author: By the Court. Bosworth, J. Woodruff, J. (Dissenting.)

text:
    Ketchum, and others v. Stevens, President of the Bank of Commerce of New York.
    On the 29th of June, 1864, the plaintiffs held a check for $10,000, drawn by the Schuylers on the defendants, which the latter refused to pay, there being, at the time of the last refusal to pay, money deposited with them to the credit of the Schuylers, sufficient to pay the check.
    At that time the Schuylers owed the defendants $25,000 and interest, evidenced by two stock notes, payable on demand, which notes, by their terms, pledged 370 shares ofNew York and New Haven Railroad stock for the payment thereof, with authority to sell the stocks, at public or private sale, without notice, on the Schuylers’ failing to pay as they had promised. On the 1st of July, 1864, the defendants surrendered the certificates of stock to the railroad company, and had a transfer of the shares made on the books of the company to themselves ; and obtained a certificate of their being entitled to that amount of stock in the usual form.
    On the day of, and after such transfer, the plaintiffs had two interviews with the defendants; inquiry was made of the latter why the check, which had again been presented for payment on that day, was not paid. The answer was, “ because the bank had a loan demand on the drawers, which would absorb the whole amount of the credit of the firm. The question was put if the bank had not security, and the information was finally given that they held 370 shares of the stock, which, at 70, would cover the loan. At a subsequent interview, the inquiry was made by Mr. Bement,” (one of the plaintiffs), “ whether an assignment of the securities would be made and the check paid, upon discharging the loan?” The cashier and president of the bank replied that they could do nothing without the consent or order of the Schuylers. The terms of an arrangement being understood, subject to this condition, Bement obtained from the Schuylers this order:

      “ New York, July 1, 1854.

      “ Please deliver to Rogers, Ketchum & Bement, 370 shares of New Haven Railroad stock, upon their paying our notes for which said shares are pledged.

      “ To Cashier, Bank of Commerce. “ R. &. G. L. Schuylek.”
    This order was exhibited to the defendants by the plaintiffs, who at the same time paid them the $25,000 and interest, and received from the defendants the certificate for the 370 shares of stock which had been so issued to the bank, with a power of attorney authorizing its transfer, and their cashier’s receipt that he had received payment of the Schuyler notes of Ketohum, Rogers & Bernent, and delivered them the securities,” and the defendants then paid to the plaintiffs the check for $10,000. On what arrangement the plaintiifs got such order from the Schuylers was not shown. The certificate did not represent genuine or actual stock, and was worthless. Of that fact the plaintiffs and defendants were alike ignorant, and the defendants acted in good faith throughout. On these facts, held,

    1. The plaintiffs paid, for the Schuylers, to the defendants, the amount which the Schuylers owed to the latter.
    2. Such payment was made pursuant to an arrangement between the plaintiffs and the Schuylers, as the principals and the sole contracting parties.
    3. The delivery to the plaintiffs, by the defendants, of the securities called stocks, was in consequence of and in obedience to the order of the Schuylers, and by authority of it, and was not in execution of any contract of the defendants to sell and deliver to the plaintiffs 370 shares of stock.

      4. The defendants were paid no more, as a condition of delivering the stock, than it was their right to demand, before they could have been compelled, by the Schuylers or any other person, to surrender it.
    5. If the plaintiffs paid this money for a consideration which has failed, or by reason of the suppression by the Schuylers of the information that the stock was false and spurious, their only remedy is against the Schuylers, on'whose account it was paid. (Woodruff, J., dissented.)
    A check, before acceptance, does not operate as an assignment of funds deposited by the drawer to his general credit with the drawee, nor create any lien thereon. When the drawees, at the time the check is drawn and presented, hold a note made by the drawer, payable on demand, such note may he off-set against the claim of such drawer to recover the amount due for money so deposited, although actual payment of the note has not been demanded. No actual demand before suit brought is essential to the right to maintain an action on such a note, and of course it can be set up, as a set-off, without, a previous demand. Stock pledged as security for the payment of such a note, with power to sell the stock on default of the maker to perform his promise to pay, cannot rightfully be sold until after payment has been demanded; but such a note may he sued upon, or set-off, at a time when, by reason of no demand of payment having been made, the stock, pledged for its payment, could not be lawfully sold.
    (Before Duer, Bosworth and Woodruff, J.J.)
    December 17, 1856 ;
    February 28, 1857.
    This action comes before the General Term on an appeal by the plaintiifs from a judgment dismissing their complaint. It was tried before Mr. Justice Hoffman, without a jury, in October, 1854.
    It was brought for the purpose of rescinding a contract alleged to have been made between the plaintiffs and the defendant.
    The alleged contract was, that the plaintiffs should pay to the defendants two loans which they had made to the Schuylers, amounting in all to $25,000 and interest, in consideration of which, the defendants should pay to the plaintiffs a check for $10,000, held by the latter, and drawn by the Schuylers on the defendants, and should transfer "to the plaintiffs notes given by the Schuylers for the amount of said loans, and three hundred and seventy shares of the stock of ,the New York and New Haven Railroad Co., held by the defendants as collateral security for the payment of such notes and the said loans,
    The plaintiffs, having paid the $25,000 and interest, and received payment of said check, claimed to rescind the alleged contract on the ground of fraudulent misrepresentations made by the defendants, that the security they held was stock, when, in fact and in law, they held no stock, and, at the same time, to retain the $10,000 paid to them on the check, on the ground that the defendants, irrespective of the alleged contract, ought to have paid the check as a matter of legal duty.
    The said Justice found, as matter of fact and conclusion of law, as follows:
    “ That on the 29th day of June, 1854, a check was drawn by the firm of R. & Gr. L. Schuyler, of which Robert Schuyler was a member, upon the Bank of Commerce in New York, for the sum of $10,000, in favor of the plaintiffs, acting under the firm of Ketehum, Rogers, & Bement. This check was given for a loan made by the plaintiffs to the firm of R. & Gr. L. Schuyler.
    - “On the 29th day of June, and about one o’clock, the check was presented to the teller of the bank, and payment refused; also,
    “ That on the same day a deposit was made to the credit of the firm of R. & Gr. L. Schuyler of about $9,000, which, with the sum already to their credit, made an amount sufficient to meet the pheck. This sum of $9,000 was handed to a clerk about six minutes before three o’clock, to be deposited.
    “ This check was, on -the next day, namely, the 30th of June, and shortly after ten o’clock, deposited in the City Bank by the plaintiffs. It was sent from that bank with the receipts of that day, and went to the Clearing House about a quarter before ten of the 1st of July. It was sent back to the City Bank by the Bank of Commerce about eleven o’clock of that day as not being good. The teller of the City Bank shortly after returned it to the plaintiffs.
    “ On the 30th of June the Schuylers failed. On that day there was a note of the firm which had been discounted at 'the Bank of Commerce for a third party. About half-past two o’clock the cashier was informed that such note was unpaid. Inquiries were then made by him at the office of the firm. Heither of the members was present; and he was there informed that the firm had failed. After this, the cashier, Mr. Vail, directed the teller of the bank not to pay any checks of the firm which might be presented.
    “ That the tellers of the bank had been instructed sixty days before not to pay the checks of the firm unless funds were in the bank, nor to take checks from them on other banks on deposit unless certified; and in the latter case checks had been frequently rejected when not certified.
    “ Some time before the 29th of June, the bank had loaned to the firm the sum of $30,000, in two loans, at different times, for which the stock notes hereafter mentioned were taken. These were, as usual, payable on demand, with the customary statement of a deposit of stock. Five thousand dollars had been paid before the 29th of June.
    “At the time when the check of $10,000 was presented, on the 29th of June, there were not sufficient funds in the bank to pay it.
    “ One of the notes held by the Bank of Commerce was payable at such bank. On this $10,000 and interest was payable. The cashier called on the 30th in relation to a note discounted at the bank on behalf of a third person, and which it was supposed would not be paid, and was not paid. Heither of the firm was to be found. Again, he is shown to have called to make a demand at the office, but did not find either of the partners, and was informed by a clerk of the failure; and on the morning of the 1st of July an order was obtained from one of the firm, sanctioning the transfer of the collaterals and notes, on payment of the debt.”
    “ I further find as matters of fact,
    “ That, on the 10th of February, 1854, a certificate was entered in the certificate book of the Hew York and Hew Haven Railroad Company, numbered 4353, for two hundred shares of its stock, in the name of R. & Gr. L. Schuyler. Ho transfer was made on that day of such shares on the transfer-book, or stockdedger,

