author: By the Court.—Freedman, J.

text:
    ANGELINA G. WICKS, Plaintiff v. WALTER J. HATCH and NATHANIEL W. T. HATCH, Defendants.
    A married woman who carries on a business for profit, and employs her husband as her agent," to manage it, is legally liable for the acts of such agent, the same as though the marital relation did not exist (Warner v, Warren, 46 W. T. 228).
    In case at bar, the power was conferred by a married woman to her husband in a written instrument, bearing date July 31, 1869, appointing him as her attorney and authorizing him as such attorney “ to buy, sell, assign and transfer in his discretion, gold, stocks and bonds, and to draw, execute, sign and deliver for me and in my name, all orders, checks, or other instruments in writing whatsoever, which shall or may, in his discretion, be necessary in the conducting, ■carrying on and transacting the business of buying and selling gold, ■stocks and bonds on speculation or otherwise, giving and granting unto my said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be ■done in and about the premises, as fully, to all intents and purposes, as I might or could do if personally present, with full power ot substitution and revocation, hereby ratifying,” &c.

      Before Freedman, Van Vorst and Speir, JJ.

      Decided October 31, 1874.
    George A. Wicks, the husband and agent of the plaintiff, in the exercise of the powers conferred upon him by plaintiff, in this power of attorney, employed the defendants as brokers, in the business described in said power, and on September 18, 1869, authorized them in writing, to sell in their discretion at public or private sale, and without notice to plaintiff, the stocks, bonds or gold that defendants should be carrying for plaintiff, whenever the plaintiff’s margin should fall below five per cent.
    Reid, that the acts of defendants within the line of this- authority in the sale of stocks, bonds or gold, should he sustained (See opinion of the court, Kebedmait. J.).
    By the instrument of September 18, the plaintiff waived her right to notice of sale by the defendants, and the defendants acquired by such waiver the right to sell for their own protection, and all they ■ were hound to do was to act in good faith and in the exercise of their best judgment and discretion.
    When authority is given to sell without notice, at public or private sale, a sale at the board of brokers is valid (Milliken i>. Dehon, 27 R. Y. 864.).
    The case of a verdict for defendants, and the judgment suspended by the court, and plaintiff’s exceptions ordered to be heard in the first instance at general term.
    The defendants were brokers and stock brokers in the city of New York, and the complaint charged them With the conversion to their own use of bonds and stocks, the property of the plaintiff, to plaintiff’s damage, ninety-live thousand dollars.
    The defendants by their answer, first denied the allegations of the complaint, except as therein after stated and then alleged :
    And for a further answer herein, the defendants allege that in the beginning of April, 1669, the plaintiff through her husband, Q-eorge A. Wicks, opened an account with these defendants as bankers and brokers, advancing to them two thousand dollars in cash, and the proceeds of fifty thousand dollars in United States bonds, which the defendants were authorized to and did sell and pass to plaintiff’s credit; and then and there employed these defendants as such brokers from time to time to buy and contract to buy for her, and as she through the said Greorge A. Wicks should direct, and with the moneys so advanced, and other moneys to be provided joy these defendants, bonds and stocks and gold coin, and the same again from time to time to sell and contract to sell as she should in like manner direct.
    That in and by such arrangement it was understood and agreed that the purchases and sales, or contracts of purchase and sale, were to be made, not as investments or changes of investment, but with a view to profits that might be made by plaintiff' in buying or selling according to the fluctuations from time to time, of the market prices of the said bonds, stocks, and gold coin so dealt in ; that such purchases and sales, and contracts of purchase or sale, were to be made by the defendants as brokers, for a commission to be paid therefor, and according to the custom of brokers and in their own names, and that the defendants were to carry for plaintiff the securities so purchased, or, in other words, advance or provide the moneys necessary for purchasing and holding the same, the plaintiff to protect them by providing further moneys whenever the said stocks and bonds should, at their market price, prove an insufficient security, and that they might use the said stocks, bonds, and gold coin, or any proceeds thereof in their hands, in borrowing money to carry on the said operations, or retain the same on account of moneys by themselves advanced for the same purposes ; that balances of moneys in their hands were not to be considered as special deposits, but that plaintiff was to be allowed interest thereon.
    And these defendants further allege, that under the said agreement they did, in pursuance of instructions given by plaintiff through said G-eorge A. Wicks, in their own names, buy and sell, and make contracts to buy and sell, large amounts of the stocks of various incorporated companies, and also gold coin, and render accounts from time to time of such transactions jo the plaintiff ; that the stocks and bonds mentioned in the complaint were acquired by these defendants, and came to their possession as being purchased under the said arrangement, and not otherwise; and that a true account of such transaction, starting from the settlement oí a prior account as of the date of August 31, 1869, and brought down to September 30,1869, is hereunto annexed, marked “A,” showing that irrespective of the sale of certain stocks and bonds, made on September 38, 1869, and assuming them to be on hand on September 30, plaintiff stood debited with the sum of two hundred and seventy-seven thousand eight hundred and thirty-four dollars and seventy-four cents, on paj-ment of which she would have been entitled to receive certificates for six hundred shares of the stock of the New York Central Railroad Company, for four hundred -shares of the Toledo, Wabash & Western Railroad Company, for one hundred shares of the common stock of the Chicago & Northwest Railroad Company, for two hundred shares of the stock of the Hudson River Railroad Company, and one hundred thousand dollars in bonds of the United States, known as five-twenties, of the issue of 18(37,-all being stocks and bonds which these defendants liad pure lia sed in llieir own name, but for the account and benefit of plaintiff, under the arrangement aforesaid. That defendants had the said bonds and the certificates of the said shares in their possession on September 28, 1869. That prior to said date, to wit: on September 18, 1869, defendants being apprehensive of the course of the stock market, and fearful of heavy and sudden depreciations in the market value of stocks and bonds, and of the embarrassment which might ensue thereby to themselves and other customers for whom they had similar dealings, and considering in reference to the plaintiff and her husband and agent, the said George A. Wicks, that they reside at Fort Washington, and had no place of business near that of defendants, and could not be easily communicated with, required of plaintiff, and she thereupon on the said September 18, 1869, through the said George A. Wicks, gave .to defendants express authority, in writing, to sell in their discretion at public or private sale, and without notice to her, or any notice whatever, the stocks, bonds, or gold, which they were or might be carrying for her, whenever her margin should fall below five per cent.
    That on September 28, 1869, there occurred a sudden and heavy fall in the market price of all the securities above mentioned, so that according to such market price the said securities did not furnish a surplus or margin, a,bove the amount of said indebtedness above stated, of five per cent., or any margin whatever ; and apprehending, as defendants had reason to do, a still further decline, defendants, in the exercise of their best discretion, sold on behalf and for account of the plaintiff all the stocks and bonds above mentioned, except three hundred shares of the stock of the Toledo, Wabash & Western Bailroad Company, which they were unable to sell; that such sales were the same disposition of the stocks and bonds in the said amended complaint mentioned, therein untruly charged as a conversion thereof to defendants own use.
    That defendants at once applied the proceeds of such sales to the credit of plaintiff’s account, and rendered a statement thereof to the plaintiff. That on the follow ing morning, September 29, the plaintiff having been fully advised of the said sales and informed, as was the fact, that since they had been made, the market prices had still further declined, so that the same stocks could be bought back if she desired it, at a much lower rate than that at which they had been sold, did not object to the said sales, but as these defendants allege, fully ratified the same. And they further allege that, though these defendants then offered plaintiff to purchase for her the same amount and description of stocks and bonds so sold as aforesaid, on being furnished a reasonable margin or security for the money required for such purpose beyond what the said stocks and bonds themselves, if repurchased, would furnish if retained by defendants, so as to protect defendents against loss upon such repurchase in case of a still further decline in the market, yet the plaintiff did not accept the said proposition, or tender or offer to furnish any such margin or security, nor did she claim to reject the sales so made as aforesaid, as having been made on her account, until after the prices of the securities so sold had again advanced in the market; nor has plaintiff ever tendered or offered to pay to the defendants the moneys advanced by them for the purchase of said stocks and bonds which the plaintiff in her said amended complaint claims to have been converted by these defendants, or any part thereof, or demanded from these defendants the san stocks and bonds or any of them.

