author: By the Court—Woodruff, J.

text:
    The Farmers' and Mechanics’ Bank, Plaintiffs and Respondents, v. The Empire Stone Dressing Company, Defendants and Appellants.
    1. Where a manufacturing Company was incorporated “ for t.he purpose of carrying on the business of cutting, sawing and dressing stone of all, kinds, and the business of stone cutt’ng in all its branches,”’ and its by-laws provide that the Secretary, “in the prosecution, of'the business, may make, draw, indorse and accept notes and bills of exchange,” such Secretary has no authority to accept a bill for the accommodation of the drawer, drawn and used to raise money for the use of the latter.
    2. Nor has thé President or Trustee or Manager of its affairs, any such authority by mere virtue of his office or agency.
    3. The Company is not liable, upon such an accommodation bill, so drawn and • accepted by the Secretary, by direction of such President or Manager, to a holder who discounted the same for the drawer before it was accepted, notwithstanding he received the bill in good faith, and paid value therefor, in the expectation that it would be accepted, and in ignorance of the fact that it was drawn for the accommodation of the drawer, and that the Company had no funds of the drawer.
    4. One who discounts a ‘bill of exchange before acceptance by the drawee, does so on the credit of the drawer or indorser, or both, and is not a holder for value paid on the faith of the acceptance.
    5. Whether any or all the officers of such a corporation can bind the corpo- - ration by accepting bills for the accommodation of third parties? Qucere.

    (Before Hoffman, Woodruff and Pjbrrepont, J. J.)
    Heard, May 5th;
    decided, October 29th, 1859.
    Appeal from a judgment in favor of the plaintiffs for the sum of $2,575.25 and costs, upon the report of John P. Crosby, Esq., Referee, to whom the cause'was referred.
    The action is brought by the plaintiffs as indorsees of two bills of exchange, drawn upon the defendants by the Hartford Quarry Company. One of the bills is dated April oth, 1854, for the sum of $2,000, payable sixty days after its date, to the order of Charles T. Shelton, and is accepted thus, viz.:
    “Accepted at Empire City Bank.
    “ Geo. Sherman, Secretary.”
    The other of the bills is dated May 19, 1854, for the sum of $500, payable thirty days after its date, to the order of C. R. Shelton, (Clark R. Shelton,) and is accepted thus, viz.:
    “Accepted at Empire City Bank.
    “ Geo. Sherman, Secretary.”
    The plain tiffs áre a banking corporation chartered by the State of Connecticut, and doing business at Hartford, in that State.
    The defendants are a manufacturing corporation, organized under the general law of the State of New York authorizing the formation of corporations for manufacturing, mining, mechanical or chemical purposes, passed Feb. 17, 1848, (Sess. Laws of 1848, ch. 40,) in compliance with which the certificate (which was signed, acknowledged and filed in order to create the corporation,) declared and defined the “ objects for which the Company was formed,” in these words, viz.: “For the purpose of cutting, sawing and dressing stone of all kinds, and the business of stone cutting in all its branches.”
    The bills of exchange in question were both drawn in Connecticut, and were discounted by the plaintiffs, in their usual course of business, at Hartford, for the account and at the request of the drawers, before they had been accepted or presented for acceptance.
    The answer of the defendants, (so far as it is material to state . its contents,) denied that the bills of exchange were, or that either of them was, accepted by the defendants. And it also averred, specially, that the bill for $2,000 was accepted in their name, out of the course of their regular business, and without consideration to them, by one George Sherman, pretending to act under their authority, but that said acceptance was so made without their authority or consent, and was fraudulent and void.
    The Referee found, as matters of fact, “ that the plaintiffs are a corporation duly created by the Legislature of the State of Connecticut, in 1833, and that they transact their business at Hartford, in said State. That the defendants, are a corporation organized under the General Manufacturing Law of the State of New York, passed in 1848.
    “ That between the 5th day of April, 1854, and the 7th day of May, 1854, the defendants duly accepted a certain bill of exchange for $2,000, drawn by the Hartford County Quarry Company, upon the defendants, dated on said 5th day of April, and payable to the order of Charles T. Shelton, in sixty days after the date thereof.
    “ That the same was discounted at legal rates, on or about its date, by the plaintiffs, for and at the request of the drawers thereof.
    “ That through an oversight said bill was not indorsed by the payee thereof until after maturity and protest thereof for nonpayment.

      “ That between the 19th day of May, 1854, and the 21st day of June, 1854, the said defendants duly accepted a certain other bill of exchange for $500, drawn by the Hartford County Quarry Company upon the defendants, dated on said 19th day of May, and payable to the order of Clark R. Shelton, in thirty days from the date thereof.
    “ That the same was, on the day of its date, indorsed to the plaintiffs, who discounted the same at legal rates, for and at the request of the drawers thereof.
    “ That neither of said acceptances was made in the prosecution of the business of the defendants, but solely for the accommodation of the drawers thereof, and that the defendants never received any consideration for such acceptances, but that the plaintiffs had no actual notice thereof.
    “ And that there was a payment made to said plaintiffs, on account of the indebtedness arising upon said acceptances, of $500," on the 12th day of October, 1855, and that the balance due on said acceptances is still due and unpaid.”
    He found, as a conclusion of law, from the foregoing facts, “ that the.said defendants are indebted to the said plaintiffs in the balance of said indebtedness, with interest, amounting in the whole, at the date of this report, to the sum of $2,575.25, for which sum the plaintiffs are entitled to judgment.
    “Dated New York, Hov. 24, 1859.”
    The defendants excepted to the findings and decisions of the Referee, in that he found that the defendants duly accepted the bills; that he did not find that the same were accepted by the Secretary of the defendants without authority and in excess of his powers; and, third, that he found that the defendants are indebted to the plaintiffs in the sum of $2,575.25.
    On the trial the plaintiffs read in evidence the certificate under or by means of which the defendants became a corporation above referred to ; also the by-laws of the defendants, the 6th section whereof was as follows:
    “It shall be the duty of the Secretary to keep the books and accounts of the Company, and make report of his doings to the stockholders at each annual meeting, and to the Trustees whenever called upon by them to do so. And he is empowered to make orders on the Treasurer for all moneys to be paid by the Company; and, in the prosecution of its business, may make, draw, indorse, and accept notes and bills of exchange."
    In relation to the authority of the Secretary to accept the bills, the1 Secretary testified:
    “ Mr. Charles T. Shelton attended to the financial affairs of the defendants at the time of making those acceptanceshe was at this time one of the Trustees, and he was acting as the general agent of the Company at that time; I do not know whether he was also President; it was my practice to accept drafts drawn on the Company, at that time and previously, by his directions; my acceptances as Secretary of the Empire Stone Dressing Company were generally recognized and paid by the Company; the defendants became insolvent about the time these drafts matured; I am not aware that any acceptances of mine as Secretary of the defendants were ever dishonored or repudiated by the defendants before their insolvency; when I was instructed by the Company, or its officers, to accept a draft, it was not my custom to inquire as to whether there was or was not a consideration; I am not aware that the defendants and the Quarry Company ever exchanged acceptances for their mutual accommodation.” “ I had, before this time, made accommodation acceptances for the Hartford County Quarry Company; these previous accommodation acceptances had not been paid by the defendants that I know of, but I suppose had been paid by the Hartford County Quarry Company, as I had no notice of their non-payment; we gave the Hartford County Quarry Company credit for their payment."

      Charles T. Shelton testified on that subject:
    “ I remember telling Mr. Sherman to accept the drafts; * * * I told Sherman to accept them; I assumed it, and was a sort of king over both Companies;”
    There was much testimony to the effect that the bills were accepted, without consideration, for the accommodation of the drawers—some of which is stated in the opinion of the Court; and it was admitted that the $500, found by the Referee to have been paid thereon, was received by the plaintiffs as a dividend from the drawers of the bills, and was paid by their Trustee.
    The testimony of the plaintiffs’ cashier showed that the bills were discounted by them for the drawers, and the proceeds passed to their credit and checked out as wanted, and that the drafts were, after such discount, forwarded by. the plaintiffs to New York for acceptance. In relation to the plaintiffs’ practice of discounting bills of exchange on New York which were not accepted, he said: “ If we had a long acquaintance and full confidence in the drawer or the offerer, we took them without acceptance, trusting that they would be accepted.”
    It appeared that, by mistake, the payee of one of the drafts, Charles T. Shelton, did not indorse it until some months after the drafts were discounted and had become due; but, being requested to correct the error, he put his name upon the draft.
    From 'the judgment entered on the Referee’s decision for the plaintiffs, the defendants appealed.

      Charles F. Sanford, for defendants, (appellants.)
    I. The defendants never accepted either of the drafts, and can be charged with no liability upon either, except in the hands of a bona fide indorsee, for value, before maturity.
    1. The act of Sherman, in accepting these drafts, was not within the scope of the authority conferred upon him by the hy-law.

      (a.) Special or limited powers are to be construed strictly. (Stainer v. Tysen, 3 Hill, 279.)

      (b.) The act of Sherman, therefore, under consideration, was not only in excess of the authority conferred upon him by the by-law, but, as it involved a willful violation of duty, amounted, if not to forgery, at least to heinous fraud. (See argument in Mechanics' Bank v. N. Y. & N. H. R. R., pp. 14, 19.)
    2. If the delegated power had contained no express limitation, the act would have been a nullity, for the defendants themselves could not, under their charter, (7. e., the General Manufacturing' Law and their certificate of incorporation,) issue accommodation paper, for the .purpose of enabling third parties to raise money thereon. (2 R. S., 596; id., 657, 5th ed.; Talmage v. Pell, 3 Seld., 328.; Bank of Genesee v. Patchin Bank, 3 Kern., 314.)
    3. The attempted exercise of such a power is a violation of the Restraining Act. (Attorney-General v. Life and Fire Ins. Co., 9 Paige, 470; Schermerhorn v. Talman, 4 Kern., 140.)
    . 4. Those who deal with an agent, acting under special powers, are chargeable with knowledge both as to the nature and extent of the limitations prescribed. (Atwood v. Munnings, 7 B. & C., 278; Tulmadge v. Pell, 3 Seld., 328; Stainer v. Tysen, 3 Hill, 279; Nixon v. Palmer, 4 Seld., 398; Alexander v. Mackenzie, 6 M., Gr. & S., 766; Mechanics' Bank v. N. Y.& N. H. R. R., 3 Kern., 599.)
    5. J. fortiori, if a corporation, the mere creature of legislation, transcends corporate powers, the dealer must be charged with notice, since, in such case, the limitations to its authority are not only defined in writing, but are matter of public law and public record. (Bank of Genesee v. Patchin Bank, supra ; Mechanic' Bank v. N. Y. & N. H. R. R., supra.)

