgage was paid. Issue was joined and proofs taken, and the cause was brought to a hearing in this court, to which it had been transferred.

      H. M Davies and W.. Kent, for the plaintiffs.
    I. The right to have the lands which have been sold by the mortgagor, charged in the inverse order of their alienation, is not a legal, but only an equitable right; and the party holding the incumbrance is not bound to regard, and is not affected by the subsequent incumbrances, unless he is informed of the existence of the facts on which this equitable right depends. (Guion v. Knapp, 6 Paige, 35.)
    II. The Howard Insurance Company, the first mortgagees on the'premises in question, were not bound by, nor affected by the subsequent conveyance by the mortgagor of part of the mortgaged premises to George Wildes., 1. Because no actual knowledge nor notice of this conveyance was brought home to the mortgagee. 2. The recording of the conveyance to Wildes, subsequently to the mortgage, was not constructive notice. (Stuyvesant v. Hall, 2 Barb. Ch. Rep. 151.) 3. Neither was any information obtained by George T. Strong, Esquire, while preparing a bill of foreclosure of the present mortgage, in 1842, of any interest of Wildes or his assignees, notice to the mortgagees. (a) Because his information was not communicated to the mortgagees, (b) Mr. Strong was solicitor for the mortgagee in an inchoate and isolated transaction, which was abandoned before it reached a suit in chancery, and therewith his agency terminated.
    The rule, which makes the principal liable by notice to his agents has this qualification, viz.: “ that notice to the counsel, attorney, or agent, to bind tbe principal, must be in tbe same transaction.” A notice then, given in 1842, to a solicitor or counsel, „who never foreclosed the mortgage, and whose functions ended with some preliminary preparations for a suit, cannot affect the mortgagees, to whom his information was never communicated, in a different transaction, and at different time, viz.: in their release to Hunt, on 12th June, 1846. (2 Sugden on Yendors, 9th ed. p. 278; Preston v. Tubbin, 1 Vern. 286; Ashley v. Bailie, 2 Ves. Sen. 368; 2 Atk. 242; Hamilton v. Royse, 2 Sch. & Lef. 327; Bank of U. S. v. Davis, 2 Hill, 451.)

      D. Lord, for the defendants.
    I. By the conveyance of the 92 acres by Halsey to Wildes, the mortgaged premises became thereafter liable to the payment of the mortgage debt, in the inverse order of their alienation, that is to say: the premises afterwards released by the plaintiffs to Hunt, primarily liable, and the premises conveyed to Wildes, liable only in the event of the residue proving not sufficient to satisfy the mortgage. And Wildes and his grantees would have had the right to insist, on the filing of a bill, to foreclose against the whole property, that the plaintiffs should exhaust their remedy against the other portion, before resorting to the 92 acres. (Kellogg v. Rand, 11 Paige, 59, and cases cited in arguments of respondent’s counsel.)
    II. The plaintiffs were chargeable with notice at the time when they released the 200 acres conveyed to Hunt, that the 92 acres, had been previously conveyed to Wildes. 1. The deed to Wildes had been many years on record. 2. The 92 acres had been for many years known and designated as the George Wildes’ farm. 3. Before and at the time of the delivery of the release, the witness, Storms, was in possession of the 92 acres under the defendants, Griffin, Havens, and Townsend, the grantees of Wildes, as Archer had previously been, from the time of the conveyance to Wildes, under him. 4. The plaintiffs had notice, through their solicitor and counsel, employed to foreclose the mortgage in 1842, of the title of Wildes. Notice to their solicitor and counsel was notice to them, and the testi'mony also shows, that they were cognizant of the investigation of the title, which was being prosecuted by their solicitor. 5. The release executed by the plaintiffs to Hunt, upon its face expressly refers to the conveyance by Hunt and wife to Paulding, and sets forth in which of the parcel’s described in that conveyance the premises released are embraced. And by referring to that conveyance, it will be seen that parcel No. 1, (one of those released,) is there described as “beginning at the north-easterly corner thereof, on the south side of the New York and Albany post-road, adjoining land now or late of George Wildes, and running thence southerly in three different courses along said Wildes’ land.” And on the map annexed to the deed, the premises in question are laid down as land of George Wildes, Esq. (See Fraser v. Western, 1 Barb. Ch. R., at p. 232, and the cases cited there.)
    III. The plaintiffs, therefore, having released the 200 acres of the mortgaged premises conveyed by Halsey and wife to Hunt, and by Hunt to Paulding, with notice of Wildes’ title to the remaining 92 acres, and the land released having been, by the plaintiff’s admission in the case, of a value more than sufficient to satisfy the mortgage debt, the premises now in question are in equity discharged from the mortgage. (Guion v. Knapp, 6 Paige’s R. 42 ; Stuyvesant v. Hone, 1 Sandford’s Ch. R. 419; Stevens v. Cooper, 1 Johns. Chan. R. 425; Parkman v. Welch, 19 Pickering, 231; Patty v. Pease, 8 Paige’s R. 277; Cheesebrough v. Millard, 1 Johns. Ch. R. 414; Neimcewicz v. Gahn, 3 Paige, 614, S. C. on appeal, 11 Wend. 312.)
   By the Court.

Duer, J.

It may be true, as Mr. Justice Story has suggested, that some exceptions from the equitable doctrine upon which this defence is rested, ought to be admitted ; but the doctrine, as supplying a general rule, has been too firmly established by repeated decisions to be now shaken; nor is it pretended that there are any circumstances in the present case that can lay a ground for an exception. The doctrine is, that when a mortgagor sells a portion of the lands which the mortgage covers, those which he retains become primarily liable for the satisfaction of the debt, those which he has conveyed being answerable only for an eventual deficiency;. and, as a necessary consequence, that a similar equity prevails between purchasers, so that distinct parcels or lots of the mortgaged lands, which have been conveyed at different times to different purchasers, are chargeable in the inverse order of their alienation, and must be sold in that order under a decree. The equity which may thus have been created between a purchaser and the mortgagor, or between several purchasers, the mort-‘ gagee, when he has a knowledge of the facts, is not permitted to disregard or disturb, and, with this knowledge, he acts at his own peril when he releases from the lien of the mortgage any portion of the lands which it embraces. If the lands released are primarily liable, and are of sufficient value to satisfy the debt, those previously conveyed are wholly discharged, and in no case can they be charged with any larger sum than the proportion of the debt that may remain unsatisfied when the value of the lands released has been applied and exhausted.

As these rules' are undisputed, and it is admitted that the value of the lands which were released by the plaintiffs to J. Hunt, in April, 1846, exceeds the whole amount of the original debt, the only question necessary to be considered is, whether the company, at the time of the execution of the release, are chargeable with notice that the 92 acres, not released, and upon which they meant to retain their lien, had been previously conveyed. If notice cannot be justly imputed to them, their lien is retained, and they are entitled to a decree. If they are chargeable with notice, actual or constructive, their lien upon the lands thus conveyed is wholly gone, and the bill as to the defendants, now before us, must be dismissed.

The deed for the 92 acres to Gr. Wildes, from whom the other defendants derive their title, was recorded in the proper clerk’s office several years before the execution of the release ; but we agree with Chancellor Walworth, (Stuyvesant v. Hall, 2 Barb. Ch. E. 151,) that the recording of a subsequent deed from the mortgagor cannot operate, per. se, as notice to the mortgagee; since, by the plain terms of the statute, the constructive notice which arises from the recording of a conveyance is limited to subsequent purchasers of the lands which it embraces. Yet the fact that this deed was recorded, is not to be regarded as wholly unimportant; since, if it shall appear from other circumstances that the plaintiffs were bound to inquire, the record of the deed is evidence that an inquiry, properly conducted, must have led to a knowledge of its existence.

Nor shall we lay much stress upon another circumstance, upon which a good deal of stress was laid in the argument, namely, that the existence of the conveyance to Wildes was ascertained in 1842, by the attorney and agent, who was then employed by the plaintiffs to foreclose the mortgage. It is true, as a general rule, that the knowledge of an agent is, by construction of law, the knowledge of his principal; but the .sole grounds of this imputation are, that it is the duty of the agent to communicate to his principal all the facts which have been ascertained by him in the course of, and relating to the subject of his agency, and this duty, when it has attached, the law presumes to have been discharged. (Story on Agency, § 160, 208.) In this case, .however, by the sudden discontinuance of the proceedings in the foreclosure suit, the agency of the attorney was terminated before his inquiries were completed, and at any rate before it was necessary for him, or it became his duty to communicate their result to the plaintiffs. As the reasons for the communication had ceased, the obligation also ceased. Hence, since the duty of communication never attached upon the attorney during the course of his agency, there is no room for the presumption that it was actually made; the ground of the presumption wholly fails; and that the communication was not in fact made, we think the evidence shows.

But there are other facts in this case of far greater significance and value than those to which we have adverted. It appears from the evidence, that Wildes took possession of the lands conveyed, by his agent or tenants, immediately, or shortly after he received the deed, and that the fact of his possession was so public and notorious, that it was generally known in tbe vicinity that he was, or claimed to be the owner. When lands contracted to be sold, are in the actual possession of the vendee, his possession is notice of his equitable title to all persons, who may subsequently deal in relation to the same lands with the vendor, so that a subsequent purchaser, who has paid the full value of the lands, in total ignorance of the contract, is yet bound by its terms, and may be compelled to execute its provisions by a conveyance of the legal title which he had acquired. We are not prepared to say that this rule, which is constantly applied to a subsequent purchaser, may with equal justice be applied to a prior mortgagee. There is undoubtedly a distinction that may prevent this extended application; yet, it may deserve consideration, whether a knowledge of the actual state of the possession and of the title and claims of those holding the possession may not, even with greater reason, be imputed to the mortgagee than to the purchaser. His existing relation to the lands makes it his interest, generally speaking, to possess the knowledge, and it therefore seems a fair presumption that he has not neglected the means of acquiring it. The actual question has never been decided, nor is it necessary that it shall now be determined, since there are other grounds upon which, with more satisfaction to our own minds, and as we cannot but think, with a very slight hazard of error, we may place the judgment we intend to deliver.