      Third. And for a further answer herein, by way of counter-claim, these defendants allege that in the month of April, 1869, the plaintiff, by and through her agent George A. Wicks, employed those defendants as bankers and brokers to buy and sell stocks and bonds and gold coin for her on commission, the said defendants to advance the moneys required for such purpose, over and above certain sums and amounts to be furnished by the plaintiff herself, the property so purchased to be retained by these defendants until the plaintiff should pay the amounts due upon the same, and defendants to have power to sell the said securities for their own protection and reimbursement whenever the plaintiff might fail to furnish reasonable security, which agreement was subsequently, and on September 18, 1869, modified, so that the defendants might so sell, without any notice whatever to her, whenever the securities at their market price should fall below the amount of the plaintiff’s indebtedness to defendants with five per cent, added.
    That in pursuance of said arrangement, these defendants did, from time to time, proceed to buy and sell, in pursuance of plaintiff’s directions and for her account, stocks, bonds, and gold coin, and report such transactions to the plaintiff.
    That on September 28, 1869, the defendants being largely in advance to the plaintiff for moneys furnished by them in the purchase of stocks and bonds and gold coin on her account, and the market price of all the securities in their hands having declined below the amount of such advances, under the power and authority aforesaid, and in the exercise of their best discretion, sold all the securities in their hands, held for and on account of the plaintiff, at the highest market price obtainable therefor, except three hundred shares of the Toledo, Wabash & Western Railroad Company, which they were unable to sell; and upon making such sales, credited the proceeds to the account of the plaintiff; and afterwards, in like manner, on October 28, 1869, these defendants sold the said three hundred shares of the Toledo, Wabash & Western Railroad Company, and credited the proceeds to the plaintiff’s account. That after crediting all the proceeds of such sales, which these defendants allege were duly made in pursuance of authority conferred by the plaintiff, there is due to these defendants the sum of one thousand five hundred and twenty-one dollars and sixty-five cents, with interest from October 23, 1869. That the schedules hereto annexed, marked A and B, show the said transactions : the said schedule A commencing with a balance, according to previous accounts rendered to plaintiff, and being made up for convenience to September 30, as though the said stocks and bonds, sold on September 28, were still on hand ; that schedule B shows the actual sale thereof on the said September 28, and the subsequent sale on October 23, 1869, of the said three hundred shares of the stock of the Toledo, Wabash & Western Railroad Company.
    The said accounts, with the above explanations, are just and true, and contain, as these defendants allege on information and belief, all credits by way of interest, dividends, or otherwise to which plaintiff is entitled, and they make them part of this their counterclaim.
    And the defendants further allege that the said sale, made on September 28, 1869, is the same disposition of. the stocks and bonds in the said amended complaint described, therein wrongly alleged to have been converted and disposed of by these defendants to their-own use, and these defendants accordingly claim judgment against the plaintiff for the balance due to them by reason of the transactions aforesaid, to wit: for the said sum of one thousand five hundred and twenty-one dollars and sixty-five cents, with interest from October 23, 1869, and the costs of this action.
    The plaintiff, by her reply, put in issue the new matter, and the counter-claim contained in the answer.
    Upon the trial both parties gave evidence, and the case was submitted to the jury. They rendered a verdict for the defendants, and the court ordered the . plaintiffs’ exceptions to be heard in the first instance, • at the general term.

      George S. Stitt, attorney, and Aug. F. Smith, of counsel for plaintiff.
    I. The power of attorney did not give Mr. Wicks authority to make the paper of September 18, 1869.—1. The power of attorney gave to Wicks authority to manage the speculation. This secured to Mrs. Wicks the benefit of the attorney’s judgment. The attorney could not delegate this exercise of judgment without express authority to do so (Berger v. Icard, 4 Johns. Ch. 368; 2 Kent, 633; Story Agency, § 13 ; Commercial Bank v. Norton, 1 .Hill 501). 2. The power of attorney authorized Wicks to “ sign all orders, checks or other instruments which may, in his discretion, be necessary in transacting the business.” This did not, in terms, nor by implication, give Wicks the right to delegate the exercise of a discretion as to whether the stock should be sold or not. Under this power, no doubt Wicks could order stocks bought or sold, but he could not give a discretion to buy or sell. What he did was to give a discretion to sell, if the stock so fell that there was not a margin of five per cent. left. And the parting with this discretion brought the ruin, for it is certain that had Wicks been consulted, he would not have ordered the stock sold. The principle governing the case wmuld be the same if the paper of September 18 had been a simple authority to sell at discretion, with no mention of a fall, so as to consume the margin. 3. The w'ords in the power of attorney, “all orders, checks or other instruments,” are certainly to be read, all orders, checks or other instruments of a similar nature. Surely it can not mean that the attorney could sign a mortgage as a security, or in the place of a margin. And can it any more be said that the attorney could sign a cut-throat agreement (so called in Wall-street) ? Powers of attorney are construed strictly, and all the attorney could do was to “ sign orders, checks and other instruments,” necessary in transacting the business—not those necessary to secure the broker—but orders.necessary in the usual current of the business. A. gave to B. a power of attorney to grant, bargain, sell, release &c., certain lands, and on such sale to “ execute, seal and deliver in the name of A. such conveyances and assurances in the law of the premises from the purchaser in- fee as should be needful or necessary, according to the judgment of B. his attorney.” It was held that B. had no power to execute a deed with the usual covenants of seizin, &c., so as to bind his principal. The case says, “a conveyance or assurance is good and perfect without warranty or personal covenants, an authority must be strictly pursued, and any act substantially foreign to it is void.” (Nixon v. Hyserott, 5 Johns 58; Rossiter v. Rossiter, 8 Wend. 494; Mills v. Carnly, 1 Bosw. 159, 164; Parson Mercantile Law, 142). The settled rule of construction, noscitur a sociis, is in aid of our view of the construction of the power. The rule laid down by Lord Bacon was, that ‘ ‘ copulaiio nerborum indicat acceptationem in eodem sensu,” (the coupling of words together shows that they are to be understood in the same sense, Broom Legal Maxims, 294). 4. Nor can this paper signed by Wicks be said to be a substitution of attorney, (a.) If it can, then Wicks’ power was altogether gone, and the substituted attorneys stood in his place for all purposes, which will not be claimed, (b.) If Hatch & Son were thereby made the substituted attorneys of Mrs. Wicks, their liability would be very different from that now resting upon them. They would then be liable in a proper case, for a negligent exercise of their discretion ; but while they are mere brokers, they incur no liability, if they follow the letter of their employ ment.
    II. It was error to charge the jury, “ that the instrument of September 18, executed by Wicks to the defendants, conferred the same power and authority which he possessed, on them, and authorized them, in the exercise of their discretion, to deal with the stocks precisely as he might do himself.” 1. Doubtless this is, in substance, what the court meant to hold when they admitted the paper of the 18th in evidence, when the court said, “There was ample authority in the power of attorney granted to George A. Wicks by the plaintiff, not only to buy and sell stocks, but to delegate whatever discretionary power he possessed to the defendants in this action.” 2. But can it be claimed for a moment that the paper of the 18th was a substitution of attorney, and as it was not, is it possible to say that there is any principle on which it can be claimed, that Mr. Wicks could delegate his discretion conferred by the power of attorney to these defendants, or anybody else ?
    III. If the theory of the learned court, referred to in the second point, was right, it was error to charge the jury, “that whenever the state of the stock and money market rendered it prudent, either for the benefit or protection of their principal, the plaintiff, or for their own protection, to sell the stocks and bonds which the defendants were carrying for the plaintiff, they had a right to do so under the power which had been conferred upon them.” 1. The plaintiff had requested the learned court to charge as follows: “(5.) The defendants were bound, under the authority which they held, to exercise that authority in the interest of the plaintiff, and not in their own interest. (6.) If the jury find that the defendants sold the stocks in question in their own interest and to save themselves, the plaintiff is entitled to a verdict. (7.) If the jury find, from the evidence, that the defendants did not exercise, in good faith towards the plaintiff, the discretionary power with which they claim to have been clothed, they are liable to her in damages, for their breach of duty.” The court had refused, and the plaintiff had excepted to each refusal. 2. There was abundant evidence in the cause to show that the fall in the price of the government bonds, the,New York Central and the Hudson River was the result of mere panic, and not because they had stood above their value—that they were first class stocks—and that it was to be expected they would very soon recover. It was also in evidence that the defendants were engaged in large business, that the money market was very tight on the day of the sale, and it was certainly competent for the jury to draw the inference that the sale of these bonds and stocks was made to relieve the defendants from a money pressure growing out of other transactions than those of the plaintiff. Under this state of the proofs, could it be said that the defendants, agents in that behalf of the plaintiff, cpuld sell her stocks and bonds to protect themselves %

    IY. It is submitted that a sale at the beard of brokers was not within the scope of the authority to sell “at public or private sale,” given by the writing dated September 18, 1869.
    Y. It was error to admit the question put to Chittenden, an impeaching witness, as follows : “Q. Would you believe him under oath, where he was pecuniarily interested. ” 1. Upon authority in this State it is competent to ask an impeaching witness, “ would you believe him (the witness sought to be impeached) on oath,” but it is opposed to general principle to suffer such a witness to give an opinion upon such a subject, and in some of the States it is not allowed (See Phillips v. Kingfield, 1 App. (Me.), 375; 2 Taylor on Ev., 1274). But to suffer the question to be extended, and to add, “where he was pecuniarily interested,” is without the sanction of any authority (1 Phill. Ev., 292, old edition; see page 955 of vol. 2 of the 3 volume edition ; 1 Starkie Ev., 182 ; 2 Taylor on Ev., 1274 ; People v. Rector, 19 Wend. 569-579 ; Wright v. Paige, 3 Keyes, 581-588; 2 Greeleaf Ev. § 461). 2. In this case the witness sought to be impeached was George A. Wicks, and it was not pretended that he had any pecuniary interest in the case, so that in our judgment there is nothing to sustain the question in the form in which it was put.