    6. The case of The Farmers' and Mechanics' Bank v. The Butchers' and Drovers' Bank, (16 N. Y. R, 125,) so far as it controverts these positions, is applicable solely to negotiable commercial paper, in the hands of bona fide indorsees for value, before maturity.
    II. But the $2,000 draft was not, at the time of its transfer, nor at any time during its life, a negotiable instrument. It was not indorsed by the payee till long after its maturity.
    1. Prior to the Code, the transfer of a bill payable to order was only properly made by indorsement. In no other way could the" transfer convey the legal title, so as to enable the holder to recover at law. (Story on Bills, § 201; Gibson v. Minet, 1H. Bl., 605; 2 Story Eq., §§1036, 1037, 1044, 1047.)
    2. In case of an assignment without indorsement, the holder acquired only the rights which he would have acquired upon the assignment of a bill not negotiable. (Story on Bills, §201; 2 Story Eq., § 1047; Murray v. Lylburn, 2 John. Ch., 441; 2 Vern., 692; 1 Ves. Sen., 123.)
    3. In such case the holder, having an equitable interest, might sue in the name of the person having the legal title. (Pease v. Hirst, 10 B. & C., 122; Chitty on Bills, 536.)
    4. The Code has changed the law in this respect, so far as to permit the assignee to maintain the action in his own name, but as regards equitable defenses the law remains the same. (Hastings v. McKinley, 1 E. D. Smith, 273; Code, §§111, 112.)
    5. The holder may, in"certain instances, compel a payee, who transfers a bill without indorsing it, to indorse. (Story on Bills, §201.)
    6. But the object of such compulsory indorsement is to charge the assignor as indorser—not to give the holder, as against prior parties, any rights which the assignor, at the time of such compulsory indorsement, did not himself possess. (Chitty on Bills, 244, 246.)
    7. An intended indorsee, when a bill has, by neglect, been transferred to him without indorsement, might, formerly, sue in the name of the payee. (Chitty on Bills, 536; Pease v. Hirst, supra; 5 Man. & Ryl., 88.)
    8. How, under the Code, as already suggested, he may sue in his own name, but, obviously, subject to all existing equities.
    Thus, if the holder of a bill, by his negligence or mistake, fails to give due notice to an indorser, no court of equity will interfere to enforce his remedy; or if he lose his right against a surety, by failing to proceed against the principal, he will not be entitled, in equity, to any relief.
    So, in the case of an intended indorsement by a payee, the Court, while it compels the indorsement, so as to give a right of action against the payee as indorser, thus enforcing a purely equitable right, will never interfere to exclude equitable defenses, but will leave the party to the just consequences of his negligence. (Franklin Bank v. Raymond, 3 Wend., 69; 13 Mass., 305.)
    9. A voluntary indorsement, after maturity, is only equivalent to an assignment, and is made subject to all equities between the original parties. (Williams v. Matthews, 3 Cow., 252.)
    10. As between the original parties, the want of consideration is a good defense. (People v. Howell, 4 Johns., 296; Pearson v. Pearson, 7 id., 26; Schoonmaker v. Roosa, 17 id., 301; Slade v. Halstead, 7 Cow., 322; Bank of Troy v. Topping, 9 Wend., 273; Franklin Bank v. Raymond, supra.)

    III. The acceptance of the $500 draft is not, and does not, on its face, purport to be, the act of the defendants. In this respect it differs from the other, which is accepted in the defendants’ name. Upon this draft, George Sherman is the acceptor, and he alone is liable as such. The word “ Secy.,” appended to his signature, is merely descriptio personae. (Hills v. Bannister, 8 Cow., 31; Taft v. Brewster, 9 Johns., 334; Stackpole v. Arnold, 11 Mass., 27; Pentz v. Stanton, 10 Wend., 271; Barker v. Mech. Fire Ins. Co., 3 id., 94; Moss v. Livingston, 4 Comst., 208; De Wilt v. Barley, 5 Seld., 371; Bolles v. Walton, 2 E. D. Smith, 164.)

      IV. The plaintiffs are not bona fide indorsees for value of either acceptance.
    1. The defendants having shown that neither the Quarry Company nor Shelton could have recovered upon the drafts, for the reasons above urged, the burden of proof was thrown upon the plaintiffs to show that they parted with value, in the regular course of business, before the maturity of the drafts, and on the faith of the acceptances.
    2. Again, the drafts were respectively discounted on or about the day of their date, and were subsequently forwarded to New York for acceptance. The plaintiffs, therefore, if they parted with value at all, did so on the faith of the drawer’s responsibility, not on that of the acceptor’s.
    The judgment should be reversed, and judgment rendered for defendants, since the plaintiffs can derive no advantage from a new trial.

      William B. Curtis, for plaintiffs, (respondents.)
    I. The acceptances were not accommodation. The failure of the defendants to produce and show the general account between the companies where these drafts are charged, and the character of their transactions appears, establish the presumption that the acceptances were made in their ordinary course of dealings, either as payments or advances for stone quarried and delivered, or to be quarried or delivered.
    I. The act of Sherman in accepting these draffs was within the scope of his authority, as represented and recognized by the defendants in their dealings with third parties, and as established by by-laws. (The United States v. The City Bank of Columbus, 19 How. U. S. R, 385.)
    II. If, for the purposes of the argument, it is conceded that defendants’ secretary exceeded his authority, and that the drafts were accommodation drafts, the plaintiffs having discounted the same in the ordinary course of business before maturity, and without notice, come within the rule, that as between two innocent parties thus situated, the principals in whose name the drafts were accepted, rather than the holder of the drafts, should suffer for their misplaced confidence.

      The same principle applies to the acts of the officers of a corporation as to a partner of a mercantile firm who affixes the firm name to a paper in which the firm has no interest. Where such paper is negotiable, and passes to an innocent holder for a valuable consideration, the corporation is bound, and doubly so, when by their conduct they have also induced the party to take it. (The Bank of Genesee v. The Patchin Bank, 3 Kern., 315-317; Attorney-General v. The Life and Fire Ins. Co., 9 Paige, 470; Belmont v. Coleman, 1 Bosw., 188; Storey v. A. M. Life Ins. Co., 11 Paige, 636; Mechanics' Bank v. N. Y. & N. H. R. R., 3 Kern., 622, 626; Farmers' and Mechanics' Bank v. Butchers’ and Drovers' Bank, 16 N. Y. R., 125; Exchanqe Bank v. Monteith, 17 Barb., 171.)
    III. The plaintiffs do not hold the $2,000 draft subject to the equities affecting it in hands of the indorser, by reason of his omitting to indorse it at the time of the transfer.
    The subsequent indorsement has relation back to the time of the delivery of the bill, and was sufficient to give effect to the antecedent right that vested at the times when the consideration was paid. (Chitty on Bills, 8 Am. ed., 263; Story on Bills, § 201; Anon., 1 Camp., 492; Watkins v. Maule, 2 Jacob & Walker, 244.)
   By the Court—Woodruff, J.

The defendants are a corporation organized under the General Manufacturing Law of this State, passed in 1848. (Sess. Laws of 1848, ch. 40, p. 54.)

They are sued upon two bills of exchange drawn upon them by the Hartford Quarry Company, and which were in terms accepted by the defendants’ Secretary.

It is expressly found by the Referee that “ neither of the said acceptances was made in the prosecution of the business of the defendants, but solely for the accommodation of the draw'ers, and that the defendants never received any consideration for such acceptances.”

This finding is in clear conformity to the weight of the evidence. The Secretary of the defendants, by whom the acceptance was written, and whose duty it was to keep their books and accounts, testifies that so far as he knows there was no consideration for the acceptance; that it was his impression at the time that the acceptances were made for the accommodation of the drawers solely; that no consideration passed from any' one to him, or to the defendants, so far as he knows; that although he cannot testify that he knows, of his own knowledge, that they were without consideration and accepted for the accommodation of the Hartford Quarry Company, that is his impression and belief. And it having been suggested that the defendants had accepted drafts in payment for stone shipped to them by the Quarry Company, and this being indeed the only consideration which it was claimed by the plaintiffs the defendants had received, the Secretary testifies of his own knowledge that “ they were not made for stone.” The President of the Hartford Quarry Company, (the drawers,) who was also the chief manager and agent of the defendants, and who told the Secretary to accept the bills, testifies in explicit terms that they were accepted for the accommodation of the Quarry Company.

The Treasurer of the defendants testifies that at a date prior to the date of these bills he was chosen Treasurer, and from that time until long after the maturity of the bills he had the sole management of the financial affairs of the defendants, and that he did not as Treasurer, or in any way, receive any consideration for the acceptances, and that the Company did not to his knowledge.

There is no testimony in contradiction of this evidence. The only testimony which in any degree tends to show consideration, is that of Julius H. Pratt, a Director of the Quarry Company and a Trustee of the defendants. He knows the general fact that the Quarry Company sent stone to the defendants, but his testimony is chiefly hearsay. He says in terms he does not know what was the consideration of these acceptances. He says he did not know what was the state of the accounts between the two Companies in the spring of 1854, and he adds that he does “ not think anybody did.”

