author: Landon, J.:

text:
    AARON R. STEVENS, HARPER W. ROGERS, NANCY E. WILBUR AND ANDREW A. DOUGLAS, as Trustees, etc., of WILLIAM H. DOUGLAS, Deceased, Appellants, v. THE UNION TRUST COMPANY OF NEW YORK and Others, Respondents.

      Bepresentative action, by one in behalf of himself and others similm'ly situated — the judgment therein is not conclusive if the action is fraudulently conducted — how reviewed in another action —proper parties to a representative action for thefoi'eclosure of a lien — receiver’s certificates.

    An action of mortgage foreclosure was brought by a bondholder of the Lebanon Springs Railroad Company in behalf of himself and of others similarly situated, to procure a sale of said company’s road, and also to obtain an adjudication that a judgment affecting the road, obtained in a suit somewhat similar in its nature, brought by one Sackett, be adjudged fraudulent, and praying that all liens upon the road be foreclosed, and that the lien sought to be enforced be adjudged to have priority over those allowed and credited in the Sackett suit the judgment in which was sought to he set aside as fraudulent.

      Held, that if the Sackett suit was, in truth, a representative one, fairly brought and honestly and regularly conducted for the benefit of all the bondholders, the judgment therein would be conclusive; but if it was not conducted in good faith, and the suit was used as an instrument to acquire advantages for the plaintiff bringing it, at the expense of the interests of those whom he assumed to protect, that the latter would not be bound thereby.
    That an action in the nature of a bill of review impeaching the representative action so brought by Sackett, and the judgment entered therein, for fraud, brought before the court the fraudulent practices of the plaintiff therein, and the proceeding suffered by him to be taken in the action, whereby he wronged those whom he assumed to protect.
    That such an action does not rest upon any alleged errors of the court in its treatment of the former suit, but upon the fraud of the plaintiff therein.
    That, as in this case the plaintiff in the representative action appeared to have deliberately planned the spoliation for his own benefit of the Lebanon Springs bondholders, for whose alleged protection the action was brought, the judgment therein could not be sustained.
    That receiver’s certificates issued in the representative suit brought by Sackett would not be obligations enforceable out of the property of the road, as against parties who were not concluded by the judgment and proceedings in the action in which they were issued.
    Where a party brings a representative action in behalf of himself and others, he is bound to bring into such action as parties those who ought to be sued, and where such an action is brought to effect a sale of a railroad, the interest of the bondholders requires that all outstanding liens and clouds upon the title behind the bonds should be cut off, and although the trustee of a mortgage given to secure the holders of bonds issued thereunder may refuse or neglect to act properly as such, and in that case an action may be brought by one or more bondholders acting as the representative of all to enforce their rights, yet the trustee should be made a party to such action and be brought into court.
    Appeal by the plaintiffs from a judgment entered in the office of the clerk of the county of Rensselaer on the 24th day of January, 1890, and also from an order denying the plaintiff’s motion in relation to the form of entry of the judgment to be entered herein, made at a Special Term held in Albany county on the 24th day of January, 1890.
    The judgment was entered upon a decision rendered at the Rensselaer Special Term, upon a trial before the court, dismissing the complaint upon the merits, as to the answering defendants, and an order was made denying judgment against the defendants who had made default.

      The action was originally brought by the plaintiff Stevens, in behalf of himself and of others similarly situated, to procure the sale of the Lebanon Springs Railroad, under judgments of. foreclosure and sale procured by the defendant the Union Trust Company, in December, 1872, as trustee for the first-mortgage bondholders of the Lebanon Springs Railroad Company’s first-mortgage bonds, and also as trustee for the bondholders of the Harlem Extension Railroad Company’s mortgage bonds upon. the same railroad; the Harlem Extension Company being the subsequent owner of the same railroad. The plaintiff Stevens owned the Lebanon Springs bonds to the amount of $2,200, and the Harlem Extension bonds to the amount of $5,000. Other plaintiffs, during the pendency of this action, were allowed to come in who owned both classes of bonds.
    The complaint is also in the nature of a bill of review of a judgment obtained in an action somewhat similar to this, brought by one Marvin Sackett against Russell C. Root and three others, in 1880, the plaintiff in this action asking relief against that action and proceedings therein as fraudulent, and praying to foreclose all liens, real or apparent, upon the railroad, and to establish the priority of the liens asserted by the plaintiff against all the liens allowed and created in the Sackett suit.
    The plaintiff makes parties defendant all persons who can claim under either the Sackett judgment or liens created since the foreclosure judgments. Answers were interposed by holders of receiver’s certificates created in the Sackett suit, alleging that the plaintiffs are bound by that suit, and by the trustees of a mortgage, for $12,250,000 issued by the New York, Boston and Montreal Railway Company, and by Park and Duncan as owners of a mortgage of $5,000,000.
    The further facts are sufficiently stated in the opinion.

      E. W. Paige, for the appellants.

      Matthew líale, Delos MeOurdy and Robert Ludlow Fowler, for the respondents.
   Landon, J.:

The disposition of this case requires us to determine: Eirst. What were the riglits of the plaintiffs as bondholders of the Lebanon Springs and Harlem Extension Railroad Companies at the date of the commencement of the action of Marvin Sackett v. Russell C. Root and others ? Second. Was that action a representative one, fairly conducted for the benefit of all the bondholders, or was it so vitiated by fraud as to entitle the plaintiffs to have the orders and judgment therein vacated and set aside as to them.

A brief reference to the facts, most of which were found by the trial court, will, we think, make the proper answers to these questions obvious.

In December, 1872, the Union Trust Company, as trustee for the holders of the first-mortgage bonds of the Lebanon Springs Railroad to the amount of $2,000,000, obtained as plaintiff in two actions against the proper defendants, one in the Supreme Court of the State of New York, and the other in the Court of Chancery of the State of Vermont, judgments of foreclosure and sale — in the New York action of so much of the Lebanon Springs Railroad as was situate in that State, and in the Vermont action of so much thereof as was situate in that State.

The railroad extended from Chatham, New York, to Bennington, Vermont. Subject to the mortgages upon which these two judgments were obtained, the Lebanon Springs Railroad Company had been merged by due consolidation agreements into the Harlem Extension Railroad Company. That company had issued its mortgage bonds to the amount of $1,500,000, and secured them by a mortgage upon the Lebanon Springs Railroad and a small additional railroad, not necessary here to be further mentioned, given to the Union Trust' Company as trustee for the bondholders. In December, 1872, the Union Trust Company, as plaintiff, obtained against the proper parties defendant judgment of foreclosure and sale, in the Court of Chancery of Vermont, upon the last-named mortgage. These three judgments were effective, if executed, to vest complete and unincumbered title in the purchaser under them of the Lebanon Springs Railroad.

While the actions which resulted in these judgments were pending Trenor W. Park and - William B. Duncan, who were large holders of both the Lebanon Springs and Harlem Extension bonds, were active promoters of a scheme which resulted in the consolidation of the Harlem Extension Railroad Company with various other railroad companies, and the merging of the companies and the vesting of the titles of their railroads into the consolidated company-known as the New York, Boston and Montreal Railway Company. By the consolidation agreement it was proposed that the New York, Boston and Montreal Railway Company should provide, by means of its mortgage bonds to be issued, $5,000,000, or securities to that amount, to provide for the $2,000,000 of Lebanon Springs bonds, and the $1,500,000 of Harlem Extension bonds and the interest thereon, and for other claims against those companies.

It was contemplated to consummate this scheme in time to prevent the sale of the Lebanon Springs Railroad under the foreclosure judgments, but as many of the bondholders were towns, and it was otherwise difficult to procure their acquiescence, it was concluded by the promoters to let the forclosure sales take place, and then arrange with the purchaser.

Park and Duncan had no authority to act for any of the bondholders other than themselves, but they assumed to be masters of the situation so far as the bondholders were concerned.

The railroad in each State was brought to sale under the three foreclosure judgments in January, 18J3. At the referee’s sale in New York William B. Duncan bid off the property for $100,000. At the master’s sales in Vermont Trenor W. Park bid off the property, bidding $25,000 at each sale. As they claimed to be acting for the bondholders, neither of them paid anything upon his bid, except the costs, less than $1,000.

At the request of Duncan the referee executed and delivered a deed of the property in New York to one Hull, who was Duncan’s clerk. Hull paid nothing. At the request of Park the master in Vermont executed and delivered a deed of the property in that State to one Lincoln, who was Park’s clerk. Lincoln paid nothing. Hull and Lincoln two days thereafter, at the request of Park and Duncan, executed and delivered to Park and Duncan their bond for $5,000,000, and also their mortgage upon the Lebanon Springs Railroad to secure its payment. Park and Duncan then completed their negotiations with the New York, Boston and Montreal Railway Company, whereby the latter agreed to purchase the Lebanon Springs Railroad, subject to the Hull and Lincoln mortgage of $5,000,000, and to provide for its payment out of $25,000,000 of new bonds to be issued by the New York, Boston and Montreal Railway Company. Thereupon Hull - and Lincoln, at the request of Park and Duncan, conveyed the Lebanon Springs Railroad to the New York, Boston and Montreal Railway Company for the expressed consideration of five dollars, subject to the $5,000,000 mortgage.

The New York, Boston and Montreal Railway Company then, in pursuance of its agreement with Park and Duncan, issued a first mortgage upon its entire property, including the Lebanon Springs Railroad, for $12,250,000 to Brown, Seligman and Sherman as trustees for the bondholders to that amount, and also a second mortgage-upon the same property for $12,750,000 to the New York Loan and Indemnity Company, as trustees for the bondholders to that amount.