      Rodman & Adams, attorneys, and S. P. Nash, of counsel, for defendants.
    I. The stocks, for the sale of which this action is brought, were purchased by the defendants, by the directions of George A. Wicks, acting under the power of attorney given to him by the plaintiff. She can make title only through his acts, as she never personally had any dealings with the defendants before these stocks were sold. They had cost some three hundred thousand dollars, and the transactions, after she executed the power of attorney, involve millions. The purchases and sales were made according to the custom of brokers, the defendants advancing the entire cost beyond sixty thousand dollars, and retaining the securities as margin. They were bought by defendants in their own name and on their own credit. When plaintiff, after learning of the sale of them, made claim to them as her property, she adopted all the instrumentalities by which they had been purchased, that is, the entire series of speculative transactions of which they were a part (Meehan v. Forrester, 52 N. Y. 277 ; Henry v. Root, 33 N. Y. 526, 552-3; Elwell v. Chamberlain, 31 N. Y., 611, 619). That she was a married woman and her husband her agent did not enlarge her rights or privileges. If married women carry on business for profit, and employ their husbands as their agents, “ they become legally liable for the acts of such agents, the same as though the marital relation did not exist” (Warner v. Warren, 46 N. Y. 228, 233).
    II. The power that plaintiff gave lo her husband must, therefore, be construed in reference to the usages of the business to which it related (Horton v. Morgan, 19 N. Y. 170). It authorized him to buy when and what he chose, to sell in his discretion and to give all orders, checks and other instruments in writing which might, in his discretion be necessary, in transacting the business of buying and selling on speculation. If this involved the employment of brokers,' it authorized such employment; if it involved the pledge of. the securities bought with the broker’s funds, it authorized such pledge ; if the pledge gave the broker stringent powers of protection proportioned to the magnitude of the risks and the precariousness of the speculation,' she can not complain that he gave such powers. On the faith of the authority to sell, given on September 18, defendants had “carried” plaintiff’s large line of stocks for ten days, and the six hundred shares of N. Y. Central, of the sale of which she complains, would appear to have been bought the day the paper was given and the day after, involving an outlay of over one hundred and twenty thousand dollars.
    III. If the authority of September 18 had not been given, the defendants, in order to close the account would have been obliged to make demand and give notice of the time and place of sale. But it would have been entirely sufficient to have made such demand of George A. Wicks, and to have given the notice to him, as he was the agent charged with the management of the entire transaction (Milliken v. Dehon, 27 N. Y. 364). If notice to the agent would have been a proper notice, he had a right to waive such notice. He was constantly watching the market, from the newspapers and “indicators,” which he testified were located all about the city, and he had a right to say, “ I shall know when the margin is exhausted ; you may not be able to find me ; sell without notice whenever from the decline in stocks the margin declines below five per cent.” The ruling of the court in admitting the paper of September 18, was therefore correct, and none of the exceptions based upon the effect given to it were well taken.
    IV. The power of attorney gave to Wicks full power to substitute another person in his place, and the substitute had all the powers, discretionary and otherwise, of the first agent. Wicks did not confer on the detenían ts all the powers conferred on him—the powers to buy and to sell generally at discretion—but having in the hands of defendants certain securities bought by his order, he authorized them to sell these securities, not absolutely, but in case the margin should “fall below five per cent.” This was a power which imposed also a certain duty. The margin did fall below five per cent, and the defendants exercised the power. If they had failed to exercise it and a still greater decline followed, the question might have arisen whether they were liable for not selling. The point, therefore, presented by plaintiff s fifth and sixth requests did not arise. The power to sell on the margin’s declining, was absolute; the discretion was to refrain from selling, if that seemed best. But the charge that the defendants had a right to sell whenever, “either for the benefit or protection of their principal, or for their own protection .......a prudent and careful man would have deemed it expedient to sell,” was all that the plaintiff had a right to ask. After a pledgee has acquired the right to sell for his own. protection, either by a demand and notice, or by a waiver of such demand, and notice, “all he need do is to act in good faith” (Marfield v. Goodhue, 3 Comst. 62, 73).
    V. There was no reason why the defendants should not have been made the substitutes of Wicks in his agency. He was not restricted in the selection of substitutes. He had full power of delegation, and it is only in the absence of such power that the rule delegatus non •potest delegare governs (Story on Ag. §§ 13, 14).

      YI. The authority being to sell at public or private sale, a sale at the board of brokers was valid., and the exceptions at fols. 56 and 390 were not well taken. The whole dealing had been according to the custom of brokers, and a sale in any other way would have been in violation of duty (Milliken v. Dehon, 27 N. Y. 364).
   By the Court.—Freedman, J.

The most important question which presents itself at the very threshold of this case, relates to the extent of the power possessed by George A. Wicks, as the agent of the plaintiff. The fact that he was, and is, the husband of the plaintiff, is immaterial. A married woman who carries on a business for profit, and employs her husband as her agent, to manage it, is legally liable for the acts of such agent, the same as though the marital relation did not exist (Warner v. Warren, 46 N. Y., 228).

The power was conferred by a written instrument, appointing him as her attorney “to buy, sell, assign and transfer in his discretion, gold, stocks and bonds, and to draw, execute, sign and deliver for me and in my name, all orders, checks, or other instruments in writing whatsoever, which shall or may in his discretion be necessary in the conducting, carrying on and transacting the business of buying and selling gold, stocks and bonds, on speculation or otherwise, giving and granting unto my said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as I might or could do if personally present, with full power of substitution and revocation, hereby ratifying,” &c.

It bears date July 31, 1869, and consequently was executed by the plaintiff after an experience of nearly three months in the hazardous business in which she had embarked. For the evidence shows that the first account of the plaintiff with the defendants was opened on April 2, 1869, and closed on May 26 following, by defendants’ giving to Mr. Wicks a check to the order of the plaintiff for about forty-five thousand dollars, and that a second account was opened by her on June 12, 1869, by a deposit of sixty thousand dollars, as security for such orders as she might thereafter give.

The defendants may well insist, therefore, that the power thus given should be construed, as against them, with reference to the nature and usages of the business to which it related. These usually involved the employment of brokers. The defendants were employed as such, and the power of attorney executed by the plaintiff was placed into their hands. As such brokers the defendants, pursuant to directions from plaintiffs’ agent, made according to the custom of brokers, purchases and sales for account of the plaintiff, which involved millions. In the case of the purchases they advanced the entire cost beyond the sixty thousand dollars on deposit with them, and retained the securities as margin. This a broker, who is employed as such to purchase and carry stock or other securities, has a right to do (Horton v. Morgan, 19 N. Y. 170). The stocks and bonds for the conversion of which this action is brought, were purchased in precisely the same way, namely in defendant’s own name, and on their own-credit, and at the time of their alleged conversion the plaintiff was indebted to the defendants thereon in a sum exceeding two hundred and fifty thousand dollars, over and above the sum of sixty thousand dollars deposited. And as the plaintiff never had any personal dealings with the defendants before the alleged conversion, she can make title only through the acts of her husband, and to that end she must adopt all the instrumentalities by which the stocks and bonds were purchased, that is to say, the entire series of speculative transactions of which they were a part. Accounts had been rendered covering the transactions during the months of June, July and August, and moneys had occasionally been paid to the plaintiff, by checks to her order, on account of profits made ; when the change in the market occurred. In September, the stock-market became excited, and the defendants being apprehensive of it.s course, and fearful of heavy and. sudden depreciations in the market value of stocks and bonds, and of the embarrassment which might ensue therefrom to themselves and their customers, and considering in reference to the plaintiff and her agent the said George A. Wicks, that they resided at Fort Washington, and had no place of business near that of defendants, and could not be easily communicated with, required of the said George A. Wicks, and, on September, 18, received from him as the agent of the plaintiff, authority in writing to sell in their discretion, at public or private sale, and without notice to the plaintiff or any notice whatever, the stocks, bonds, or gold, which they were or might be carrying for the plaintiff, whenever her margin shall fall below five per cent.

By this instrument George A. Wicks did not confer on the defendants all the powers possessed by him as the agent of the plaintiff,—the power to bay and sell generally at discretion,—but merely the power to sell such securities as by the exercise of his own discretion had come to their hands. And even this power was not conferred upon the defendants absolutely, but their right to exercise it was made to depend on a proper exercise of discretion and upon a fall of the margin below five per cent. As thus interpreted the delegation of authority that was made to the defendants, was, under the circumstances, clearly within the scope of the general powers of George A. Wicks, and the plaintiff is bound by it, for, as already stated, the powers conferrecL by her upon her husband must be construed with reference to the usages of the speculative business to which they related. When they are thus construed it is, in view of all the circumstances, and especially in view of the magnitude of the risks involved and the amount of watching required in consequence thereof, not at all astonishing that the defendants were intrusted with a limited discretion to sell. The instrument was, therefore, not objectionable on this ground. Mor could it be rejected on the ground that thereby George A. Wicks waived plaintiff’s right to a demand, and to notice of the time and place of sale. As it would have been entirely sufficient to have made such demand of George A. Wicks, and to have given the notice to him, as the agent charged with the management of the entire transaction (Millikin v. Dehon, 27 N. Y. 364), he had a right to waive them. The paper of September 18 was therefore properly received in evidence, and none of the exceptions based upon the effect given to it are well taken.

The question therefore remains: Did the defendants make a proper exercise of the authority delegated ? There is no dispute in regard to the statement of the accounts between the parties. The action is not predicated upon any balance claimed to be due from the defendants to the plaintiff, but it is for the conversion of a specific lot of stocks and bonds which had been carried for the plaintiff on the faith of the authority to sell delegated by the paper of September 18, on which the plaintiff was indebted to the defendants in a sura exceeding two hundred and fifty thousand dollars, over and above the amount of her deposit, and which, with the exception of three hundred shares of Wabash, for which no bids could be obtained and which were subsequently sold, but as to which sale no question arises, in consequence of the entire exhausion of the margin by a panic, the defendants on September 28, 1869, sold for account of the plaintiff. They possessed no arbitrary discretion to sell, but a discretion to be exercised upon sufficient cause. Upon this point there was abundant evidence to the effect, that the defendants acted not only within the scope of their authority", but honestly and in good faith, and in the exercise of their best judgment and discretion. They are not guarantors of their infallibility, nor of the soundness of their judgment, and all that could be expected of them was that upon the occurrence of the event contemplated in the paper of September 18, they should do what from their experience they deemed best under the circumstances. And that their judgment on September 28 was sound, has been attested by the fact that on the following day the market went still lower, and that the stocks and bonds in question could have been repurchased at a profit of fifteen thousand dollars, provided the plaintiff had, as she was requested to do, provided the necessary funds or put up a sufficient margin. If, therefore, the question was fairly submitted to the jury, their finding upon this point should not be disturbed. The difficulty which here presents itself, arises upon the language used by the learned judge below in his charge to the jury. After telling them that the discretion conferred upon the defendants by the instrument of September 18, was not an arbitrary one, but a discretion to be exercised upon sufficient cause, and that without the existence of sufficient cause on September 28, the sales made on that day could not be justified under it, he continued to charge as follows :

"It has also been determined by the court, as matter of law, that the discretionary power which was thus vested in the defendants was as well for their own protection as for the benefit and interest of their principal; and the proposition, therefore, may be stated thus: That-, whenever the state of the stocks and money market rendered it prudent, either for the benefit or protection of their principal (the plaintiff) or for their own protection, to sell the stocks and bonds which the defendants were carrying for the plaintiff, they had a right to do so under the power which had been conferred upon them.