The finding of the Referee on this point is therefore in accordance with the proofs. The acceptances were without consideration and for the accommodation of the Hartford Quarry Company.

The Secretary of the defendants had no authority to accept for the accommodation of third parties. The by-laws authorized him “to accept bills of exchange in the prosecution of the business of the Company.” That business was “ the business of cutting, sawing and dressing stone of all kinds and the business of stone cutting in all its branches." '

It may perhaps be conceded that the certificate of incorporation, under the clause last quoted, would authorize the purchase of stone to be cut or dressed, and then that the by-law would authorize the Secretary to accept bills in payment for stone purchased. But no latitude of construction would extend the authority conferred in the language above cited, so as to include an authority to accept for accommodation merely and without any consideration.

■ The Agent or Manager of the Company, who was a Trustee and had been President, told him to accept the bills, but the evidence fails to show that either he or such Agent or President or both had any authority to bind the defendants by such an acceptance.

If the report of the Referee that “ the defendants duly accepted the bills," is to be taken as importing that the Secretary had authority to accept accommodation bills, then his report is in this respect against the weight of the evidence and the judgment should be reversed on that ground, unless we can now hold upon the other facts that the defendants are liable whether the Secretary was authorized to accept such bills or not, and alike liable in either case.

If the report is not to be taken to find such authority, then there is no finding on the point, and a new trial should be granted because enough is not found to sustain the judgment, unless, as before, we are prepared to say that the question whether he had authority or not is immaterial and the defendants are liable, although the Secretary was not authorized to accept these bills.

This, I apprehend, cannot be correctly held. On the contrary the right of the plaintiff, in my judgment, depends primarily upon the question, whether the Secretary of the defendants had authority to accept bills for the accommodation of a third party. If he had, then the plaintiffs are doubtless entitled to recover. And when this case was before the General Term in January, 1858, there was an express finding by the Referee that the Secretary of the defendants was “duly authorized” to accept these bills. If that were true as matter of fact, the cases which hold that an accommodation acceptor; whose acceptance is given without restriction as to its use, and especially where it is given for the very purpose of securing a third party, is bound thereby, would apply to this case.

It is, however, obvious that a finding that the Secretary was “ duly ” authorized to accept accommodation bills involves the legal proposition that the Secretary of a manufacturing corporation may be duly authorized to accept accommodation paper, that the corporation have legal power to make such an acceptance, and that all things had been done which are requisite to confer such legal authority on the Secretary.

Although it may be true that a corporation having an authority to accept for the purposes of its business may exceed their legitimate power and so accept that as against a third person relying on the representations of its agents, or advancing money on the faith of the acceptance, it will not be permitted to allege the true character of the acceptance to defeat a recovery, stül it is, we think, quite clear that neither the Secretary of a manufacturing corporation, nor any or all of its officers have, as matter of law, any legal authority so to accept; and that in this case under the charter, or the general principles applicable to the subject, the Secretary of the defendants had no such authority; and if not, then the question will arise whether he was clothed with such authority to accept for the purposes of the Company that a third person had a right to rely upon his act of acceptance without further inquiry, and by advancing money or giving credit on the faith thereof without notice that the bill was an accommodation bill, would become entitled to hold the Company, notwithstanding the Secretary had no legal authority from the defendants to accept accommodation bills. And if this last question' be answered affirmatively, then are these plaintiffs Iona fide holders without notice that the bills in question were accommodation bills, who have given value therefor upon the credit of the acceptance and in reliance upon the apparent authority of the Secretary.

1. Upon the first question the evidence is clear, and it has already been sufficiently noticed. The by-law, under which alone the Secretary had actual authority to accept any bills, confined such authority to the prosecution of the business of the Company. There was no evidence that the powers of the Secretary had been enlarged by any other means. Although the Secretary states that it is his impression that he had previously made accommodation acceptances for the drawers of these bills, he also states that they were paid, as he supposes, by the drawers and not by the defendants, and if a previous practice of giving out such acceptances would bind the Company to a person who received them for value without notice, it is not shown that the Trustees of this Company ever sanctioned any such practice.

The Referee finds that the present acceptances were not made in the prosecution of the business of the defendants. It must be adjudged, I think, that they were made by the Secretary without authority.

2. Would these acceptances by the Secretary bind the Company in favor of a bona fide holder of the bills for value paid upon the faith of the acceptances, and in reliance upon any apparent authority of such Secretary to bind the defendants.

In the Bank of Genesee v. The Patchin Bank, (3 Kern., 309,) the action was against the defendants as indorsers of a bill of exchange discounted by the plaintiffs. And it appeared on the trial that the indorsement was by the cashier of the defendants for the accommodation of a third party, (a Railroad Company;) that the defendants had no interest in the bill which was so indorsed. It however appeared that in that case the proceeds of the discounted bill were sent by the plaintiffs to the defendants’ cashier from whom the bill was received for discount.

The Court of Appeals unanimously held that a charge to the jury, that “if the cashier had special authority from the Patchin Bank,, or from the Manager of the Bank, to indorse the draft in question, the Bank was bound by it, although it was an accommodation indorsement for the Railroad Company, and the bill was made to raise money for it,” was erroneous and the judgment below was reversed for that error.

Mr. Justice Denio expressed the opinion that had the charge annexed a further condition that, “ the plaintiffs had received and discounted the bill under a representation of the defendant that it was the owner of the bill and that it was to be discounted for the, defendants’ benefit,” the charge would have been correct, but the other Judges declined passing upon that question.

That case, therefore, leaves it quite doubtful at least whether any or all of the agents of a corporation can bind such corporation, whose business is limited to the purposes of banking or of manufacturing, by an accommodation indorsement or acceptance made for purposes not within the scope of that business.

It is requiring very little of one who deals with a corporation having limited powers, to inquire whether the acts upon which he relies are within the scope of those powers; and I cannot think that a manufacturing corporation has such an unqualified authority to make promissory notes, or draw, indorse or accept bills of exchange, that a third party may without inquiry rely upon their drawing, indorsement or acceptance, and claim'to be regarded as a bona fide holder for value, protected against any inquiry into the consideration thereof, or into the actual authority of the officer or agent; or whether in truth the note or bill is issued for the proper purposes of the corporation. (Central Bank v. Empire Stone Dressing Co., 26 Barb., 23.)

I do not think it necessary to pursue this question, for if the plaintiffs are not bona fide holders for value paid in reliance upon the defendants’ acceptance, and in faith that the Secretary had authority to accept, then upon the case cited, it is certain they are not entitled to recover. On the subsequent trial of the case of The Bank of Genesee v. The Patchin Bank, and on a, second review thereof in the Court of Appeals, it was held, as we are informed, that the discount of the bill by the plaintiffs on the application of the defendants’ cashier, and the sending of the proceeds of the discount to the defendants upon the representation that the defendants desired the discount for their own benefit, or in substance to that effect, and without any notice that the discount was for the benefit of a third party, made the plaintiffs bona fide holders for value entitled to recover. That having a general power to procure notes held by them discounted and to indorse them for that purpose, the defendants would not, after having made application therefor, obtained the discount and received the money, be permitted to allege as a defense that in truth the discount was procured for another.

3. In regard to the claim of the plaintiffs to be bona fide holders for value, it should be borne in mind that to entitle one to enforce an indorsement or an acceptance (which is otherwise invalid) on the ground that he is a Iona fide holder for value, it must appear that he parted with value upon the faith of such indorsement or acceptance. He may be a Iona fide holder of the bill for value paid therefor, and be entitled to enforce it against every other party thereto, and yet have no right to recover on such indorsement or acceptance.

This distinction is applicable to the present case, and defines the plaintiffs’ relation to the bills here in question. They are bona fide holders of the bills for value paid therefor to the drawers, and as to such drawers they have a plain right to recover from them the full amount.

But they have paid nothing in reliance on the defendants’ acceptance. The bills were discounted before they were accepted, and upon such discount the proceeds were placed to the credit of the drawers, and made subject to their checks, and the bills themselves became the property of the plaintiffs.

At that time there was no acceptance upon which the plaintiffs did or could rely. They were therefore not discounted upon the faith of the acceptances at all.

At the moment when the defendants’ Secretary accepted the bills they were the plaintiff’s property, and they were the immediate parties to the contract which, without consideration and without authority, the Secretary assumed to make.

The plaintiffs no doubt discounted the bills with an expectation that they would be accepted, but- they can in no just sense be said to have discounted the bills-in reliance upon an acceptance winch had not then been made.

They may have been induced to believe that the bills would be accepted by the fact that they had held similar drafts which •were accepted, and may have had the assurance of the drawer that they would be accepted. But relying upon their previous experience, or relying upon such an assurance, is by no means discounting the bills on the faith of the acceptances.

It is not shown that any one who had authority from the defendants, gave them an assurance that the bills would be accepted. And if it had been shown that Charles T. Shelton, the defendants’ Agent and former President, had given the plaintiffs an unconditional promise that the bills should be accepted, the defendants would not have been bound, not merely because he had no authority to bind the defendants by such a promise,, but especially because by our statute an acceptance must be in writing before it becomes binding as an acceptance,, and an unconditional promise to accept must also be in writing in order to. bind the drawee of a bill. (1 R. S., 768, §§ 6-8.)

It is suggested that the plaintiffs would have caused the bill's to be protested ’ for non-acceptance, and have had immediate' recourse to the drawers, if the defendants’ Secretary had not written an acceptance on the bills: and that, relying on the1 act of the Secretary, they have omitted such protest and have waited until the bills became due before proceeding against the drawers; and that this delay is equivalent to discounting the bilí or paying value in reliance on the acceptance. This claim- is as ingenious as I think it is novel.

If any fraud was practised on the plaintiffs to Ml them- into an unwarranted security they may have recourse to the individuals who practised such fraud. But the defendants are not to be held by the unauthorized act of their Secretary merely because the'plaintiffs, but for such act, would have sought earlier redress.