The New York, Boston and Montreal Railway Company issued $6,000,000 in amount of these bonds and sold them in Prance to iona fide purchasers, and out of the proceeds paid to Park and Duncan upon the Hull and Lincoln mortgage $807,077.05. Park and Duncan paid no part of this sum to any of the Lebanon Springs or Harlem Extension bondholders other than themselves. The New York, Boston and Montreal Railway Company did not take possession of the Lebanon Springs Railroad, but, in conjunction with Park and Duncan, leased it to the Central Yermont Railroad Company. Soon after the New York, Boston and Montreal Railway Company became hopelessly insolvent, and although a receiver, the defendant Butterfield, was appointed, yet he never had anything to do or receive. The company practically ceased to exist. The Yermont Central Railroad Company abandoned the Lebanon Springs Railroad in August, 1877. Soon after the defendant Russell. C. Root took possession of it without right, but under the favor of Park and Duncan. Root organized the defendant, the Harlem Extension South Coal Transportation Company, and that company, Root being manager, operated the railroad until October, 1880, when it was delivered to the receiver appointed in the action of Marvin Sackett v. Russell C. Root and others.

Park and Duncan’s plan of protecting the bondholders through the New York, Boston and Montreal Railway Company’s larger connections having failed, Root was allowed to operate the railroad and to preserve it from decay and debt until some more promising plan for the future could be devised and consummated.

This is not expressly found by the court, but it is the inference to which the testimony pointed. So far as the bondholders were concerned the property was, when Sackett commenced his action, free from debt, and wholly applicable to the satisfaction of their bonds. The Union Trust Company was the plaintiff and owner of the judgments of foreclosure.

Every other party was foreclosed by the judgments except as to the surplus, and the Union Trust Company’s title to satisfaction out of the railroad was complete. The sale to Hull and Lincoln, and their mortgage of $5,000,000 to Park and Duncan were either for the benefit of the bondholders or in hostility to, and, therefore, in fraud of their rights. The consent of the Union Trust Company was not asked or given to the sale to Hull and Lincoln. Hull and Lincoln, therefore, took the title without furnishing the consideration and without the consent of the Trust Company, which may be said passively to have furnished it. A trust in the railroad, therefore, resulted in favor of the Union Trust Company. (1 R. S., 728, § 53; Lounsbury v. Purdy, 18 N. Y., 518; Swinburne v. Swinburne, 28 id., 568; 2 Story’s Eq., §§ 1197, 1198.)

If' Hull and Lincoln assumed to acquire title in hostility to the Union Trust Company’s rights, then they became trustees ex maleficio in spite of themselves. Hull and Lincoln had no interest of their own in the property. Park and Duncan had none, except as bondholders, and were thus represented by the Union Trust Company. The Trust Company, as against them, could have moved and obtained a re-sale of the railroad under the judgment. (Hale v. Clauson, 60 N. Y., 339.) It is said that the granting of the motion for a re-sale rests in the discretion of the court; that is so, even where the purchaser is a bona fide one and has paid the consideration. Discretion is such an enlargement of judicial power as makes it adequate to accomplish justice. We cannot conceive that it would be perverted to deny it in the case presented, where the purchase was experimental and the consideration not intended to be paid unless the experiment succeeded. The sale of $6,000,000 of the mortgage bonds issued by the New York, Boston and Montreal Railway Company to the French purchasers doubtless vested in them an apparent lien upon the property, since the record title, through the referee to Hull and Lincoln and to the New York, Boston and Montreal Railway Company, was perfectly straight, and the Union Trust Company had not challenged it. To cut that lien off the Union Trust Company could have had recourse to the $5,000,000 mortgage given to Park and Duncan, who took that mortgage for the benefit of the bondholders, of whom the Union Trust Company was the trustee. The Union Trust Company could treat that mortgage as the real proceeds of the foreclosure sales. (Dows v. Kidder, 84 N. Y., 121.)

In whatever aspect we look at the case, or whatever form of remedy or theory of relief should be adopted, the bondholders, through their trustee, were prior in right and in lien, and were the equitable owners of the railroad for the purposes of procuring payment to themselves, free from any prior or superior incumbrance.

The suggestion that the referee appointed by the court to make the sale displaced the owner of the judgment in its title to it, or right or duty to seek satisfaction thereof and take the proper remedies therefor, is not valid. The referee is appointed to make the sale as an impartial and responsible manager for the benefit of all 'parties concerned, and the Trust Company was most concerned. It was the Trust Company’s right to have a genuine sale and to have the proceeds thereof. Its duty to the bondholders was measured by its right and power to protect them, and until that duty was performed, or it was competently released from it, it continued.

Marvin Sackett was the owner of $8,700 of the bonds of the Lebanon Springs Railroad Company. He brought an action in the Supreme Court, as he alleged in his complaint, “ in behalf of himself and all others similarly situated, who hold any of the $2,000,000 of the bonds of the Lebanon Springs Railroad Company, and who shall be entitled to avail themselves of the benefit of this suit.” He alleged in his complaint the aforesaid sales to Hull and Lincoln; their mortgage of $5,000,000 to Park and Duncan; and their conveyance, subject to the mortgage, to the New York, Eoston and Montreal Railway Company, and alleged that Hull and Lincoln and Park and Duncan acted throughout for the benefit of the Lebanon Springs bondholders ; that nothing had been or would be realized for the bondholders by a continuance of the existing situation, and he prayed that a receiver be appointed and the railroad sold for their benefit. He made parties defendant, Russell C. Root, The Harlem Extension South Coal Transportation Company, the New York, Boston and Montreal Railway Company, and Daniel Butterfield its receiver, and no others. He alleged that they had no title or interest in the railroad valid against the bondholders, and prayed that it be so adjudged.

The defendant John Van Valkenburgh was thereupon appointed receiver, no one opposing. The defendants, the New York, Boston and Montreal Railway Company and its receiver, Butterfield, made default. The defendants Root and the Transportation Company answered, putting in issue some of the allegations of the complaint respecting the rights of the bondholders, but asserting no right or title in themselves to the possession of the railroad. Seven bondholders, upon petitions representing their interest, moved the court to be made jDarties, but their motions were opposed by the plaintiff and denied. The court, however, made an order “ that the plaintiff's attorneys be and they are hereby required to serve copies of all papers and notices of every kind, which shall be served herein, upon Mr. F. L. Westbrook, of Kingston, Ulster county, N. Y., and he is hereby authorized and allowed to appear as counsel in behalf of said bondholders, hereinbefore mentioned, upon all trials, hearings and motions herein.”

Park and Duncan also made application to the court to ' be made parties, alleging their ownership of $300,000 of Lebanon Springs bonds, $600,000 of Harlem Extension bonds, and their interest in the Hull and Lincoln mortgage. Their motion was opposed by the plaintiff and was not granted. One Henry A. Tilden, who claimed to own thirty Lebanon Springs bonds, was associated with the said Sackett in the bringing of the action. He retained Mr. Harris as counsel, and assumed to control the action. Mr. F.,LWestbrook, receiving no compensation, took no steps under his appointment adverse to the interests of the plaintiff. He delivered most of the papers served upon him to Mr. Harris, the counsel for Mr. Tilden. The case was pending upwards of four years, and was brought to trial in October, 1881. Meantime the plaintiff made two applications to the court for payment to himself, first, for services in collecting the facts and instructing his counsel for the purposes of preparation to bring the said action,” claiming $J96.80, which was allowed and paid him; second, for services rendered the Lebanon Springs Railroad Company; for this he was allowed and paid $3,000.04. Henry A. Tilden, the coadjutor of the plaintiff, also claimed and was allowed and paid, by order of the court, $23,967.37 for moneys expended at the request of the Lebanon Springs Railroad Company. Two other persons were allowed claims amounting to $2,858.75. All of these claims were, if valid, behind the mortgages. Various counsel, including those of the receiver, of the plaintiff, and Tilden, were allowed and paid $39,203.60, and included in this sum was a large allowance for services in the Sackett and Tilden claims. The receiver issued $350,000 in certificates. Finally the court directed judgment, in form substantially as prayed for, directing a sale of that part of the railroad situate in the State of New York, subject to the receiver’s certificates to the amount of $350,000, and providing that the accrued interest thereon, and the allowed claims and obligations of the receivership remaining unpaid, including costs and taxes, be paid from the purchase-money. These amounted to $155,000, and for this sum the railroad was sold, under the judgment, to the defendants Hazard and Foster. The aggregate of liens thus accumulated, and given a preference to the bonds, was $505,000. The entire property was consumed, leaving nothing for the bondholders.

It was found by the trial court that the Sackett action was a representative one; that, since Sackett brought the action for himself and all other Lebanon Springs bondholders, he represented them all, and they are bound by the judgment, and hence the plaintiffs cannot maintain the present action.

This is the important question in this appeal. If the Sackett action was, in truth, a representative action, fairly brought and' honestly and regularly conducted, for the benefit of all the bondholders, the judgment therein is conclusive against these plaintiffs. (Kerr v. Blodgett, 48 N. Y., 62.) Representative actions are a recognized method of equity procedure, and the rule is thus codified: “ "Where the question is one of a common or general interest of many persons ; or where the persons who might be made parties are very numerous, and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.” (Code of Civ. Pro., § 448.)