      “ On the 4th of March, 1854, another certificate was entered in the certificate-book of the company, in the name of the firm, but no transfer from the firm was made on that day upon the transfer-boob or ledger.
    “ On the 6th of May, 1854, the firm of R. & G. L. Schuyler borrowed from the Bank of Commerce the sum of $15,000, and thereupon executed to them a note, usually called a stock note, payable on demand, stating that they had 'deposited with the bank, as collateral security, with authority, to sell the same at the brokers’ board or at public or private sale, or otherwise, at their option, on the non-performance of the promise, and without notice, two hundred shares of the capital stock of the New York and New Haven Railroad Company, as per certificate 4353 annexed. The certificate thus annexed had the usual power attached in favor of H. F. Yail, (the cashier of the bank,) to make a transfer.
    “ On the 6th of April, 1854, the firm borrowed of the bank the sum of $15,000, for which they executed another stock note in the same form, with the variation of authorizing the president or cashier, as well as the bank, to sell in case of default. For this loan, one hundred and seventy shares of the stock were pledged. The power annexed to the certificate was 4409, and was dated 4th of March.
    “ Each of these certificates was signed ' Robert Schuyler, Transfer Agent;’ and it seems that No. 4409 was made use of before 4353. One of those in question is as follows:
    “‘New York and New Haven Railroad Company No. 4409.
    Capital, $3,000,000. New York office.
    Shares $100 each.
    “ ‘ Be it known that R. & G. L. Schuyler, of New York, are entitled to one hundred and seventy (170) shares of the capital stock of the New York and New Haven Railroad Company, transferable on the books of the company at its office in the city of New York, by the said R. & G. L. Schuyler, or their attorney, on the surrender of this certificate.
    “ ‘ Robert Schuyler, Transfer Agent.’
    “ ‘ Know all men bj these presents that, for value received,

      have bargained, sold, assigned, and transferred, and by these presents do bargain, sell, assign, and transfer unto
    of shares in the capital stock
    of the Hew York and Hew Haven Railroad Company, standing in name on the books Of said company, and transferred only at its office in the city of Hew York. And do hereby constitute and appoint H. F. Yail, our true and lawful attorney, irrevocable for and in name and stead, but to use, to sell, assign, transfer, and set over, all or any part. of the said stock, and for that purpose to make and execute all necessary acts of assignment and transfer, and one or more persons to substitute with-like full power, hereby ratifying and confirming all that said attorney, or substitute or substitutes shall lawfully do by virtue hereof.
    ‘“In witness whereof, we hereunto set our hand and seal, the fourth day of March, one thousand eight hundred and fifty-four.
    “ ‘R. & Gr. L. Schuyler.
    ■ “ ‘Sealed and delivered in the presence of
    “ ‘A. J. Yandevehter.’
    “ Heither on the 6th of April, nor the 6th of May, was there any transfer entered from the firm to Mr. Yail.
    “ On the 30th of June, upon ascertaining the failure of the firm, Mr. Yail called at the office to effect a transfer of the three hundred and seventy shares, but' it being after the usual hours of business, and the books being locked up, the transfer was not effected. On the morning of the 1st of July, Mr. Yail went to the office about a quarter before eleven, and transferred the stock from the name of the Schuylers to that of John A. Stevens, president. He was promised a certificate, which he received about half-past twelve. On making this transfer, the certificates of two hundred and one hundred and seventy shares, numbered 4353 and 4409 were surrendered, and a new certificate of three hundred and seventy shares (Ho. 4897) was issued, dated July 1st, 1854, signed by W. E. Worthen, transfer agent. A blank power of attorney was annexed. Mr. Stevens was the president of the bank. After this transfer, and on the morning of the 1st of July, as before stated, the check of the firm for $10,000 had been finally pre-j sented, and rejected. It came back to the plaintiffs from the City Bank probably about eleven o’clock. A series of interviews then took place between Mr. Bement, one of the plaintiffs, and Mr. Vail, the cashier of the Bank of Commerce. The first was after eleven, the two next between one and two o’clock. The inquiry was made why the check was dishonored ? and the answer was given, because the bank had a loan demand on the drawers which would absorb the whole amount of the credit of the firm. The question was put, if the bank had not security, and the information was given, that they held three hundred and seventy shares of the stock, which at seventy would cover the loan. At a subsequent interview, the inquiry was made by Mr. Bement, whether an assignment of the securities would be made, and the check paid upon discharging the loan. This was between one and two o’clock of the 1st of July.
    “ It was insisted upon by the cashier, and confirmed by the president, that they could do nothing without the consent or order of the Messrs. Schuylers. The terms of an arrangement being understood, subject to this condition, an order was obtained by Mr. Bement, signed by Geo. L. Schuyler, in the name of the firm, as follows:
    ‘“Please deliver to Rogers, Ketchum & Bement three hundred and seventy shares of New Haven R. R. stock, upon their paying our notes, for which said shares are pledged.
    “‘R. & G. L. Schuyler.
    “ ‘New York, July 1,1853.
    “ ‘ To cashier Bank of Commerce, New York.’
    “ At about two o’clock the last interview took place. The order was exhibited; Mr. Bement produced a certified check for $25,000, and another in blank, which was filled up with the interest due. The certificate for three hundred and seventy shares in favor of Mr. Stevens, with a power in blank signed by him. was delivered, and the check for $10,000 was then paid by the bank. No transfer was made on the books of the company from Mr. Stevens to the plaintiffs, although the cashier had requested that it should be done forthwith.
    “ The form of the transfer used by the company may be useful, and that made by Mr. Vail, as attorney, to Mr. Stevens, is subjoined.

      “ ‘Capital $3,000,000. Ko. 9,904.
    . “ ‘Shares $100 each.
    “‘For value received, we hereby transfer unto John A. Stevens, president, all our right, title, and interest in three hundred and seventy shares in the capital of the Kew York and Kew Haven Railroad Company. “ ‘R. &. Gr. L. Schuyler,
    “ ‘By attorney, H. F. Vail.’
    “ On the 5th of July, a letter of Robert Schuyler, resigning his office as president and transfer agent, and calling attention to the stock ledger, was read at the board, and the transfer books yrere directed to be closed.
    “ And on the 10th day of July, the plaintiffs addressed a letter to the president of the bank, stating that neither the bank nor any one else was entitled, on the 1st of July, to the three hundred and seventy shares of the stock which they possessed, and held out to hold, and upon the faith of which the plaintiffs had advanced the sum of $25,00(1 They then demanded re-payment of that sum, upon which they would return what falsely purported to be a certificate and assignment for three hundred and seventy shares of stock of the company.”
    “I further find, as matter of fact,
    “ That on the 17th of October, 1853, the firm of R. & Gr. L. Schuyler had to their credit, on the books of the company, four shares of stock. That an entry as of that date appears on the stock ledger, carrying to the credit of the firm, as from ‘ Robert Schuyler, transfer agent,’ five thousand shares.
    “ This entry was made in April, 1854, and was effected by erasing the entry before made on the line, and writing over it. That erased entry was a credit of one hundred shares of stock by E. W. C., D. & Co., which was dated Kovember 9, 1853, and was subsequently interlined between entries of the 29th of Kovember, and the 1st of December, 1853.
    “ After certain other entries to the credit of the firm, and under date of the 3d of February, 1854, another entry to their credit of five thousand shares is made, as from Robert Schuyler, transfer agent. This entry was also made in April, 1854, at the same time as the previous one, and was written on an erasure of an entry of one hundred shares to their credit,- and that entry was tonsferred to a line after an entry of April 14th. These two entries were fabrications of credits.
    “ Between the 17th of October 1853, and the 19th of June, 1854, the firm appears to have transferred by debits on the stock ledger, fourteen thousand six hundred and fifty-two (14,652) shares, and between the same dates to have transferred to them three thousand five hundred and eighty-one (3581) shares; leaving a balance of excess of transfers of eleven thousand and seventy-one (11,071) shares.
    “After the 19th of June, the firm did not receive any transfers, and their own issues, down to the 3d of July, inclusive, amounted to six thousand four hundred and twenty (6420) shares. That the whole excess was seventeen thousand four hundred and ninety-one (17,491) shares, and the excess, had the ten thousand been genuine, would have been seven thousand four hundred and ninety-one.
    “ That if these credits had been genuine, the firm would have been entitled, on the 1st of February, 1854, to five hundred and ninety (590) shares, and the balance against them, on the 8th of June, would have been four hundred and eighty-one (481) shares, and which gradually increásed to the seven thousand four hundred and ninety-one, on the 3d of July.
    “ The undoubted genuine stock, which was acquired by the firm, among the transfers to them from October 17,1853, to June 19, 1844, was about one thousand shares.
    “ The certificate No. 4353, for two hundred shares, with the power to H. F. Vail, was dated the 10th of February, 1854, and the certificate No. 4409, for one hundred and seventy shares, the 4th of March of the same year. Neither of these certificates were accompanied with a transfer at their respective dates to Mr. Vail, or any one élse, on the transfer book, nor, of course, on the stock ledger. They do not so appear at all, except as consolidated in the certificate issued, and the transfer made, on the 1st of July, to John A. Stevens, of three hundred and seventy shares.
    “And I find that the Bank of Commerce did not acquire genuine stock under and by virtue of the certificates issued on the 10th of February and 4th of March, respectively, nor under the certificates of the 1st of July, for 370 shares, and consequently plaintiffs did not receive genuine stock under the transfer to them.