If, therefore, you believe that on September 28, the state of the market was such that a prudent and careful man would have deemed it expedient to sell, either for the benefit and protection of his principal or for the protection of himself, then the sale was justifiable.

But if you believe that there was no sufficient reason existing at the time, to make it expedient to sell, either for the benefit of the plaintiff or for the protection of themselves, then the sale was not justifiable, and the defendants are liable to the plaintiff for her damages.’*

Plaintiff’s counsel duly excepted to this portion of the charge, and requested the court to charge:

“ 5. The defendants were bound, under the authority which they held, to exercise that authority in the interest of the plaintiff, and not in their own interest.
6. If the jury find that the defendants sold the stocks in question in their own interest, and to save themselves, the plaintiff is entitled to a verdict.”

The request was denied, and plaintiff excepted. At first blush these rulings may seem indefensible, but reflection has convinced me that under the peculiar circumstances of this case they were not erroneous. The fair import of the language used, when considered with the other facts In the case, was that the def mdants, in the exercise of a proper discretion, had the right to sell to protect themselves against a loss that might possibly ensue if they carried the stocks and bonds in question too long. These were not deposited with them for purposes of permanent investment, but had been purchased on their own credit for the account of the plaintiff, on a margin, and the plaintiff was largely indebted to the defendants for advances thereon. Upon a fall of the margin below five per cent, the interests of the plaintiff and of the defendants became in fact identical with regard to such stocks and bonds. So, independently of the instrument of September 18, the defendants possessed the right of a pledgee to sell on demand and reasonable notice, for the purpose of reimbursing themselves for their advances, and if such demand had been made, and the notice given, the defendants would have had an absolute right to sell. By that instrument the plaintiff waived her right to such demand or notice. Having acquired by such waiver, the right to sell for their own protection, all the defendants were bound to do, was to act in good faith.

The question whether or not the defendants, on September 28, waived their discretionary .right to sell for the period of twenty-four hours, was also submitted to the jury under instructions quite favorable to the plaintiff', and under such instructions and the evidence in the case, the jury must be presumed to have found either that no such waiver took place, or, if it did, that the plaintiff subsequently ratified the sale.

As the authority given to the defendants enabled them to sell without notice at public or private sale, a sale at the board of brokers was valid (Milliken v. Dehon, 27 N. Y. 364).

The exception taken at folio 351 relates merely to the form of the question, and is quite unimportant when considered either in connection with the other evidence upon the same point, or the merits of the case.

Plaintiff's exceptions should be overruled, and the defendants should have judgment on the verdict, with costs.

Vah Yokst and Speik, JJ., concurred.


source: Caselaw Access Project

license: Public Domain

text:
    JAMES MORGAN, Plaintiff and Appellant, v. BEN HOLLADAY, Defendant and Respondent.
    Before Freedman, Van Yorst and Speir, JJ.

      Decided October 31, 1874.
    Every court of record, unless restrained by positive enactment, has the power on motion, to vacate its judgment or process, to prevent a perversion thereof, or to frustrate oppression.
    This power is constantly exercised by courts of equity, to relieve against sales of .real property, and no good reason exists why it should not be exercised to prevent injustice flowing from an irregular and void sale of personal property.
    In the case at bar, the power was properly exercised for the reasons stated by the learned chief justice at special term (ante, p. 53).
    Appeal of George H. Waite, purchaser on the sale trader the execution issued in this action, from the order of the court vacating and setting aside the sale.
    Judgment was entered in this action in favor of the plaintiff against the defendant for seventeen thousand nine hundred and seventy-five dollars, and nineteen cents. Executions were issued same day to the sheriffs of New Yoik and Westchester counties.
    On July 8, 1874, notice of appeal to the general term from said judgment was served, accompanied by an undertaking which was objected to, and returned on the ground that the same was not properly acknowledged nor the affidavits of justification sworn to.
    On July 18, 1874, another and further undertaking was served, which was objected to and returned, on the ground that the sureties had not justified in double the amount of the undertaking.

      On July 30, 1874, on motion the court granted leave to the defendant to serve and file a new undertaking, but the court at that time declined to set aside or supersede the execution. Afterwards, on motion, and on August, 24, 1874, the court made an order setting aside a sale made under the execution, on July 27, 1874, to Gfeorge H. Waite, from which order the said Waite, the purchaser under the execution, appeals.

      Alexander Thain, and Wesley Gleason, of counsel, for the appellant presented the following points:
    I. The court erred as to the undisputed facts in connection with the giving of the undertaking. The fact is that no attempt was made to give an undertaking until after the issue of the execution and levy made thereunder.
    II., There was no stay of proceedings in the case until after the sale had been made. The first undertaking was without affidavit of justification or acknowledgement, and properly returned as void and of no .effect (Code, § 341). The second was insufficient in amount by about one thousand dollars to stay proceedings, being for double the amount of the judgment only, and returned for that reason (Hoppock v. Cottrell, 13 How. Pr. 461 ; Chemung Canal Bank v. Judson, 10 How. Pr. 133; People v. Tarbell, 17 Id. 125; Halsey v. Flint, 15 Abb. Pr. 367; Newton v. Harris, 8 Barb. 386; S. C., 1 Code R. N. S. 191; Code, § 341). It has been doubted whether the sureties were liable upon such an undertaking (Halsey v. Flint, 15 Abb. Pr. 369). The third not having been served with the notice of appeal, and without leave of court, was likewise without authority of law and properly returned. It must be served with the notice of appeal (Code, § 340 ; Smith v. Heermance, 18 How. Pr. 261; N. Y. Cent. Ins. Co. v. Salford, 10 Id. 344; Cushman v. Martine, 6 Duer, 660). Plaintiff’s remedy was, motion to set aside the undertakings or returning them with notice of the objection ; the latter course was adopted (Parrot v. Warner, 13 Abb. Pr.). Had there been a stay of proceedings, there would have been no occasion for the order of July 30, granting the defendant leave to serve an undertaking with stay until justification of sureties. That order was in fact, a refusal of the court to interfere with what had been done under the execution.
    III. The court erred in assuming the value of the property sold to be about thirty thousand dollars. The only evidence to sustain this is that of the witness McKean, who saw some bills for furniture which varied from twenty-five thousand dollars to thirty thousand dollars in amount; but he does not say that the furniture in this house cost that sum, or that it was worth either sum, or that it was worth as much after two years’ use as it cost. The only direct evidence is that of the witness Hermann, an auctioneer, accustomed to such sales, and familiar with that kind of property and the prices brought at such sales. He saw the furniture and made the sale, and says the price which it brought was fair. The fact that the sale was at public auction, that greater than the usual publicity was given and dealers invited to attend, and that a number did attend and declined to bid above the price for which the goods were struck down, is the best evidence as to the value.
    IV. Inadequacy of price is never, of itself, aground for setting aside a sale (Willard Equity Juris).