As above suggested the plaintiffs- had already become the holders of the bills, and when the alleged acceptance was written it was an act to which the plaintiffs were direct and immediate parties. They were not bound to take an. unauthorized acceptance; and they should have seen to it that the acceptance if given was authorized and was an act to which the agents of the defendants could bind them.

It is proper to observe that when the case was before the General Term of the Court on a former occasion, there was not-only a finding that the Secretary had actual authority to accept the bills, but much stress was also placed upon the want of clear proof that these bills were in truth accommodation bills for which the defendants had received no consideration, and also on the circumstance that the accounts between the drawers and the defendants were not produced.. On the present trial it was proved without objection that in proceedings in insolvency relating to the settlement of the affairs of the drawers of the bills it was found that the drawers were indebted to- the defendants. This, may perhaps be deemed to strengthen! the other proofs, already adverted to, that the bills were accommodation bills. At all events, the finding of the Referee on that point cannot be disregarded or be deemed against the evidence when as it now appears it is so fully sustained.

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

Ordered accordingly.

This action was again tried on the 14th of February, 1861. On the second trial, which was had before Mr. Justice Wood-buff, it appeared that the bill for $500 was discounted and the money paid over to the drawers before it was accepted, and in conformity with the foregoing decision the jury were instructed that the plaintiffs could not recover thereon. But .in relation to the bill for $2,000, evidence was given and the jury found that, although it was received by the plaintiffs from the drawers, and passed through the form of a discount before its acceptance, this was done under an express agreement that the plaintiffs should not pay over the money unless, nor until after the bill was accepted, and that the money was not paid to the drawer until after the acceptance. Upon this ground and the good faith of the plaintiffs in taking the bill, and in paying over the money on the faith of the acceptance, without notice that the bill was an accommodation bill, or not drawn in the usual course of business, for value, and in the proper business of the defendants, or of other want of authority in the Secretary to accept, the plaintiffs had a verdict for the amount of the $2,000 bill, less the dividend received thereon from the drawers.

       Since reported, 19 N. Y. R., 312.


source: Caselaw Access Project

author: By the Court—Pierrepont, J.

license: Public Domain

text:
    Charles Thomson, Plaintiff and Respondent, v. The Sixpenny Savings Bank, of the City of New York, Defendants and Appellants.
    A corporation was created for the purpose of receiving on deposit sums offered therefor by mariners, tradesmen, clerks, mechanics, laborers, minors; servants and others, and investing the same in State or city stocks or bonds, or loaning the same on such securities, or on bond and mortgage on real estate, for the use and advantage of the depositors; the business of the corporation to be managed by a Board of Trustees, who were authorized to appoint a President and two Vice-Presidents; and power was given to hold only such real estate as was necessary for the transaction of its business, and such as should be purchased at sales upon judgments or decrees obtained for money so loaned, and the corporation was prohibited dealing in or buying or selling any goods, wares or merchandise. The by-laws provided for monthly meetings of the Trustees, and conferred the superintendence and management upon seven Trustees during the intérval. Upon the foreclosure of a mortgage, held by such corporation, upon a manufactory, and a sale of the mortgaged premises, the corporation became the purchaser. Thereafter, and after the corporation had taken possession, one of the Vice-Presidents, without the authority of the Trustees, forbade the removal of certain tools and machinery therefrom by the purchaser thereof under a sale by virtue of a mortgage upon such tools and machinery, alleging that, as to any of the articles which were fixtures, they were the property of the corporation, and declining to specify which he claimed to be fixtures, until consultation could be had for the purpose of ascertaining which were in law fixtures passing to the corporation under the first named foreclosure sale.
    1. Held: That if the act of the Vice-President was such as to amount to a tortious conversion of the tools, the corporation was not liable for his acts.
    2. Proof that he acted by the authority and sanction of the President would not be sufficient to subject the corporation to such liability.
    3. A subsequent demand of the property being made of the Vice-President at the place of his private business, he replied that he would lay the matter before the Trustees of the corporation: Held, that this did not render the corporation liable as fór a refusal to permit the plaintiff to take his property.
    A Whether, if the action had been against such Vice-President as an individual, his statement at the time he prohibited the removal, that he only claimed to detain such tools as were fixtures, and as such belonged to the corporation, would have justified him in forbidding the removal of any tools until the question which were fixtures was determined, or would have been a defense ? Qucere.

    5. And whether the subsequent consent of the plaintiff to refer the question, which were fixtures, to the counsel for the respective parties, and to abide by their decision, was not a waiver of any such previous wrong, if any ? Qucere.

    6. How far a qualified refusal to deliver on demand is to be taken as evidence of conversion considered.
    (Before Woodruff, Pierrepont and Moncrief, J. J.)
    Heard, February 18;
    decided, October 29, 1859.
    Appeal from a judgment rendered on a verdict for the plaintiff, for $4,801.80 damages and costs.
    The complaint alleged the incorporation of the defendants, the plaintiff’s ownership of four drilling machines, eight engine lathes, three planing machines, one steam engine, and other machines and tools of the value of $8,000; that the defendants, on, &c., became possessed thereof, and have refused to deliver the same to the plaintiff, but on the contrary have converted and disposed thereof to their own use; and demanded damages for such wrongful conversion and disposition of the property.
    The answer denied all these allegations, and stated that the articles were and are in a certain building specified; that the defendants never have made, and do not make, any claim to the said articles; and the defendants in the answer offered to deliver the same to the plaintiff.
    On the trial the proofs showed that the defendants, upon the foreclosure of a mortgage, given by Sloan & Leggett, held, by them upon the building or manufactory in which the property was in use, became the purchasers of the building; that there was then outstanding a mortgage given by the same parties (Sloan & Leggett) upon the chattels now in question; that such last named mortgage was foreclosed by a sale of the chattels at auction on the 80th January, 1857, by the mortgagee, in pursuance of a power contained therein, and at such sale the plaintiff purchased the articles mentioned in the complaint.
    At the sale of the mortgaged chattels, William Miles, the Vice-President of the defendants, was present. The sale took place on the premises. He was there professing to act for the defendants as owners of the manufactory. When the auctioneer was about to sell the mortgaged chattels, Mr. Miles, according to the testimony of some of the witnesses, forbade the sale; according to some of the testimony, he forbade the sale of any of the articles which were fixtures, and according to other testimony he forbade the sale of anything belonging to the defendants; but being called on to state which articles he claimed to be fixtures, or to belong to the defendants, he declined doing so at that time. The sale proceeded, and the plaintiff became the purchaser of the articles in question, and Miles instructed the person in charge of the building not to allow the removal of any of the articles until it was ascertained which belonged to the defendants.
    There was evidence that, immediately after the sale, the plaintiff and Miles agreed to refer the question which, if any, of the articles were fixtures belonging to the defendants to their respective attorneys, who should meet at the building two days thereafter, and to abide by their decision or opinion. Several days elapsed, and the attorneys not having so met, the plaintiff sent a messenger on the 9th of February to the store (or place of private business) of the said Miles, and made a written demand of the chattels, to which he replied that he would lay it before the Board of Trustees of the Bank. A like demand was also made of the person whom Miles had instructed to detain the articles, and his answer was, that he was instructed not to deliver the articles. The President being called upon, referred the plaintiff to the Vice-President.
    There was evidence tending to show that, after this, and before suit brought, the attorney for the defendants stated to the plaintiff’s attorney, at an interview between them, that the defendants had no objection to his taking the articles. After suit brought, the defendants’ attorney, in writing, declared to the plaintiff’s attorney that the defendants made no claim to the articles mentioned in the complaint, and did not and had not refused to deliver them.
    There was some conflict of testimony; and the opinion of the Court refers to some of the evidence, which it is not necessary here to repeat.

      The opinion also states the provisions of the defendants’ charter defining the object of the incorporation. It further declared the purpose to be, the investment of the moneys deposited in State or city stocks or bonds, or loaning them on such securities, or on bond and mortgage, for the benefit of the depositors, and authorized the corporation to purchase, on foreclosure or on sales on judgments, the real estate sold.
    The 16th of their by-laws provided as follows:
    “A monthly Attending Committee of seven Trustees shall be appointed, whose duty shall be to attend at the Bank during the month, .when necessary, and to have the general superintendence and management of it during the recess of the Board. They shall keep minutes of their proceedings, and lay them before the Board of Trustees at each monthly meeting, noting particularly the amount deposited and drawn out.”
    There was no evidence defining the powers of the President; and the proof in relation to the Vice-President only showed that he was to act in the absence of the President.
    The requests of the defendants’ counsel for special instructions to the jury, and the charge as given, are sufficiently stated in the opinion of the Court.
    The jury rendered a verdict for the plaintiff for $4,623 damages; and lor that sum, and for $178.80 costs, judgment was-.entered, from which the defendants appealed.