      “ And I further find, as matter of'fact, that
    “ The first section of the charter passed 1st of May, 1844, constituted Joseph E. Sheffield, and others, naming them, with such other persons as shall associate with them for that purpose, a body politic and corporate, by the name of the Hew York and Hew Haven Railroad Company.
    “ The second section provides, that the capital stock shall be $2,000,000, with the privilege of increasing the same to $3,000,000, and to be divided into shares of $100 each, which shares shall be deemed personal property, and shall be transferred in such manner and at such places as the by-laws of the company shall direct.
    “By the third section, the parties who were authorized to receive subscriptions might make 20,000 shares subscribed the capital stock of the company. But if the subscription exceeded 30,000, the same were to be reduced, and apportioned in such manner as should be deemed most beneficial to the corporation.
    “That, under the fourth section, the immediate government and direction of the affairs of the company were vested in a board of nine directors, to- be chosen by the stockholders. Four of such directors formed a quorum for the transaction of business.
    “By the seventh section, the directors were vested with the power to make by-laws, and regulations touching the disposition and management of the stock, property and estate of the company, not contrary to the charter, or the laws of the state, or of the United States—the transfer of the shares—the duties and conduct of their officers and their servants, and all matters whatsoever which may appertain to the concerns of such company.
    “■By the twentieth section, the act might be amended, altered, or repealed, at the pleasure of the general assembly.
    “ That in the exercise of the powers conferred by the charter, a resolution was adopted by the stockholders to the following effect. (Book of Records, Hos. 20 and 21.)
    “ ' Transfer and Certificate of Stock.

      “' The. principal transfer office shall be in the city of Hew Haven, but transfer agencies may be established in the cities of Hew York and Boston, by resolution of the board of directors; and all transfers of stock, at any office- shall be made- under and in compliance with such rules and regulations, and by such instruments of assignment and transfer (which need not be under seal) as may from time to time be made, ordered and appointed by the board of directors.

      “ ‘ Certificates of stock, shall be in such form, and issued under such rules as the board of directors may from time to time appoint and direct.’
    “ That the directors adopted the form of transfers, certificates, and blank powers of transfers, and ordered their general use.
    “ On the 3d of February, 1847, the following resolution was adopted by the directors: ' The receipts and certificates of stock on the books at New Haven to be signed by J. E. Sheffield, as transfer agent; at Boston, to be signed by J. E. Thayer & Brother, as transfer agents; at New York, to be signed by Robert Schuyler, as transfer agent.’

      “ That upon the evidence before me, if the shares thus fraudulently issued are admitted, the shares of the stock of such company would be increased to the number of 47,497, and the nominal value of each share would be about $63.80, and that upon such estimate the 370 shares transferred to the plaintiffs would be worth the sum of $23,039.60.
    “ From all which facts thus found, being material facts in the case, I have concluded as matter of law:—
    “ 1. That the Bank of Commerce, and the defendant as its president, had a right to retain the amount standing to the credit of the firm of R. & Gr. L. Schuyler, on the 30th day of June in the year 1854, in part discharge, and satisfaction of the sum made payable by the stock notes, or one of them given by such firm for moneys loaned to them by such bank.
    “ 2. That the claim of the plaintiffs against the defendants, if the same could in any way be sustained, would be restricted to a claim to recover the sum of $15,000 with interest, they being-bound to restore or allow to the Bank of Commerce, the sum of $10,000 held by them on the said 30th day of June, and the 1st day of July, 1854, and paid out to the plaintiffs upon the check of R. & Gr. L. Schuyler on the latter day.
    “ 3. That the plaintiffs would have a right to recover such sum of $15,000 with interest, had it been duly established in this case that the certificate for stock of the New York and New Haven Eailroad Company, for 370 shares, delivered to them with a power of attorney to transfer the same, was wholly valueless, illegal, and void, and conferred no right or interest whatever in or against such company, its property, or franchises.
    “ 4. That the plaintiffs did, in and by the possession of such certificate and power of transfer, acquire and became entitled to a right to be admitted as stockholders of such corporation, called the Hew York and Hew Haven Eailroad Company, in common' with all the other stockholders thereof, whose rights are admitted or shall be established; and that their right is in proportion to the whole number of such stockholders allotted and divided upon a capital of $3,000,000; and that thereby such plaintiffs received what upon the evidence appears a full consideration for what they advanced to or could in any view demand of the Bank of Commerce upon the transaction in question.
    “ 5. That there is no ground to make the plaintiffs responsible, or vary their rights or position by reason of any knowledge of the fraudulent issue and employment of the stock in question.
    “Therefore it is ordered and adjudged that the plaintiffs’ complaint be dismissed with costs to the defendants.
    “ To the opinion of the court and order dismissing plaintiffs’ complaint, the plaintiffs excepted; judgment having been entered on the decision, the plaintiffs appealed from it to the General Term.”

      H. Ketchum and H. Ketchum, Jr., for the plaintiffs,
    made and argued the following points:—
    I. Plaintiffs have a right to retain the $10,000, because they were entitled to it when the check was presented previous to the completion of the contract. Because,
    1st. Defendants held the money as trustees for plaintiffs. The money was specially deposited by Schuylers to pay the plaintiffs. They had constructive knowledge, at the time the money was deposited, by law and by the usage of bankers, of the use for which it was intended. (Bailey on Bills, 331; Chitty on Contracts, 5 Am. ed., 19, 20; Church v. Clark, 21 Pick. 310; Beckwith v. Union Bank, 4 Sand. S. C. 604; Whittaker v. Bank of England, 1 Crompton, M. & R. 753. They had notice previous to the deposit that the Schuylers intended and had promised to pay, through them, $10,000 to plaintiffs. On the same day money was deposited enough to pay $10,000, without directions not to apply it to any other use. In this state of things by law and the usage of bankers, they are presumed to have knowledge that the deposit was made for the express purpose of paying it to plaintiffs.
    2d. Defendants had no lien on the funds of Schuylers in their hands, and were, therefore, bound to pay them over upon their order. 1. The notes were not due, and without this defendants had no lien. (Cross on Lien, 43 marg.) (a) Ho demand of payment of them had been made. This was necessary to render the notes due. (Wilson v. Little, 1 Sand. Law R. 351; 2 Comst. 443; 2 Kent’s Com. 745 and 746, 7th edition; Stearns v. Marsh and another, 4th Denio, 227.) (b) If they could be rendered due without demand, and by a simple operation in the mind of the holder, defendants’ acts must have been such as to show that this operation had taken place. Their acts show the contrary to this. 1. By not indorsing the balance in "the bank upon the back of one of the notes, as they had been in the habit of doing with other part payments. 2. By not selling the stock at public or private sale, as they were authorized to do on non-payment of the notes. 3. By requiring the consent of the Schuylers before transferring the securities.
    3d. They waived their lien by taking a special security for the payment of the loan. (16 Vesey, pp. 278 and 279; 6 id. 759; Hewison v. Guthrie, Bing. New Cases, 759; Story on Agency, §§ 354, 362; 1 Stephens, 914.)
    If either of the above propositions is correct, then plaintiffs were entitled to receive the money upon the first presentation of the check, and are entitled to retain it, now it is in their possession.
    II. The contract ought to be rescinded, because,—
    1st. It had its origin in an attempt to get possession of funds wrongfully detained from plaintiffs by defendants, as shown in point I.
    2d. It was made upon a misrepresentation of the defendants that the notes were due. This was one of the main incentives to the contract, because (a) plaintiffs would not have entered into the contract but to obtain possession of the $10,000. Had they

      known that the notes were not due, they would have enforced payment of the money which was their right, without giving a consideration for it. (b) Plaintiffs, being bankers, would not have make the arrangement, had they not supposed they could have recovered their money when they pleased, by selling the stock without notice. This they could not have done if the notes were not due.
    3d. It was made upon a misrepresentation that they'held stock in the New York and New Haven Railroad Company at seventy, when, in fact, they held no such stock, but merely a fabricated certificate which represented no stock. (See Mechanics’ Bank v. New York and New Haven Railroad Co.