    V. The levy was regular. The deputy called and announced that he came to levy upon defendant’s interest in the furniture, went through the house and saw the property, made an inventory (although that was not necessary) (Watt v. Cleveland, 3 E. D. Smith, 553 ; Cormack v. Hale, 23 Wend. 468; 2 Cow. Treat. 1071 ; Wood v. Van Arsdale, 2 Rawle, 401 ; Green v. Burke, 23 Wend. 493; Mills v. Thursby, 11 How. 121). The mere entry of the sheriff under the. execution, without any formal act, though the property be not present and the officer does not know where it is, is valid as against the debtor (Crocker on Sheriffs, § 427). The presumption is that a public officer has performed his duty, and the contrary has not been shown in this case.
    VI. Under the revised statutes, all goods and chattels of the debtor are bound from the time of the delivery of the execution (3 Rev..Slat. 5th ed. 644, § 13); and all such" property is liable to sale under such execution, except articles especially exempted by law, choses in action, and mere equitable interests.
    VII. The property was present in the house when sold, subject to the examination and inspection of purchasers. The property was designated verbally, and described by the sheriff in the inventory. It was physically impossible to put it all in one room, and equally impossible for the sheriff to be in several rooms at the same time. An opportunity was offered for examination. It would be a remarkable construction of the law to hold that where the right, title, and interest of a party in a large number of articles, rightfully in the possession of a bailee, was offered for sale in one parcel, that the bailee should be discommoded, his rights invaded, and the goods removed to the public street, so that they could be seen at a glance. The goods were present and within view within the meaning of the statute, which intended to provide against absence and concealment. In Tifft v. Barton (4 Hill, 174), the court say, “In this case it was necessary, as we have already seen, to sell the whole of the property in one parcel. A part of it was in the house, some of it was in the barn, and some was in the fields and elsewhere on the farm. The whole could not be gathered so as to be brought into view at one time without incurring great and useless expense. The sale was made on the farm, and some of the property was actually present and in view. If the officer had previously declared what property in particular was to be sold, and had pointed it out to the persons in attendance, I think the whole should be deemed present and in view within the meaning of the statute.” In Bruce v. Westervelt (2 E. D. Smith, 459), Judge Daly, in delivering the opinion of the court, held substantially that there had been a sufficient compliance with the statute in “ an announcement made at the sale that there were stereotype plates in the vault and that they could be examined.” At all events part was present and fully within view, and as to that part, at least the sale was valid (Linnendoll v. Doe, 14 Johns. 223).
    VIII. The law does not require that sales shall be made in parcels, only that “it shall be offered for sale in such lots and parcels as shall be calculated to bring the highest price” (3 Rev. Stat. 5th ed. 648, § 37). This vests in the sheriff the discretionary power of determining what lots and parcels would be best calculated to bring the highest price, and his discretion ought not to be reviewed by the court unless it appear that he has abused the power vested in him, which does not appear in this case. The sheriff evidently adopted the only reasonable course to be pursued under the circumstances ; the entire property was subject to a lease having nearly two years to run; and no one would be likely to offer anything in the purchase of a chair or a table, the possession of which would be lawfully held by another for that period, and subject to use. The only way the same could be offered with the view of realizing anything would be in bulk, subject to the lease. There is no proof that the property would have brought any more sold otherwise, and the burden is on the defendant to show that it would. The property sold being in the possession of Mr. J affray, and subject to his rights under his lease with the defendant, could only be sold legally and with advantage in one parcel (2 Rev. Stat. 367, § 23; Tifft v. Barton, 4 Den. 173; Crocker on Sheriffs). Had it been sold, under the circumstances, in parcels, scarcely anything would have been realized, and the plaintiff and the sheriff would have been liable in damages to the owner and bailee (Manning v. Monaghan, 23 N. Y. 549).
    IX. The sale of tlie right, title, and interest of the defendant was proper. The estate which the defendant had in the goods was qualified by the right of Jaffray, the lessee, to the possession and use of the same for two years, and the interest sold was defendant’s title, subject to this lease, and was properly expressed in the words, “right, title, and interest.” “Alevy upon the right, title and interest is in the law equivalent to a levy upon the things themselves” (Waid v. Graylord, 1 Hun. 607). “A sale of all the right, title, and interest was a sale of all that was vendible on execution against the defendant” (Porter v. Parmley, 52 N. Y. 190).
    X. There was no collusion shown. The sheriff did i as he was directed and required by the execution to do. The extra advertising that was done, his calling to see Mr. Barlow, and his entire course show good faith on his part; and the necessity which appeared for sending the telegram shows no previous arrangement or collusion on behalf of the plaintiff, nor was there any with the purchaser.
    XI. The order setting aside this sale of personal property is without precedent. There is no adjudged case where a sale ofpersonal property has been set aside or interfered with, on motion, especially after the sale has been consummated and title passed. The parties have invariably been left to their action, either legal or equitable ; and especially is the latter the proper remedy when the rights of third parties have intervened. Sales of real estate on execution have been set aside on motion, but only for fraud or collusion, and because the court retains control until after the time to redeem has expired ; and also, in foreclosure and partition, for such are proceedings in rem, the disposition of the property being the primary object of the suit, and even in these cases the court has refused to interfere when the sale has been consummated, unless fraud or collusion has been shown. The learned judge is in error when he says that the power to set aside, on motion, sales of personal property is sustained by authority. 1 Burrill Pr. 300, does not touch the point it is cited to sustain. The only portion of the text bearing upon this case is to the effect that if the judgment be not paid, the sheriff should proceed to sell the property levied upon. Bixby v. Mead, 18 Wend. 611, was a motion at special term, unopposed to set aside a sale on the ground that a person who had been appointed to attend had forgotten to do so. There is nothing from which an inference can he drawn that the property was anything hut real estate / but the fact that a resale was ordered, and the manner in which the court speaks of the property, would seem to indicate that real property had been sold. Davis v. Tiffany, 1 Hill, 642, was a motion for a perpetual stay of a fi. fa., upon which it was sought to sell real estate under a judgment recovered more than ten years before, against a prior owner, upon which property it had ceased to be a lien. Ames v. Lockwood, 13 How. Pr. 555, was a motion to set aside a sale of real estate on the ground that the judgment creditor had been misled by the statements of the sheriff into not attending upon the sale. Richards v. Varnum, 8 How. Pr. 79, was a motion to amend a sheriff’s certificate on sale of real property by striking therefrom the description of a lot in which the defendant had an equitable interest only, under a contract to purchase. Myers v. Kelsey, 19 Johns. 197, was a refusal of the court to determine the rights of the parties, on motion to stay proceedings on a jü. fa., under which it was attempted to sell real estate upon a prior judgment which had been previously sold on a later judgment. The question was whether the judgment had been properly revived so as to continue to be a lien in advance of the later judgment. The court left the parties to their remedy by action. Adams v. Elliott, 1 How. Pr. 220, was a motion by Jaques, as landlord, that the sheriff pay over to him the proceeds of sale of the defendant’s chattels, on the ground that the rent of the premises in which they had been situated had accrued prior to the date of the sale. A question arose as to the extent and sufficiency of the levy. Held, these were fair questions to be submitted to a jury. The foregoing is submitted as a fair review of the decisions referred to in the opinion, and not one of them will be found to justify the order appealed from. The court should not, on ex parte affidavits, where no opportunity has been afforded for the cross-examination of witnesses, attempt to dispose of so important an inquiry, especially, where the rights of third persons not parties to the suit, are involved.

      John Sessions, defendant’s attorney, and Joseph Larocque, of counsel,
    presented the following points.
    I. This court, at special term, had jurisdiction and power to make the order appealed from (Kellogg v. Howell, 62 Barb. 280; 1 Barb. Ch. Pr. 538; 1 Burr. Pr. 300 ; Bixby v. Mead, 18 Wend. 611; Davis v. Tiffany, 1 Hill, 642; Ames v. Lockwood, 13 How. Pr. 555 ; Richards v. Varnum, 8 Id. 79 ; Dwight’s Case, 15 Abb. Pr. 259 ; Ontario Bank v. Lansing, 2 Wend. 260 ; Mulks v. Allen, 12 Id. 253).
    II. The pretended sale of the sheriff was a nullity, for the reason that property let to hire can not be levied upon or sold under execution against the owner during the time the property is so hired, and while in the possession of the lessee (Crocker on Sheriffs, 2nd R. ed. § 452, citing Hartford v. Jackson, 11 N. H. 145).
    III. It is a general principle that a sheriff can only levy on goods of which be may lawfully take possession, i. e., goods of which the judgment debtor is in possession, although that possession be in virtue of a special property, or to the immediate possession of which the judgment debtor is entitled. Thus, the interest of a lessee may be sold on execution against him (Otis v. Wood, 3 Wend. 498). The interest of a mortgagor in possession may be sold ; otherwise, when the mortgagee has taken possession, although the mortgagor has not lost the right to redeem (Madison v. Baucus, 1 N. Y. 295; Hall v. Cornly, 11 Id. 501; Gloulet v. Asseler, 23 Id. 225).
    IV. The exception, in the case of a pledge, to the rule stated in the last point is made by special statute (3 Rev. Stat. 5th ed. 645, § 20). At common law the interest of the pledgor could not be levied upon or sold (Stief v. Hart, 1 N. Y. 20).
    V. The said pretended sale was irregular and void, for the reason that no sufficient levy had been made, and the goods were not lawfully in the sheriff’s possession. “What constitutes a levy,” says Chief Justice jSTblson, “ according to the practice in this State, has been very well settled, and is not now open to .dispute. The officer must take actual possession, and the goods should be subject to his disposition and control” (Ray v. Harcourt, 19 Wend. 497). There must be a sufficient levy before there can be a sale (Butler v. Maynard, 11 Wend. 551).
    VI. The said pretended sale was also irregular and void, for the reason that the property was not within the view of those attending the sale (3 Rev. Stat. 648, 5th ed. § 37).
    VII. The said pretended sale was also irregular and void, for the reason that the property was not offered for sale in such lots and parcels as were calculated to bring the highest price (1b.). In the case at bar, the pretended sale was so conducted as absolutely to exclude any competition and to prevent the property from bringing an approximation to its value, and is a vindication of the wisdom of the legislature in the enactment of the provision cited, as well as of the rule at common law.
    VIII. On the ground of gross inadequacy of price alone the order appealed from could properly be sustained. It appears that property which cost, within two years, from twenty-five thousand dollars to thirty thousand dollars, was sold for eight hundred and fifty dollars (Bixby v. Mead, 18 Wend. 611).
    IX. The said pretended sale was also collusive, and voidable on that ground. The purchaser was acting under the advice and direction of the plaintiff’s attorney, and appears to have taken, personally, no interest in the matter. Although the defendant’s attorney was in correspondence with the sheriff’s deputy holding the execution, the fact of this pretended levy and intended sale was never communicated.
    X. The said sale was also in violation of the stay of proceedings effected by operation of law, upon the defendant’s having taken an appeal and given the requisite undertaking for that purpose. The undertaking was actually sufficient to effect a stay (Code, §§ 335, 341; Rich v. Bateman, 2 Code R. 63). At all events it could not be disregarded (Parfitt v. Warner, 13 Abb. Pr. 471).
   By the Court.—Freedman, J.

The questions arising upon this appeal, were properly determined at special term. The sale, as conducted by the sheriff, was a violation of the statute in the particulars named, and no tide passed to the purchaser (Sheldon v. Soper, 14 Johns. 352; Cresson v. Stout, 17 Johns. 116; Warring v. Loomis, 4 Barb. 484; Stevens v. Eno, 10 Id. 95).

Every court of record, unless restrained by positive enactment, has the power, on motion, to vacate its judgment or proéess to prevent a perversion thereof or to frustrate oppression. This power is constantly exercised by courts of equity, to relieve against sales of real property, and no reason can be assigned why it should not exist to prevent injustice flowing from an irregular and void sale of personal property.