The last and most material allegations on the part of the defendants are, that the plaintiffs, by the very terms of the release to Hunt, had notice that George "jYildes was then .the owner of that portion of the mortgaged premises which, with a view to retain the lien of the mortgage, was excepted from the operation of the rel'ease, and that the notice, if not direct and positive, was yet sufficient to put them upon inquiry, and by a legal consequence to charge them with a knowledge of all the facts which upon inquiry they would have ascertained. The release embraces three distinct lots or parcels of land, and in giving the boundaries of parcel No. 3, closes the description with these words, “ being part of the same premises conveyed to "William Paulding, &c., by tbe said John Hunt and Mary his wife, by tbe deed bearing date tbe twenty-fifth of February last past, and are therein described as parcels 1, 3, and 4, (one, three; and four).” It was candidly admitted by tbe counsel for tbe plaintiffs that tbe necessary effect of tbis reference to tbe Paulding deed was to adopt and incorporate into tbe release tbe description which is there found, and that tbe release must therefore be construed precisely as it would have been bad tbis description, instead of being referred to, been literally transcribed.

In tbe deed to Paulding, parcel No. 1, (wbicb we have seen is included in parcel No. 3 in tbe release,) is partly described as follows: “Beginning at tbe northeasterly corner and adjoining land now or late of George Wildes,” and running thence southerly in three different cóurses along said Wildes’ land; tbe land thus described as being “now or late of G. Wildes,” being exactly that part of tbe mortgaged premises wbicb Halsey bad conveyed to him, and upon wbicb tbe sum remaining due upon tbe mortgage is now sought to be charged.

It was not denied by the counsel for tbe plaintiffs that tbis descriptive clause bad the words or late” been omitted, would have amounted to a positive notice to tbe plaintiffs of tbe prior title and equity of Wildes’; it would have been evidence of their actual knowledge of the facts upon wbicb bis equity and that of bis grantees depend. But it was contended that by tbe insertion of the words “ órlate,” tbe clause, as conveying notice, was rendered wholly inoperative, since these words might, with as much propriety, be referred to a time anterior to tbe execution of tbe mortgage, as to any subsequent period. In short, that tbe clause, as it stands, means only that at some period or other one George Wildes had been tbe owner of the land to which it refers. Could we assent to tbis as tbe true construction of the clause, we should still hesitate to say that tbe notice wbicb it conveyed was not sufficient to create an obligation to inquire; but we cannot think that tbe words of tbe clause ought to be thus construed; such is not their natural interpretation; nor is it the meaning, we are satisfied, wbicb they conveyed at tbe time to tbe minds of the parties. When lands are described in a deed as “ now or late of A. B." tlie plain and obvious meaning is, that A. B. was the last person who was known to the parties as the owner, and that they still believed him to be so, but inserted the words “ or late,” to guard against the possible contingency of a conveyance by him to some person then unknown. It may be true that such a descriptive clause, having reference to boundaries only, and not to the lands conveyed, is not unfrequently copied from a prior conveyance, and in many such cases is not understood by the parties as a representation of existing fa-cts; still the true and primary meaning of the words is that which we have stated, and except when they are known to be a mere transcript from a prior deed, it is this meaning which they naturally, if not necessarily, suggest to the mind of a reader. The presumption, that it was in this sense that the words “ now or late” were understood and meant to be understood in this case, is greatly strengthened by the circumstance that the clause in which they are found describes the line of boundary in its continuance, “ as running along said Wildes’ land,” words so positive that it is quite improbable they would have been used, had not Hunt, whose words they are, believed that Wildes was then the owner; and it must be remembered that the plaintiffs, when they adopted the words of Hunt, were bound to consider in what sense he probably employed them.

Let it be admitted, however, that the words “ land now or late of G-. Wildes” are not equivalent to a declaration of the belief of the parties that Wildes was then the owner, it cannot be denied that they are evidence that they deemed it to be possible that he was so, and the admission of this possibility, under the circumstances of this case, was alone a sufficient notice to put the plaintiffs upon inquiry. Such a possibility could not have existed at all, Wildes could not then-have been the owner, had not the land been conveyed to some person by Halsey, the mortgagor, in the interval between the execution of the mortgage and that of the general assignment to Hunt, for had there been no such conveyance, Hunt himself, when he executed the deed to Paulding and when the release was executed, would have been in the possession of the land as owner, and could therefore never have admitted the possibility of an existing title in another person.

And this circumstance, we must remark, furnishes a complete answer to the argument upon which the able counsel for the plaintiffs chiefly insisted. It is doubtless true that when lands adjoining those which are conveyed are described in a deed as now or late of a third person, the descriptive clause is frequently repeated, without alteration, in successive conveyances, although from the lapse of time or change of circumstances, it has wholly lost its original meaning, and is no longer a true expression of the facts which it asserts; but we are persuaded that this only happens when the lands still remain in the occupation of strangers, or strangers are still believed to be the owners. We cannot believe that the owner of lands that in former deeds have been thus described, when he is himself a party to a conveyance of adjoining land, would permit the insertion of a clause, which he not only knows to be false, but which involves in its falsity a disclaimer and denial of his own title. Had there been no prior conveyance by Halsey of the land described as now or late of Wildes, we have seen that Hunt must necessarily have been the owner when he conveyed to Paulding, and had such been the fact it would be unreasonable to doubt that the land would have been described as his in the conveyance. It would have been designated as “ other land of said Hunt,” or “ of the party of the first part,” or by other words of equivalent import.

Were it possible for us, then, to concede that the words “ now or late of Gr. Wildes” are so vague and equivocal that they ought not to have been understood by the plaintiffs as conveying any affirmation of the actual or recent ownership of Wildes, they certainly implied, and must have been understood by the plaintiffs as implying, that no title was then vested in Hunt, and the notice thus given to them that Hunt was not then the .owner, was equivalent to notice of a prior conveyance by the mortgagor, since they knew that all the lands which the mortgage covered, had no portion of them been previously conveyed by Halsey, must have passed to Hunt by virtue of tbe general assignment. They could not have released to him without knowing that he was tbe owner of tbe equity of redemption in tbe lands released, and they must therefore have known by what title be became so.

Hitherto we have made no mention of tbe map which is annexed to the deed to Paulding, and upon which the learned counsel for tbe defendants laid a good deal of force in bis argument. We have not done so for two reasons: we have considerable doubts whether tbe map can be properly regarded as embraced by tbe reference that is made in tbe release, so as to charge tbe plaintiffs with a knowledge of its existence and contents, and we have no doubt that without the introduction of the map, the proof of notice is sufficient.

It is, indeed, very possible, and it may even be admitted, as very probable, that neither the release, nor the deed to Paulding, were read, or even slightly inspected by the officers of the company when the release was executed; but it is needless to cite authorities to show that in all cases it is a presumption of law that the contents of a deed were known to tbe parties before its execution, and that except in’ cases of actual fraud, this presumption precludes them, when the rights of a third person are concerned, from averring their ignorance. We must, therefore, decide tbe case now, precisely as we must have done, bad there been positive evidence that the clauses in the release and in the deed, upon which the allegation of notice is founded, were carefully read by tbe officers of tbe company' before or at the time of tbe execution of the release. Reasoning then, as we are bound to do, upon this presumption of law as a fact, tbe conclusion, it seems to us, is necessary and irresistible, that tbe information thus given to the plaintiffs, if not positive in its nature, yet rendered tbe fact of a conveyance by the mortgagor prior to his assignment to Hunt of tbe land not embraced in tbe release, so probable, that a further inquiry, for tbe purpose of ascertaining the fact, became their immediate and imperative duty ; and the rule of law that must govern our decision, is as inflexible as it is just, that he who is bound to inquire before he performs an act by which he has reason to believe that the rights of others may be affected, is chargeable with a knowledge of all the facts that an inquiry, properly made, would have disclosed to him. If his actual knowledge would have rendered his act, as affecting the rights or equities of others, illegal and void, such is also the necessary effect of the knowledge which, when he omits to inquire, the law imputes to him. (Green v. Stryker, 4 John. Ch. R. 47; Pendleton v. Fay, 2 Paige, 204; Sigourney v. Mason, 7 Cow. 313; Fraser v. Weston, 1 Barb. Ch. R. 220, 232; Kennedy v. Green, 3 Mylne & Keen, 99.)

Although the internal evidence of the transaction between the officers of the company and Hunt, if we chose to dwell upon it, might not improbably lead us to the conclusion, that the parties, in making the agreement which was consummated by the release, acted, not at all in ignorance of the facts, but only under a mistake, a serious though very common mistake as to the law, yet we are not prepared to say that there is sufficient proof of the actual knowledge of the plaintiffs to justify us in making it a ground of our decision; but of that knowledge which the law imputes to those who are bound, yet omit to inquire, the proof is, in our judgment, ample and conclusive.