Of course, -if Sackett did fairly, honestly and regularly bring and conduct his action for the benefit of these jffaintiffs, then he brought them and their interests in the subject-mattter as fully before the court as if they themselves had brought precisely the same action; what he did in it they did; these plaintiffs in such case, therefore, put all theii interests mentioned in the complaint in the hands of the court, and asked the court to take jurisdiction of them and dispose of them. This the court did, and no matter what irregularities in procedure or defects in parties there may have been, these irregularities and defects are chargeable to these plaintiffs; and in the absence of unfairness they are estopped to escape from the consequences of their own conduct, or if they wish any relief they must seek it in the action of Sackett v. Root itself, and not in a collateral action. It follows, therefore, that if the plaintiffs, through their representative Sackett, did not choose to bring Hull and Lincoln, or Park and Duncan, or their own trustee, the Union Trust Company, or the trustees of the New York, Boston and Montreal Railway Company’s mortgage into court in order to cut off whatever lien or title any of them might have or claim, the law imputes the omission to the plaintiffs, and refuses to relieve them, at the expense of third parties, from the consequences of their own acts. Plainly they could, if they would, cut off their own interests in the railroad, whether legal or equitable, whether they cut off that of any one else or not; and they were not obliged to cut off the interest of any third party in order to cut off their own. If the Sackett suit was a true representative suit, fairly brought and conducted for the benefit of all the Lebanon Springs bondholders, the judgment in it bars the plaintiffs from maintaining this action, except possibly with respect to that part of the railroad situate in the State of Vermont. If these plaintiffs wrecked their own interests, they must abide the consequences. But if it was not fairly conducted for the benefit of all the Lebanon Springs bondholders, if the plaintiff Sackett, and his associate in its management, Tilden, used the suit to acquire an advantage for themselves and others at the expense of the interest of those whom they assumed to protect, the latter are not bound by it. (Kerr v. Blodgett, supra; Campbell v. R. R. Co., 1 Woods, 368.) An appeal in the Sackett action would only bring up for review errors of law or fact committed by the court.

A bill of review, impeaching the action and judgment for fraud, brings up the fraudulent practices of the plaintiff,.or suffered by him in the action, whereby he wronged those he assumed to protect. Such is this action. It is a direct attack, not upon any alleged errors of the court, but up011 the fraud of the plaintiff. (Hackley v. Draper, 60 N. Y., 88, 92; Dobson v. Pearce, 12 id., 156; State of Michigan v. Phœnix Bank, 33 id., 9-27.)

The importance of the finding that the Sackett action was a representative one, has induced us to examine with care all the evidence bearing upon the question. The conviction is forced upon our minds that the finding cannot he sustained, and that the finding requested by the plaintiffs, namely, “ That said suit of Sackett v. Boot was neither brought nor conducted for the purpose of realizing the property to the owners of the Lebanon Springs bonds,” ought to have been made.

Assuming that Sackett, and Tilden, his associate, in bringing and conducting the action contemplated the natural and probable consequences of their management of the action of Sackett v. Boot, they cannot be acquitted of deliberate spoliation of the Lebanon Springs bondholders.

What has already been said suggests the delicate and highly responsible trust which a representative plaintiff assumes in bringing such an action as Sackett brought. ILe impliedly guaranties that he will not allow his private interest to conflict with his discharge of duty. Here we find Sackett and Tilden obtaining from: the fund, which it was their duty to protect for the bondholders, $27,761.21 upon their private claims, which, if valid, were behind the bonds. No suggestion of these claims was made in the complaint. Presumably the other bondholders, if they had not been kept out of court by the plaintiff’s intrusion as their self-elected representative, would have opposed their priority. If, aside from the bondholders, there had been made parties defendant those who, as we shall hereafter show, were entitled to claim an interest in the action, they presumably would have opposed such priority. There were no parties to the action interested to oppose these claims. Sackett and Tilden represented both sides of their own case. Not content to leave out of the action those who would naturally oppose these claims, they successfully opposed and kept out such of them as tried to come in. Under a pretense of protecting the common and general interests of the bondholders, Sackett and Tilden sacrificed them to their own interests. This was a fraud, and of itself is sufficient to establish the non-representative character of the action and its misrepresents^ tive character. Sackett’s omission to make the Union Trust Company, Park and Duncan, and the trustees of the New York, Boston and Montreal Railroad Company parties to the action is significant. When a party brings an action for himself he can select his own defendants, but when he volunteers to sue as the representative of others, he should sue those who ought to be sued.

If the railroad was to be sold, the common interest of the bondholders required that all outstanding liens and clouds upon the title behind the bonds should be cut off, to the end that there should be no diminution of price upon account thereof.'

Now, the Union Trust Company was the plaintiff in the original judgments, and, of course, their legal owner. As there had been no satisfaction of these judgments, the Union Trust Company was the party entitled to seek satisfaction. The bonds held by the bondholders were merged in the judgments. (See cases cited in O'Brien v. Young, 95 N. Y., 436; Matter of European Central Railway Co., L. R., 4 Ch. D., 33; S. C., 19 Moak’s Eng., 642, and cases cited in note thereto.) The bonds were of no further value than as evidence of their holders’ equity in the judgments, or in whatever the trustee could obtain towards their satisfaction. Whether the Union Trust Company was to be deprived of its legal title to the judgments, or of its right to pursue all available remedies, or was to be used as an instrument through which the bondholders could work out their equities, its presence as a party was necessary. (Hallett v. Hallett, 2 Paige, 17-22; Western R. R. Co. v. Nolan, 48 N. Y., 513; Greaves v. Gouge, 69 id., 154.) The Union Trust Company was also the trustee of the Harlem Extension Railroad bondholders and the owner of the foreclosure judgment, whereby their rights were made second only to those of the Lebanon Springs bondholders. Certainly these bondholders were interested in the fund to be realized by the sale of the railroad; they were entitled to oppose Sackett and Tilden’s priority upon their unsecured claims; to oppose the other charges whereby the entire fund was consumed, and, therefore, were entitled to be represented in the Sackett action by their trustee. As the trustee represents the bondholders, his presence as a party is, in legal effect, their presence; and if the trustee is a party, the bondholders are not necessary parties, except' in the case of the trustee’s neglect or refusal to become a party or act properly as such, in which case one or more bondholders, acting as the representatives of all, may bring the action and make the trustee a party and compel his proper action as such. (Cases supra.)

It would seem to follow that the action by one cestui qui trust, as the representative of all,'is not proper where the' trustee is alive and not brought into court. He who seeks to procure the representation of all the bondholders should perform the condition precedent to such representation, namely, bring in as a party to the proper action their legal representative, their trustee. Where the trustee is dead the cestui qui trust, through one or more as their representative, can bring the action, since no trust shall fail for want of a trustee. (Galveston R. R. Co. v. Cowdrey, 11 Wall., 459.) It is plain that' if the Union Trust Company is not cut off, and these plaintiffs are not cut off by the Sackett suit, then no bar exists to the present action.

Park and Duncan held the $5,000,000 mortgage given to them as mortgagees by Hull and Lincoln. That mortgage should either have been cut off, or wielded to cut off the French .bondholders under the New York, Boston and Montreal Railway mortgages. In either case Park and Duncan and the trustees of the New York, Boston and Montreal bondholders should have been made parties.

The Constitution, as it is judicially construed, provides that no person shall be deprived of his rights or property by any judgment unless he is actually or constructively a party to the action in which the judgment is rendered. It is urged that the Union Trust Company was constructively a party, because it did not ask to become one, and because it must have known of the existence and object of the suit. The evidence of its knowledge of the character of the action is too feeble to support a finding to that effect. It is a novel proposition that a person may lose his prior-acquired property by hearing that other parties have become involved in a law-suit about it. Even Us pendens only affects claims acquired after the suit is commenced. It is said that the plaintiffs might have come in if they had applied. Their application to do so would have been a concession of the point of their contention here, that the action was not a representative one. If they had come in they would have been bound; and if they had applied, and been refused, they would have been told, in effect, that their rights would be just as well protected if they were kept out as if they were let in, and thus they would have been bound except as against fraud. If they had come in, of course, they would have had an opportunity to resist the applications of Sackett and Tilden to spoliate the fund, but being out they could not know of such spoliation until after it was accomplished ; and then, if they knew the law, they knew they could not be made accessories after the fact, by failing to seek to reclaim what was so effectually lost. Whatever might have been their duty if the action had been fairly conducted for the benefit of all, we need not inquire, since in such case they probably would have been without the causes of complaint which they now set forth.

The plaintiffs, as we have already said, could have assented to the action, and to all that was done in it, and thus by their assent precluded themselves from complaint. But there is no presumption that a principal consents to the acts of his agent whereby his agent defrauds him. Quite the reverse. The absence of affirmative evidence that the plaintiffs did not consent is not the equivalent of evidence that they did. We point out what was done and omitted, not for the purpose of declaring the rights of third parties who may not now care to assert them, but to show how far Sackett and Tilden trifled with and subordinated the rights of the bondholders to procure priority for their own unsecured claims. Unless the plaintiffs can be held to have consented to the Sackett action, then, whatever rights they could work out for themselves under the Union Trust Company’s judgments, or the Park and Duncan mortgage, can be worked out in this action, since neither they nor the Union Trust Company nor Park and Duncan were parties to the Sackett action, and all necessary parties are made defendants in this action.

Sackett neglected for four years to bring the action to trial. Indeed, the trial seems to have been brought on and conducted by those who were interested to realize upon the claims which had been created during the four years of its pendency. There was apparently some clanger that further delay would imperil, by further accumulation, the par value of the claims already accumulated. Certainly Sackett waited until the wreck of the railroad, so far as the bondholders were concerned, was complete. Such an action, thus instituted, controlled and resulting, cannot be upheld. It was not a representative suit in fact; if it was such in form and regularity, then it is effectually impeached for fraud.

The plaintiffs are entitled to a reversal of the judgment and to a new trial in which they will be entitled to relief substantially the same as if the Sackett action had never existed. They were in no sense parties to that action, and, therefore, their rights remain untouched.

It is said that they are bound by the receiver’s certificates, which were declared to be a first lien upon the property. This cannot be so without a violation of constitutional protection. The court acquires jurisdiction of the pai’ties, and of the subject-matter before it, but, from the nature of the case, can only acquire jurisdiction of so much of the subject-matter as all the parties before it hold. When parties are unknown, equity provides for bringing them in, or reserving or securing their rights. A decree binds the parties to it. In railroad cases the courts have gone further than in other cases in displacing prior liens in order to preserve and operate the railroad, but only as between parties to the action, actual or constructive. They can create no lien against persons not such parties, and can displace none. (Raht v. Attrill, 106 N. Y., 423, and cases there cited.)