      H. Lord and B. D. Silliman, for the defendants,
    made and argued the points following:—
    I. 1. On the 30th June, 1854, when R. and Gr. L. Schuyler failed, they were indebted to the Bank of Commerce in the balance of $25,000 of principal, on the two notes of April 6 and May 6, of which the latter was for $15,000, payable on demand at the bank.
    2. Demand, especially applicable to the latter, was in fact made on the 80th of June, for payment of these notes. (3 Kent’s Com. 98, and note; Story on Prom. Notes, § 29; Newman v. Mohawk Ins. Co., 13 Wend. 268; Cornell v. Moulton, 3 Denio, 13; Bailey on Bills, ch. 9, p. 201, Boston edition, 1836; Field v. Nickerson, 13 Mass. 131; U. S. Bank v. Smith, 11 Wheat. 171; U. S. Bank v. Carneal, 2 Peters, 543; Saunderson v. Judge, 2 H. Blackstone, 509; Ogden v. Dobbin, 2 Hall, 112.). The other note was duly demanded.
    3. The defendants, having this claim against R. & 0. L. Schuyler, had a right to apply the cash to their credit, on the 30th June, to this note.
    4. The check for $10,000, held by plaintiffs, would form no assignment of the fund on which it was drawn, until it had been accepted or paid. (Chapman v. White, 2 Selden, 412.)
    5. On the presentment of the check at 1 o’clock on 29th June, the drawers had not funds to meet it, and it was refused payment.
    The check was not left with defendants as a warrant to retain moneys which R. & Gr. L. Schuyler might deposit, but was taken and kept by the plaintiffs; on, which they could have sued the drawers as on a dishonored check.
    6. When the check was presented next, on the 1st July, the defendants had, by right, appropriated the cash of the drawers, R. & Gr. L. Schuyler, to the claim on the notes.
    7. The note for $15,000, payable on demand at the bank, was a legal ground on which to claim the application of the cash funds of R. & Gr. L. Schuyler, without any actual demand. (2 Kent, 640, note C, 641; Cross on Lien, 316, Law Lib. v. 18; Davis v. Bowsher, 5 D & E, 488; Jourdain v. Lefevre, 1 Esp. 66 ; Bent v. Puller, 5 D & E. 494; Chapman v. White, 2 Selden, 412.)
    II. 1. The defendants were mere bailees of the certificates of stock, taking it bona fide to secure advances. They so held it subject to the order of R. & Gr. L. Schuyler, the proprietors; and this relation of the defendants to the certificates was known to the plaintiffs.
    2. The defendants refused all negotiation in relation to the certificates of stock, except to have their debt paid and the pledge redeemed by R. & G. L. Schuyler, the declared principals.
    3. The defendants did no more than submit to a payment, creating a redemption, procured by the plaintiffs on an order of R. & G. L. Schuyler, as known owners; and the amount the defendants received was payment of a debt and not the price of a sale or transfer. (2 Kent, 577-579; Story’s Bailment, 197; 2 Ld. Raymond, 915-17.)
    4. The payment was received bona fide and without any warranty, deceit, or misrepresentation on part of the defendants; it cannot be recalled on part of the plaintiffs, in consequence of any transactions between them and R. & G. L. Schuyler.
    5. Even had this been a sale by the defendants of the pledge, no warranty would have been implied. (Morley v. Attenborough, Welsby, Hurlston, and Gordon, 3 Ex. Rep. 499; Chapman v. Speller, Queen’s Bench, Feb. 26, 1850; Law Jour., Cases at Com. Law, N. S., vol. xix. part 2, p. 239; McCoy v. Artcher, 3 Barb. S. C. R. 323.)
    HI. The certificates of stock received by the plaintiffs were binding upon the Hew York and Hew Haven Railroad Company, and gave the plaintiffs a right against them to so much stock or the value thereof for security of their transaction—in substance therefore there was no failure of consideration.
    1. The plaintiffs, if they succeeded to the title of the defendants, were bona fide purchasers without notice.
    2. The certificates in defendants’ hands were signed by the officer appointed. by the company to sign such certificates; and these were in the form always used by the railroad company since its organization.
    3. The certificates were intended to be assurances to all dealers to whom they should be delivered on good consideration, and bound the company. (See the printed assignments forming part of the certificates.
    4. The stock was recognized by a transfer on the books of the company, to the defendants.
    5. The plaintiffs have a valid claim against the company to the extent of the value of the stock, for their advances. (Davis v. Bank of England, 2 Bing. 393; 9 E. C. L. R. 44.)
    IY. The plaintiffs have not proved the certificates of stock in question not to be true certificates of actual stock.
    1. There was a parcel of 550 shares proved by plaintiffs to be valid, placed to R. & Gr. L. Schuyler’s credit on the 1st of February, 1854.
    2. The same witness proves that this parcel was the supply for the first transfers afterwards.
    3. Prior to 10th of February, the date of defendants’ certificate for 200 shares, there was no other transfer, so that the defendants’ certificate of this date was true—and prior to 4th of March, the date of defendants’ certificate for 170 shares, the transfers were (110+15 + 65=) 190 shares, which, added to the 200 of defendants’, made but 390 out of 550 shares.
    4. The stock certificate for 170 shares to plaintiffs of March 4, is not shown to have been issued before that of defendants’ of same date.
    And if this certificate had been issued before that of the same date of defendants’, still it created only a deficiency of 10 shares.
    5. The plaintiffs’ evidence as to the falseness of the certificates is wholly insufficient. 1st. It rests on the stock ledger account alone, and this takes no notice of certificates issued not returned on transfers on the books, although outstanding and transferred by the indorsed form of assignment. 2d. The plaintiffs cannot claim that the transfer of undeniable stock shall be applied to the balance of over transfers; for, if they deny the validity of such over transfers against the railroad company, the latter have no claim on any such balance; or, if they admit such validity, then the stock the plaintiffs received from the defendants is valid.
    V. Plaintiffs claim that to enable them to procure payment of their $10,000 check, they were induced to advance the amount which they did, and take up the note and receive the stock. They thus paid........$25,334 66
    The market price of the stock when the transfer was made by defendants to plaintiffs was 81 cents. Thus, if plaintiff received but 360 (instead of 370) shares, the same would amount to..... 29,160 00
    Leaving a surplus to plaintiffs of . . . . $3825 34
    VI. The plaintiffs have not shown that the railroad company disclaim the stock in question. They have shown no demand on the company to recognize it, or any refusal by the company so to do. The action is, therefore, premature. The plaintiffs are not at liberty to volunteer a repudiation of the stock which the company may not see fit to make.
    VII. As between the plaintiffs and defendants, the former had better knowledge than the latter as to the genuineness of the stock. Mr. Ketchum (one of the plaintiffs) being a director and officer of the railroad company, and as such being bound and presumed to know the state of its affairs. His knowledge charges his partners with like knowledge. (Angel on Corporations, 306; Verplanck v. Merch. Ins. Co., 1 Edwards, 87; Scott v. Depeyster, 1 Edwards, 513; Bayless v. Orme, 1 Fearne Miss. R. 175; Collyer on Partnership, § 443; Fulton Bank v. N. Y. and Sharon Canal Co., 4 Paige, 128; Lord Worthington, 2d Eden. 303.)
   By the Court. Bosworth, J.

We do not understand that the plaintiffs claim the right to-have a new trial, on the ground that the facts, specially found by the Judge, before whom this action was tried, are not warranted by the evidence. The practical question presented by the appeal is this: Do the facts, found by the Judge, and admitted by the pleadings, warrant the judgment appealed from?

The check of the 29th of June, 1854, drawn by R. & Gr. L. Schuyler, on the defendants, was presented for payment about one o’clock, p. M., of the day of its date, and payment of it was refused. The refusal was j ustified by the fact, that the drawers had not then sufficient funds in bank to pay it. According to the facts found, the check was next, and again presented to the defendants for payment, on the 1st of July, before eleven o’clock, A. M., and about that hour it was returned to the City Bank, from which it had then come to the defendants, and was returned as not being good.

In the mean time the drawers had failed. The defendants knew of such failure on the 30th of June, and on that day instructed their teller not to pay any checks of the Messrs. Schuyler, which might be presented.

On the 29th of June, about six minutes before three, P. M., a deposit was made with the defendants by the Schuylers, to their credit, of $9,000. This deposit, with the previous balance to their credit, made an amount a little more than sufficient to pay the $10,000 check. Unless these facts created a right in favor of the plaintiffs, to have enough of the deposit applied to pay the check, when it was last presented, and a right of action against the defendants, after such refusal to pay, for the amount of the check, the plaintiffs do not show that they had a cause of action against the defendants at any time, unless one accrued from the subsequent transactions had on the 1st of July, between the plaintiffs, the defendants and the Schuylers.