A decree must therefore be entered, declaring in substance, that as the plaintiffs, when they released to Hunt a portion of the mortgaged premises exceeding in value the whole amount of the mortgage debt, had notice that the lands not embraced in the release, and which they seek by their bill to charge with the payment of the sum remaining due upon the mortgage, had been conveyed by the mortgagor before those which they released, the lands not released are wholly exonerated from the lien of the mortgage, which, in respect to them, must be held to be satisfied. Consequently the bill, as against the defendants now before us, must be dismissed with costs.


source: Caselaw Access Project

author: Oakley, Ch. J.

license: Public Domain

text:
    Woods and others v. Moore.
    Where it is clear that there was an intent that specific property should pass by a will, it will be held to pass, notwithstanding a misdescription of the property, so long as there is enough of correspondence to afford the means of identifying the subject of the gift.
    Thus, where a testatrix devised two lots of land, describing them, which lots she had sold and conveyed previous to mating the will, and then held bonds and mortgages thereon for the unpaid purchase money, it was held, that the bonds and mortgages passed to the devisee.
    (Before Oakley, Ch. J., and Dues and Paine, J. J.)
    April 8;
    May 10, 1851.
    The bill in this cause was filed in the court of chancery, on the 24th day of April, 1847, by James H. Woods and his infant children by his deceased wife, Mary S. Woods, against Clement C. Moore. It set forth that, on the 6th day of April, 1802, Mary Clarke, then of the city of New York, widow, made her will, by which she appointed her son-in-law, Rev. Benjamin Moore, and Charity his wife, their son, Clement C. Moore, Elizabeth Maunsell, and Thomas B. Clarke, her executors and executrixes. After large devises and bequests to Rev. B. Moore and his wife, and to C. C. Moore, and devises in trust for the benefit of other grandchildren, the will contained the following paragraph:—
    “ Item. — I give and devise unto the said Benjamin Moore and Charity, his wife, and Elizabeth Maunsell, and to their heirs forever, as joint tenants and not as tenants in common, all that house and lot of ground situate in Hague-street, in the city of New York; also, all that lot of land situate in the patent of Kayaderosseras, and lying on the Mohawk River, in the possession of one Northrup; also, the lot of land situate in the said patent in the possession of Hacaleah Foster; also, seven hundred and fifty-one acres of land, lying in the twenty-third allotment of,the patent aforesaid ; also, six hundred acres divided into farms, now leased to different tenants, on the counterparts of whose leases I have indorsed the name of Samuel Clarke, so as to designate the farms included in this devise of six hundred acres; to hold the same to the said Benjamin Moore, and Charity his wife, and Elizabeth Maunsell, and to the survivors or survivor of them, and to the heirs of such survivor, as joint tenants, and not as tenants in common, in trust to receive the rents, issues, and profits thereof, and to pay the same to Samuel Clarke, a natural son of my late son Clement, during his natural life, and from and after his death, in the further trust and confidence, to convey the same in fee to such lawful issue of the said Samuel as he may leave at the time of his death ; and if the said Samuel shall die without leaving lawful issue living at the time of his death, then in the further trust to convey the same in fee to the said Clement Moore, son of the said Benjamin Moore, and to his heirs in fee, or to such person as he may by will appoint, in case of his death prior to that of the said Samuel Clarke.” The testatrix gave her residuary estate to the five children of her son Clement, and to Clement Moore. She died on the 23d day of July, 1802.
    The bill further stated, that the testatrix, at the date of her will, and for a long time previous thereto, and thence until her death, except as thereinafter mentioned, was seised and possessed in her own right, in fee simple absolute, of the real estate described in the will as all that house and lot of ground situate in Hague-street, in the city of New York; also all that lot of land situate in the patent of Kayaderosseras, in the possession of one Northrup; also the lot of land situate in the same patent, in the possession of Hacaleah Poster; also seven hundred and fifty-one acres of land, lying in the twenty-third allotment of the same patent; also six hundred acres, divided into farms, now leased to different tenants, on the counterparts of whose leases she had indorsed the name of Samuel Clarke.
    That all the executors and executrixes in the will named, except Elizabeth Maunsell, duly qualified, and took upon themselves the administration thereof, and received letters testamentary thereon, and that Benjamin Moore and Charity his wife, and Elizabeth Maunsell, immediately after the death of tbe testatrix, accepted all tbe trusts in tbe will mentioned, including the trusts respecting the real estate above described, and took possession of the seven hundred and fifty-one acres of land, lying in the twenty-third allotment of the patent of Kayaderosseras, and of the two hundred and fifty-two acres and one-quarter of an acre of the six hundred acres, divided into farms, so specifically devised to them; and after the death of Samuel Clarke, conveyed the same seven hundred and fifty-one acres, and two hundred and fifty-two acres and one-quarter of an acre to the children of the same Samuel Clarke hereinafter named.
    That Mrs. Clarke had at the time of making her will, and on or about the first day of May, 1801, sold and conveyed the house and lot of ground situate in Hague-street, to one Thomas Cooney, and that for the whole, or a great part' of the price thereof, she had received from .Cooney a bond, and also a mortgage on the house and lot, executed to her in the sum of thirteen hundred and fifty dollars, payable at a future period later than her death, which bond and mortgage remained in her hands unpaid at the time of making the will, and thence until her death, though, at the time of making the will, she had forgotten or overlooked the fact of her having sold the house and lot, and received in place thereof the bond and mortgage, and that her omission to specify the bond and mortgage and her interest in the house and lot arising therefrom, was a mere oversight and mistake.
    That notwithstanding the provisions of the will, Benjamin Moore and Charity his wife collected the money due by that bond and mortgage, in different sums, amounting in the whole to the sum of sixteen hundred and thirty-four dollars and ninety-six cents, the last payment in full being made on the fourth day of February, 1807, and converted the whole of the money to their own use, or disposed thereof in some other way unknown, in violation of their duty as such trustees, and contrary to the will of the testatrix, so that neither of the children of Samuel Clarke, nor the complainants received • any part thereof, or any benefit therefrom. .