As said in Union Trust Company v. Illinois Midland Company (117 U. S., 460), “Those who take receiver’s certificates must be deemed to have taken them subject to the rights of parties who have prior liens upon the property, and who have, not, but should have been, brought before the court. While the court, under some circumstances and for some purposes, and in advance of the prior lien-holders being made parties, may have jurisdiction to charge the property with the amount of the receiver’s certificates issued by its authority, it cannot, without giving such parties their day in court, deprive them of their priority of lien. When such prior lien-holders are brought before the court they become entitled, upon the plainest principles of justice and equity, to contest the necessity, validity, effect and amount of all such certificates, as fully as if such questions were then for the first time presented for determination.”

The trial court refused to find, as the plaintiffs requested, that the receiver realized only $236,500 upon the $350,000 of certificates issued, but failed to find what sum he did realize.

The evidence shows that he did receive that amount, and we think fails to show that he received any more. Thus the loss or waste of $113,500, or more than thirty-two per cent of the issue of certificates, would, if the certificates are first paid at par, be charged to the bondholders. There may be an equity in favor of the purchasers of certificates that the reasonable cost of the permanent betterment of the railroad be charged to all the bondholders, and thus ratably against the plaintiffs. (Miner v. Beekman, 50 N. Y., 337.)

The Central National Bank, of Boston, a large holder of these certificates, as plaintiff for itself and all other certificate holders, brought an action against Hazard and Foster, the purchasers of the railroad, upon the sale in the Sackett suit, and against the New York, Rutland and Montreal Railway Company, to which company Hazard and Foster conveyed the railroad, and against the American Loan and Trust Company, trustees of mortgage bonds issued by the said railway company. Judgment was obtained against said defendants, establishing the bank’s ownership of its certificates and their lien upon the railroad, and providing for the sale of the railroad to pay the plaintiff and such others as should come in and establish their ownership. Such a judgment is good against the defendants in that action. They derive title to the railroad under the Sackett sale, which preferred the certificates. It is not binding upon the plaintiffs. Whether Hazard and Foster, or their grantees, are entitled to any equity for betterments against the plaintiffs is doubtful; they were bondholders themselves, and they acquired by their purchase the title of such of the other bondholders as acquiesced in the Sackett suit; they took the risk of its extent, and could ■expend as much money in betterments as they chose. They ■co-operated with other bondholders in making the purchase and in •organizing the New York, Rutland and Montreal Railway Company in order to make it their grantee. This company conld only mortgage its own title.

As there must be a new trial, we leave this question to be adjusted as the equities may then appear. There will need to be an identification of the bondholders who are entitled to come in and share with the plaintiffs in this action. They are those who held aloof from the Saekett action.

It is urged that the plaintiffs are estopped by their laches in not earlier signifying their dissent to Sackett’s claim to represent them. They are not barred by any statute of limitations; they are not shown to have been advised of the Saekett action, or of its purpose or of its fraudulent character; it is said that it was the more notorious because of a legislative investigation. The notoriety, if it reached the purchasers, would have suggested that possibly some of the parties in interest were injured; and if it reached the plaintiffs, it possibly aided them in ascertaining the means by which injury was done them. These are possibilities — not more. Laches which does not amount to an estojipel or violate any rule of law does not release a cause of action, though often confirmatory of other evidence of its doubtful character. The only laches which we see in the case affecting the plaintiff’s rights by way of estoppel is that of the Union Trust Company in allowing the sale to Hull and Lincoln to remain unchallenged until after the New York, Boston and Montreal Railway Company had, upon the strength of its recorded title from Hull and Lincoln, sold its mortgage bonds to the French purchasers; but the Hull and Lincoln mortgage saves them from the consequences of that acquiescence. As all the parties are before the court their several rights can be determined in this action.

The judgment should be reversed, new trial granted, costs to abide the event.

Learned, P. L, concurred; Mayham, J., not acting.

Judgment reversed, new trial granted, costs to abide event.


source: Caselaw Access Project

license: Public Domain

text:
    FRANKLIN BAILEY, Appellant, v. MARY A. KINCAID, Respondent.

      Notice of appeal — statutory change of limit of time within which an appeal may be taken — effect of such change.

    Where, subsequent to the time that the right to appeal from, a judgment accrued, and before the expiration of the time limited for such appeal, section 1841 of the Code of Civil Procedure was amended by striking out sixty days and inserting thirty days, and thereafter the notice of appeal was served more than thirty days from the time that the right to appeal accrued, hut less than sixty days thereafter, and also more than thirty days after the date at which the amendment took effect, the service of the notice is too late.
    Motion to dismiss an appeal on the ground that notice thereof was not served within the time prescribed by law.

      P. J. Sullivan, for the motion.

      A. P. Arnold, opposed.
   Landon, J.:

The limitation of the right to appeal began May 6, 1890, and under section 1311, Code of Civil Procedure, as then in force, would continue for sixty days. May 26, 1890, the section was amended by striking out sixty days and inserting thirty. The notice of appeal was served June 30, 1890, more than thirty days from May 6,1890, but less than sixty days, also more than thirty days after the amendment took affect.

The right to appeal is not a vested right. Whether a party may appeal, and if so, under what limitation as to time, are matters of legislative control. (Butterfield v. Rudde, 58 N. Y., 489; Ryan v. Waule, 63 id., 57.) Upon and after the amendment of the section the limitation was defined by tbe section as amended. (Moore v. Mausert, 49 N. Y., 332; People v. Board of Assessors of Brooklyn, 84 id., 610.) It is undoubtedly tbe rule that amendments to statutes should not be construed to have a retrospective effect unless the intention to give them that effect is plain. (Matter of Miller, 110 N. Y., 216, 223.) Giving due effect to that rule, the thirty-days limitation would not begin to run before the amendment was passed, but would begin with the date of its passage. Such was the construction given by the Supreme Court of the United States to a new statute of limitations upon causes of action already accrued. (Sohn v. Waterson, 17 Wall., 596.) This seems to be reasonable. The repealed portion of the statute is no longer the law, and the amended portion is the present law. In the absence of any vested right we must give the amendment effect from the date it began to operate. The time to appeal was not exhausted under the old law, and, therefore, upon its repeal no limitation existed except under the new law, that did not begin to operate until it took effect, and its operation continued thirty days.

Williamson v. Field (2 Sandf. Ch., 533), held that the provision of the Revised Statutes prescribing a limitation of ten years to suits of exclusive equitable cognizance does not apply to a right which was vested and perfect before those statutes took effect. It was held that the peculiar language of the Revised Statutes was limited to rights of action thereafter accruing.

In Goillotel v. City of New York (87 N. Y., 441), the terms of the statute as amended were held to reserve existing limitations as to existing causes of action.

But as the appellant did not serve the notice of appeal until more than thirty days after the amendment took effect, he was still too late.

Motion granted, but without costs.

Learned, P. L, and Mayham, J., concurred.

Appeal dismissed, with costs.


author:
Landon, J.:
      Mayham, J.:
      Learned, P. J.

text:
    CORNELIUS W. CARNRIGHT, Respondent, v. MORGAN GRAY and WILLIAM FRELIGH, Executors of the Last Will and Testament of SAMUEL P. FRELIGH, Deceased, Appellants.

      Consideration of a note — burden of proof in respect thereto.

    An action was brought upon the following promissory note:
    “Quarryville, September 2, 1871.
    “Thirty days after death I promise to pay to Cornelius W. Carnright fifteen hundred dollars, with interest. “ SAMUEL P. PRBLIGPI.”
    to which a defense was interposed denying that the note had been made, and alleging that there was no consideration therefor.
    The' plaintiff upon the trial rested his case without proving any consideration for the instrument.
    Upon a motion made upon the trial for a nonsuit, the trial court held that, if the note was genuine, there was a presumption of a consideration, and that the burden rested upon the defendants to show that it was without consideration; that the absence of words of negotiability or words expressing a consideration did not change the rule.

      Held, that although, if the fact of the existence of the consideration is assailed by evidence tending to disprove it, the burden of establishing the consideration upon the whole case may rest with the plaintiff, yet where there is no evidence to disprove the existence of a consideration, the note itself is prima facie evidence of its existence.
    That, although the note was non-negotiable, it came within the provision of the statute (3 and 4 Anne, chap. 9,1704 ; 1 R. L., 151; 1 R. S., m. p. 768, §§ 1-4) to the effect that a note in writing made and signed by any person whereby he shall promise to pay to any other person, or his order, etc., any sum of money, “shall have the same effect and be negotiable in like manner as inland bills of exchange, according to the custom of merchants.” (Learned, P. J., dissenting.)
    That the words “ value received” do not constitute an essential part of a promissory note.
    Appeal by the defendants from a judgment of the Supreme Court, entered in the office of the clerk of the county of Ulster on the 2d day of January, 1890, and also from an order denying the defendants’ motion for a new trial made upon the minutes of the court.
    The action was tried at the Ulster County Circuit before the court and a jury, and a verdict -was rendered in favor of the plaintiff for $3,395.15.

      The action was upon a promissory note as follows :
    “Quarryville, September 2, 1871.
    “ Thirty days after death I promise to pay to Cornelius "W. Cam. right fifteen hundred dollars, with interest.
    “ SAMUEL P. ERELIG-I-I.”
    The defense was a denial that the testator made the note, and the answer further alleged that there was no consideration therefor.

      Peter Ocmtine, for the appellants.