We concede that its exercise calls for the employment of great caution and discrimination at all times, and in cases of personal property it should be exercised in extreme cases only, where no substantial right can be prejudiced by a summary examination.

In this case the power was properly exercised for the reasons stated by the learned chief justice at special term (see p. 53, ante).

The order should be affirmed, with costs.

Van Vorst and Speir, JJ., concurred.


text:
    JEREMIAH E. CARY, Plaintiff and Respondent, v. WILLIAM GOOD GREGORY, as Executor, &c., Defendant and Appellant.
    The rule is well-established that the contracts of executors, although made in the interest and for the benefit of the estate they represent, if made upon a new and independent consideration, moving between the promisee, and the executors as promisors, are the personal contracts of the executors, auS. do not bind the estate (Austin 'o. Munro, 47 N. 7. 880; Ferrin v. Myiick, 41 IV. 7. 815).
    In the case at bar, the plaintiff seeks to recover judgment against the estate, for the amount of a note given by the defendant as executor to the plaintiff’s indorser,, and in order to succeed he was bound to prove that his cause of action arose upon a contract made by the testator in his lifetime and this he must do by proving :
    Befóse Freedmah, Yah Yorst and Speir, JJ.

      Decided October 31, 1874.
    1. The claim or debt of plaintiff’s indorser against the estate of the testator;
    2. That the original claim or debt was not extinguished by the acceptance of the note in question.
    3. That the plaintiff, by assignment, acquired title to said original claim to the extent of the note in question;
    Having failed in establishing the second and third points, or most certainly the last (having failed to prove an assignment from the original creditor of the testator, to him, of the original claim or debt, to the extent of the note transferred to him), he can not recover.
    The simple indorsement of the note in question from the original creditor to the plaintiff, is wholly insufficient to prove such assignment.
    Appeal from a judgment.
    Robert A. Gregory in his lifetime, was indebted to one Cyrenus Bloodgood in about the sum of one thousand five hundred dollars. He died October 1, 1868. His will was proved, and Sarah J. Gregory, his widow, on October 19, 1868, qualified as sole executrix.
    Thereafter, Cyrenus Bloodgood presented his claim to the executrix for payment, and on January 12, 1871, accepted from her in settlement of such claim a note made by John H. McCunn, for eight hundred dollars, and her own note, made and signed as executrix, and payable one year after date, for five hundred and nine dollars and thirty-three cents. At the same time Cyrenus Bloodgood executed and delivered to her a writing, stating that the notes were in full settlement, and payment of R. A. Gregory’s note for one thousand dollars, dated August 3, 1868, and also in full settlement and payment of all claims and demands' I have or may have against the estate of said Robert A. Gregory, deceased, or against the executrix thereof.”

      On December 7, 1871, the executrix was removed by the surrogate, and the defendant, William Good Gregory (who was also one of the executors named in the will of deceased) qualified as executor.
    Before the note for five hundred and nine dollars and thirty-three cents became due, it was indorsed and delivered by Oyrenus Bloodgood, to Morris S. Bloodgood. It was not paid at maturity.
    On August 2, 1872, the defendant gave to Morris S. Bloodgood two notes for the amount then due upon the note of five hundred and nine dollars and thirty-three cents. One of them was for eighty-seven dollars, and by the terms of it, the defendant as executor, and not personally, promised to "pay one year after date, to the order of Morris S. Bloodgood, the said sum of eighty-seven dollars. This note Morris S. Bloodgood indorsed to the plaintiff. It was not paid at maturity, and plaintiff commenced this action upon it.
    Upon the trial, the question was submitted to the jury, whether in reality the action was to recover for an indebtedness upon a cause of action which arose substantially in the lifetime.of the testator, or whether it was upon a cause of action that arose after the death of the testator; and the jury were instructed that if they found that the cause of action arose substantially in the lifetime of the testator, the plaintiff was entitled to recover the sum of eighty-seven dollars and interest.
    The jury found for the plaintiff. Judgment having been entered upon the verdict, the defendant appealed.

      James Flynn, attorney for appellant.

      J. E. Cary, attorney in person, for respondent.
   By the Court.—Freedman, J.

By the note in question, the defendant promised to pay solely as ex ecutor. He expressly stipulated against a personal liability. The plaintiff's claim stands, therefore, precisely as if Sarah J. Gregory had continued to be executrix, as if as such she had given the note for eighty-seven dollars, in part renewal of the note of five hundred and nine dollars and thirty-three cents, and the action had been brought against her as executrix;

As the rule is well settled that the contracts of. executors, although made in the interest and for the benefit of the estate they represent, if made upon a new and independent consideration moving between the. promisee and the executors as promisors, are the personal contracts of the executors, and do not bind the estate, notwithstanding the consideration moving from the promisee is such that the executors could properly have paid for the same from the assets, and been allowed for the expenditure in the settlement of their accounts (Austin v. Munro, 47 N. Y. 360 ; Ferrin v. Myrick, 41 Id. 315), the plaintiff, in order to succeed, was bound to show that his cause of action arose upon a contract made by the testator in his lifetime, and this he could only do by proving.

1. The claim of Cyrenus Bloodgood against Robert A. Gregory ;

2. That it was not extinguished by the acceptance of the notes : and

3. That he, the plaintiff, by assignment acquired title to such claim to the extent of at least eighty-seven dollars.

The first point may be deemed, for the purposes of this appeal, to have been sufficiently established.

As to the second, the receipt executed by Cyrenus Bloodgood to the executrix on January 12, 1871, if not as conclusive as its language, which is very strong, seems to make it, is, to say the least, strong evidence of an extingishment. Mo explanatory evidence was given to change its legal effect, or the legal effect of the transactions therein recited. True, Cyrenus Bloodgood testified that he took the note of five hundred and nine dollars and thirty-three cents from the executrix to hold the estate. But that is swearing to a mere conclusion. Even if it be assumed; however, that upon the whole • case a fair question of fact did present itself as to the extinguishment of the original cause of action, the plaintiff, in order to get to the jury at all, was still bound to prove an assignment by Cyrenus Bloodgood to Morris S. Bloodgood, and by the latter to himself, the plaintiff, of the original claim against the estate of Robert A. Gregory, deceased, to the extent of at least eighty-seven dollars. He seems to have been fully aware of the necessity of furnishing such proof, for at the commencement of the trial he obtained leave to amend his complaint by setting up such assignments, and the complaint was thus amended, and the answer was amended to deny the fact. The plaintiff rested, however, without giving any such proof. There is not a particle of evidence in the case from which the fact of such assignments can be deduced. The bare indorsement of the notes is wholly insufficient for such purpose. The court erred, therefore, in denying defendant’s motion for a nonsuit and in submitting the case to the jury against defendant’s exception.

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

Van Vorst and Speir, JJ., concurred.


text:
    MORRIS S. BLOODGOOD, Plaintiff and Respondent, v. WILLIAM GOOD GREGORY, Executor, &c., Defendant and Appellant.
    Before Freedman, Van Yorst and Speir, JJ.

      Decided October 31, 1874.
    Appeal from, judgment.
    This action was based upon one of the notes mentioned in the foregoing reported case (Cary ®. Gregory), andas the points of law and rulings are the same as in that case, it was stipulated between the parties that the decision of this case should follow that of Cary v. Gregory.

      James Flynn, for appellant.

      J. E. Cary, attorney in person, for respondent.
   By the Court.—Freedman, J.

For the reasons assigned in Cary v. Gregory, the judgment must be reversed, and a new trial ordered, with costs to appellant, to abide the event. r

Yan Yorst and Speir, JJ., concurred.


author: By the Court.—Van Vorst, J.

text:
    PATRICK RYAN, Plaintiff, v. WILLIAM M. THOMSON, Defendant.
    Before Freedman, Van Vorst and Speir, J.L

      Decided October 31, 1874.
    The plaintiff, a policeman, while on duty in his precinct, saw a window open in the second story of the defendant’s store, and suspecting the building had been entered by burglars, he and another policeman, whom he had called to his assistance, entered the store by the window that was open, by means of a ladder. Plaintiff fell through a hoistway that was open, and sustained a severe injury, and brings an action against the defendant, to recover damages for the injury, because of the negligence of defendant in leaving the hoistway open, in violation of the city ordinance directing the same to bo closed, &c.

      Held, 1. That the violation of the corporation ordinance, in omitting to close a hoistway on the completion of business each day, subjects the owner, or occupant, to an action for damages, in favor of a person who lawfully entered the premises, and sustained damages by reason of the omission. A breach of the ordinance under such circumstances would be negligence. The offender is liable for the penalty, and also to an action for damages in favor of the injured person (Busegel ®. N. Y. Central R. R., 14 Abb. Pr. K. 8. 20; Jetter v. N. Y. & Harlem R. R. Co., 2 Keyes, 154). 2. It appealing by the uncontradicted testimony of three .witnesses that tne hoistway and shutters were closed on the previous evening" at the close of the business of the day, the ruling of the court below in dismissing the complaint, and directing a verdict for the defendant was correct, and should be sustained.
    The admission of the defendant, testified to by the plaintiff, to the effect ‘•that he left the window open for the purpose of drying paint,” (which admission and the fact stated was denied by the testimony of the defendant), raised no such conflict in the evidence as would have justified the submission of the case to the jury.
    Exceptions heard at general term in the first instance.

      On the evening of May 29, 1869, the plaintiff, a policeman, while on duty in his precinct, saw a window in the second story of defendant’s store open. Suspecting something wrong he rapped, and was joined by a fellow-policeman named Gannon. They entered by means of a ladder, at the window, which was shoved up. Gannon lit a match, but it went out. Plaintiff intending to take a match out of his pocket stepped backwards and fell through a hoistway which was open, to the floor below, and dislocated his hip. To recover damages for this injury the action was brought. An ordinance of the city of New York was introduced in evidence by the plaintiff in these words.
    “ Of Hoistways.”