      The bill then further showed, that before the death of Mrs. Clarke, one Beriah Palmer, her agent, had made a contract in her name, to sell the land described in the will as “ that lot of land situate in the patent of Kayaderosseras, and lying on the Mohawk river, in the possession of one Northrup,” and that after her death Benjamin Moore and his wife, trustees, recognized the contract as valid, and completed it, conveying the land, and receiving a large sum of money for the price thereof, and converted the money to their own use, in violation of their duty as such trustees, and contrary to the will of the testatrix.
    That the land described in the will as “ the lot of land situate in the said patent, in the possession of Hacaleah Poster,” had been sold and conveyed by Mrs. Mary Clarke, before making the will, and on or about the twentieth day of April, 1801, to one John Davis, for the price of five hundred dollars, for the whole of which she had received the bond of Davis, payable at a future period, and also his mortgage to her on the same land, payable to her later than the time of her death, which bond and mortgage remained in her hands, unpaid at the time of making the will, and thence until her death, though at the time of making the will she had forgotten or overlooked the fact of her having sold the land and received this bond and mortgage, and her omission to specify the bond and mortgage and her interest in the land arising therefrom, was a mere oversight and mistake. That Benjamin Moore and wife, converted Davis’s bond and mortgage, or the proceeds thereof, to their own use, in violation of their duty as such trustees, and contrary to the will of the testatrix.
    That of the six hundred acres divided into farms specifically devised by the will, for the benefit of Samuel Clarke and his issue, only two hundred and fifty-two acres and one-quarter of an acre, or thereabouts, have ever been conveyed by the trustees to the issue of Samuel Clarke, or to the complainants, or accounted for by the trustees, either to him or them; that the trustees either so neglected the remaining three hundred and forty-seven acres and three-quarters of an acre, or so disposed of the same, in violation of their duty as such trustees, that neither Samuel Clarke, or either of his children, or the complainants ever received any part thereof, or any rents or profits thereof, or any benefit therefrom, and this land by reason of such neglect, has been wholly lost to them and to the issue of Samuel Clarke.
    That Samuel Clarke was married and had issue, Mary S. Clarke and Harriet S. Clarke; that Mary S. Clarke was born on the ninth day of March, 1813, and Harriet on the twenty-second day of September, 1814; that Samuel Clarke died on the sixth day of May, 1815, intestate, leaving Mary S. and Harriet S. Clarke his only issue; that Harriet died on the tenth day of October, 1815, leaving her sister Mary her only heir-at-law ; that Mary S. Clarke intermarried with the complainant, James H. Woods, on the fourth day of September, 1830, by whom she had issue, the other complainants, the eldest of whom was born on the third day of August, 1831; and that their mother, Mary S. Woods, died in 1845.
    That the trustees before named were often applied to by or on behalf of Samuel Clarke and his issue, to account for and restore the bonds and mortgages, and the lands before mentioned, or the price, or the value thereof, but that all such applications were unavailing.
    That the trustees and Clement C. Moore, sometimes pretend that the three hundred and forty-seven acres and three-quarters of an acre of land, had been sold by Mrs. Clarke, before her death, or could not be located; but the bill charged that large-tracts of land belonging to Mrs. Mary Clarke, in the Kayaderosseras patent, were taken possession of by the executors of the will, Benjamin Moore and his wife among the rest, as a part of the residuary estate, and so afterwards partitioned and disposed of, which would have satisfied the specific devise to the. trustees, if the lands therein mentioned could not otherwise be. located, so that if the lands had been sold by Mrs. Clarke, there were bonds and mortgages therefor remaining in her hands at her death, which should have been taken by the trustees, and held in the place of those lands.
    That Benjamin Moore and Charity his wife, and Elizabeth Maunsell, are all dead; Moore having died on the twenty-seventh day of February, 1816, Elizabeth Maunsell, previous to the year 1820, and Charity Moore, on the fourth dáy of December, 1888, and all died intestate.
    That letters of administration of the estate of Benjamin Moore, were duly granted to Clement O. Moore, the same person named in the will, on the twelfth day of March, 1816, and that as such administrator, he took possession of, and received a large amount of personal assets over and above the amount paid out by him for debts of B. Moore; that no letters of administration have been granted on the estate of Elizabeth Maunsell, or the estate of Charity Moore, but that Clement C. Moore was the only child, and heir-at-law of Benjamin and of Charity Moore, and that he took possession of and received all the personal property, rights, and credits, of Charity Moore, left at her death, which were of considerable value, and assumed the administration and disposition thereof; that he also received from them a large real estate, being the same devised by Mrs. Glarke’s will to Benjamin Moore and Charity his wife, and to their heirs, in fee; and that the amount of real estate which descended to him, as the heir-at-law of Benjamin and Charity Moore, amounts to more than five hundred thousand dollars in value, and that he still has the same estate.
    ' The bill prayed that Clement C. Moore, as administrator of Benjamin Moore, and as heir-at-law of Benjamin and Charity Moore, and in his own behalf, and as having intermeddled with and disposed of the goods, chattels, and credits of Charity Moore, might be held to account for the breaches of trust alleged; that the complainants be paid the amount of the bond and mortgages, with interest thereon from the death of Samuel Clarke, that the real estate so devised, or the value thereof, with all the rents, income, and profits received, or that might have been received therefor, might be restored or paid to them ; that an account be taken of the extent of their losses by reason of the alleged acts and neglects of Benjamin Moore and Charity his wife, and of all those breaches of trust, of the amount of the bonds and mortgages and interest, of the contract price of the land so sold by Beriah Palmer, and the interest thereon, from the twenty-third day of July, 1802, and the value of the lands, rents, income, and profits received, or that might have been received, with interest thereon, and that the . amount thereof be paid and satisfied to the complainants; first, out of the personal assets of Benjamin Moore, and then out of the personal assets of Charity Moore received by Clement C. Moore, and the residue out of the real estate descended to him as the heir-at-law of Benjamin Moore and Charity his wife, or either of them, or conveyed by them to him after the acceptance by them of the trusts of the will.
    The answer of the defendant admitted the statements of the bill, except as follows. He did not admit the quantity of land contained in the leases was six hundred acres. He stated that $100 was paid on Cooney’s mortgage to Mrs. Clarke in her lifetime. That he is unable to say how it happened that the testatrix made the devise in question of the house and lot in Hague-street, nor why she omitted to specify the bond and mortgage and her interest in the house and lot, nor whether she had forgotten or overlooked the fact of her having sold the house and lot, and received in place thereof the bond and mortgage ; nor whether her omission to specify the bond and mortgage and her interest in the house and lot arising therefrom, was a mere oversight and mistake.
    He admitted that the acting executors of Mrs. Clarke did collect all the money due upon the bond and mortgage at her death, with interest thereon; and that the whole sum so collected amounted to sixteen hundred and thirty-four dollars and ninety-six cents; and that the same was paid at different times and in different sums; and that the last payment thereof was made on or about the fourth day of February, 1807.
    He does not know, and is unable to state, what proceedings were had, subsequent to the death of Mrs. Clarke, in reference to the lot of land contracted by her agent, B. Palmer, nor how much land there was, nor where it was.
    As to the land contracted to John Davis, he answered as in' respect to the Hague-street lot; and he insisted as to both, that the devises of the premises conveyed to Cooney and Davis were wholly inoperative and void, inasmuch as Mrs. Clarke had no title to the same at the time the will tvas executed by her. He alleged that the acting executors of the will of Mrs. Clarke appropriated and applied the bonds and mortgages of Cooney, and Davis, or the proceeds thereof, to the residuary legatees of Mrs. Clarke, some or one of them, as part of her residuary estate. He stated that he was unable to give any explanation as to 347f acres of the 600 acres stated in the will to have been divided into farms, and to be specifically devised for the benefit of Samuel Clarke and his issue. . He presumes either that the same were sold by Mrs.. Clarke, in her lifetime, or that no counterparts of leases were .found among her-papers with the name of Samuel Clarke indorsed thereon to designate the.same.
    The answer denied all the breaches of .trust alleged, and all liability.
    A replication was filed and proofs taken.. The cause was transferred to this court. The. proofs established that the defendant,. and those whom he represented, had received the amount of the mortgages of Cooney and Davis, and also a bond of four hundred dollars, given for a part of the proceeds of the six hundred acres mentioned in the will as having been divided into farms. There was ho evidence showing the receipt of any thing from the lot of land described in the will as in the possession of one Northrup.

      D. D. Field, for the plaintiffs.
    I. The plaintiffs have .succeeded to all the rights of Mary, the sole surviving child of Samuel Clarke, under the will of Mary Clarke; and the defendant is .responsible as the legal representative of his father and mother, t.wo of the trustees under the will, for any breach of trust they may have committed. . (Lewin on Trusts and Trustees, 630, 634, and cases cited.) The defendant is also responsible as the sole surviving executor of Mrs. Clarke’s will.
    II. The breaches of trust charged are the diversion from the beneficiaries of four out of five different items of property, devised for tbe benefit of Mr. Clarke’s children, viz.: the interest of the testatrix in the Northrup lot; in the house and lot in Hague-street; in the Foster lot; and in 347 acres of the Kayaderosseras patent. If such diversions were made, they were breaches of trust. As to the Northrup lot, the claim of the plaintiffs is substantially admitted by the answer. There must therefore be a decree in their favor for that; and a reference should be ordered to ascertain its value.
    III. The lot in Hague-street having been sold and mortgaged back to the testatrix before the date of her will, the devise is to take effect so as to pass the bond and mortgage. This is so for two reasons, either of which is sufficient to sustain it.
    1. There appears to have been a mistake made in describing the lot, instead of the bond and mortgage which were substituted for it. This must have happened either from her own forgetfulness and oversight, or from the draftsman having copied from a previous will, drawn before the sale of the lot. In case of mistake in the description of property, the court will ascertain by parol evidence what property was meant, and decree accordingly. The intent that Mr. Clarke should have the lot, or its proceeds, is manifest. (1 Story, Eq. § 179; 1 Jarman on Wills, 329; 1 Yes. Jr. 259; 3 Yes. 306; 11 East, 246, Doe v. Tofield; 2 Sim. 493, Benson v. Whittan ; 10 Paige, 140, Pond v. Beach; 1 Sandf. Ch. R. 330, Havens v. Havens; 3 Ibid. 77, Smith’s Ex’s. v. Wyckoff.)

    2. The mortgage of the lot back to the testatrix revested the fee in her, according to the law existing at the execution of the will, which fee passed by the devise, and carried with it the beneficial interest in the mortgage debt. (Powell on Mortgages, 408; 1 Jarm. 363, 633, 638, 714, 725; 5 Sim. 384, Le Gro v. Cocherell; 11 Sim. 469; 13 John. 537, Jackson v. De Lancey.) For the same reasons the bond and mortgage upon the Foster lot passed under the devise of that lot.
    IY. The 347 acres under lease in the Kayaderosseras patent must be accounted for, or a sufficient reason for not doing so given. The burden of proof lies upon the trustees. In this case no proof is produced, and no reason given.

      G. Wood, for the defendant.
    I. The devises, in the will of Mary Clarke, of the house and lot of ground on Hague-street, and the lot in possession of H. Poster, were void and totally inoperative to pass any thing.
    1. The testatrix did not own the premises at the date of the will. And ownership or seisin by the testatrix, at the date of the will, was essential, to pass any title by devise. (Goodright v. Forrester, 1 Taunt. R. 578; Roe v. Griffith, 4 Burr. 1961; Campbell v. Sandys, 1 Sch. & Lef. 294; 8 East. 552, 563-4; Roberts on Wills, 297-8; 6 Cruise, Tit. 38, ch. 3, §§ 26, 28.)
    2. The mortgage debt would not pass under a devise of the land, it being totally distinct in its character, being a chose in action. (Edwards v. The Farmers’ Fire Insurance Company, 21 Wend. 490, 491; Martin v. Rowlin, 2 Burr. 969, 978-9.)
    II. The devise of the lot in the Kayaderosseras patent, in the possession of Northrup, was void, and totally inoperative, to pass any thing. 1st. The land having been previously sold, belonged to the purchaser in equity; and the purchase money, being a chose in action, could not pass under a devise of land, which is a different thing, and in no respect identical. 2d. If the testatrix had owned the land at the time of the devise, and had subsequently contracted to sell it, the devise would have been revoked. 3d. There was no mistake of description by the testatrix. The mistake, if any, consisted in her not owning the land which she accurately described. 4th. Parol evidence would be inadmissible to explain the will, by showing a different tract from the one described was intended. (Mann v. Mann, 14 John. R. 1; Norwood v. Bard, 1 Richardson R. 135.)
    III. The court cannot conjecture that, if the testatrix had known she did not own the land, she would have given the respective choses in action instead thereof. This would be making a new will, by carrying the Cy pres doctrine of construction to a length unknown before, instead of restricting it, as ought to be done. (Fearne Cont. Rem. 203, 208, n. &c.; Moggridge v. Thackwell, 7 Ves. Jr.)
   By the Court.