      F. L. Westbrook, for the respondent.
   Landon, J.:

The jury decided the signature to be genuine upon testimony which, no doubt, admitted of a decision either way. This issue was sharply litigated. In the absence of any erroneous rulings we ought not to set aside the verdict upon this issue.

The plaintiff in the first instance rested his case without showing any consideration other than that which the note and his possession and production of it imported. The trial court refused to nonsuit the plaintiff, and held that, if the note was genuine, there was a presumption of consideration sufficient to authorize a recovery, and that the burden rested upon the defendants to overthrow it.; that the absence of words of negotiability, or expressing a consideration, did not chapge the rule. The defendants excepted.

Testimony was then given by the defendants tending to show that it was improbable that the piaintiff had any money to loan, or that the testator would have borrowed it; that the parties were unfriendly to each other. The plaintiff then adduced some testimony tending to impair this position of the defendants. The plaintiff did not attempt to show what the actual consideration was.

The court charged the jury that the note, if genuine, imported a consideration, and that the burden rested upon the defendants to show that it was without consideration.

Undoubtedly the rule is that the plaintiff by producing the note and proving the signature makes out a prima faeie case of consideration, and, if nothing more is offered, is entitled to recover; but if this prima facie case is assailed by evidence tending to die-prove it, tlie burden of establishing the consideration upon the whole case rests with the plaintiff. (Perley v. Perley, 144 Mass., 104 ) "When the transaction which resulted in giving the note is disclosed by the evidence, it is plain that the question of consideration should be determined upon the actual facts instead of upon the presumption which the note affords. (Bruyn v. Russell, 52 Hun, 17.) But in the present case the evidence does not disclose the transaction which resulted in giving the note. Its tendency, so far as it has any, is to show that it is improbable that the parties should have had such dealings with each other as to result in this note or any other like it. This evidence goes to the genuineness of the note, not to its consideration. But the jury have found the note to be genuine. ■ There is nothing in the testimony, assuming the note to be genuine, that would sustain a verdict that there was no consideration. The evidence tends to show that the testator would not have given the plaintiff a note except upon consideration. The appeal thus depends upon the question whether this note on its face imports a consideration.

The note in question contains no words of negotiability. It is, therefore, not negotiable. (McMullen v. Rafferty, 89 N. Y., 456; Cromwell v. Hewitt, 40 id., 491.) Non-negotiable notes differ from negotiable ones in the particular that the indorser is regarded as a maker or guarantor, and not as a simple indorser (same cases); also in the further particular that the equities between the parties are not cut off by transfer to a bona fide purchaser for value before maturity. (Maule v. Crawford, 14 Hun, 193; Lee v. Swift, 1 Den., 565; Barrick, v, Austin, 21 Barb., 241.)

But they are regarded as promissory notes under the statute of 3 and 4 Anne (ch. 9, 1704, enacted in this State in 1801; 1 R. L., 151); and in the Revised Statutes (vol. 1 m. p. 768, §§ 1-4) as follows:

Sec. 1. “All notes in writing, made and signed by any person, whereby he shall promise to ■ pay to any other person, or his order, or to the order of any other person, or unto the bearer, any sum of money therein mentioned, shall be due and payable as therein expressed ; and shall have the same effect, and be negotiable, in like manner, as inland bills of exchange, according to the custom of merchants.”

§ 4. “ The payees and indorsees of every such note payable to them or their order, and the holders of every such note payable to bearer, may maintain actions for the sums of money therein mentioned, against the makers and indorsers of the same respectively, in like manner as in eases of inland bills of exchange, and not otherwise.”

Before the statute of Anne, inland hills of exchange and promissory notes payable to the order of the payee, were, by the custom of merchants, negotiable. "With respect to inland bills of exchange, it was held that the indorsee could recover of the maker or acceptor, as the case might require, and that the custom of merchants had become the common law. It was héld the same way in several cases with respect to promissory notes, but in Clerke v. Martin (2 Ld. Ray., 757; 1 Salk., 129), Lord IIolt, C. J.,held that the merchants could not change the law; and in Potter v. Pierson (2 Ld. Ray., 759; 1 Salk., 129), Lord Holt held that “this custom to oblige one to pay by note without consideration is void and .against law.”

The statute of Anne was enacted to reverse the ruling of Lord Holt, and to place promissory notes upon the same footing as inland hills of exchange, with respect to their negotiability and effect. The indorsee or transferree can recover upon them. See Dunlop v. Silver (1 Cranch Rep., 367), for a full exposition of the law and •cases leading to the statute of Anne. The sections of our Bevised Statutes above quoted are a substantial re-enactment of the statute of Anne. Both statutes, by their terms, refer to negotiable notes. They shall “ be due and payable as therein expressed.” Nothing is said in the statute about consideration, and hence the notes need recite none. The English courts, however, regarding the statute as remedial, extended the benefit of it beyond its literal terms and held that non-negotiable notes came within it, and that the payee could maintain an action within the statute against the maker. (Kyd on Exchange, 65, published in 1790; Smith v. Kendall, 6 Term Rep., 123; S. C., 1 Esp., N. P. C., 231; Burchell v. Slocock, 2 Ld. Ray., 1545.) That is to say, the payee could declare upon the note under the statute, instead of declaring upon the consideration or transaction which led to the giving of the note. If the non-negotiable note was within the statute, it imported a consideration without reciting it. Such being tlie rule in England, it seems to have been assumed to be tlie rule in this State.

In Downing v. Backenstoes (3 Caines, 137), tlie note was nonnegotiable and was declared upon as within tlie statute. The defendant demurred upon the ground that the note was not. within the statute, and that, therefore, the declaration was bad because it did not allege tlie transaction and consideration upon which the note was given. The report states that counsel for defendant confessed that if the case were to be determined on the English decisions it would be against him, but if it were res integra in this court, he had much to say. The court said: “ The very point was settled in Green v. Long, April Term, 1798, in conformity to the adjudications in Westminster Hall. Judgment for the plaintiff.”

We understand that the rule thus announced has ever since been followed in this State without question. (The President, etc., v. Hurtin, 9 Johns., 217; Kimball v. Huntington, 10 Wend., 675; Paine v. Noelke, 53 How. Pr., 273; 3 Kent. Com., 77.)

The same rule prevails in Massachusetts. (Townsend v. Derby, 3 Met., 363: Dean v. Carruth, 108 Mass., 242.) The statute of Anne, though not enacted in that State, seems to be regarded as declaratory of the common law. (Richards v. Barlow, 140 Mass., 218.)

No definition of a promissory note requires the use of the words “value received.” It is an unconditional promise in writing to pay a specified sum of money to another at some time certain to arrive. (Buller on Trials, 272 [edition of 1788]; 2 Black. Com., 467; 3 Kent, 75; Kyd on Exchange, 18.) This definition, in substance, is in all elementary books. Negotiability is not an essential quality of a promissory note. (Sibley v. Phelps, 6 Cush., 172.) Of course, if both negotiable and non-negotiable notes are within the statute, neither needs the words “ value received.” Yery j>ossibly different rules prevail in different States. As was said by counsel in Downing v. Backenstoes (supra), if the question were res integra it this court, much could be said, but it seems to have been so early and positively settled that very little can be found in our reports upon the subject.

Judgment affirmed, with costs.

Mayham, J.:

Section 1 of title 2 of chapter 4, part 2 of the Revised Statutes (vol. 3, p. 2242 of 7th ed. of Banks’ R. S.), which is a transcript of 1 Revised Laws, 151, passed in 1801, and which, in substance, re-enacts chapter 9 of 3 and 4 Anne, passed in 1704, seems broad enough to embrace both non-negotiable and negotiable promissory notes, and as that part of the section relating to non-negotiable notes is connected to the part of the same section relating to negotiable notes disjunctively, either non-negotiable or negotiable notes are promissory notes within that section, and if we read the section leaving out all that part which relates to negotiable notes or those payable to order, we will have an instrument containing all the elements of a non-negotiable promissory note. The section would then read : All notes in writing made and signed by any person, whereby he shall promise to pay to any other person * * * any sum of money therein mentioned, shall be due and payable as therein expressed; ” by section 4 of the same title, if we read the same as it relates to the maker and payee only, we will have this provision: The payees * * * may maintain actions for the sums of money therein mentioned against the makers.” * * * Tested by this reading of the statute, we would find in the note in suit all the statutory elements of a promissory note; and it will be observed that as the provisions of the first section are connected by the disjunctive “ or,” no misinterpretation of the whole section is effected by reading the same in the manner above indicated. If, then, this is a promissory note, neither words of negotiability or expression of a consideration upon its face are necessary as between the maker and payee to authorize a recovery. It is an unconditional promise in writing to pay a specific sum of money to another at a time certain to arrive, which completely answers the definition of a promissory note.

In Paine v. Noelke (53 How. Pr., 272) it was held that a note not negotiable imported a consideration, though none was expressed, and might be sued on without alleging or proving a consideration.

I think the trial judge committed no error in his charge or on the motion for nonsuit in holding that this note imported a consideration, although none was expressed upon its face, and it was non-negotiable, and that the judgment should be affirmed.

Learned, P. J.

(dissenting):

This is an action on a written instrument alleged to have been made by the testator of the defendants in the words and figures following:

“ Quarryville, September 2, 1871.
“ Thirty days after death I promise to pay to Cornelius W. Carnright fifteen hundred dollars, with interest.
“SAMUEL P. FRELIGH.”

Freligh died June 21, 1888. The answer denies the making of the writing, and alleges also that there was no consideration. The jury found a verdict for plaintiff of $3,395.75.

After the plaintiff had given evidence tending to show that the writing was in the handwriting of the testator he rested. The defendant moved for a nonsuit, among other grounds, that the plaintiff had not proved that there was any consideration. The court denied the motion. Evidence was then given by the defendants tending to show that the writing was not that of the testator. Some evidence was given on each side as to the condition of the plaintiff; as to the possibility or probability of his having the amount of money and being able to lend the same to the testator; and as to disagreements between plaintiff and the testator.