We shall consider this latter question first. As we read the facts found, the defendants did not represent that payment of the stock notes had been demanded, nor that they were due. In answer to the inquiry, why the check was dishonored ? the defendants’ cashier, replied, “ because the bank had a loan demand on the drawers, which would absorb the whole amount of the credit; of the firm.”

If it would be a material matter, in determining a party, to take a transfer of these stock notes, and the collaterals deposited to secure the payment of the money named in them, that a demand of the payment of them had, or had not been made, there was no misrepresentation with respect to this point. So, too, if it be conceded, that as matter of law, they would not become due, so as to justify a sale of the stock, until a demand of payment and refusal to pay them, there was no misrepresentation on that point. Whether payment had, or had not been demanded, does not seem to be very important, regarding it merely as an operative inducement to such a transaction as occurred. The Schuylers had failed. This was known to the plaintiffs as well as to the defendants, and payment could have been demanded at any moment, as they resided in this city. The plaintiffs knew that the collateral security held by the defendants was something which the Schuylers had pledged. They undoubtedly supposed the defendants held actual stock, or perfect evidence of a right to it. The defendants as fully believed the same thing. But the defendants did not propose, or accede to any proposition to sell to the plaintiffs any stock, or the stock-notes. When asked “ whether an assignment of the securities would be made, and the check paid, upon the discharging the loan?” the reply made by the officer of the bank was, “that they could do nothing without the consent or order of Messrs. Schuylers.”

The plaintiffs then obtained a written order from the Schuylers, upon the defendants, to deliver to the plaintiffs three hundred and seventy “shares of New Haven Railroad Company" stock, upon their paying our notes, for which said shares are pledged.” By what arrangement between the plaintiffs and the Schuylers this order was given, the case does not disclose. Whether the plaintiffs bought the stock absolutely of the Schuylers for $25,000, or agreed with them to take up the notes, on receiving a transfer of the pledged stock, does not appear. But whatever the agreement between those parties was, it was an agreement relating to the stock pledged by the Schuylers to the defendants; of its terms the defendants knew nothing, except what Schuylers’ order of the first of July imports.

All the defendants wished, or could lawfully claim, was payment of the $25,000 loan. That being paid, they were willing and could be compelled to deliver the notes, and the stock pledged as security for their payment, to any person the Schuylers might designate.

The amount due to the defendants was paid by the plaintiffs by virtue of an arrangement between them and the Schuylers. The defendants did not sell to the plaintiffs the notes or the stock. By the terms of the Schuylers’ order, the defendants were not authorized to deliver the stock to the plaintiffs, except upon the condition of the plaintiffs paying the notes, and on compliance with that condition they were required to deliver it. If the plaintiffs paid the notes, then the defendants were to deliver the stock which the Schuylers had pledged to secure the notes.

The plaintiffs brought this order, and paid the amount due on the two notes, and then the defendants delivered, and were bound, and could have been compelled, to deliver this stock to the plaintiffs. The defendants made all the delivery of which the subject matter was susceptible. They delivered the evidence of a right to the stock, which was all the delivery contemplated, or which, in the nature of things, could be made.

The notes were delivered to the plaintiffs, with a written indorsement on them, to the effect that the defendants had “received payment of Ketchum, Rogers & Bement, and delivered them the securities.”

Under such circumstances, we do not see why the defendants should be required to reimburse the $25,000 to the plaintiffs. If this stock, or evidence of right to it, had never been in possession of the defendants, but had passed directly from the Schuylers to the plaintiffs, upon payment, by the latter, to the defendants, of the $25,000, we think no such claim would be urged. We do not see how the defendants’ liability is varied by the fact that the defendants, pursuant to an order from, the Schuylers, which it was their duty to obey, delivered the stock to the plaintiffs, upon their doing what they had agreed with the Schuylers they would do, as a consideration and condition of such delivery. The plaintiffs and defendants severally acted in good faith. The defendants had a right to retain the stock until the $25,000 was paid, but they had no right to insist upon retaining it after such payment was made. Whether the defendants, on the facts then existing, could have retained the $10,000 on deposit, as against the plaintiffs, we may assume to be a debatable question, but the defendants, clearly, would have no such right after the $25,000 was paid. In our opinion, the conclusions of law, as to this branch of the case, upon the facts found, are:—

1st. The plaintiffs paid for the Schuylers, to the defendants, the amount which the Schuylers owed to the latter.

2d. Such payment was made pursuant to an arrangement between the plaintiffs and the Schuylers, as the principals and sole contracting parties.

3d. The delivery to the plaintiffs, by the defendants, of the securities, called stock, was in consequence of and in obedience to the order of the Schuylers, and by authority of it, and was not in execution of any-contract of the defendants, to sell and deliver to the plaintiffs three hundred and seventy shares of stock.

4th. The defendants were paid no more, as a condition of delivering the stock, than it was his right to demand, before they could have been compelled, by the Schuylers or any other person, to surrender it.

5th. If the plaintiffs paid this money for a consideration which has failed, or by reason of the suppression by the Schuylers of the information that the stock was false and spurious, their only remedy is against the Schuylers, on whose account it was paid.

If these views are sound, the inquiry whether an action could have been maintained by the plaintiffs against the defendants to recover the amount of the check, after it had been presented for payment on the first of July, and the refusal at that time to pay it, becomes unimportant to the proper determination of this appeal. The check has been paid by the defendants; but, unless a discrimination can be made between this case and Chapman v. White (2 Seld. Rep. 412), no right of action arose in favor of the plaintiffs against the defendants by reason of the presentment of the check and the refusal to pay it. The instruments, ordering the parties to whom they were directed, to pay the sums named in them, are in the same form in both cases. Both were drawn on a bank. The drawer, in each case, had moneys to his credit in the bank on which the check or bill was drawn; but in neither case was the deposit a special one. The moneys deposited in each case, from the time of the deposit, were the property of the depositary. Although lost, stolen, or burned, without any fault of the depositary, the latter would continue liable to the depositor for the amount. The right of the depositor was a mere chose in action. We do not see why Chapman v. White is not controlling on this question. If it is, the plaintiffs had no right of action against the defendants for the $10,000 at the time the $25,000 loan was paid, and the securities pledged for the payment were surrendered. Whether, if an assignment had been made by the Schuylers to the plaintiffs, on the first of July, of all claims of the former against the defendants, by reason of the deposits made by the Schuylers with the defendants, and the plaintiffs as such assignees had brought an action to recover the sums deposited, the defendants could have offset the notes, is a question which does not arise. No such assignment was made, and the check itself did not operate as an assignment, or create a lien on the amount standing to the credit of the Schuylers, until the check was accepted or paid.

But it by no means follows, that although no such demand of payment of the stock notes had been made, as would have authorized a sale of the pledged stock, that an action would not have lain, at the suit of the defendants against the Schuylers, upon the notes, nor that, if the Schuylers had sued the defendants on the first of July, to recover the balance standing to their credit, that the stock notes might not have been set-off. Notes payable “ on demand” are due at their date; interest accrues, .and the statute of limitations begins to run from that day. They may be sued without a previous actual demand. It is not apparent why the Bank of Commerce, if the Schuylers had assigned their claim, by reason of their deposits, to the plaintiffs, on the first of July, and the latter had thereupon brought an action against the bank, might not have set-off the stock notes. The Schuylers had failed on the 30th June. The bank knew of it, and on that day sought the Schuylers, and, failing to find them, directed its teller to pay no more checks drawn by the Schuylers. The defendants have done enough to show their purpose, to insist on the right to apply the amount of Schuylers’ credit to satisfy pro tanto these notes. We do not think the Schuylers could have made an assignment of their claim, by reason of their deposits after that date, which would preclude the defendants from setting-off the notes.

But although a note is by its terms due, yet property pledged for its payment cannot be sold until after payment has been actually demanded and a reasonable time to pay has elapsed. If the makers cannot be found, so that a demand of payment can be made of them, a resort to judicial proceedings must be had to authorize a sale. (Stearns v. Marsh, 4 Denio Rep. 227, 230, and 231; Wilson v. Little, 2 Comstock R. 443.)

Upon the facts as found, we think the conclusion of law is, that no such demand had been made as would authorize a sale, on the 1st of July, of the pledged property. If the defendants had sold it that day, the sale would have been unauthorized.

This view strengthens the conclusions before stated, that the transactions, which resulted in payment of the loan and surrender of the stock, were, so far as they related to such payment and surrender, matters as to which the plaintiffs and the Schuylers were the contracting parties.