      “ The owner or occupant of each and every store or other building in the city of New York, in which there" is a hoistway, shall cause "the said hoistway on each story of said store or other building, to be forthwith inclosed by a good and sufficient railing around the opening thereof, and provide for the inclosing of such opening by a trap-door, and each owner or occupant of any such building or store shall cause said railing to be securely fastened up, and said trap-door to be closed, on the completion of the business of each day, in such store or building; and for every violation of the provisions of this section or any of them, the owner or owners, occupant or occupants of any such store or building, shall be liable to a penalty of fifty dollars for each and every offense.”
    When the testimony was closed, the court ordered a verdict in favor of the defendant. The plaintiff’s exceptions thereto were directed to be heard in the first instance at the general term.

      Nelson, Cooke & Thorn, plaintiffs attorneys.

      William, G. Cooke, of counsel.

      Wright and Landesman, defendant’s attorneys.

      Charles Kipp, of counsel.
   By the Court.—Van Vorst, J.

The city ordinance providing for railings around hoistways, and for their being closed on the completion of the business of each day, would seem to be a wise precaution in favor of policeman, fireman, and others who are often obliged to enter at night stores and warehouses, with which they are not familiar, to arrest burglars, extinguish fires, or for other lawful occasions, and the omission by the owner or occupant of a building to use the precautions indicated in the ordinance, would reasonably subject him to an action for damages in favor of one * lawfully on the premises, who should sustain injury through such, omission. A breach of the ordinance under such circumstances would be negligence. The violation of the ordinance being unlawful, the offender is not only liable for the penalty imposed thereby, but also to an action for damages in favor of one injured through the omission (Beisegel v. N. Y. Central R. R. Co., 14 Abb. Pr. N. S. 29).

The case of Brown v. State Line R. R. Co. (22 N. Y. 191), to which we have been referred by defendant’s counsel, holding a contrary doctrine with regard to the consequence of the violation of a municipal ordinance, duly passed, has been substantially overruled by the above case, as also in Jetter v. N. Y. & Harlem R. R. Co. (2 Keyes, 154), in the same court.

But the evidence does not establish that the defendant violated the ordinance in question. The defendant testified that when he left his store at the close of business hours, on the afternoon of the day in question, and several hours before the plaintiff sustained his in- * juries, the hoistway was closed. Tullebaum, the porter of the defendant, and whose business it was to close the hoistway, says that he closed it and left the store in company with the defendant.

The testimony of the defendant and his porter is corroborated by the positive evidence of the witness Stevenson, who was in the store when it was closed. Before the store was locked up he looked up and saw that the hoistway was closed. This witness had property stored on the premises, and does not appear to have had any interest in the suit.

All these witnesses testify that the outside shutter was closed when they left the premises. There is no evidence to contradict these positive statements of these three witnesses, unless it be found in what is claimed to have been an admission made by the defendant to the plaintiff some months afterwards, that the hoist-way and window had been left open.

The direct admission if made, however, was not that the hoistway had been left open, but the window “ to dry paint.” The remainder of the claimed admission is inference only. The defendant denies positively the making of any such admission.

The evidence in regard to the defendant’s admissions, and especially so when it is positively denied, would not have justified the jury, in the event that the case had gone to them, to set aside the positive evidence of the three witnesses whose testimony is wholly unimpeached, except by such claimed admission of one of them, to the effect that the hoistway and shutters were closed when the store was shut up for the day.

And a verdict for the plaintiff obtained under such a state of proof, must have been inevitably set aside as against the clear weight of evidence.

The shutter and window being found open sometime after the store had been closed for the day, attracted the notice of the plaintiff, and had aroused his suspicions that all was not right. If the premises had been burglariously opened and entered, the plaintiff supposed it to be Ms duty to enter and arrest the offenders, and secure the building.'

The suspicious facts and circumstances upon which the plaintiff acted suggest an agency through which the window as well as the hoistway were opened, without attributing the same, in opposition to the evidence, to the negligence of the defendant.

We find no such conflict in the evidence as would have justified the submission of the case to the jury.

The exceptions to the judge’s rulings should be overruled, and judgment ordered on the verdict in favor of the defendant, with costs.

Freedman and Speir, JJ., concurred.


text:
    JEROME B. FELLOWS, Plaintiff and Respondent v. CATHARINE MULLER and GEORGE BISCHER, Defendants and Appellants.
    Under the former system of pleading, the general issue could not be stricken out as false or sham.
    “ Courts have never set aside the general issue ” (Brewster®. Bostwick, 6 Oow. 37; Broome County Bank®. Lewis, 18 Wend. 566).
    Under the Code, the answer may contain a general or specific denial of each material allegation of the complaint that is controverted ( Code, § 149). And a verified answer containing such a denial can not be stricken out as sham (Winnie ®. Sickles, 9 Bow. Pr. 217 ; Wayland ®. Tyson, 45 N. T. 281; Thompson ®. Erie R. R. Co., 45 N. T. 468).
    Special pleas under the former system might be stricken out as false and sham (Stewart ®. Hotchkiss, 2 Oow. 634; Brewster ®. Bostwick, 6 Id. 37), and in like manner, under the Code, and the present rules of practice affirmative defenses in an answer, or an answer containing affirmative defenses, without any general or special denial, may be so treated (Code, § 152).
    Although section 152 of the Code states that “sham and irrelevant answers and defenses maybe stricken out,” a general or specific denial of material allegations of the complaint may not be so disposed of.
    Before Van Vorst and Speir, JJ.

      Decided October 31, 1874.
    The admission in the answer of the truth of specific allegations of a complaint, and a general denial of every other allegation, puts in issue sucl^ other allegations (Allis v. Leonard, 46 2F. 7. 688).
    The affirmative defense set up in the answer, in the case at bar, of the payment of the interest claimed to be due in the complaint appearing by the affidavits to be false and sham, should be stricken out, but the allegations in the answer that form a general or specific denial of material allegations of the complaint can not be stricken out as false or sham.
    Appeal from an order of the special term.
    This is an action to foreclose a mortgage for the alleged non-payment of six months’ interest, which became due on May 3, 1874.
    As alleged and claimed in the answer, the interest was paid on May 6, 1874, by the defendant, three days after it became due.
    This action was commenced on July 16, thereafter, nearly two and a half months after the interest had been paid, as claimed.
    The defendants answered, denying that any interest was due, and setting up payment in full of said interest on May 6, 1874, and denying any indebtedness of principal or interest, or of any part thereof!, also a general denial, and it was duly verified.
    The plaintiff moved the court, at special term, on affidavits, to strike out the answer as sham and false, which was granted on September 4,1874, and an order striking out the entire answer was entered, and tiled in the office of the clerk.
    The defendant appeals from that order to the general term.

      M. H. Topping, for appellants.

      Hatch & Van Allen, for respondent.

      H. F. Hatch, of counsel.
   By the Court.—Van Vorst, J.

Under the former system of pleading, a plea of the general issue could not be stricken out as sham. The defendant had the right by such plea, to put in issue for trial in the ordinary way in which issues of fact are tried, all the material allegations of the declaration. “ Courts have never set aside the general issue” (Brewster v. Bostwick, 6 Cow. 37; Broome County Bank v. Lewis, 18 Wend. 566).

Under the Code, the defendants’ answer may contain a general or specific denial of each material allegation of the complaint controverted by hita (Code. § 149).

And-when an answer contains such a denial, and is verified in the manner prescribed by law, it can not be stricken out as sham (Winnie v. Sickles, 9 How. Pr. 217; Wayland v. Tysen, 45 N. Y. 281; Thompson v. Erie R. R. Co., Id. 468).

But as special pleas under the former system might be stricken out as false and sham, so affirmative defenses in an answer, or an answer containing affirmative defenses without a general or specific denial, may be so treated under the Code on similar grounds (Stewart et al. v. Hotchkiss, 2 Cow. 634; Brewster v. Bostwick, supra; Code, § 152).

But so reluctant was the court to strike out a plea setting up new matter by way of a defense, or a, special plea when properly pleaded, that it would be allowed to stand, upon a very slight suggestion of its truth (Stewart v. Hotchkiss, supra).

Although the language of section 152, states that “sham and irrelevant answers and defenses may be stricken out,” a general or specific denial of material allegations of the complaint may not be so disposed of.

The answer of the defendent, which was stricken out by the judge, at special term, as false and sham, concludes by stating,- “that except as hereinbefore admitted or denied, this defendant has no knowledge or information sufficient to form a belief as to whether or not the matters set forth in said complaint are true; and she therefore denies the same, and each and every allegation thereof, and she demands that the complaint may be dismissed.”

In the commencement of the answer, the defendant admits the execution by her of the bond and mortgage sought to be foreclosed. There is no other clear and unqualified admission in the answer.

The admission of the execution of the bond and mortgage, concedes that the same, with all its terms and conditions, is properly set forth in the complaint. But every other allegation is denied. While, therefore, the answer admits the allegation in the complaint “ that in and by said mortgage, it was provided that in case the party of the second part (the mortgagee) should effect insurance on said premises, the premiuins should be due and secured by said mortgage,” it must be held to deny the allegation in the complaint that “ such insurance was effected by said plaintiff,” and paid for by him. This is a material allegation of the complaint, and is accompanied by a claim on the plaintiff’s part that in addition to the principal sum and interest secured by the mortgage, the premium for insurance is due thereon. Under such an issue, the plaintiff on the trial would be obliged to prove the payment by himself of such insurance premiums.