The defendants again moved for a nonsuit, insisting that the writing recited no consideration ; and also that the burden of proof of consideration had been now shifted to the plaintiff, and that he could not recover without showing such consideration. This was denied.

The court charged the jury that the writing, if found to be that of testator, imported a consideration; that no proof of consideration was required to sustain it; that the burden rested on defendants to overcome this presumption by a preponderance of evidence and by showing that the writing was without consideration. To this the defendants excepted.

It was proved on the trial that plaintiff was a son-in-law of the testator, married in 1863 ; that he lived for some time in testator’s family, till soon after the death of plaintiff’s wife in 1871; that testator’s first wife died in 1869, and that he married again in 1871. There was evidence that about this time an alienation of feelings ai'ose between plaintiff and testator, and continued, so that there was little intercourse. There was evidence that plaintiff, in 1819 and since, had been a stone measurer at fifteen dollars per week; that in 1811 he gave to testator his note • for fifty dollars, which does not appear to have been paid by plaintiff. There was also evidence that testator was a lender of money, and that at the date of the alleged writing he had $1,392 .on deposit to his credit in a savings bank. It was shown that, in 1866, the father of plaintiff conveyed to him and his wife a lot of land, the consideration expressed in the deed being $1,500; and that a few months afterwards, October 6, 1866, plaintiff and his wife conveyed the same to one Steenburgh, the consideration expressed in the deed being $1,500. No other.proof of the consideration of the deeds was given. The plaintiff gave evidence of a conversation between the testator and one Gillespie two or three years after the death of plaintiff’s wife. ’ In that conversation testator is said to have stated that he loaned his daughter $1,500 when the farm was bought, and that she had brought back the money to him. This alleged conversation must have taken place about 1811. The recollection of the witness is very indistinct and vague. The matters thus briefly stated are substantially the only proof tending to show an actual consideration for the written promise in suit.

It was the general rule of the common law that no one could sue on a contract but the original party. The custom of merchants first, and the statute law afterwards, made the exception that a promissory note, payable to a person or his order, or to bearer, might be indoi-sed, or transferred and the indorsee or transferree could sue in his own name. It followed, too, as part of that custom of merchants, that defenses good against the original party were not good against the indorsee. A want of consideration was no defense against the indorsee. Hence, as against the indorsee, it was immaterial whether any consideration was expressed in the note by the words value received ” or otherwise. As against the payee, a want of consideration could be shown. But as it was not necessary to show consideration, even 'prima facie, against the indorsee, and as the words value received ” were, therefore, iinimportant as to him, it was naturally said, generally, that as to negotiable notes those words were not necessary. The negotiable character of the writing showed that it was made to be transferred, if the payee desired. Inasmuch as the words “ value received ” or other prima facie evidence of a consideration were immaterial, when the note passed to the indorser it readily followed that they should be considered unnecessary in the hands of the payee. But this arose from the fact that the note was negotiable, and from no other fact whatever. If it were not negotiable on its face the reason ceased.

Reference is often made to the statute of Anne (3 and 4 Anne, C. 9). The preamble is: “Whereas, it has been held” that notes in writings, etc., payable to order “ were not assignable or Indomable over within the custom of merchants,” etc. Then the statute enacts “ shall be assignable and indomable over in the same manner as inland bills of exchange,” etc., declaring, also, that the indorsee may maintain his action in like manner as on inland bills. Hence it appears that the object of that statute was to secure the negotiability of notes, a matter which had been doubted. (Buller v. Crips, 6 Mod., 29; Clerke v. Martin, 2 Lord Raym., 757), and it is not disputed that no notes are negotiable which have not the word “ order ” or “ bearer; ” although having the words “ value received ” they may be valid instruments and entitled to days of grace. (3 Kent’s Com., 77.)

It has become the law now that the assignee of any contract may sue in his own name. We may, therefore, lose sight of the fact that negotiability was the principal peculiarity of notes by the custom of merchants, and by the law establishing that custom. (Chitty on Bills, 195.) Of course negotiability depends on the words “ order ” or “bearer” in the note. (McMullen v. Rafferty, 89 N. Y., 456; Cromwell v. Hewitt, 40 id., 491.)

The statute of our State is as follows: “ All notes in writing, made and signed by any person, whereby he shall promise to pay to any other person or his order, or to the order of any other person, or unto the bearer, any sum of money therein mentioned, shall be due and payable as therein expressed.” (1 R. S., m. p., 768, § 1.) This includes three classes of notes: First, notes payable to A B or order; second, notes payable to the order of A B ; third, notes payable to bearer. No other notes are included. A note payable to A B without the words “order” or “bearer” is not included. This is evident from the rest of the section, which is: And shall have the same effect and be negotiable in like manner as inland bills of exchange, according to the custom of merchants.” Now, as it is settled that a note without the words order ” or bearer ” is not negotiable, it is evident that this section does not include any note which does not contain one of these words.

The same is seen in the following section 4, which gives the right to maintain actions against makers and indorsers on a “ note payable to them or their order, * * 'x' as in cases of inland bills of exchange, and not otherwise.” Now, the indorser on a non-negotiable note may be held as maker or guarantor, and is not entitled to notice of demand or non-payment. (Cromwell v. Hewitt, supra.) Therefore, he is not held as in case of inland bills, because in case of such bills there must be notice of demand and non-payment.

Whatever may be the proper construction of the statute of Anne, or of the present English statute (45 and 46 Vict., ch. 61, § 83), we must be governed by the Revised Statutes of our State. The plaintiff urges that section 1 is to be construed to include, first, a promise to pay to any other person; second, a promise to pay to Ms, the payee’s, order; third, a promise to pay to the order of any other person; and fourth, a promise to pay to bearer. This cannot be correct. For the second would be the same as the third. And, further, such construction would make a note negotiable which had neither the word “ order ” or the word “ bearer.” A reference also to chapter 33, Laws of 1788, and to chapter 48, Laws of 1794 (which are the basis of our Revised Statutes) will show that the notes there mentioned are “ assignable or indorsable,” and the indorsees may maintain actions thereon. This shows that these statutes also had reference exclusively to negotiable and not to non-negotiable notes.

The proper construction of our statute, then, is, as above stated, that the words or his order ” are connected with the preceding words to any other person; ” and do not form a description of another kind of notes. The present note, then, is not a writing described by our statute. (Daniel’s Neg. Paper, § 162.)

Now, it is the general rule that there cannot be a recovery on an alleged contract without proof of consideration. The words “ for value received,” in a note, are pyrima facie evidence of a consideration. (Prindle v. Caruthers, 15 N. Y., 425; Blackman v. Cavin, 21 Wkly. Dig., 445; Daniel on Neg. Paper, 163.) It lias been shown above why, in a negotiable note, these words are not necessary ; as is held in 3 Kent’s Commentaries, 77. But where the note is not negotiable, it is a mere contract between the original parties, not intended for transfer; and a consideration must be shown. So it was held in Edgerton v. Edgerton (8 Conn., 6). Again, in Bristol v. Warner (19 Conn., 7), there -was a note: “ On demand, after my decease, I promise to pay J. W. B. or order $800,” and the court held that it imputed a consideration because it was, in form, negotiable, and cited the preceding case.

“ But such notes as are not negotiable by statute, or upon which no action of debt is authorized by statute, remain as at common law, and not importing a consideration, it must be alleged and proved.” (Daniel on Neg. Paper, § 162.) In Parsons on Bills (p. 227) it is said that in negotiable notes, if there are no such words as value received,” in some States the presumption of consideration would be denied; in others, perhaps admitted.

It wall be seen that Chancellor Kent says that, without negotiable Avords, the note is a valid instrument; is entitled to grace and may be declared on as a note. And this is what is meant by the common statement that a non-negotiable promise is a note under the statute of Anne, above cited. (3 Kent’s Com., 77.) But immediately folloAving these words he speaks, as above cited, of the words “ value received,” and says that “ they are unnecessary, and value is implied in every negotiable bill, note,” etc. Thus he limits his remark as to these words to negotiable paper, as he had previously explained it.

The case of Kimball v. Huntington (10 Wend., 675) was on a due bill: “ Due A B $325, payable on demand.” The defendant had pleaded a release puis darein continua/nce. The court said that this waived all former pleas, and that the question whether the due bill was a promissory note could not be raised on the trial. In fact, on the trial, plaintiff proved the loan of money and that the bill was given therefor. Therefore, the question of the necessity of proof of consideration could not arise. But, obiter, the court said that the words Aralue received ” were not needed to bring this paper under the statute. The word due ” admits an indebtedness existing. The court cited President, Directors, etc., v. Hurtin, (9 Johns., 217). That was ah action on a promissory note by which defendant promised to pay plaintiff $125 “ for five shares of the capital stock of said company,” and the court said that the note expressed the consideration, as it plainly did. The court cited also Downing v. Backenstoes (3 Caines, 137), decided on demurrer to the declaration. It does not appear whether or not the words “ value received ” were in the note.

In Dean v. Carruth (108 Mass., 242), the note contained the words “value received.” In Underhill v. Phillips (10 Hun, 591), it does not appear that the note was not negotiable.

Cook v. Fellows (1 Johns., 143), was an action on a due bill, and it was also held the plaintiff could not recover. Lequeer v. Prosser (1 Hill, 256) was an action on the guaranty of a note payable to bearer, and, therefore, negotiable.

It does not seem, therefore, that there is any controlling decision which holds that in a non-negotiable note it is not necessary to show a consideration, either in the note itself or by extrinsic evidence. Certainly this must be the rule upon principle. The plaintiff in order to show the defendant’s liability must show a promise made on a good consideration. That rests upon him as a part of his affirmative case. There has been sometimes an attempt to hold that a consideration was not necessary in case of a written promise. (Pillans v. Van Mierop, 3 Burrow’s, 1663.) But that is not the rule of our law. There must always be a consideration.