      Charles T. Cromwell, for defendants, (appellants.) .
    I. The defendant has no corporate power other than express trust powers, which are confined (§ 6 of act) to receiving deposits from laborers, minors, mechanics and others, of five cents and over, and investing the funds deposited. It cannot be forced to take personal property, which it is expressly prohibited from taking, or from selling after it is taken, nor can it, therefore, be made liable in damages for a tort, because the enforcements of such liabilities would necessarily work a breach of trust, to the injury of its cestui que trusts, for it would be directly taking from those laborers, minors, and mechanics, the amount of this judgment, and forcing upon it an investment of that amount in old rusty tools; and such liability would force on the corporation a direct violation of its act of incorporation, which positively proMbits it from “ directly or indirectly dealing or trading in, buying or selling any goods, wares or merchandise.” (Laws of 1853, 670; N. Y. Firemen's Ins. Co. v. Ely, 2 Cow., 678; McCullough v. Moss, 5 Denio, 567, overruling 5 Hill, 137; 2 Denio, 110.)
    II. The trespass complained of was not authorized by the defendant. No express authority was shown, nor were the acts of Miles within the scope, actual or apparent, of Ms agency as an officer of the Bank. His duties, by the charter and its by-laws, are restricted simply to preside at the Board in the absence of the President. The defendant, therefore, cannot be made liable for Miles’ acts, especially if they were tortious. (Wright v. Wilcox, 19 Wend., 345; National Bank v. Norton, 1 Hill, 572; Vanderbilt v. The Richmond Turnpike Co., 2 Comst., 479, and cases cited; Mechanics' Bank v. N. Y. & N. H. R. R. Co., 3 Kern., 633; Weed v. Panama R. R., 17 N. Y., 362; Philadelphia R. R. v. Derby, 14 How. U. S., 468; Story on Bailments, § 400, et seq.; 5 Denio, 567; 2 id., 110.)
    III. The third proposition of the charge to which the plaintiff excepted was erroneous, and calculated to mislead the >7-
    1. There was not any evidence tending to prove that the Trustees had any knowledge of, or that they in any manner sanctioned, the acts of Miles complained of.
    2. The President had no power, by virtue of his office, to sanction or authorize such acts, and no express authority was shown; on the contrary, the existence of such a power was negatived, and the plaintiff was expressly notified of this absence of authority. (See 16th by-law, also act of incorporation.)
    3. If the President was vested with such a power he could not delegate it to another. (Paley’s Agency, by Dunlap, 175, and n. A; 2 Kent’s Com., 613; Lyon v. Jerome, per Verplanck, Sen., 26 Wend., 485; Com. Bank v. Norton, 1 Hill, 501.)
    4. The President did not, in fact, assume to confer any such power.
    IV. The Court also erred in refusing to charge as requested, that the proof was insufficient to make out a conversion, and in its instructions to the jury on these points.

      1. As to the occurrence at the sale. The articles were on the defendants’ premises, had been there, and used there since its erection, were there at the foreclosure sale through which defendants acquired title to the premises. The plaintiff had no legal right to enter defendants’ premises to take them away, or to require any action on the part of the defendants to put him in possession of them. (Wilde v. Waters, 32 Law and. Eq. R., 422; Colgrave v. Dias Santos, 2 B. & C., 76; Mount v. Derick, 5 Hill, 455, and cases cited.)
    2. Mr. Miles asserted no title in the defendants, but in good faith merely requested time to ascertain to whom they belonged. The articles were part of them in the nature of fixtures, and had been used in and with the building ever since its erection. There was every ground to doubt-whether they belonged to the assignees, to plaintiff, or to defendants, and which articles belonged to either. The plaintiff was a stranger, and had shown no right to the goods. (Cases supra, and Beckley v. Howard, 3 Brev. S. C., 94; Parkinson v. Simmons, 2 McMullen S. C., 188; Solomons v. Dawes, 1 Esp., 83; Wilbraham v. Snow, 2 Saund., 47, d. e. f, and cases cited inf.)
    3. The plaintiff consented to give time, and thus waived all right founded upon what had previously occurred.
    4. The right of the plaintiff thus rested solely on the alleged demand and refusal.
    5. As to this, the ruling of the Court was to this effect:
    (a.) That Miles’ answer in law was a refusal, thus taking from the jury the consideration of the evidence whether it amounted to a conversion or not.

      (b.) And that if the jury believed a demand had in fact been made, a conversion had been made out.
    6. This was manifestly erroneous.

      (a.) It submitted nothing to the jury. It left nothing for the jury to determine.
    (5.) Miles’ answer was simply a declaration of his want of authority to refuse. (5 Hill, 204,406, and others, supra; Green v. Dunn, 3 Camp., 215; Isaac v. Clark, 2 Bols., 312; Severin v. Keppell, 4 Esp., 156; Foulds v. Willoughby, 8 Mee. & W., 440; Hayward v. Seaward, 1 Moore & Scott, 459; Watt v. Potter, 2 Mason, 80; Yale v. Saunders, 16 Vt., 243; Anon., 2 Show, 161;
      Alexander v. Southey, 5 Barn. & Ald., 247; Bull, N. P., 446; 2 Denio, 643; 10 R., 56; Mires v. Solebay, 2 Mod., 244; Pothonier v. Dawson, 1 Holt C., 383.
    (c.) A refusal to deliver a chattel which is on the defendants’ premises, unaccompanied by a positive denial of the plaintiff’s right to it, or an assertion of dominion over it by the defendant, is not evidence of a conversion. (32 Eng.. L. and Eq., supra; 1 Esp., 83; 2 Mason, 77-81; 2 Denio, 643, and cases, supra.)

      A fortiori, it is not, in the language of the charge, conclusive evidence.
    Y. The demand and refusal did not prove a conversion, for other reasons:
    1. It was not made at the proper place. It should have been made at the Bank, and of the committee in charge there.
    2. The articles in question were not in the possession of the defendants when the demand was made.
    3. A sufficient excuse was shown for not complying with it.
    YI. The offer to deliver the goods before the commencement of the action was a bar to a recovery by the plaintiff. (1 M. & S., 459, and other cases, supra.)

    YII. The question of conversion is one eminently for the jury, and it was error not to have submitted the question, whether the testimony amounted to a conversion or not, to the jury. The conversion was adjudged by the Court before the submission to the jury, and nothing was left for them to find but the value of the tools. (Watt v. Potter, 2 Mass., 80, and others, supra.)

    YIII. A qualified refusal is no evidence of conversion. The refusal here, if what took place amounted to that, which we deny, was qualified, and therefore was no conversion. (Green v. Dunn, 3 Camp., 215, and others, supra)

    IX. There is no evidence showing-any authority in Nicholls to make a demand, and such authority cannot be inferred, but must be proved. (Right v. Cuthell, 5 East, 498; Gunton v. Nurse, 2 Brod. & Bing., 447.)
    Nor is it any where shown that Nicholls communicated to the plaintiff what occurred between him and Miles upon the delivery

      of the plaintiff’s letter. Eo pretense of ratification by plaintiff of Hicholls’ acts can, therefore, be presumed.
    X. If the property of plaintiff was in the custody or under the control of the defendant, a corporation, as was certainly plaintiff’s view of the case, from the direction of.the notice, trover will not lie, unless it be affirmatively shown that Miles had authority to respond to the demand, by.making or directing a delivery of the goods. This is not only not proved, but the converse is clearly shown. The corporation could only act by its Board of Managers, and Miles gave the only response that he could, viz.: that he would invoke the authority of the Board; and it is nowhere shown that such authority had been invoked, or that the Board had ever been convened, or had notice of the alleged demand. Time should have been allowed for the Board to refuse, before it could be said the defendants refused. Hill v. Covell, (1 Comst., 522,) settles that a conversion must be tortious, and that a compliance with a demand must be possible. It was not possible for Miles to comply.
    XI. The question of title, &c., had been mutually submitted to the arbitrament of the .counsel of the respective parties, and until their determination of the matter in controversy the action was premature, and what occurred at Livingston’s office may be-considered as an award. (Hays v. Hays, 28 Wend., 363.)
    XII. The proceedings on the part of plaintiff and his attorney show a predetermination and a scheme to impose an action on the defendants, and to coerce them into the-position of purchasers of the old rubbish for which the suit is brought.
    XIII. There being no questions raised as to the answer on the trial, none can be .now raised. (Belknap v. Sealey, 14 N. Y. R., 143.)
    XIV. There should Ijave been a nonsuit, as requested.
    XV. The Court erred in refusing to charge as requested, and in charging as it did.

      John S. Parsons, for plaintiff, (respondent.
    I. An action of trover will lie against a corporation, and this, though the conversion be of property, to deal in which is not the business of the corporation. (Yarborough v. The Bank of Eng

      land, 16 East R., 6; Beach v. The Fulton Bank, 7 Cow. R., 485; trover for flour and lard; The Bank of Columbia v. Patterson, Admr., 7 Cranch, 299; Foster v. The Essex Bank, 17 Mass., 503.)
    II. The plaintiff, before resting his case, offered evidence from which the jury might properly infer that the defendants authorized the act of Mr. Miles in refusing to permit the plaintiff to remove his goods at the time of the sale, and in. refusing the written demand made upon him; the act of Mr. Purdy, the President of the Bank, in the refusal made by him ; and also authorized the act of Mr. Leggett in refusing the demand made upon him. Either of those acts amounted to a conversion, and the motion to dismiss the plaintiff’s complaint was therefore properly denied.
    1. The defendants had, on January 15, 1857, purchased the building in which was the plaintiff’s property, and they owned that building at all the times mentioned. They took the position that the plaintiff’s property was in the nature of fixtures, and belonged to the realty. The Bank, therefore, intended to have the benefit of the property, and to their use was it converted. They themselves have offered some testimony tending to show its actual use by them, or their assumption of beneficial ownership of it through the person in charge for them of the building.
    2. The property was in the possession of the defendants. The defendants could only act in reference to it by its agents. The building, which did belong to the defendants, was so used as to deprive the plaintiff of his property. The plaintiff could only make a demand on the defendants by a demand made on the defendants’ agents. He made his demand upon the President, who expressly stated that “the Bank” (the defendants) claimed the property, and himself refused to permit a delivery of it— referring the plaintiff to Mr. Miles, the Vice-President; upon Mr. Miles, who refused, and who, by making an appointment between the attorneys of the parties to determine the ownership of the property in question, as between the Bank and the plaintiff, proved that the Bank claimed the property as its own, and upon the person in charge of the building, who refused under instructions, as the defendants proved by .his own testimony, from Mr. Miles and Mr. Cromwell, a Trustee, and the attorney of the Bank, if not from the Trustees themselves.
    . 3. The refusal by Mr. Miles and Mr. Leggett to the written demand was 'made after numerous interviews with, and 'on advice from Mr. Cromwell, the attorney of the Bank, and the defendants’ counsel in this very action, and Mr. Purdy, the President of the Bank.
    4. The plaintiff was not bound to show any express authority from the Bank to its agents to convert his property. Specific authority to commit a tort is an absurdity. The building and its contents were in the charge of Samuel Leggett, appointed by the Bank to take charge of them. His acts in respect to such property were the acts of the Bank. But he acted on direct authority from the executive officers of the Bank.
    5. Mr. Miles was specially authorized to act in respect to this property. Mr. Purdy, the President of the Bank, was also an assignee of Sloan & Leggett; as such represented an interest possibly conflicting with that of the Bank, and therefore refused to act in the premises, authorizing Mr. Miles to act in his stead.
    . 6. The sale took place on January 30,1857. On the following morning Mr. Miles saw and advised in the matter with Mr. Cromwell. He saw and advised several times with Mr. Purdy, the President of theBank, before the written demand was made. Mr. Vandewater, one of the Trustees, by the request of the President, was present at, had notice of, and tacitly sanctioned Mr. Miles’ acts at the sale. On the first Monday in February, 1857, there was a meeting of the Trustees. Subsequently, Mr. Cromwell, the regular attorney of the Bank, had the matter of the plaintiff’s claim in charge. Mr. Miles-says that he acted to protect the interests of the Bank. The plaintiff was urgent for.an immediate answer, and delayed two weeks before insisting upon the conversion. Surely, from all these circumstances, there was some evidence to go to the jury.
    III. The Court properly refused to charge the first two propositions of the defendants’ counsel. It was properly left to the jury to say whether Mr. Miles was empowered to commit the trover, and whether the general authority to manage the affairs of the Bank in the absence of the President, embraced such power.. The question of authority is a question of fact.