Oakley, Ch. J.

The first question arises upon the devise of the house and lot in Hague-street, and the other lands which Mrs. Clarke had sold and conveyed before she made her will, and had received mortgages for the purchase money. It is contended, on the part of the defendant, that the lands did not pass under the devise, because she had no title, in them, and that the mortgages did not pass, because, a devise of land is a totally distinct thing from a gift of a mortgage debt. On the other hand, the plaintiffs claim that this is a mere mistake in the description of the property, and many authorities were cited to show that the courts will carry into effect the will of the testator, where it is clearly shown that it is an -error in 'description.

The rule established is very plain, that where it is clear that there was an intent that the property in question should pass, it will be held to pass, notwithstanding a misdescription, so long as there is enough of correspondence to afford the means of identifying the subject of the gift. The rule comes to this, that where it is necessary to carry out the intent that the will shall operate on the real estate, it will be held so to operate, although the«object is not thus described, and vice versa.

So when the devise is of land, and it turns out that the testator’s interest was a mortgage upon the-same.land, the la.w may-pass his estate as mortgagee, such as it actually existed, with all his rights and interests in the debt, and in the land itself growing out of that relation to it.. In a case like the present, where the testatrix once owned the land in fee, and had conveyed it, receiving a mortgage upon it for the purchase money, the intent to give such interest as she had in the land, or arising from it, is so. plain, that the court can have no hesitation in holding that the mortgage debts secured upon the lands devised passed to the objects of her bounty, as indicated by the gift of the lands.

It was contended, th’at-in truth the title was. revested in Mrs. Clarke by the mortgage, and that the mortgagor' had a mere equity in the land. This was technically true, and it adds to the force of the reason founded on the manifest intent of the testatrix.

In such cases, the residuary devisees and legatees take the property in question as trustees for the persons for whom it was intended, and are bound to account for the proceeds, in the same manner as other trustees. The defendant must in this case account to the plaintiffs for the proceeds of the bonds and mortgages in question, as representing Benjamin Moore and his wife, by whom the same were received.

With respect to the six hundred acres mentioned in the will as divided into farms, it appears there were four leases of farms in that tract indorsed by the testatrix with the name of Samuel Clarke, of which farms all except one were disposed of either by him or by the testatrix in her lifetime. The defendant is shown to have received, on account of that farm, four hundred dollars, for which he is liable to the plaintiffs.

There must be a decree for an- account on the principles we have stated. Neither party will recover costs against the other to this time. All further questions and directions are reserved until the account is taken.


text:
    Lyle, Executrix, &c., v. Murray.
    As a general rule, it is the duty of a collecting agent, to pay over the moneys he collects as soon as he receives them.
    The case of a factor is an exception, and the reason is that he is entitled to receive first the instructions of his principal as to the time and mode of remittance.
    An agent, who has collected money on account of his principal, must give him immediate notice of the fact.
    After a reasonable time from the receipt of such notice, in which to make a demand of it from the agent, the statute of limitations will commence running, although no demand be made.
    (Before Oakley, Ch. J., and Duna and Paine, J. J.)
    April H;
    May 10, 1851.

      This suit was commenced in January, 1848, by the plaintiff as executrix of Samuel Lyle, deceased. The declaration contained five counts. The first was on the money counts, the second was on an account stated with the testator; both averring promises to him, and the cause of action in each set forth as having accrued April 1, 1819. The third count contained the money counts, with a promise to the plaintiff as testatrix. The fourth was on an account stated with the plaintiff. The fifth was for money had and received to the use of the testatrix. The defendant pleaded the statute of limitations to the first four counts, and also to the fifth count, except as to the sum of $151.64, which he paid into court. The replications to these pleas are stated in the opinion of the court. The defendant demurred to the replications.

      E. Sandford, for the defendant.
    I. The replication of the plaintiff to the second plea of the defendant is not a sufficient answer to that plea.
    1. The causes of action mentioned in the first, second, third, and fourth counts, severally accrued at the time when the moneys in the first and third counts respectively were lent and advanced, or were paid, laid out and expended, or were had and received, as therein stated; and at the times when the accounts were stated, as alleged in the second and fourth counts. The second plea shows that these several causes of action did not accrue at any time within six years next before the commencement of this suit. The replication to this plea does not take issue upon it, nor set up any of the exceptions mentioned in the statute. (2 R. S. 296, 297; Howell v. Babcock’s Executors, 24 Wend. 488.)
    2. The matters set up in the second replication do not avoid the second plea. If the defendant received the money as an agent or attorney, the fact that a demand was not made within six years before suit brought will not save the statute. (Stafford v. Richardson, 15 Wend. 302.) The statement in the replication that defendant, “ as agent and trustee,” received the moneys, only imports such a trust as belongs to an agent empowered to collect money for tbe use of another, and not that trust which is the mere creature of a court of equity. If this were the character of the trust, then the replication shows that this action cannot be maintained, as no action at law can be maintained by a cestui que trust against a trustee, for the omission to pay over trust funds. ’ (Dias v. Brunel’s Executors, 24 Wend. 9 ; 2 Hall’s R. 130; Lewin on Trusts, 2.) Such a construction of the word “trustee,” as used in the replication, would constitute a departure from the causes of action set forth in those counts of the declaration, and the replication, for that reason,- would be bad.
    II. The fifth replication to the fifth plea is not a sufficient answer in law to that plea, for the same reasons stated under the first point.

      J. T. Brady, for the plaintiff.
    The replications are good in substance and in form. The cause of action did not accrue at any time before the commencement of this suit until a demand made, and that is alleged to have been within six years next before suit brought. (Thorpe v. Booth, 1 Moody & Ryan, 338; 20 John. 576 ; Ballantine on Limitations, 309, 369; Cooley v. Betts, 24 Wend. 203; Evarts v. Mann, 11 Vermont, 122. And see Stafford v. Richardson, 15 Wend. 302; Hutchins v. Gillmore, 9 N. H. Rep. 359 ; Buchanan v. Parkes, 5 Iredell, 597.)
   By the Court.

Duer, J.

The declaration in this case is in assumpsit, and contains five counts; the first two upon promises made to the testator in his lifetime, and the three last upon promises made to the plaintiff as executrix. The second.plea embraces the first four counts and sets up as a bar the statute of limitations. The fifth plea, which is confined to the fifth count, except as to a small sum which under the fourth plea the plaintiff admitting to be due had brought into court, sets up the same bar. The replication to the second plea, omitting parts .merely formal, is as follows: “ And the said plaintiff, executrix,. as to the said second plea, &c., saith, that by reason, &c., she ought not to be barred, &c., because she saith that the said several causes of action in the first, second, third, and fourth counts in the said declaration mentioned, accrued to the said plaintiff as executrix, &c., by reason of the said defendant having as agent and trustee in that behalf for the said plaintiff, received certain sums of money for her and with her consent, which said moneys were, at the time of the commencement of this suit, in the hands of the said defendant, and which had not, nor had any part thereof, been demanded from the said defendant until within six years next before the commencement of this suit; and this, &c.” There is a similar replication, mutatis mutandis, to the fifth plea, and to both these replications the defendant has demurred.

It was admitted by the counsel for the plaintiff that the replication to the second plea, in respect to the causes of action set forth in the first three counts of the declaration, involves a vicious departure, but he contended that as the demurrer is not limited to this infirmity, but covers the whole plea, it is too broad, and he cited several authorities to show, that upon this ground, it ought not to be allowed. It is needless, however, to consider whether this alleged mistake in the form of the demurrer would compel us to overrule it, since we are clearly of opinion that the entire replication, for reasons that apply equally to the replication to the fifth plea, is bad in substance.

Each of these replications assumes that an agent who has collected moneys, on account of his principal, is not bound until demand to pay them over, and that until demand no cause of action accrues to the principal, and from both these propositions, which were treated in the argument as identical, but which in reality are distinct, we entirely dissent. As a general rule, it is the duty of a collecting agent to pay over the moneys he collects, as soon as he receives them. It is this undertaking which the law imputes to him, and the cases which were relied on as establishing an opposite doctrine, are in truth only exceptions from this general rule. Thus, a factor, who has sold goods on account of a foreign correspondent, is not bound to remit the proceeds, until he has received the instructions of his principal as to the time and mode of remittance, and for this plain reason, .that he is not bound to take upon himself the hazard of a remittance, which, should he act without a special authority, the law would, cast upon him. (Ferris v. Paris, 10 John. 286; Murray v. Coster, 20 Ibid. 556.) And it was upon the same ground, we apprehend, that the supreme court meant to place its decision in Taylor v. Bates, (5 Cow. 376,) in which it was held, that as there had been no previous demand, the defendant, as attorney, was not liable in that action for money he had collected on account of the plaintiff. It is a necessary inference from the language of the court, that the plaintiff resided in a different place from the attorney; and that the decision was founded upon this circumstance is evident from the reference which is made in the opinion of the court to the case of a factor as strictly analogous. Ferris v. Paris, is the only authority quoted and relied on.