This view is especially applicable to a writing like the present, payable after the maker’s death, and, therefore, from his estate; a writing which, without a consideration, would be an atttempt to make a testamentary disposition. (Earl v. Peck, 64 N. Y., 596; Worth v. Case, 42 id., 362.)

It cannot be doubted that between the original parties the question of consideration is open. And the matter thus far discussed is really whether the defendants must prove the negative. For certainly the note contains no admission by the maker that his promise was made on any consideration. It is very possible for one to make a written promise without any actual consideration. Then, however, he is not legally to be compelled to fulfill. If he admits a consideration, that admission is prima faeie evidence against him. But if he make no admission, the plaintiff is put to other proof.

But further: It will be seen that on the trial evidence was given by defendant tending to show that the plaintiff did not have this amount of money to loan, and, in rebuttal, evidence was given by the plaintiff tending to show that he had property. It is plain that this evidence on each side was given on the question whether or not there was a consideration. Because if the note was entirely without consideration, the writing might, nevertheless, be genuine; and the note might have been intended as a gift. Therefore, the evidence that the plaintiff had no money to loan the deceased was evidence, so far as it went, on the point of consideration, and not on the genuineness of the writing. The writing might have been genuine, although no consideration passed to the deceased. On this poinf the court charged that “ it is upon the defendant that the onus rests of assailing the consideration, to overcome the presumption by a preponderance of evidence, and showing that it was without consideration.” In Perley v. Perley (144 Mass., 104) there was no question as to the form of the note. On proving the signature the plaintiff rested. Evidence was then given by each party in regard to the actual consideration, which evidence was conflicting. The court held that the burden of proving a consideration still remained with the plaintiff, notwithstanding the presumption arising from the note itself; and that if there was any evidence in the case on this point on behalf of defendant, the plaintiff must show by a preponderance of the whole evidence that the note was given for a valuable consideration. This same rule is stated in Delano v. Bartlett (6 Cush., 364); Simpson v. Davis (119 Mass., 269) and Powers v. Russell (13 Pick., 69). These are cases in which a consideration was expressed in the notes by the words “value received.” Yet the court held, evidence on both sides having been given on the question oí consideration, that the orms of proving consideration was upon the plaintiff on the whole case.

In this respect 1 think that injustice was done to the defendants. Assmning, now, that the writing could be given in evidence without proof of consideration, still thefact of a consideration was a part of plaintiff’s case ; and the burden of that proof was on him. If, by a preponderance of evidence on the whole case, he failed to show a consideration, he could not recover. In the case of Delano v. Bartlett the plaintiff’s counsel, relying on the note which purported a consideration, and thus making out a prima facie case, requested the court to charge that the burden of proof was on defendants to establish a want of consideration. But the court refused, and charged that the burden of proof was throughout on plaintiff to satisfy the jury, on the whole evidence, of the fact of consideration. And this was held to be correct. I think that this is a sound principle, and, therefore, that it was incorrect (in any view of the note), to charge that the burden rested on the defendants of showing that the note was without consideration.

A further point is urged by defendants, viz., that the verdict is against the weight of evidence. Ordinarily, we are not disposed to interfere with a verdict given on conflicting evidence. But this case is peculiar. There is no direct evidence to the fact of the execution of the note by the testator. The only testimony is that of witnesses who had seen the testator write, and who believed the note to be in his handwriting. Now, such testimony, of course, means only that there is a very great resemblance between the writing in question and other writing which the witnesses know to have been that of the testator. The opposing testimony is of a similar character. But under the present law of the State a great number of specimens of the handwriting of the testator were produced, and the jury were allowed to compare them with the disputed note. Now, on such a- comparison, the jury have no advantage over the appellate court. The appellate court is just as able as the jury to determine whether a disputed handwriting is like other and undisputed specimens. There is no judging of the integrity and truthfulness of witnesses. And every one must see that the ■opinion of witnesses, as to the genuineness of handwriting, is only an opinion as to resemblance. In the present case, one witness for the plaintiff testified to his belief that three notes w'ere in the testator’s handwriting which were proved to have been written by another person a few days before the trial An unusual opportunity of comparison was given in this case by the production of an assessment-roll of 18Y0, containing eighty foolscap pages all written by the testator, in which some 3,000 names are written, including the testator’s, and including his surname many times. There is thus an unusually full opportunity for the appellate court to examine in detail the testator’s mode of making nearly all the letters of the alphabet, capitals and small liand. There has also been exhibited to ns on the appeal a great number of notes drawn up by the testator payable to himself or his order, and which were originally signed by persons owing him.

I have given all these papers a very careful examination. I ought not to comment upon them in detail lest I prejudice the parties on another trial. But I have come to the conclusion that, taking into consideration these papers and all the testimony in the case, the verdict should be set aside on the evidence. There is, I may remark, no evidence of any dealings between the parties which tends to give probability to the genuineness of the note, or to show a consideration therefor; and although the complaint alleges that this note was given for money lent by the plaintiff to the testator, nothing of that kind was shown by the slightest evidence.

For these reasons the judgment and order should be reversed, new trial granted, costs to abide event.

Judgment and order affirmed, with costs.


author: Landon, J.

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. JAMES KENNEDY and THOMAS BOWES, Appellants.

      Instruction to thejwy in a criminal case in the absence of the defendant’s counsel — conviction of larceny under an indictment charging robbery —■ intimidation of the jury.

    In a criminal action the counsel for the defendants, after the case had been submitted to the jury, but before they had agreed upon their verdict, stated to the court that he was about to go to his home, some nine miles distant from the court-house, and not to return until the next morning, asking that he might then be heard upon any motion that he might make. The presiding judge stated that the court would attend at the court-house during the evening to receive the verdict and answer the jury, and that if the jury should agree all that would be done would be to receive their verdict that evening, and that counsel could make any motion he desired in the morning.
    Subsequent to the departure of the defendants’ counsel the jury came into court and asked for instructions, which were given by the court, to which, by its direction, exceptions were entered in favor of the defendants, the defendants being present in person, but their counsel being absent.

      Held, that the action of the court was not in violation of section 427 of the Code of Criminal Procedure, providing that the jury can be given further instructions, only “ after notice to the district attorney and to the counsel for the defendant.”
    That in this case the counsel for the defendants had all the notice that he or the defendants were entitled to under the circumstances.
    A verdict of grand larceny in the first degree is properly rendered under an indictment charging the prisoner with robbery in the second degree, as there caá be no robbery without larceny.
    ' The remark of one of the jurors at the time, when the jury came into court asking for further instructions in a criminal case, that “Thereis eight of us standing for conviction,” cannot be construed to have constrained the jury to an agreement, as subsequently shown by their verdict against; the prisoners, through fear of public opinion, and to have thus deprived the prisoners of their legal right to the unrestrained deliberation of all the jurors.
    Appeal by tbe defendants from a judgment of conviction of the crime of grand larceny in the first degree, after a trial at a Court of Sessions, held at the city of Albany on the 28th day of February, 1890.

      P. D. Hiver, for the appellants.

      Andrew Hamilton, for the respondent.
   Landon, J.

The case was given to the jury about four o’clock in the afternoon. A little later they came into court and said they could not agree. The court asked if they wanted any further instructions. One of the jurors then said: “ There is eight of us stands for conviction” — and was apparently about to speak further when he was stopped by the court. The jury did not ask for instructions and, upon the direction of the court, retired to consider further of their verdict. The defendants were indicted for robbery in the second degree. The jury subsequently found them guilty of grand larceny in the first degree. Counsel for the defendants urges that the remark of the juror in open court may have in some way constrained some of the jurors to an agreement through fear of public opinion, and thus deprived the defendants of their legal right to the unconstrained deliberation of all the jurors. This is too conjectural, and too lightly supported by probabilities to justify a disturbance of the verdict.

Before the jury had agreed upon their verdict, and about the hour of the evening recess, the counsel for the defendants stated to the court that he was about going to his home in Cohoes — about nine miles distant from the court-house — and would not return again until the next morning, and asked if he might then be heard upon any motion he might make. Thereupon the presiding judge stated to him that the. court would attend at the court-house during the evening to receive the verdict and answer the jury, and that if the jury should agree, all that would be done would be to receive their verdict that evening, and that counsel could make any motion he desired in the morning. The jury came into court about nine in the evening and asked instructions; the defendants were present in court, but their counsel was absent. After waiting some time, and it appearing that counsel had left for his home, the court gave the jury instructions upon the points submitted by them, the court directing that exceptions be entered in behalf of the defendants to such instructions. Defendants’ counsel now urges that it was error for the court to give instructions to the jury in his absence. Section 427, Code of Criminal Procedure, provides that the jury can be further instructed only after notice to the district attorney and to the counsel for the defendant.” We think the counsel for the defendants had all the notice that he or the defendants were entitled to under the circumstances. He had had express notice that the court would attend during the evening to answer the jury, but he deliberately absented himself. The ruction of the Code must have a reasonable construction, and it would be unreasonable to confer upon counsel the power to deprive the court of the right to instruct the jury, and to deprive the jury and the defendants of the benefit of such instructions and to obstruct the administration of justice by his deliberate absence after such a notice as was here given. It has been held a sufficient notice, under a like statute, to call the counsel at the court-house door. (McNeill v. State, 47 Ala., 498.) The defendants’ counsel had notice, and thus the case of People v. Cassiano (30 Hun, 388) does not apply.

The indictment was for robbery, second degree, and the verdict was grand larceny, first degree. There can be no robbery without larceny, and hence the accusation of robbery includes that of larceny, the greater including the less.