      IV. The defendants produced in evidence their by-laws. The duties of the officers were neither defined nor restricted therein. The President, therefore, in the intervals between the meetings of the Trustees, as the chief executive officer of the defendants, and in his absence, (or, what is equivalent, inability, neglect or refusal to act,) the Vice-President had general charge of their affairs. The defendants were the owners of the building in which was the plaintiff’s property; the disposition of that property was an incident to such ownership, and the President or Vice-President, therefore, were the properly constituted agents of the defendants in respect thereto. The Court, therefore, properly left it for the jury to say whether Miles was acting with the authority and sanction of the President or of the Trustees, and charged that if he was, his conduct at the sale amounted to a conversion. There was no conflict of evidence as to his acts. His own testimony shows that he directed Leggett, after the demand made on him, to prevent the removal of the plaintiff’s property by force.
    V. The owner of property is entitled to absolute and entire possession and control of such property at all times. Whoever usurps that control, does so at his peril; and it is no defense that he acted in good faith, honestly questioning the ownership of such owner. The jury have found that Mr. Miles’ acts were the acts of the Bank. He was therefore required to give an immediate answer when the demand was made upon him, both on January 30th, at the sale, and on February 9th, when the written demand was served. He refused the demand, and Mr. Leggett, on his instructions, prevented the removal by the plaintiff of his property. This perfected the conversion, and the Court therefore properly refused to charge the requests, and did charge as excepted to.
    VT. There was no contradictory evidence as to the alleged offer of February 12, 1857. By the defendants’ own testimony, that offer amounted simply to this: That a chance meeting between the plaintiff’s and defendants’ attorneys on other business, after the conversion was perfect and the preparation of the complaint, the defendants’ attorney said to the plaintiff’s attorney, (no authority being shown in him to act on any offer that might be made,) that he might take the things that were loose; some

      of the things being spiked, secured, and some loose; none of the tools being designated, and the offer by its terms only capable of embracing an indefinite portion of the property in question.
    Snch .offer could in no way affect the rights of the plaintiff, and the Court properly refused to charge that it was a bar to the plaintiff’s action, and the charge in that respect is correct. The judgment should be affirmed, with costs.
   By the Court—Pierrepont, J.

The Sixpenny Savings Bank was incorporated by an act of the Legislature passed June 4th, 1853. (Laws of 1853, p. 670.) The Trustees named in the act and their successors were created a body corporate with perpetual succession, “ by the' name of The Sixpenny Savings Bank of the Empire City.” The business of the corporation was confined to “receiving deposits from mariners, tradesmen, clerks, mechanics, laborers, minors, servants and others, and investing the same,” in the mode prescribed. (§ 6 of act.)

By section 2 it is provided that “ the said corporation shall not, directly or indirectly, deal or trade in buying or selling any goods, wares or commodities whatever, except in cases where it is authorized to do so by the terms of this act," &c.

Section 4 provides that “ the business of the said corporation shall be managed and directed by the said Board of Trustees, who shall elect from their number a President, two Vice-Presi-. dents, and such other officers as they may see fit; eight of said Trustees, of whom the President and one of the Vice-Presidents shall be one, shall form a quorum for the transaction of business, and the affirmative vote of at least seven members of the Board shall be requisite for the making of any order for investment,” &c.

By section 7 the Board of Trustees are empowered to pass bylaws for the general management of the affairs of the corporation.

An examination of the charter and by-laws of the defendants shows that the corporation had no authority whatever to engage in any manner in the purchase and sale of goods, and the case does not disclose any practice or act inconsistent with the duties and restrictions imposed by law upon the defendants. They are charged with the conversion of certain machines and tools to their own use, and a judgment of $4,801.80 has been obtained against them for such conversion.

It does not appear that the defendants have ever used or sold the property claimed to have been by them converted, or that they have ever derived any advantage whatever therefrom, or that the Trustees ever had knowledge of, or in any wise sanctioned the acts of which the plaintiff complains.

The acts complained of are those of Mr. Miles, the Vice-President of the Bank. The substance of all he did before the sale was to forbid the sale of fixtures belonging to the realty or of anything belonging to the defendants. “After the sale ” Jonathan Purdy, a builder, who was present at the sale, says, “ the plaintiff and Miles were talking about the delivery of the articles sold; Miles said he did not want anything but what were fixtures, and until it was ascertained what did belong to the Bank he did not want anything removed. Thomson asked how long it would take to ascertain that; Miles replied that as soon as he could see the attorney for the Bank, and ascertain what belonged to the Bank, he would make no further objection'; Miles proposed that their attorneys should meet together. Thomson assented and agreed that the two attorneys should meet.”

• When the'formal written demand was made upon Mr. Miles at his counting-house in Gold street, “ he said he would lay it before the Board of Trustees of the Bank,” and said “he could not at present give an answer.”

The President declined to have anything to do with the matter, but referred the plaintiff to Mr. Miles.

After the formal demand and before the commencement of this suit the attorneys of the respective parties met, and the defendants’ attorney asked the plaintiff’s attorney why he did not take the articles, stating that the Bank had no objections to his taking them, to which the plaintiff’s attorney replied that he should rely upon the demand made, and that Thomson wanted to get the value'of the tools.

Soon after the commencement of this action the attorney of the Bank addressed a note to the plaintiffs attorney, referring to this affair, above mentioned, and asking him to take the articles and discontinue this suit, which proposition the plaintiff did not accept.

At the close of the testimony on both sides, the counsel for the defendants requested the Court to charge the jury, 1. “ That the general authority given to Mr. Miles to manage the business, of the Bank in the absence of the President, did not empower him to commit the trover and conversion complained of.”

■ 2.' “That proof must be given that Miles had specific authority to do the acts complained of, and that in the absence of such proof the presumption of law is that no such authority had been conferred on him.”

■ 3. “ That the proof was insufficient to make; out a conversion.”

4. ' “That if Mr. Miles did not-intend to assert a title to the goods in the Bank, ‘but merely intended to postpone answering the.demand until -he should have received instructions from the Trustees or ascertained the rights of the parties, and he acted in good faith in the matter, the defendants ‘are not liable.”

5. “ That the offer made by the defendants’ attorney on the 12th of February, was a bar to a recovery here.”

' The Court refused so to charge as to each request, and the defendants’ counsel excepted.

- The Court-charged the jury as follows:

“The defendants became owners of the building in which the articles in question were, on the 15th January, 1857; the articles were in the building at the time; the defendants were therefore lawfully in possession of the articles; the articles were sold under foreclosure of a chattel mortgage, on 30th January; the articles were at the time in the building; the plaintiff was the purchaser; he became entitled to have possession of the articles; to make the- subsequent possession of the. defendants tortious, it' was necessary that a demand of possession should- be made of the defendants, and that defendants should refuse to comply with the demand, or that defendants should undertake to exercise dominion over them in exclusion and" in defiance of" plaintiff’s title: evidence of this fact, the property being in the actual possession of the defendants, would be evidence of a conversion of the articles, which would be conclusive until the contrary was proved, as by the pleadings the defendants disclaim all title in the goods themselves. The principal question turns on the fact" Of demand and refusal, or assertion of adverse control over the property; to constitute a proper demand, it must have been made by a person entitled to make it, and of the party having the possession and control of the property, and to make out the ease of a conversion, the refusal must be by the party having the possession or control, or legally bound to make the delivery, or by a person authorized by such party; if you shall be satisfied on the evidence that Miles was acting with the knowledge and sanction of the Trustees or by authority and sanction of the President, it is enough to make his acts in the premises binding on the defendants; you will then consider the evidence respecting the demand and refusal, and the conduct of the defendants, in respect to the property. Miles, at the sale, forbade the sale of property in which defendants had any right, but did' not point out to auctioneer that property; he then told Leggett not to deliver any articles purchased at the sale, if parties who had purchased at the sale should call to take them away; his conduct, if Miles was acting with the knowledge and authority of the Trustees or President, would amount to a conversion of the property.

“ But if you shall be of opinion under the evidence that the parties shortly after agreed that their rights should be referred to the lawyers of the respective parties, this, though the first meeting fell through, would' be a waiver of this conduct of Miles as a tortious act, and the case- would then turn on the question of demand and refusal- But if such was not the character of that arrangement it would have no such effect.

“The plaintiff contends that it was a mere agreement that plaintiff should suspend the assertion of his rights until Miles could consult his counsel. The plaintiff was not bound to wait an unreasonable time, and from 30th January to 12th February was an unreasonable time.

“ Then as to the demand and refusal.