The defendants having received no more than was their strict right, and having received that as a payment in behalf of their debtor, and being guilty of no fraud, the judgment appealed from should be affirmed, but not for the reasons assigned in support of it by the learned Judge by whom it was rendered.

Woodruff, J. (Dissenting.)

I concur with my brethren in their views respecting the right of the defendants, upon the facts found in this case, to refuse payment of the check for ten thousand dollars held by plaintiffs; but, in regard to the claim of the plaintiffs to relief from the consequences of the arrangement made with the defendants in order to obtain the payment of that check, I am constrained to dissent from the opinion pronounced herein.

The difference, however, between myself and my brethren is not so much in respect to the existence and soundness of the rule by which the case, in my judgment, ought to be governed, as on the question whether the facts of the present case call for its application.

I believe we are fully agreed that the doctrine of Courts of of Equity is well settled, that a mutual mistake of facts which are material, which enter into the consideration of the parties, and are in that sense a cause of a contract, is a sufficient gound to avoid it.

This general rule is not, so far as I understand, denied by the defendants’ counsel.

Under such circumstances, I do not deem it necessary to cite authorities to a rule often, and, I may say always, recognized as one especial head of equity jurisdiction, and, in appropriate cases, acted upon with scarcely less freedom by courts of law, both in England and in this country. (See 1 Story’s Eq. Jur. § 141 and onward, and cases in notes; 1 Spence Eq. Jur. p. 632 and onward; Fonbl. Eq. 116, etc., 120; and cases at law, in application of this rule, might be greatly multiplied. Some are cited in the opinion of Mr. Justice Hoffman in this case, at Special Term; and see. Story on Sales, § 145 and onward, and cases in notes; and Story on Contracts, § 419, etc., and cases in notes; Wilkinson v. Johnson, 3 B. & C. Rep. 429; Kelly v. Solair, 9 Mees. and W. Rep. 54, and cases cited; Merkle v. Hatfield, 2 J. R. 455; Canal Bank v. The Bank of Albany, 1 Hill Rep. 287.)

As, in my opinion, the plaintiffs are entitled to relief upon the doctrine above stated, I deem it also unnecessary to inquire whether, in strictness, the transaction between these parties was to be deemed a sale of stock by the defendants to the plaintiffs, or whether there was in the transaction an implied warranty of the genuineness of the stock. Still less is it necessary to impute to the defendants any intentional misrepresentation or want of entire fairness in their dealing with the plaintiffs.

It is sufficient for my purpose to take the facts as found by the Justice before whom the action was tried; and if they show a bargaining between these parties—a consideration moving to each in the arrangement which they had with each other, and an entire mistake or error in regard to the subject to which the arrangement related, and one which vitally affected the contract as one of its inducements, the general rule above stated seems to me to require that the contract be rescinded, and the' parties be restored to the position in which they were before it was made; and this accords with what I cannot but claim to be eminently just.

The inquiry, therefore, which I deem it alone necessary to consider, is, whether the facts found establish a case, within the rule referred to ?

The very basis and ground of the negotiation (so far as related to stock) was, that the defendants held 370 shares of stock in the New York and New Haven Railroad Company.

This was the distinct and unqualified representation of the defendants to Mr. Bement. No certificate was produced or exhibited; no confidence in any other title than that of the defendants was directly or impliedly invited.

In truth, at that very time, whatever evidence of title was in the possession of the defendants, represented, not that Schuyler, but that the defendant as president, or the bank, was the holder of 370 shares of such stock, in precise accordance with the representation made to Mr. Bement.

However honestly the representation was made, that representation was the starting point in the negotiation which ensued; it was in mutual belief that there was stock, real stock, and just 370 shares thereof, that the parties treated together on the subject.

In that mutual belief, and, as the result has shown, under that mutual mistake, in regard to a matter that formed the inducement to Mr. Bement, and the only inducement to what followed, what was done?

“An arrangement was made” between them, subject only to the consent of the Messrs. Schuylers, for the payment to the defendants, by the plaintiffs, of $25,000, and the transfer to the plaintiffs, in consideration thereof, of the 370 shares of stock, and, as a consequence resulting from this arrangement, (the whole sum due to the bank, the defendants, being paid to them,) the amount of the check held by the plaintiffs, being then on deposit, would be relieved from any claim of the defendants, could properly be paid, and would be paid.

Here, then, was a mutual mistake, and an arrangement founded therein. It was a mistake in a particular vital to the transaction. I need not pause to argue that, had the actual character of the stock been known, the plaintiffs would not have consented to it, and the defendants would not have, for a moment, supposed such an arrangement possible.

Was there a consideration moving between the parties, prejudicial to the plaintiffs and beneficial to the defendants ? The answer is, unhesitatingly and incontrovertibly, yes, both.

The plaintiffs parted with their money. The defendants received full satisfaction of their claims. Assuming, for the purpose of this last inquiry, that the stock was all that the parties believed it to be, still there was consideration, and a consideration beneficial to the defendants, in this arrangement; they received certain payment. True, they supposed the debt well secured; and, if the stock was genuine, they had good reason for their belief; nevertheless, there was benefit to them in the actual payment, "which at once relieved them from all the possible hazards of depreciation in value, or other event which could affect their position.

Besides, when the relation which the plaintiffs and the defendants at that moment bore to each other is taken into view, the consideration and the motives prompting this arrangement become even more important.

The plaintiffs held a check of $10,000, drawn by the Schuylers upon the defendants. It was drawn on the 29th day of June, and an actual deposit was on that day made by the Schuylers, sufficient to make their account good-—the balance to the credit of the Schuylers was sufficient for its payment. In the negotiation referred to, the plaintiffs were actually claiming, that, although nothing was said by the Schuylers, on making the deposit, amounting to a specific appropriation of the money, with the defendants’ assent, to this particular check, yet that the deposit was. in fact made for the very purpose of meeting the check, and, therefore, that the plaintiffs were entitled to have that check paid, and the defendants had no right to withhold that money; and further, that the defendants had no right to appropriate that money to the payment of the notes which they held.

Now, although we are of opinion, as already suggested, that, in point of law, this claim of the plaintiffs could not, upon the facts proved on the trial, have been sustained, still such was the claim urged upon the defendants then and forcibly urged by the plaintiffs’ counsel down to this time. It was • at the time of the negotiation an existing, pressing claim, and a claim of such importance and plausibility that it might very properly enter into the consideration of the parties; and by the arrangement then made that claim was fully adjusted and the defendants were relieved.

The circumstance that, if that claim had been litigated, we are of opinion that the plaintiffs must have failed, does not change the aspect of the case in this respect. The very purpose of all arrangements, of this description, is to avoid controversy and litigation.

There-was, then, in the arrangement then agreed upon, a consideration on both sides—a benefit to the defendants, a prejudice to the plaintiffs; that is to say, a parting with their money upon the chance of realizing it again, on the mutual assumption that the stock was the genuine stock of the railroad company.

What then remained to be done ? The consent of the Schuylers was to be procured. Not because any benefit was to result to the Schuylers. Not because it was supposed that this was imposing upon the plaintiffs any further actual burden, but, simply, that it might not be in the power of the Schuylers, afterwards, to say to the defendants, you have dealt with the securities, pledged by us with you, as if they were your own, without our assent; in other words, to relieve the defendants from any liability to the Schuylers in regard to the transactions. >

The consent was procured in the form of a distinct direction to the defendants to do what they had arranged to do, subject to such consent.

It is not warranted by any facts found, and it seems to me to do violence to the character of the transaction as it appears upon the evidence, or finding of the Judge, to say by way of supposition, or even to imagine that this consent was the result of a negotiation between the plaintiffs and the Schuylers, by which the plaintiffs became purchasers of the stock from them, or that it was any thing whatever other or more than the procurement of the Schuylers’ assent, such as the defendants deemed reasonable for their own protection as against the Schuylers—an assent to an arrangement already made, only subject to such assent—one which did not in any wise prejudice the Schuylers—one for assenting to which they could not, upon any equitable ground, ask to be paid one penny, and which they had no apparent motiveto disapprove.

Under such circumstances, it seems to me that it would be doing violence to the obvious character of the transaction, to place any stress upon the idea that possibly the negotiation between the plaintiffs and the Schuylers proceeded upon a sale from the latter to the former, which converted the transaction into a dealing between the plaintiffs and the Schuylers in respect to this stock. Nothing indicates that such was the actual fact, and if there was any such dealing it should have been proved by the defendants.