Even where an agent, from the peculiar nature or circumstances of his agency, is only bound to pay upon demand, it by no means follows, that until a demand no cause of action accrues, so that the statute does not begin to run. It by no means follows that the principal, by omitting to make the necessary demand, may suspend the operation of the statute for an indefinite period. It is the duty, in all cases, of an agent who has collected money on account of his principal, to give him immediate notice of the fact, and when the principal has received such notice, he is bound to make the requisite demand, within a reasonable time, and if he omit to do so, he puts the statute in motion, and when he suffers the term which it limits to expire, is concluded by his laches. This exact question was determined by the supreme court in Stafford v. Richardson, (15 Wend. 305.) There was no demand in that case until the very day upon which the suit was commenced, but as it appeared in evidence that the plaintiff, more than six years before that day, had notice that the moneys which he claimed to recover had been received by the defendant,, it was very reasonably and justly held, that the expiration of the statutory term was an absolute bar. The replications in this case do not aver that notice was not given by the defendant, until within six years previous to the commencement of the suit. They only aver that, until within that period, there was no demand, and therefore imply what is certainly not true, that until such demand, the causes of action could not have accrued.

There are other objections to these replications which, even upon the supposition'that the law is such as the counsel for the plaintiff contended, would be fatal. If a demand was necessary, the rules of law plainly require that it should have been positively averred. The replications contain no such averment. The fact may possibly be implied, but certainly is not averred. Nor is this all. If the causes of action never accrued to the plaintiff until demand, the special replications were useless, and the plaintiff, instead of replying, should have taken issue upon the pleas of the statute. The replications are therefore bad, for'the same reason that a plea is bad which amounts only to the general issue. . Upon this point we may refer to Howell v. Executors of Babcock, (24 Wend. 488,) as a controlling authority.

The defendant is entitled to judgment upon the demurrer; but ten days are allowed to the plaintiff to withdraw upon payment of costs, the replications demurred to, and either amend them, or take issue upon the pleas, as she may be advised.


author: Duer, J.,

text:
    Hasbrouck v. Vandervoort and Hayward.
    At common law a husband cannot be a witness for the wife, nor the wife for the husband.
    This rule is founded upon reasons of public policy, and not upon the interest of the witness.
    The rule has not been changed or affected by the code of procedure.
    A husband, siuce the code, cannot be a witness for his wife’s trustee in a suit affecting her separate estate, although she is not a party to the suit, and he has no interest whatever in tbe event of the suit.
    (Before Oakley, Ch. J., and Düer and Paine, J. J.)
    April 16 ;
    May 10, 1851.
    The bill was filed by Stephen Hasbrouck as trustee of tbe separate estate of Adeline, tbe wife of William. L. Pickering. The cause is reported on tbe demurrer to tbe bill, ante page 74. After tbe demurrer w;as overruled, tbe defendants put in an answer, and issue was joined. Tbe cause came on to be -beard before Campbell, J., at tbe special term. Tbe plaintiff offered as a witness W. L. Pickering, tbe husband of bis cestui que trust Tbe defendants objected to bim as an incompetent witness. Tbe judge, after taking bis testimony conditionally, and considering tbe point, sustained tbe objection, and excluded tbe testimony. Tbe plaintiff not offering any other evidence, tbe judge dismissed tbe bill. From tbis decree tbe plaintiff ap-' pealed to tbe general term.

      W. O. Noyes, for tbe plaintiff.
    I. Tbe right of tbe plaintiff to recover on tbe case made by tbe bill, was settled when tbis cause was before tbe court upon the demurrer; and upon the bearing all tbe material facts stated in the bill, except tbe tender, were proved, and no defence was established.
    II. The only question now presented is, whether Mr. Pickering, tbe husband of Mrs. Pickering, for whom tbe plaintiff is trustee, was a competent witness in behalf of the plaintiff; and it is submitted that he was, and that his testimony should not have been disregarded, for the following reasons:
    1. The true reason why husbands and wives are not allowed to be witnesses for each other is, that they are interested in the event of the suit. The notion that they are inadmissible from policy, and irrespective of interest in the event, seems to be pretty much given up in England as well as .here. (Cowen & Hill’s Notes to Phil. Ev. 1555, and cases there cited; Norris’s Peake, on Ev. 247, ch. 3, § 4.)
    '2. There never was, in truth, any rule that a witness was excluded from testifying on the score of policy alone. In the case of husband and wife, there was, until recently, such an identity of interest, especially by the husband in the wife’s property, that he would be excluded from testifying in her favor on that ground alone, especially if she was a party to the suit.
    3.. In the present case, the trust under which the stock in question was held, with the income, was exclusively for the benefit of the wife during her life, with a contingent right of survivorship in the husband; and as the husband, prior to the filing of the bill, had released such contingent right, he had no interest whatever in the event of the suit. (Laws of 1848, p. 307, ch. 200; Laws of 1849, p. 528, ch. 375.)
    4. The bases relied on as excluding him, are chiefly the following : 1 Greenleaf’s Ev. §§ 344, 381; Davis v. Dinwoody, 4 T. R. 678; 2 Sand. S. C. R. 340; Barry v. Mercein, 8 Paige, 50; Windham v. Chetwind, 1 Burr. R. 424; Snyder v. Snyder, 6 Binn. 488; Burrell v. Bull, 3 Sand. Ch. R. 15; 1 Phil. Ev. 83. But these cases were all decided when there was less liberality in the admission of testimony, and before the adoption of the code, admitting interested witnesses to testify. (Code, §§ 351, 352.)
    5. Before the adoption of this rule in England, and even in Massachusetts, where the rigid common law rule as to interest still exists, a husband has been admitted as a witness in a suit brought by a trustee, for a trust fund, in which she was entitled to share. (Abercrombie v. Hickman, 8 Adol. & E. 683 ; Richardson v. Learned, 10 Pick. 261; Dyer v. Homer, 22 Pick. 253.) So the wife has been held competent against her husband, in a suit ,to which he was not a party, and where his liability was only contingent. (Fitch v. Hill, 11 Mass. 286.) This decision was founded upon Peake’s Evidence, 128. (Norris’s Peake on Ev. 254; Williams v. Johnson, 2 Strange, 504.)
    The rule was the same ,in Yirginia. (Baring v. Reeder, 1 Hen. & Munf. 154; 1 Green Ev. § 841, note 6, and cases there cited.)
    6. In this case, the husband has no interest whatever, nor is he a party to, nor can he be legally benefited by the result of the suit, nor is his wife a party. Besides, the whole legal and equitable title to the trust fund was in the trustee.
    7. Nor was the husband the person for whose immediate benefit the suit was brought, nor was the demand in suit, assigned for the purpose of making him a witness.
    III. There should be a decree for the plaintiff declaring that he is entitled to the stock as trustee, and directing the defendants to transfer it to him, and to account for the dividends received, with interest, and for costs. 1. The stock has been redeemed by the payments and receipts upon it. 2. A considerable surplus has been received from dividends for which the defendants should account. 3. They should pay costs, because they have set up an absolute claim to the stock, which was unfounded, and have relied upon an inequitable and unconscionable defence.

      J. M. Mason, for the defendants.
    I. The testimony of William L. Pickering, the husband of the cestui que trust, was properly excluded by the judge at special term, because he was one of the parties for whose immediate benefit the suit was prosecuted, and was, therefore, incompetent. (Code, § 399.)
    II. Mrs. Adeline Pickering would have been incompetent as a witness in behalf of her trustee, for the same reason, and Pickering’s relation, as husband, rendered him incompetent.
    III. The husband is excluded from testifying in a case where his wife’s rights, and interests are concerned, by reason of .the marital relation, and because it is contrary to public policy that he should be a witness in such a case, and not on the ground of interest. (Davis v. Dunwoody, 4 Term R. 678; 1 Greenleaf on Evidence, 384, § 334; Ibid. 389, § 341; The People v. Mercein, 8 Paige, 50; Erwin v. Smallen, 2 Sand. S. C. 340; Pillow v. Bushnell, 5 Barb. S. C. R. 156.)
    IY. Nor can the husband be a \yitness for trustee of his wife’s estate, where the legal title is vested in the trustee. (Windham v. Chetwind, 1 Burrow, 424; Snyder v. Snyder, 6 Bin. 483, 488; Burrell v. Bull, 3 Sand. Chy. 15; Hosack v. Rogers, 8 Paige, 242; Hopkins v. Smyth, 7 J. J. Marsh, 263; Hopkins v. Br. Bk. of Montgomery, 13 Ala. 455; Hale v. Dagan, 4 Ala. 696.)
    Y. The rule is not altered bjr the provisions of the code. The 398th section must be construed strictly, and so as to remove the disqualification of the witness, on the ground of interest only.

    'YI. But even if the testimony of Pickering is admitted, the bill cannot be sustained by the plaintiff. The testimony shows that the trustee had applied the stock according to the provisions of the trust deed, and that so far as this share of stock was concerned, the trust had ceased.
   Duer, J.,

delivered the opinion of the court.

Whether the testimony of W. L. Pickering, the husband of the lady for whose benefit as a cestui que trust this suit is brought, was properly rejected by the judge at special term, is the only question necessary to be considered. This evidence, if admitted, establishes the plaintiff’s case, and if rejected, leaves it wholly ■unsustained by proof.

This court has decided that the rule of the common law, which prohibits husbands and wives from being witnesses for or against each other has not been repealed, or in any manner affected by the provisions of the code. (Erwin v. Smallen, 2 Sand. Sup. C. R. 340.) The supreme court in the third district has made a similar decision, (Pillow v. Bushnell, 5 Barb. S. C. Rep. 156,) and we little expected that the question which these decisions involve, would again be raised.