“The demand was in writing served on Miles; if Miles acted in the transaction with the sanction or assent of the Board of Trustees, he had authority to receive the demand and to refuse.

“ Upon receiving the demand he was bound to deliver the property, or to refuse to deliver. After all that had taken place it was not sufficient for Miles to say he would lay the matter before the Board of Trustees.

“ The defendant's contend that the subsequent offer by defendants’ attorney, before suit brought, is a bar to this action. This is not so. If that offer was tantamount to an absolute offer to deliver possession of the property, and plaintiff under it had gone and taken possession of the property, this, while it would not take away the right of action, might be considered on the question of damages, and go in diminution of them. But the plaintiff did not act on it, nor is the evidence under it very clear that he could have done so. Kor if he could was he bound to do so. In one sense only could this offer be material. If you shall be of opinion that both agreed that the demand by plaintiff should be held in suspense until Cromwell and Parsons had met and-determined whether the Bank was entitled to any of the articles, and that the interview at which this offer was made was an interview between them for that purpose or that the offer ■was the result of their deliberations, then the offer, if full and ■complete, to surrender the possession of the whole, would be a bar; but the evidence will not justify such a construction.' A meeting was appointed shortly after the sale. Plaintiff’s attorney kept the appointment. Defendants’ did not. Plaintiff had, some three days before the interview in question, served a written demand. The meeting at which the' offer was made was on other matters, and the subject was introduced as the parties were leaving the room.”

Thereupon the defendants’ counsel duly excepted to each of the following propositions contained in the charge, namely:

• 1. That a demand and refusal are conclusive evidence of a conversion, until the contrary is proved.

2. That defendant being owner of the building, it was in possession of the articles in question.

3. That if the jury should he satisfied, on the evidence, that Miles was acting with the knowledge and sanction of the Trustees, or by authority and sanction of the President, it is enough to make his acts binding on the defendant.

4. That the conduct of Miles at the sale, if he was acting with the knowledge and authority of the Trustees or President, would ¿mount to a conversion of the property.

5. That from the 30th January to 12th February was an unreasonable time.

6. That if Miles acted in the transaction with the sanction or .'assent of the Board of Trustees, he had authority to receive the demand and to refuse, and that it was not sufficient for him to say that he would lay the matter before the Board of Trustees.

7. To the proposition in respect to the offer of 12th February.

8. To the proposition that the evidence will not justify such a construction as to make the offer on the 12th of February a bar.

9. That Miles’ answer to the demand was a refusal.

Where goods have been converted wrongfully for the benefit of a corporation, and they adopt the wrong by taking the avails of such conversion, the corporation is liable; and before the Code, an action of trover would lie, and now an action for the conversion of personal property in a like case may be maintained. (Yarborough v. The Bank of England, 16 East, 6; Beach v. The Fulton Bank, 7 Cow., 484.)

But in the case before us it is difficult to see how there has been any conversion of the plaintiff’s property by the defendants.

The trespass complained of was not authorized by the Bank, nor did they afterwards sanction it or receive the avails of it, nor were the acts charged as having been done by Miles within the scope of his real or apparent authority as an officer of the corporation. If the Vice-President of a Bank commits a trespass quite outside of his official duties, and not within the real or apparent scope of his agency, without authority from, or subsequent ratification by, the Bank, he does not thereby render the corporation liable for his tortious acts. (Vanderbilt v. The Richmond Turnpike Co., 2 Comst., 479; Mechanics' Bank v. N. Y. & N. H. R. R. Co., 3 Kern., 633; Weed v. Panama R. R. Co., 17 N. Y. R., 362; Wright v. Wilcox, 19 Wend., 345.)

The Judge charged the jury, “that if Miles was acting with the knowledge and sanction of the Trustees, or by authority and sanction of the President, it is enough to make his acts in the premises binding on the defendants; and that his conduct, if Miles was acting with the knowledge and authority of the Trustees or President, would amount to a conversion of the property.”

To this part of the charge of the learned Judge we think the exception was well taken. The President could no more confer authority upon the Vice-President to do the acts-complained of, than the Vice-President could confer the same authority upon the President; no such authority resided in either, and neither could by their wrongful acts bind the Bank under the circumstances of this case.

The Court further charged that, “ upon receiving the demand he (Miles) was bound to deliver the property or to refuse to deliver. After all that had taken place, it was not sufficient for Miles to say he would lay the matter before the Board of Trustees.” To this there was an exception. •

If Miles had no authority from the Trustees to act in the matter, he could not bind the Bank by refusing to act until-authorized by the Board of Trustees; and we are inclined to think that this part of the charge was .erroneous, and that it might have misled the jury.

It is abundantly settled that a qualified refusal like this does not amount to a conversion of the property, and that the question of conversion is one of fact to be determined by the jul7-

In the case of Green v. Dunn, (3 Camp., 215,) Lord EllenboROUGH held that a qualified refusal was not evidence of conversion.

And in Watt v. Potter, (2 Mason, 80,) Judge Story, delivering the opinion of the Court, says:

. “ The first question is whether there has been a conversion in this case. This is a question of fact to-be judged of by the jury under all the circumstances. A demand and refusal to deliver is not in itself a conversion; but it is evidence from which a jury may presume a conversion.”

The case of Alexander v. Southey, (5 Barn. & Ald., 247,) was an' action of trover for printing types and other goods, and was tiled before Justice Best; it appeared that the defendant, who was a servant of the Albion Insurance Company, had in his custody in-a.warehouse, of which he kept the key, certain goods of the plaintiff) which had been carried to the warehouse of the Insurance Company by the servants of the Company.

The only evidence of conversion was, that when the plaintiff demanded the goods, the defendant said that he could not deliver them up without orders from the Albion office. The learned Judge left it to the jury to say whether this qualification of the defendants’ refusal was a reasonable one, telling them that if so .there was not sufficient evidence of a conversion. The jury found for the defendant. Denman moved for a new trial on the ground of misdirection.

Abbott, Ch. J., Bayley, Holroyd, and Best, J. J., all concurred and held that there was no misdirection, and that “ if there be a qualification annexed to the refusal the question then is whether it be a reasonable one, and that such question is for the jury.” (See also Wilde v. Waters, 32 Eng. L. & Eq. R., 423; Mount v. Derick, 5 Hill, 456; Gunton v. Nurse, 2 Brod. & Bing., 447; Fouldes v. Willoughby, 8 Mees. & Welsb., 540; Hayward v. Seaward, 1 Moore & Scott, 459.)

The Judge told the jury that the subsequent offer by the defendants’ attorney before suit brought was not a bar to the' action, and the defendants’ counsel excepted to this part of the charge.

The case of Hayward v. Seaward, (1 Moore & Scott, 459,) was an action of trover to recover a steam boiler. The plaintiffs owned the boiler and demanded it in the month of October, 1830, and the defendants refused to deliver it. On the 12th of November following, the plaintiffs’ attorney directed a letter to the defendants and stated that he was instructed to commence an action against them and asked the name of their attorney. On the following day the defendants’ attorney addressed a letter to the plaintiffs’ attorney stating that the plaintiffs might take the boiler away. On the same day a writ was issued against the defendants.

The cause was tried before Tindal, Ch. J., who told the jury that the plaintiffs were not entitled to recover- after the offer of defendants made by the letter of the 13th of November to give up the boiler.

The Justices on the hearing, all concurred, holding that the ruling was correct, that the demand and refusal was only evidence and not conclusive of the fact of conversion, and that the refusal was cured by the subsequent offer made by the attorney before the writ issued. A new trial should be granted.

Woodruff and Moncrief, J. J., concurred in reversing the judgment on the ground that the defendants upon the facts proven were not liable for the acts of Miles, their Vice-President.

Judgment reversed, and a new trial ordered, costs to abide the event.


author: By the Court—Pierrepont, J. Woodruff, J.

text:
    John H. Harris, Plaintiff and Respondent, v. The Panama Railroad Company, Defendants and Appellants.
    1. In an action against a common carrier to recover the value of a horse, alleged to have been fatally injured through the negligence of the carrier during its transportation by him, although the evidence in respect to its value be conflicting and proper to be submitted to the jury, yet their verdict will be set aside as excessive in amount, if the verdict be for a sum" which, in the opinion of the Court, is clearly much larger than is warranted by the evidence.
    2. It is the duty of counsel, when objecting to a question, if he states the ground of objection, (as he may properly be required to do,) to state an objection which is well founded, otherwise bis exception to the decision of the Court which overrules his objection and admits the evidence, will not avail him as an exception.
    S. Hence, when, on the trial of an action, a question is put to a witness, and it is objected to on a specific ground, which is properly overruled, and the objecting party excepts, that exception will be unavailing, and will furnish no reason for relieving the party from paying costs as a condition of obtaining a new trial, although the Court are of opinion that upon other grounds not suggested on the trial, the evidence was inadmissible.
    4. The Court may, nevertheless, if satisfied that injustice has been done, and / that the jury may probably have been improperly influenced by the objectionable evidence, make that one of the considerations inducing them to grant a new trial on a case.
    (Before Hoffman, Woodruff and Pierrepont, X X)
    Heard, May 12th;
    decided, October 29th, 1859.
    ; Appeal by the defendants from a judgment against them for $5,000 damages and costs, on the verdict of a jury, and from an order refusing a new trial.
    The action was brought to recover the value of a horse, and was once tried in May, 1857, and, on appeal from the judgment for the plaintiff on the verdict for $2,500, then rendered, the judgment was reversed and a new trial was ordered. (See report of the case and points decided, 8 Bosw. R., 7.)
    ' The case came on again to be tried before Bosworth, Ch. J., ánd a jury, in November, 1858, when the plaintiff again had a verdict, and the jury assessed his damages at $5,000.
    The nature of the action, the evidence given, and the proceedings had at the trial, so far as they affect the merits of the present appeal, or are material to the points decided by the General, Term, are stated in the opinions.

      jD. B. Baton, for defendants, (appellants.)