But more than this, if the Messrs. Schuylers had been brought into the presence of both the parties, and had" united with the defendants in their representation that three hundred and seventy shares of stock were held by the latter—deceiving alike both the plaintiffs and the defendants—and thereupon the plaintiffs-bad advanced their money to the defendants, I cannot perceive that the claim of the plaintiffs to be reinstated in their former position would be less strong. The consideration moving between the plaintiffs and the defendants would still be precisely the same, and the position of the parties would be simply this: the fraud of the Schuylers has induced the mutual mistake under which the defendants have obtained the plaintiffs’ money. Both the plaintiffs and the defendants acted under the belief that they were dealing with actual stock. Each knew that the other was so dealing.

In this connection it is of some materiality to add, that up to the very close of the transaction, stock was the subject of the treaty. The plaintiffs were acting under the defendants’ representation that they held stock, and when-the evidence of title was produced it was in the name of the defendants; it had been transferred previously to them, and the certificate imported title in them. In this respect, it is not liable to the suggestion that the plaintiffs were dealing with, or received, or placed their reliance upon a certificate that Robert Schuyler had stock. They acted, and, as between these parties, they were warranted in acting, upon the double representation that the defendants had title to so much stock.

It was urged that the plaintiffs knew that they were dealing with pledgees who had received the supposed sureties from the Messrs. Schuylers, and that in the whole transaction, and especially in requiring the assent of the latter, they clearly indicated that they consented to do nothing, and that, in truth, they did do nothing, but transfer to the plaintiffs such interest and such property as they had.

Doubtless they might have so guarded their act, by reservations or qualifications, as to have rested safely in this view of the subject. But be it observed that this is not a mere question of warranty; the right of rescisión on the ground of mutual mistake, and the right to rescind for a breach of warranty, are not coincident. Here the thing in regard to which the parties supposed they were dealing had no existence. The plaintiffs were not buying a certificate, they were not proposing for a transfer of a certificate, down to the moment of closing the transaction they saw no certificate. Stock, and nothing else, was the subject of which they treated.

But suppose a pledgee, either in pursuance of his power to sell the pledge for the satisfaction of his claim, or by the express assent of the pledgor, offers at public sale one hundred sacks of wheat, and even announces that he sells only his right, title, and interest therein as pledgee, and that the pledgor has assented to the sale— but he nevertheless calls the subject of the sale one hundred sacks of wheat—and on such sale he receives the money of the purchaser, who, when the sacks are delivered, finds their contents not wheat but some other article, it is not, I presume, doubted that the purchaser may recover back his money. How, although the transaction under consideration may not have been in fact, and may not have been regarded by the parties as a sale, it is not apparent to my mind that, in the principles affecting the right to rescind the arrangement, there is any thing which makes this case in that respect to differ from the other.

In this view of the subject, I regard it as of no importance that when the transaction was closed, the defendants wrote upon the notes, for which they held as security the supposed stock, a receipt in form, acknowledging payment from the plaintiffs, and so delivered them to the plaintiffs. This fact does not appear by the finding of the court, but it was proved without contradiction, and we may probably be at liberty to notice it. The only effect of this upon the plaintiffs’ rights, as against the Schuylers, was that their claim on the Schuylers would be for so much money paid to their use, and for this they would hold the supposed stock. And, on the other hand, on a rescisión of the transaction, the defendants, by the very facts here found, would be remitted to their original rights, according to the very terms of the notes themselves.

Again, the defendants are not prejudiced by a rescisión of the transaction; within ten days, the fraud of the Schuylers being discovered, the plaintiffs offered back the supposed stock. Ho change had occurred in the position of the parties. Ho insolvency had intervened, for the insolvency of the Schuylers was prior to the arrangement; and the full restoration of the defendants to their original position was the immediate effect of the return of the securities to them, in view of the discovery of the fraud which was then apparent.

I have only to add that, in my conclusion, I concur with that of the Judge at Special Term, in regard to the plaintiffs’ right to rescind this transaction, a conclusion of law which he did not deem applicable, because he deemed the stock valid, though of less value than the parties supposed. The plaintiffs, in my opinion, did not obtain that for which they treated—they did not receive that which the defendants supposed they were giving. Both parties acted under a total misapprehension in regard to the subject to which the arrangement related, induced, it is true, by the fraud of another, but that was a fraud which had already been effectual to deceive the defendants, and had wrought all the prejudice it could effect upon them; and it was none the less a mistake because it originated in such a fraud.

The mutual error was in a particular vitally affecting the transaction, and but for the error the plaintiffs would have in nowise consented to it.

In my judgment, the case is within the rule requiring a restoration of the parties to their former position, and that the defendants should be adjudged to restore the money received, with interest, and receive back the supposed securities. This seems to me to accomplish what is most obviously just.

The reciprocal obligations of the plaintiffs, to restore also the $10,000 paid upon the check, make it only necessary to adjust the balance at $15,000, and interest, to be repaid by the defendants.


source: Caselaw Access Project

author: By the Court. Bosworth, J.

license: Public Domain

text:
    Eddy v. Jump, impleaded.
    When the indorsor of a note resides in the place where it must be presented, and payment of it demanded, notice to the indorsor, as the general rule, must be served on him personally, or by leaving it at his residence or place of business. The only exceptions are that, when the indorsor lives in the same city or town in whieh'presentment and demand must be made, hut at some point remote from the place of presentment, between which there is a communication by mail, the notice may be served by mailing it to him, directed to him at a post-office where he usually receives his letters and papers.
    (Before Bosworth and Hoffman, J.J.)
    February 3 ;
    February 21, 1857.
    The facts of the case, and the manner in which the questions decided arose, are briefly, but fully, stated in the opinion of the court. The action was tried in Hovember,' 1856, before GhiefJustice Oakley and a jury.

      William Norton, for plaintiff.

      Alexander P. Sharp, for defendant.
   By the Court. Bosworth, J.

The defendant, Jump, is sued as indorsor of two several promissory notes. The only question is, whether the notice of presentment for payment and of nonpayment was so served as to charge him as indorsor.

Each note, by its terms, was payable at the American Exchange Bank in this city. Jump resided at Ho. 88 Avenue D, in this city. The notices of protest were served by depositing them in the post-office in this city, directed to him at Ho. 88 Avenue D, city of Hew York, and paying the postage thereon.

There was no evidence that Jump actually received it, nor of any act done to secure a delivery of it to him except that already stated.

The Judge who presided at the trial directed a verdict to be entered for the plaintiff, subject to the opinion of the court at General Term, upon the question of law, whether that was a good service, or whether the notice should have been served on the defendant personally, or, if he could not be found, by leaving it at his residence or place of business, with liberty to the court, at General Term, to dismiss the complaint if so advised.

When the indorser resides in the same place where the presentment or demand must be made, the general rule is, that notice to the indorser must be served on him personally, or by leaving it at his residence or place of business.

The only exceptions to this rule are, that when the indorser lives in the same town or city in which the demand must be made, but at some point remote from the place of presentment, between which there is a communication by mail, the notice may be served by mailing it to him, directed to him at a post-office where he usually receives his letters and papers.

In this case, so far as the evidence given justifies any conclusion, the notice was not deposited to be forwarded to the defendant by mail to some post-office, nearer his residence than the place of presentment,at which he usually received his letters and papers, but to remain there until called for.

This case, therefore, presents precisely the same question which was decided in Ireland v. Kipp, (10 J. R. 490, and 11 id. 231,) without any fact being proved to bring it within the exceptions to the general rule, that the service of the notice must be personal when the place of presentment and that of the residence of the indorser are the same.

In Ransom v. Mack, (2 Hill, 587-590,) the rule is stated thus: “ Whether mail service is good or not does not depend upon the inquiry, whether the person to be charged resides within the same legal district, but upon the question, whether the notice may be transmitted by mail from the place of presentment, or demand, to another post-office where the drawer or indorser usually receives his letters and papers ?” (See The Montgomery County Bank v. Marsh, 3 Seld. 481.)

In Bowling v. Harrison, (6 How. U. S. R. 248,) substantially the same rule was declared.

The service of the notice proved to have been made, was insufficient to charge the defendant, as indorser, and the complaint, pursuant to the stipulation contained in the case, must be dismissed, unless the plaintiff elects to have a new trial, which is granted on his paying the costs of the trial and of the subsequent proceedings. The election to be made o.n settling the order, so that it may be entered in conformity with such election.