It is true, that with the exception of those who are parties to the suit, or for whose immediate benefit it is brought or defended, the interest of a person offered as a witness, is no longer a ground of exclusion, and if the rule of the common law to which we have referred, rested solely upon the ground of interest, it might justly be considered as abolished; but such is not the foundation of the rule. It is founded, not upon the interest of the witness, but upon reasons of public policy, and these reasons so manifestly sound and just, that we are not at all disposed to relax the obligation or narrow the application of the rule to which they have given rise. On the contrary, we must hold it to be applicable in every case, in which the admission of the evidence has a tendency to produce the mischievous consequences which the wisdom of the law, in adopting the rule, has designed to prevent, namely, the interruption of domestic peace and harmony, and the destruction of that unreserved confidence which the marriage relation implies and requires. The peace and good order of society, the real strength of a nation, and the stability of its government, spring from the charities and the virtues of domestic life, and these will be found to vanish in the proportion in which the bonds of mutual trust and mutual affection, that should unite husband and wife, are severed or impaired. The discord and distrust that separate the parents are sure to reach the children. They lose their reverence for their parents, and their sympathy with each other, and the thoughts and feelings that should endear and sanctify their home, if not wholly unknown, are soon extinguished and forgotten. Hence the hardship that may result to individuals in particular cases from the operation of the rule, is not to be compared with the evils that would flow upon society, should the safeguard it has provided be overthrown .or abandoned. It may indeed be said, that these consequences are only to be apprehended, when it is against each other that husbands and wives are admitted to testify; but without adverting to other considerations, it. is a conclusive reply, that if the testimony, ■when favorable, is to be received, when adverse, it cannot be rejected. Such a distinction would be an anomaly in the law, and would, moreover, be a direct temptation to perjury,-and a pregnant source of injustice.

It was, however, contended by the learned counsel of the plaintiff, that although the rule of the common law may not have been changed, yet it is in truth only applicable when the husband or wife, for or against whom the testimony is offered, is a party to the suit, and that in all other cases in which the evidence has been rejected, the interest of the witness has been the sole ground of its exclusion; but we do not at all hesitate in rejecting such a limitation of the rule, not only as inconsistent with the principle upon which it is founded, but as plainly contradicted by many decisions. In Hosack v. Rogers, (8 Paige, 242,) the wife was not .a party to the suit, and had only an eventual interest in a fund created primarily for the benefit of creditors, yet the testimony of the husband, whose interest was contingent and barely possible, so far as it tended to enlarge the fund, was struck out by Chancellor Walworth as plainly incompetent. In Burrell v. Bull, (8 Sand. Chy. R. Rep. 15,) the bill was filed by the trustee of a married woman and related to her separate estate, yet the husband, who, it was admitted, had no interest whatever, present or future, vested or contin- • gent, was excluded as a witness by the vice-chancellor, upon the sole ground of public policy.

The strongest case, and that which meets and refutes the entire argument on the part of the plaintiff is, Davis v. Dunwoody, (4 Term R. 678.) It was an action of trespass against the sheriff, brought by the trustee of a married woman to recover the value of certain goods which the defendant had seized, under an execution against the husband. On the trial, the husband was offered ,as a witness to prove that the goods were not his property, but were a part of those included in the settlement, and to which the plaintiff had, therefore, a legal title, and he was admitted by the judge upon the ground that it was not in favor of, but against his own interest that he was called to testify, since the value of the goods, if retained by the sheriff, would be applied to the satisfaction of his own debt. Upon the testimony of the husband, the plaintiff obtained a verdict, but the court of King’s Bench set it aside and granted a new trial, without hearing the counsel for the defendant; and Lord Kenyon and Mr. J. Buller concurred in saying that “ independently of the question of interest, it is now considered a settled principle of law that husbands and wives cannot in any case be admitted as witnesses for or against each other.”

We are now required to overthrow a principle, which more than half a century ago these eminent judges considered as settled, and to create an exception from a rule, which, with no doubt or hesitation, they laid down as universal. To such a request, we have neither the disposition, nor, as we understand our duties, the power to accede. (See Langley v. Fisher, 9 Lond. Jur. 837, S. C. 14 Law Jour. 102; Snyder v. Snyder, 6 Binney, 483.) Although we must hold that the law is established and certain that the husband cannot be a witness for or against his wife in any suit touching her separate estate, whether she is a party to the suit or not; and vice versa, that she cannot be a witness for or against her husband in any suit in which he is directly interested; yet we are far from asserting that the positions upon which the plaintiff’s counsel relied are wholly destitute of authority, and certainly not of the semblance of authority.

Mr. Peake, in his law of evidence, has said, (Peake’s Ev. 128,) that in civil suits between third parties, the wife may be a witness to charge her husband, and in Fitch v. Hill, (11 Mass. 286,) this observation seems to have been understood by the supreme court of Massachusetts as meaning that the rule of exclusion is limited to the cases in which the husband or wife is a party to the suit. We doubt whether such was the meaning of Mr. Peake, and if it were, his observation is certainly not sustained by the single case to which he refers, (Williams v. Johnson, 2 Strange, 1041.) In that case the plaintiff sought to recover the value of certain articles which had been delivered to the wife of defendant, and the mother of the wife was admitted to prove that the articles had been delivered, not upon the credit of the defendant, but upon that of ber own husband. As her husband, however, was neither a party to the suit, nor interested in the result, it is manifest that the effect of her testimony was not to charge or in any manner prejudice him, but simply to discharge the defendant. It is true her evidence might have led to a suit against her husband, but in such a suit.she could not have been a witness, nor could evidence of her former declaration, although under oath, have been received. It cannot, therefore, be said that she was a witness against her husband, within the true meaning of the rule which excludes such testimony.

Much reliance was placed on the modern case of Abercrombie v. Hickman, (8 Adolph, and Ellis, 683,) in which it was alleged that the court of King’s Bench held the husband to be a competent witness in behalf of his wife, on the ground that if he was interested at all, his interest was only contingent; but upon an attentive examination of the case, we are satisfied that the true ground of the decision was, not merely that the husband had no interest, but that there was an entire deficiency of proof as to the interest of the wife herself. She was entitled to an annuity, her right to which was not in dispute, and it did not appear that the sufficiency of the fund upon which the annuity was charged, was at all dependent upon a recovery in the suit. For aught that appeared, her interest could not be affected, whatever judgment might be given. The husband, therefore, was not admitted as a witness for his wife.

So far as we have been able to discover, the only decisions that give any countenance to the argument on the part of the plaintiff, are the two cases in Massachusetts, of Richardson v. Learned, (10 Pickering, 261,) and Dyer v. Homer, (22 Pickering, 251,) and these, it cannot be denied, bear a very close analogy to the present. In each of these cases a husband was admitted to testify, in effect, on behalf of his wife, who, as a cestui que trust, was directly interested in the property or fund, which was the subject in dispute, and he was admitted upon the ground that his personal interest, if any he had, was remote and contingent. It is a circumstance, however, which greatly detracts from the consideration to which these cases might be otherwise entitled, that in eacb of them the question of the interest of the husband, is that which was alone'considered by the court, without the slightest allusion to the reasons of policy upon which, by the consent of all the English authorities, the rule of exclusion is in reality founded. Those reasons may have been overlooked or forgotten, but it cannot be said that they were deliberately rejected. If, however, without insisting upon this remark, we admit that Richardson v. Learned, and Dyer v. Homer, are evidence of the law as it now exists in Massachusetts, we are constrained to add, that they are a very plain departure from the law, which, in this state, has invariably been followed, and to which we hold ourselves bound to adhere. That law is, that husbands and wives are not competent witnesses for or against each other, in any suit, in which either is a party, or in the event of which either has a direct and certain interest. Whether the testimony must be excluded where the interest is only future and contingent, it is not necessary to determine, since in this case the interest of Mrs. Pickering is immediate and certain.

The judgment of the special term must, therefore, be affirmed, with costs.


text:
    Beckwith v. The President, Directors, and Company of the Union Bank.
    A bank has no lien upon money standing to the credit of one of its depositors, for the amount of a bill of exchange indorsed by such depositor, and discounted by the bank, but which bill has not yet matured.
    An assignment by a depositor for the benefit of creditors, carries to the assignee all the right which the depositor had in his bank deposit, at the date of the assignment.
    Notice of such assignment to the bank is necessary only to prevent the bank from paying the deposit on the checks of the assignor, or from parting with the funds of the bank on the faith of the deposit still belonging to him.
    A bank depositor, who was an indorser on a bill held by the bank running to maturity, and in whose favor there was a balance of account nearly equal to the bill, made a general assignment for the benefit of creditors. Soon after, and before notice of the assignment, the bill was protested, the assignor fixed as indorser, and the amount of the bill was charged to his account on the books of the bank. The bill was held by the bank, uncancelled when notice of the assignment was given. Held, that the assignee was entitled to recover from the bank the entire sum in deposit, without any deduction for the amount of the bill.
    The right to set off a demand against an assignee has not been affected by the code of procedure.
    (Before-Oakley, Oh. J., and Ddek and Paine, J. J.)
    April 16 ;
    May 10, 1851.
    The suit was brought to recover the balance of a deposit, made with the defendants as bankers, by the firm of W. C. & A. A. Hunter. The Hunters kept an account in the Union Bank, the balance of which, on the 24th August, 1850, was $3600 in their favor. On that day, they made an assignment of all their property and effects to the plaintiff, for the benefit of their creditors. It did not appear that the batik had notice of this assignment till August 28th, when the plaintiff demanded -of them payment of the above balance, which payment they refused on the following' ground.
    On the 19th July, 1850, the bank discounted for the Hunters, a bill of exchange drawn by Samuel Suydam on Suydam, Sage& Co. of New York, for $3914, in favor of and indorsed by the Hunters. The bill had been accepted by the drawees. The net proceeds, on its discount, were passed to the credit of the Hunters on the books of the bank. The bill matured August 27th, 1850, was protested for non-payment, and notice thereof given to the Hunters. On thé sam,e day, the bank charged the amount of the bill to the Hunters on the books of the bank, and claimed to have thereby applied to the payment of the bill, the balance of their deposit. On the 26tb August, the bank received from the Hunters a written notice, dated August 24, directing the bank to make no payments for their account, without their special authority. The bill was still in the bank, uncancelled.
    The cause was referred by consent to a sole referee, who made a report in favor of the plaintiff. The defendants moved to set aside the report, and for a new trial.