With such a material issue formed, it is unnecessary to inquire whether or not other issues are not raised by« the defendants’ denial: such as the assignment of the bond and mortgage to the plaintiff, as alleged in the complaint,- and which is claimed to be indirectly admitted, and whether or not the allegation of the defendants’ default, by which plaintiff claims the whole amount of the mortgage to be due presently, is not also put in issue.

The admission, by a defendant in his answer, of specific portions of a complaint, accompanied by a general denial of each and every other allegation, puts in issue such other allegations (Allis v. Leonard, 46 N. Y. 688). We are, however, satisfied that the affirmative defense, set up in the answer, of the payment of the interest on the bond and mortgage, is false, and that this defense could have been stricken out, on the motion, as sham. The answer does not allege that this interest was paid to the plaintiff, nor does it state to whom or when paid. The affidavits used on the motion show conclusively that the interest has not been paid,- but that the money for such payment has been placed by the defendant in the hands of her counsel who argues this appeal, and that he still holds the same unapplied to such purpose, and that the receipt which defendant claims to hold for the payment of such interest is signed by her own counsel, acknowledging the receipt by him of such moneys for such purpose. This defense is clearly sham, and should not be allowed to stand. The affidavits used on the motion, on the defendant’s behalf, clearly Show that these moneys have never been paid to the mortgagee, or plaintiff, or any claimant whomsoever.

The order appealed from, strikes out the entire answer. As it contained a denial of material allegations of the complaint, this, under the authorities above cited, could not be done.

But as the notice of motion, on the plaintiff ’ s part, asked not only for the relief granted, but also for such other or further order as might be just, and as the defendant appeals from each and every part of the order, we can, upon this appeal, make such order as should have been granted by the judge below upon the pleadings and affidavits.

The order appealed from should be so far modified as to strike out the second defense in the answer, as sham, and that except as so modified the order appealed from be reversed, and that neither party have costs of the appeal as against the other.

Spetr, J., concurred.


text:
    THOMAS JONES, Plaintiff and Respondent v. SAMUEL L. M. BARLOW, et al., Defendants and Appellants.
    When the trustees of a manufacturing company failed to make, file and publish the annual report required by statute, and a creditor of the company at the time of such default subsequently took the promissory notes of the company in renewal, which were not paid at maturity, and one of which was not due at the time of the commencement of the action against the trustees.

      Jleld, that under the statute, the liability of the trustees became fixed at the time of the default; that such liability was in the nature of a penalty for neglect of duty ; that the trustees are neither parties nor privies to the original contract between the creditor and the corporation, nor to an^ judgment which might be recovered against the corporation thereon ; and that, consequently, neither the creditor’s effort to collect bis debt from the corporation, nor the taking of notes in renewal, is a waiver or abandonment of his remedy against the trustees.
    The debt against the corporation is not canceled by the creditor taking notes for the same. The notes are simply the company’s promise to pay the debt at a futuro time, the indebtedness still . remaining (Doming y. Puleston, 35 Superior Ot. [3 J. <6 S.]; 55 A. T. 655); nor is the liability of the trustees affected by the recovery of a judgment by the creditor against the corporation for the debt (Vincent y. Binds, 33 Superior Ct. [1 J. df if.] 511).

      Before Freedman, Van Vorst and Speir, JJ.

      Decided October 31, 1874.
    Appeal from a judgment.
    This action is brought against the defendants as trustees of the American Seal Lock Company, a corporation organized under the laws of New York, providing for the formation of corporations for manufacturing, mining, mechanical or chemical purposes, passed May 17, 1348.
    The company was incorporated May 17, 1870. The ■defendants were original trustees of the company, and continued thereafter to be trustees.
    No report, such as is called for by section 12 of the act of 1848. was published and filed until January 19, 1872. •
    In the mean time, and during the years 1870 and 1871, the plaintiff had sold and delivered to the company merchandise, on account of which there was due and owing plaintiff, on December 26, 1871, a balance of six thousand two hundred and ninety-two dollars and sixty-eight cents.
    Afterwards, and on June 9, 1872, the corporation gave the plaintiff ten promissory notes dated on that, day for six hundred ánd twenty-nine dollars and twenty-six cents each, in the aggregate amounting to the sum of six thousand two hundred and ninety-two dollars and sixty-eight cents, and which were given in renewal of former notes of the corporation for the same amount, and which had become due and were unpaid. One of the notes given on June 6, 1872, was not due at the time of the commencement of this action. The others had matured and were unpaid. The plaintiff in open court offered to surrender the notes to the defendants.
    When the plaintiff rested his case the defendants moved to dismiss the complaint on the following grounds:

      “First. That there is no proof in the case tending to •establish the fact that there was any occasion to file a certificate in January, 1871.

      “ Second. That if in error in that respect, then by what was subsequently done between these parties, touching the indebtedness of the corporation to this plaintiff, it assumed an entirely new form in the shape of the promissory notes given in 1873, and the plaintiff’s action in that respect is to be regarded in point of law as a waiver of the technical default of the trustees in not filing the report in 1871. - That the plaintiff had his election to insist upon the liability of the defendant, and when, in 1873, he gave further credit by surrendering the old notes, and taking the new ones, the defendants were relieved from any liability.” The motion was denied by the court, and the counsel for the defendants excepted.
    At the close of the case the defendants’ counsel renewed his motion to dismiss, which was denied. The defendants’ counsel requested the court to instruct the jury that as to the amount of the notes not due at the commencement of the action, the plaintiff can not recover. The court refused so to rule, and a verdict was directed for the plaintiff for the sum of seven thousand two hundred and seventy-two dollars, and sixty-eight cents, to this direction the counsellor the defendants excepted.

      W. W. MacFarland, for appellants.

      D. M. Porter, for respondent.
   By the Court.—Van Vorst, J.

Through the failure of the corporation to make, publish and file the annual report, provided for in section 13 of the act of February 17, 1848, in January, 1871, the trustees, the duty of a majority of whom it was to sign same, became jointly and severally liable for all the debts of the company then existing, and for all that should be contracted before such report should be made.

The making and filing of such report is imperatively demanded by the statute.

As the corporation filed no report until January 19, 1872, and the debt in plaintiff’s favor for the merchandise sold and delivered to the corporation, had been contracted and existed before such report was filed, the liability of the defendants as trustees therefor would seem to be clearly established, unless the taking of the notes of the corporation by the plaintiff has impaired his claim against the trustees. The liability imposed upon the trustees for the debts of the company is a penalty for a neglect of duty clearly defined. The trustees are not sued for their own debts, they have incurred none. The corporation is the debtor. The defendants are neither parties nor privies to the original contract, nor to any judgment which might be recovered against the company thereon (Miller v. White, 50 N. Y. 137).

Directly, therefore, there is a failure to make and file the report the liability of the trustees to the penalty becomes fixed. Not as a debtor, but for the neglect of a duty growing out of his relation as a trustee, and through which neglect creditors of the corporation are presumed to be injured.

Nor in this view does any attempt on the part of the creditor to collect his debt of the company, affect his-claim against the trustee. Such effort is no waiver or abandonment of his remedy against the trustees.

In Vincent v. Sands (33 Supr. Ct. [1 J. & S.] 511), the creditor had sued a stockholder for the debt and had recovered a judgment against him, before proceeding against the trustees under section 12, yet it was held that the debt “against the corporation was not merged' by such recovery, nor was the claim of the plaintiff against the trustees affected by the suit and judgment against the stockholder under another section of the act, by which an additional right of action was given against another class of persons. In Deming v. Puleston (35 Sup'r Ct. [3 J. & S.] 309), since affirmed in the court of appeals (55 N. Y. 655), the objection was distinctly taken on the part of the trustees, that the liability of the corporation was merged in promissory notes which had been taken by the creditor from the corporation, and that the creditor had waived any demand he may have had against the trustee, under the statute, by taking the notes of the company and recovering judgment thereon. The court held that the notes did not cancel the debt, they amounted to the company’s promise to pay at a future day, the indebtedness still remaining. The obtaining of the judgment and the attempt to collect it out of the corporate property was •favorable to the defendant, and in . no manner- affects the liability imposed upon him under section 12 of the act of 1848.

Where a party has an election between two distinct remedies, which are inconsistent, he is confined to that which he first chooses (Rodermund v. Clark, 46 N. Y. 854 ; Goss v. Mather, 2 Lans. 283).

A familiar application of this principle is found in •cases where a vendor of goods parted with the possession through the fraudulent representations of the vendee. The vendor can reclaim the goods, but in doing so he disaffirms the sale and can not afterwards sue for the price (Morris v. Rexford, 18 N. Y. 552). The principle involved in the doctrine above stated, is that the remedies are not concurrent and are inconsistent.

Although the trustees have violated their duty, and are liable to the penalty therefor, imposed by section 12, the creditor may attempt to collect his claim against the corporation, he may do so without action, and take the company’s note as in this case. Such note is no payment of the debt. If not paid the original indebtedness still remains. The creditor may sue the corporation for his claim and recover a judgment therefor, and if an execution is returned unsatisfied he may under the act in question prosecute a stockholder and attempt to collect the debt of him. But all this has no true relation to the distinct cause of action against the trustee for his own omission of duty, which is still open and unsatisfied, by which he became liable for the debts existing at the time of his failure, and for all that should be contracted before the report should be made.

The remedy against the trustee is distinct, and concurrent, and not inconsistent with the other remedies in favor of the creditor against either the corporation or a stockholder, but his action must be brought within three years after the right of'action accrued (Merchants’ Bank v. Bliss, 35 N. Y. 412).

The judgment should be affirmed, with costs, to the respondent.

Freedman and Speir, JJ., concurred.