      D. D. Field, for plaintiff, (respondent.)
   By the Court—Pierrepont, J.

Appeal from a judgment entered upon the verdict of a jury.

The action was brought to recover the value of a horse alleged to have been killed by the defendants’ negligence while in transit on their railroad. The jury were properly instructed, that if the horse was killed by injuries received on the defendants’ road, the Company were liable, and that the measure of damage would be the value of the horse at Panama. Under these instructions the jury found a verdict for the plaintiff of $5,000. We are satisfied that the amount of the verdict was not warranted by the evidence.

This horse was purchased in the State of Indiana for $700, and was soon after shipped for California, and died on the way. He was put on board the steamer George Law, bound for Aspinwall, on the 4th or 5th of April, 1855, and was soon after found to be out of condition. When he reached Aspinwall, in the course of that month, he was sickly, and so weak as to be scarcely able to walk without aid. From the evidence there is much reason to suspect that the horse died of disease not caused by the alleged injury.

It is quite clear that the evidence, under the law as charged by the Judge, did not warrant a verdict of $5,000. The jury were instructed that if no such horse had been bought or sold in Panama, “ in determining his fair actual value at that place they might take into consideration evidence of his actual value at San Francisco, if the evidence satisfied them that he had a certain market value there; but that they must take into consideration the risks and hazards of transportation and the expenses of transportation from Panama to San Francisco.”

According to the testimony of Weed, Nelson and Keyser, witnesses for the defendants, the value of the horse at Panama could not have been over $900. One of the plaintiff’s witnesses says that if the horse had been sound and well, his value in San Francisco would have been $5,000.

The other of the plaintiff’s witnesses says, if sound and well he would have been worth in San Francisco $3,000 and upwards. Austin, the only other witness examined on the part of the plaintiff as to value, was asked the following questions:

Q. What was the highest price—being the fair market price —which you have ever known to be paid for a horse in- San Francisco ?”

■ Question objected to by counsel for defendants, because it is not an inquiry of the market value of a witness knowing.it at the time. The objection was overruled; to which ruling the defendants’ counsel then duly excepted.

A. I think it was $9,000.”

It was a trotting horse. The injured horse was a running horse.

Q. What was the market value of the injured horse in San Francisco ?”

A. I would not know the market value in San Francisco.”

This question was pressed against the defendants’ objection, for the obvious purpose of increasing the verdict.

The witness says that he did not know the value of this horse at San Francisco. The only legitimate inquiry was his value at Panama, or his value at San Francisco in order to ascertain his valúe at Panama at the date of the alleged accident; the witness having no knowledge of the value of such a horse as this at San Francisco, states to the jury the highest price that he has ever known to be paid for a horse in San Francisco, which he thinks was $9,000.

This evidence would naturally tend to swell the verdict, and we think it clearly irrelevant to the issue. But the question before us is, whether there is any error of law raised by the exception.

If no objection is made to an improper question, admission of the answer is not error.

If objection is interposed on some specific ground alone, and the question is not objectionable on that ground, it is not error to overrule the objection.

For example, in the progress of a trial a copy of a paper is offered in evidence after due proof of loss of the original. It is objected to on the specific ground that it is a copy, and the objection is overruled, and the copy is read to the jury. When the case comes up for review on the exception it appears that the paper itself, whether original or copy, is wholly irrelevant; yet such exception could not be sustained. The attention of the Court being called to' one specific objection which is not well taken it is not error to overrule it. So in the present case the question was objectionable. But the objection being placed upon one specific ground alone, which alleged ground had no sufficient foundation, it was not error to overrule it.

But in our opinion the verdict is larger than the evidence warrants in any legal view of the case, and for that reason a new trial must be .granted, the defendants to pay the costs of the last trial; all other costs to abide the event.

Woodruff, J.

I concur in the conclusion to which my brethren have arrived, that the damages found by the jury are excessive and not sustained by the evidence. The observations of Mr. Justice Pierrepont do not, however, fully express my views of the evidence to which he has adverted and which he regards as irrelevant.

It seems to me that irrelevancy is not a just ground of objection to evidence which, when received, “ would naturally tend to swell the verdict.” If the natural tendency of the evidence would be to swell the verdict, it must be because it would naturally tend to induce the belief that the plaintiff’s loss—i. e., the value of his horse—was greater than without such testimony the jury would have believed. It is true, that testimony may be irrelevant to the issue and yet operate to excite an undue prejudice against the defendant, and so incline a jury under the influence of passion to give exaggerated damages when the damages are, in a degree, in their discretion.

But here the inquiry was respecting the value of the injured horse, and to that end what was his market value in San Francisco. Now, if evidence that a horse was sold there for $9,000, in connection with testimony previously given, tending to show that the horse in question was as good or better than any horse there, would naturally tend to induce the belief that the plaintiff's horse would have produced that sum, and so naturally tend to swell the verdict; it does not seem to me that the true ground of' objection is that it is irrelevant.

By this I do not mean to be understood as regarding the question as admissible. The witness had been in California several times from 1849.down to and including 1855. He had testified' to his knowledge of the horse market there. That he knew of sales of horses in San Francisco in 1855 and before that, and that he knew the value of horses in San Francisco. He had further testified to his acquaintance with the particular horse in question; his passage to Aspinwall on the same vessel, and his repeated examinations of the horse. The proper question, to be put to the witness was, what in his judgment was the market value of the horse in question in San Francisco, if the value in that market was admissible, as was decided when this case was before the General Term on a former occasion. The inquiry into particular sales is not a competent line of inquiry to prove market value. Such an inquiry may be proper on a cross-examination, to test the accuracy of the witness’ opinion and the grounds upon which it rests. On proof of the value of a horse, the testimony is necessarily and properly the opinion of competent men, familiar with the market, and the fair market value is what the horse will bring if offered for sale; and this is to be answered, not by proving the details which go to make up the experience of men of judgment and skill, but by requiring the witness to state his opinion as the result of the knowledge and experience he has had. What a particular horse sold for is not, therefore, a competent inquiry. It would lead to an endeavor to institute comparisons when comparisons would be dangerous, else it would involve the trial of the value of each horse and the inquiry into the particular circumstances of each sale to see whether the instance named was a fair example of the state of the market, or was a fanciful or exaggerated price obtained for peculiar reasons. And the rule is the same if the attempt were to depreciate; it is not competent to show that a sale was made for a merely nominal price, or that a useful horse was given away because a purchaser could not be found at the particular time when the owner desired, to dispose of him. One man may give his horse away, or sell him for a small sum, another may give a greatly exaggerated or fanciful price for a horse that is owned by one not desiring to sell, but who is tempted by the very eagerness of the buyer to part with him for a sum greatly exceeding his value measured by a just standard. So that the only just mode of arriving at the market value is by taking the judgment of those who, from knowledge of the state of the market and the current price of the like property, embracing also a knowledge of the particular horse in question, can form an opinion of his value. If, therefore, the objection taken to the testimony had called the attention of the Court to the objections now suggested, I cannot doubt the question would have been excluded; if not, the exception would, I think, have been well taken. The correctness of this view of the competency of the question is admirably illustrated by the answer of the witness to the subsequent questions. “ The horse sold was a trotting horse; the injured horse was a running horse,” and being asked the very question counsel had endeavored to prove him competent to answer, “what was the market value of the injured horse in San Francisco? ” he says, “I would not know the market value in San Francisco.” Thus illustrating that although the witness knew what many horses had sold for at that place, and especially knew of one sale for $9,000, yet he could not judge of the value of the horse in question. If the witness could not, surety the jury ought not to be permitted to draw any inference touching the value of the horse in question from the fact of such a sale.

The objection, however, which the counsel did make to the question was groundless, and viewing the ruling of the court as merely passing upon the objection urged, and not as deciding generally upon the admissibility of the evidence, it was property overruled.

The objection was that the inquiry was not of a witness knowing the market value at the time—i. e., at the time when the horse was injured and died. But the witness did know as much of the market value then as he ever did ; he had testified that from 1849 to 1855, he was there several times; that he knew of sales in 1855 and before that; used horses all the time he was -there, and he thought he knew the market value. He went out •by the same ship that took the horse in question from New York, and went directly to San Francisco. Hero was prima facie evidence.of Ms competency to give an opinion, and his experience and knowledge came down to the very time which was to be adopted in determining the value, viz., the season when the horse was injured. True, he afterwards showed he had not sufficient knowledge to enable him to state the market value of the horse in question, but at the time of the inquiry he had shown himself prima facie acquainted writh the value at that time.

The objection made was therefore properly overruled; yet I am of opinion that the evidence was liable to the objections I have stated. If by the term irrelevant is meant that it ought not to be permitted to influence the determination of a jury nor enter into their deliberation because it does not, in judgment of law, furnish any safe guide to the determination of the question before them, then it may be called irrelevant.

Although the exception taken does not make the granting of a new trial a matter of right for the reasons above assigned, still the admission of the evidence and its objectionable character may properly be taken into view by the Court, on a motion for a new trial. The Court regard the damages as excessive, and on examination to see whether the estimate put by the jury upon the horse is the apparent result of an honest deliberation upon conflicting evidence, with nothing in the case producing an improper influence upon their minds, we find evidence received to prove that some other horse was sold for $9,000, and can see that, it being received in spite of an objection, (though a groundless one,) the jury may well have regarded the ruling of the Court as an intimation that such evidence was proper to be taken into view in estimating the value of the horse in question. Where injustice is apparently done, the admission of improper evidence which might have influenced the jury, may be regarded by the Court on a motion for a new trial, although the objecting party has not, by the form of his objection and exception,, placed himself in a situation to demand a new trial as matter of right.

I have never fully appreciated the justice of a rule which requires the party, in whose favor a new trial is ordered, to pay the costs if the error be deemed the error of the j ury • but I suppose it to be too well settled to be at present disregarded.

New trial ordered,, on payment of costs of former trial. The subsequent costs to abide the event..