      W. Kent, for the defendants.
    I. The assignment of W. C. & A. A. Hunter, made on 24th of August, 1850, passed no greater or other interest than the assignees possessed of and in the moneys in the bank. What were the rights of W. C. & A. A. Hunter? It may be conceded, for the purposes of the argument, that up to the time of demand and dishonor of the draft, and notice thereof, they have the right to draw the money. But it is equally clear that, if they did not draw the money, and the time elapsed, they were foreclosed of their right; and the bank became entitled to apply it to their debt. The assignment must be distinguished from a check given for a valuable consideration to a bona fide holder. This would be a specific appropriation of the money, and might pass title. But an assignment of all the debtor’s property, without distinguishing it, is, though valid in the law, nothing more than merely placing the assignee in the place of the assignor, quoad this money.
    The bank, by the law merchant, has a banker’s lien; and without any right or set-off dependent on statute, has the right to apply the money, if not drawn by check for a valuable consideration, to a debt of the depositor when due. The assignee of the depositor, in the case before the referee, had no other right than his assignor.
    II. If the assignment conferred any right to the fund in bank, the assignee was bound to give notice; and as he failed to give any notice until the draft held by the bank was due and dishonored, and the money held by the bank was applied to the debt, the bank ceased to be liable to pay the money to the assignee. See case in 3 Palm. 46, where question of notice did not arise.
    III. The special notice given on the 26th August, but dated and drawn on the 24th August, removed the funds in bank from a general deposit to a special one; and then the bank had a lien upon it, for the debt being due on the draft.
    IV. The assignment of W. C. & A. A. Hunter is not an assignment for a valuable consideration, so as to cut off the bank from their right to apply the money to their debt, if done, as it was, in good faith to a bona fide debt.
    V. The bank acting in good faith, by the application of the depositor’s funds in payment of the note, and acknowledging payment, discharged the drawer of the bill of exchange. ' This result was caused by the negligence of the assignees of the Hunters to give notice. The bank, therefore, have lost rights in consequence of the negligence of the assignee; and therefore have a right to retain the money deposited.

      A. O. Bradley, for the plaintiff.
    I. While the Hunters owned the demand for which this action is brought, the defendants could not have set off against it the bill of exchange owned by them. They are not, therefore, within the statute of set off. (2 E. S. 354, § 18, subd. 7 and 8; Graves v. Woodbury, 4 Hill, 559; Spencer v. Barber, 5 Ibid. 568; Hackett v. Connett, 2 Edw. C. E. 73; Wells v. Stewart, 3 Barb. S. C. R. 40; Watts v. The City of New York, 1 Sand. S. C. R. 23.)
    II. The assignment of the Hunters, made on the 24th of August, passed to the plaintiff all their title to the deposit in question ; and as their title was absolute, his became absolute. And as before the assignment the defendants were the debtors of the Hunters, so after the assignment they became the debtors of their assignee. (Story on Bailments, § 88.)
    III. A lien is a right in one man to retain that which is in his possession, belonging to another, until certain demands of him, the person in possession, are satisfied. (2 Kent. Com. 634; Story on Agency, §§ 352, 353.) But no right of lien can arise, where from the nature of the contract between the parties, it would be inconsistent with the express terms or the clear intent of the contract.' (Ibid. § 362.) The deposit in this case, like all deposits, was withdrawable at the pleasure of the Hunters, while it belonged to them. ' If they had the right to withdraw, it is manifestly inconsistent with the clear intent of the contract that the bank should have the right to retain. (Story on Bail. §§ 4, 41, 42, 61, 88.)
    IY. The defendants, in discounting the bill in question, looked solely to the personal responsibility of the parties. By that act, the defendants became merely the lawful holders of the bill for value, and with no other rights than that situation would bestow. These rights were to make collection from the parties liable on the bill, by persuasion or by suit, or in cases provided by statute, by set off. Such holder has no lien upon any thing but the bill, because credit is given to that alone. (Story on Agency, §§ 380, 381.)
    Y. Bankers have a general lien upon all notes, bills, and other securities, deposited with them by their customers, for the balance due to them on general account. This lien is founded on the same grounds as those of insurance brokers and factors. It is given by law as a security for advances. But where no advances are made, or where the advance has been made on the credit of a particular security or person, no lien exists. (Lucas v. Dorien, 7 Taunt, 278 ; Vandeveer v. Willis, 3 Bro. C. R. 20; Davis v. Browsher, 5 T. R. 488; Jourdaine v. Lefebre, 1 Esp. N. P. C. 66; Bolton v. Puller, 1 B. & P. 539; Giles v. Perkins, 9 East. 12; Scott v. Franklin, 15 Ibid. 428; Bosanquet v. Dudman, 1 Stark. N. P. C.; Bollard v. Bygrave, 1 R. & M. 271; Story on Ag. §§ 380, 381.)
    YI. No notice of the assignment was necessary. The only object of such a notice is to put the debtor on his guard against dealing with the assignor, or perhaps obtaining other demands against him, on the belief that he still continued the owner. (Graves v. Woodbury, 4 Hill, 559; Wells v. Stewart, 3 Barb. S. C. R. 40.)
    YII. Charging the bill to the account of the Hunters did not, of course, discharge the drawer or any body else. It was a simple act of ordinary book-keeping. If the money had belonged to the Hunters, no act of charging would have been necessary. The set off would have been perfect without it. But not belonging to them, the defendant’s book-keeper could hardly divest the plaintiff of his right. Besides, the drawer was one of the firm of Suydam, Sage & Co., the acceptors, and payment alone would discharge them.
    Till. Any special notice given by the Hunters on the 26th of August, after their title to the account had vested in the plaintiff, could have no effect upon his rights, whatever might have been its terms. But the present notice was simply against paying on their account. Their title to the money had passed from them to another, and it was manifestly just, therefore, that the depositaries of it should not thereafter 'apply it to their account. Yet the depositaries seek to do, by reason of the notice, what the express terms of the notice forbade — to pay it all for their account. That notice may have informed the defendants of their duty, but could not change the character of the deposite.
   By the Court.

Oakley, Ch. J.

The fund to the credit of W. C. and A. A. Hunter, on the books of the Union Bank, arose from the discount of bills of exchange drawn by them on Suydam, Sage & Co., and accepted by the latter. One of these bills became due and was protested for non-payment, and it was thereupon charged by the bank to the account of W. C. and A. A. Hunter. At this period the bank knew of their failure, but did not know that they had made an assignment. . The assignment having been made in good faith, and transferring to the plaintiff all the property of the Hunters of every description, the deposit to their credit in the bank thereby became vested in the assignee. Therefore, when the bill fell due, and the Hunters became liable to the bank for its payment, there were no demands existing between them and the bank which could be the subject of set off. The money to their credit belonged to the plaintiff

In a suit between this plaintiff and another bank, in which thé facts are similar, it was conceded that there could be no set off in such a case previous to the code of procedure, but it was contended that under the code the rule is different, and that the right of the bank to set off their debt against the deposit is to be determined on the apparent state of facts existing previous to and at the time notice of the assignment was given to the bank, and we were referred to sections 111 and 112 of the code.

In this suit it is claimed that the bank having applied the money deposited to the payment of the protested bill without notice of the assignment of the deposit, the bank ceased to be liable; and, further, that by such application the drawer of the bill was discharged.

We have considered the subject and think these views are not sound. Under the former statute of set off, when the action was brought in the name of a party to a chose in action, by one to whom he had assigned it, the defendant seeking to make a set off was required to show that he had a right to make it against the nominal plaintiff at the time the assignment was made. The law preserved the equities of the parties, and the rights of an assignee were protected, although the suit was brought in the name of the assignor. Section one hundred and twelve of the code was intended to preserve in the same manner the rights of defendants, in cases where the suit was prosecuted in the name of the assignee, as required by the section next preceding. The effect of the provisions of the code was to leave the right of set off unaffected, and the case is to be decided according to the law of set off as established by the revised statutes. The only change made is in the form of the section.

The omission to notify the bank of the assignment before the draft became due does not alter the case. If the bank had paid over the deposit to the Hunters, or made advances to them or come under liabilities for them in respect of the deposit, it would have been protected against the assignee. But the situation of the bank has not been affected by the want of notice of the assignment. The charging of the protested bill to the account of the Hunters was not a payment of the bill, nor did it discharge any of the parties to it. The bill was still in the hands of the bank, uncancelled, and all the parties remained liable upon it as they were before the charge was made.