The facts charged in the indictment in support of the accusation' supported both the accusation of robbery in the second degree and grand larceny in tlie first degree. The verdict was, therefore, in accordance with the indictment and for the minor offense, which the greater includes. (Code of Crim. Pro., § 445.)

Judgment of conviction and sentence affirmed.

Learned, P. J., and May ram J., concurred.

Judgment of conviction affirmed.


author: Mayham, J.:

text:
    JAMES J. DOOLEY, Appellant, v. ARTHUR MOAN, Respondent.

      Books of account — what proof required to make them competent as evidence.

    Iii an action.to recover for work and labor performed, tbe plaintiff’s claim was admitted, and the defendant set up by way of counter-claim an account for goods, wares and merchandise sold and delivered by the defendant to the plaintiff. On the trial the defendant proved that he was a merchant, and as such sold and delivered goods to the plaintiff, some of which were delivered to the plaintiff’s wife and children; that the defendant, his niece Annie, and her sister, Catherine, delivered goods to the plaintiff and to his family; that Annie was his bookkeeper and made all the entries in the book of account, but none of these persons could state the specific articles delivered by them.
    When items were delivered by the bookkeeper she made the entries upon the book, and when they were delivered by others the practice was to enter them on slips of paper and place them on the desk and the bookkeeper would then enter them on the book. The defendant proved by one witness that the latter had dealt with the defendant and had settled from defendant’s book, and that defendant kept honest accounts.
    The only evidence of the items and amount of the defendant’s account against the plaintiff was from the book kept in the manner above indicated, which was offered and received in evidence upon the trial, under plaintiff’s objection.

      Held, that the book was incompetent as evidence in this case; that the evidence did not bring tne case within the rule which had existed prior to the time that parties were competent witnesses, under which the books themselves became evidence.
    That such rule required proof, first, that the party kept no clerk; second, that some of the articles charged in the account had been delivered; third, that the books produced were the account books of the party; and fourth, by some witness who had dealt with him and settled with him from said books, that he kept fair accounts.
    Appeal by tbe plaintiff, James J. Dooley, from a judgment of tbe Albany County Court, entered in tbe office of tbe clerk of tbe county of Albany on the 11th day of September, 1889, which affirmed a judgment of a Justice’s Court, with notice of an intention to bring up for review upon such appeal the judgment and the order of affirmance of said Albany County Court.
    The action was originally begun before a justice of the peace of the city of Cohoes, in the county of Albany, from the decision of which court an appeal was taken to the Albany County Court.

      Doyle <& Fitts, for the appellant.

      P. D. Fiver, for the respondent.
   Mayham, J.:

This is an appeal from the judgment of the County Court of Albany county, affirming a judgment of a justice of the peace. The action was for work and labor. The answer admitted the plaintiff’s claim, and set up by way of set-off or counter-claim an account for goods, wares and merchandise sold and delivered by defendant .to plaintiff.

On the trial before the justice the defendant claimed and was awarded the affirmative of the issue, and to establish his counterclaim proved that he was a merchant, and as such sold and delivered goods to the plaintiff, some of which were delivered to plaintiff’s wife and children. The plaintiff’s claim, as alleged and proved, amounted to ninety-six dollars and thirty-nine cents, which was not controverted by the defendant. The defendant’s account as claimed amounted to eighty-eight dollars and sixty-eight cents, some of which was for intoxicating liquors.

It seems substantially conceded by the learned counsel on either side that five dollars was deducted by the justice for liquors embraced in the account, and the balance of eighty-three dollars and sixty-eight cents allowed and deducted from the plaintiff’s claim of ninety-six dollars and thirty-nine cents, leaving a balance of twelve dollars and seventy-one cents in favor of the plaintiff, for which the justice rendered judgment, with costs.

The evidence .shows that the defendant, his niece, Annie Moan, and her sister, Catherine Moan, delivered goods to the plaintiff and his family. Annie was his bookkeeper, and made all of the entries in the hook of account put in evidence. None of these persons (who were all sworn as witnesses) could state the specific articles delivered by them. When items were delivered by the bookkeeper she made the entries upon the book direct, and when delivered by the others the practice was to enter them on slips of paper and place them on the desk, and the bookkeeper would enter them on the book.

The defendant proved by one witness that he had dealt with defendant and settled from his book, and that he kept honest accounts. The only evidence of the items and amount of the defendant’s account was from the book kept in the manner above indicated. There was but one book on which the entries were made, which on the trial was called the ledger.

This book was offered and received in evidence on the trial, under the plaintiff’s objection. We think its receipt was error, for which the judgment should be reversed.

. It is true that the objection was not specifically taken, that the proper foundation had not been laid for its introduction, but it was objected to as incompetent, illegal and improper, and it is quite apparent that no form of objection could have enabled the defendant to have supplied the proof necessary to make this book competent evidence within the established rules of law, allowing books of accounts as evidence.

Before parties were permitted to be witnesses in their own behalf, books of account of a party who kept no clerk were admitted, from necessity, where they were verified and authenticated in a given way; and the method of authentication was definitely stated in Vosburgh v. Thayer (12 Johns., 462), and that rule has been rigidly adhered to, where books of account have been offered as evidence of the transactions of parties, as distinguished from memoranda, to refresh the recollection of witnesses.

To make books competent evidence under that rule, the party seeking to use them must prove:

First. That the party kept no clerk.

Second. That some of the articles charged in the account have been delivered.

Thi/rd. That the books produced are the account books of the party.

Fourth. He must prove, by some witness who has dealt with him and settled with him from such books, that he kept fair and honest accounts; upon such proof the books became competent evidence for the consideration of the court or jury.

This rule has not been changed or relaxed by any of the legislation making parties competent witnesses in their own behalf, or by any judicial determination to which our attention has been directed.

In Knight v. Cunnington (6 Hun, 100) it was held that the books of a physician were not competent evidence for him, unless he first prove the entries were made by him, that he kept correct books, and that others have dealt and settled with him from these books. In Gould v. Conway (59 Barb., 355), it was held that where entries were reported by a salesman and entered by a bookkeeper on the book, the book did not prove the entries unless verified by the evidence of the salesman in connection with the book.

In Ives v. Waters (30 Hun, 298), the rule laid down in Vosburgh v. Thayer (supra), was reaffirmed, and it was held that books of account were not competent evidence when one-fourth of the entries were in the plaintiff’s handwriting and three-fourths in that of a clerk.

In Beatty v. Clark (44 Hun, 126), the court says: “To enable a party’s own book of accounts to be put in evidence in his favor, the rule as stated in Vosburgh v. Thayer (12 Johns., 462), and as it still exists, is that a foundation must be laid for their admission by proving that he had no clerk; that some of the articles charged had been delivered; that the books produced are the account books of the party, and that he keeps fair and honest accounts, and this must be done by those who have dealt and settled with him.” Many of these conditions have not been, and could not be complied with in this case as the defendant kept a clerk, and the books were not in his handwriting, nor was any portion of the same. But it is urged by the learned counsel for the respondent that the books in this case were competent evidence under the decisions in Krom v. Levy (1 Hun, 171); Mayor v. Second Avenue Railroad Company (102 N. Y., 572); Halsey v. Sinsebaugh (15 id., 488); Russell v. Hudson River Railroad(17 id., 140); Philbin v. Palrick (6 Abb. [N. S.], 287); and Marcly v. Shults (29 N. Y., 346). But in these cases the books and the entries were used as memoranda to refresh the recollection of witnesses who made or were cognizant of the entries at the time they were made, and could swear that they knew them to be correct when made. In such case it is the refreshed recollection of the witness, and not the abstract evidence of the books of account, that constitutes the proof.

In Krom v. Levy (supra), the witness made the entries and knew them to be correct at the time, both as to fact and price charged, but could not state them on trial without reference to the book. Held, competent for him to read from the book.

In Mayor v. Second Avenue Railroad Company (supra), where the time-keeper delivered statement of time daily to the bookkeeper, who entered the time as repoi’ted, both swearing to the accuracy of the part performed by them respectively, but neither having knowledge of the accuracy of the facts stated by or acts done by the other, the book was received, and read in evidence, and it was held no error. But this was but the verification of a memoranda which could not err unless one or the other of the witnesses swore falsely. It falls far short of sustaining the admissibility of the book put in evidence in the case at bar.

In Halsey v. Sinsebaugh (15 N. Y., supra), it is held “ that an original memorandum made by a witness presently after the fact noted in it transpired, and proved by the same witness at the trial, may be read by him, and is evidence to the jury of the facts contained in the memorandum, although the witness may have totally forgotten such facts at the time of the trial.”

This is a familiar doctrine, but it is no authority for the introduction of the defendant’s books of account in the case at bar.

In Russell v. Hudson River Railroad Company it was held competent for a witness who made a correct memorandum of an event at the time of the occurrence, which he knew at the time to be correct, but which he could not then recollect, after reading the memorandum to be permitted to read it in evidence, but it will be observed that the memorandum was of an act or event known to the witness at the time it occurred, and not communicated by another.

In Philbin v. Patrick (supra), the witness testified that the entries were made when the articles were delivered in the course of his business as the bookkeeper of the plaintiff. He did not recollect the delivering of the articles, but was only able to state what articles were actually delivered from having made charges in the scrap-book. They were made about the time of the delivery, and his evidence was properly received within the authorities above referred to.

In all these cases it will be observed that the book was only received to refresh or verify the recollection of the clerk or bookkeeper, and they do not come within the principle under which books of accounts are made competent evidence for a party in his own favor. Nor do we see that they in any way disturb or trench upon the well-settled rules so long established for the admission of books of accounts as evidence.

"We think their admission was error, for which the judgment of the County Court and that of the justice should be reversed.

Learned, P. J., and Landon, J., concurred.

Judgment reversed with costs.