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    Peckham v. Leary & Dimond.
    When a plaintiff becomes the grantee and owner of premises, at the time occupied by the defendants, under an unsealed and unexpired lease, at a specified sum per annum, and becomes such owner, and an assignee of such lease, with the assent of such tenants, and they continue to occupy the premises after notice of such facts, and that the plaintiff is their landlord, and without objection, the plaintiff can recover for subsequently accruing rent, on a complaint which merely states that he" is owner of the premises, and that the defendants occupied them at tpeir request and by his permission, and that the use of them is worth $284.14. But he can only recover at the rate specified in the lease under which the defendants entered. And they cannot set-off against rent accruing subsequent to their assent to occupy, as tenants of the plaintiff, a debt due to them prior thereto, from their lessor.
    It is not error to admit, after a plaintiff has rested and the defendant has entered on his defence, proof of a cause of action, in support of which no evidence had been given when the plaintiff rested, when the defendant is not thereby prejudiced in establishing any defence he may have thereto.
    The defendants, having assented to occupy, as tenants of the plaintiff, after notice to them that he was the assignee of the lease under which they were occupying, they cannot litigate the question whether the lease was assigned to the plaintiff with intent to defraud the creditors of their lessor. A creditor at large is not in a position to litigate that question.
    (Before Bosworth and Hoffman, J.J.)
    February 9;
    February 21, 1857.
    This action was tried in February, 1856, before Mr. Justice Woodruff, and a jury. The plaintiff recovered a verdict, on which judgment was entered, and from that judgment the defendants appealed to the General Term.
    The facts are fully stated in the opinion of the court.

      J. 2?. Parsons, for plaintiff.

      John Graham, for defendants.
   By the Court. Bosworth, J.

The complaint alleges that the plaintiff is the owner of certain premises, particularly described ; that the defendants, at their request, and by permisssion of the plaintiff, occupied them from the 1st of February to the 1st of May, 1855, and that the use of them was worth the sum of $284.14.

2d. That plaintiff furnished and delivered sand to the defendants, on their agreement to pay, at the rate of $3 per week; that for this $35.50 was due.

3d. That plaintiff carted mud and dirt from the premises, on defendants’ agreement to pay the usual and customary price, and that these services, at that rate, amounted to $26.62.

The answer puts in issue, the allegations of the complaint, as to plaintiff being the owner, and as to occupying under him; and then states, that defendants occupied the premises, under a lease in writing, not sealed, executed to them by one Austen B. Trow-bridge ; and that, so far as they know, he is the only landlord to whom they are responsible.

That Trowbridge owes them $136.31, which they claim to set-off against the rent.

It also puts in issue the allegations as to furnishing sand, and carting mud and dirt.

The evidence shows that the plaintiff became the owner of the premises in December, 1854.

Andrews & Gildersleeve, the plaintiff’s grantors, owned the premises prior to the 23d of September, 1852, the date of the lease from Trowbridge to the defendants; that is, they owned the premises, so far as the paper title discloses the true owners. Trowbridge occupied the premises, covered by the deeds to the plaintiff, under an agreement between him and Gildersleeve & Andrews. The premises in question are but a small part of those bought by the plaintiff of Gildersleeve & Andrews.

Trowbridge, while thus occupying them under Gildersleeve & Andrews, leased to the defendants, by an unsealed lease, dated the 23d of September, 1852, the premises in question, for five years from the first of October following, at the yearly rent of $1075, payable quarterly. The defendants occupied under that lease. The defendants were notified by Gildersleeve, in the presence of the plaintiff, prior to the first of February, 1855, that the plaintiff was their landlord. Trowbridge had no interest in the premises which authorized him to give a valid lease for the term for which he leased to the defendants. Trowbridge does not appear to have claimed' any rent of the defendants, or any right to any that accrued after the first of February, 1855,

By a writing, indorsed on a counterpart of the lease from Trow-bridge to the defendants, reciting that the plaintiff had purchased the premises, thereby demised from the former owners, and signed by Trowbridge, Gildersleeve & Andrews, they severally assigned the lease to the plaintiff, and all their right, title, interest, claim, and demand therein and thereunder. That writing is dated the 15th of May, 1855.

This evidence established a legal title in the plaintiff, and that he was the owner of the premises during the whole period for which the plaintiff sought to recover; that the defendants actually occupied under the lease executed to them by Trowbridge; that they were informed before the 1st of February, 1855, that the plaintiff was henceforth their landlord. To this no objection was made, and to that change they must be deemed to have assented. The plaintiff having proved these facts, and the value of the use of the premises, rested.

The defendants moved for a nonsuit, on the sole ground, that the plaintiff having shown the existence of a lease from Trow-bridge to the defendants, for the period of five years, and that it not appearing that the lease was not sealed, the plaintiff could not recover, (if at all) under the statute, for use and occupation, without first showing whether or not the lease was by deed.

The court overruled the objection, The defendants excepted, and entered upon their defence. The defendants then produced and proved the lease, and it was unsealed.

The plaintiff when he rested, had given no evidence in support of the second or third cause of action, but subsequently gave evidence tending to establish them, by his cross-examination of defendants’ witnesses.

The defendants objected and excepted to the admission of this evidence, on the ground that as the plaintiff had given no evidence in support of these claims before he rested, he could not be allowed to give such evidence after the defendants had entered upon their defence. The defendants proved that Trowbridge was indebted to them anterior to the 1st of February, 1855, to an amount between $100 and $200. But there was no attempt to prove any agreement between them that it should be applied in payment of rent thereafter to accrue under the lease. They claimed the right to have this indebtedness applied upon this rent. The right to so apply it, was based on the theory, that the premises really belonged to Trowbridge, and that he had made use of Gildersleeve & Andrews, and of the present plaintiff, to cover up and conceal that interest, by vesting the paper title in them.

Most of the exceptions taken by the defendants, to the rejection of the evidence offered by them, are attempted to be sustained, upon the idea, that upon the trial of this action, the defendants were entitled to the same range of examination, that would be allowed in a proceeding to set aside these conveyances for fraud, and to establish the fact that Trowbridge was the real owner.

All the objections taken by defendants’ counsel, may be disposed of by a few general propositions.

The evidence was satisfactory that the plaintiff was owner in fee of the premises. The defendants occupied the premises under a special agreement between them and Trowbridge. From and prior to the 1st of February, 1855, down to and until after the 1st of May, 1855, they occupied, under an implied agreement between them and the plaintiff, that henceforth they should occupy as tenants of the plaintiff, and upon the terms of their lease from Trowbridge, as to the rate of compensation.

The statute authorizes an action for use and occupation, as well when the defendants occupy under an implied agreement between them and the plaintiff, as when they occupy under a special agreement. (Osgood v. Dewey, 13 J. R. 240; McKeon v. Whitney, 3 Hill, 452 ; 1 Revised Statutes, 748, § 26.)

Under the present system, the plaintiff states, according to the actual truth of the case, facts which entitle him to recover. When there is no material variance between the facts as alleged and proved, he cannot be non-suited, if he proves facts sufficient to constitute a cause of action. The lease having been ratified by the plaintiff, so far, at least, as to permit further occupation at the rate of compensation fixed by it, the plaintiff was limited in his recovery to that sum. There was no variance between the pleadings and proofs.

It was entirely discretionary with the Judge, whether he would allow the plaintiff, after having rested, to prove the small demands constituting his second and third causes of action. There was no proof of its operating as a surprise upon, or prejudicially to the defendants.

It is quite clear, that rent which accrued for the use and occupation by the defendants of the premises, after the plaintiff became the owner of them in fee, and they had consented to occupy as his tenants, could not be off-set against a demand owing to them by their original landlord.

The defendants have not placed themselves in a position to controvert the validity of the plaintiff’s title. It is unquestionably valid, as against Trowbridge and the defendants, and all other persons, except those who are in a position, as creditors of Trowbridge or of the plaintiff’s grantors, to assail it on the ground that it was vested in the plaintiff with intent to defraud such creditors, or some one or all of them. A creditor at large of Trowbridge cannot, as such litigate that question. (3 Kern. 488.)

In this view of the case, there was no error in the exclusion of evidence offered, or in refusing to charge, as the defendants requested, or in the parts of the charge given to which exceptions were taken.

The judgment must be affirmed with costs.


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    H. P. Townsend, Executor of Thos. Johnson v. Ely Hoppock.
    The defendant sued Brooks & Hopkins, had an attachment issued, and on it seized the property in question, being the property of the plaintiff’s testator. T. Jackson, and Carr & Burnett, and S. V. Moers, subsequently and severally sued Brooks & Hopkins, and had attachments issued, which were levied on the same property, but without their direction. Judgments were obtained, and executions issued in all of said actions. The sheriff refused to sell on either of the executions, unless indemnified for so doing, Carr & Burnett executed to the sheriff an indemnity bond in their own suit, and executed as sureties one given by Moers in his suit, by the terms of each of which the sheriff was indemnified against the consequences of levying and selling, under the executions, in those two actions. Johnson having, in his lifetime, sued Carr and Burnett for a forcible and wrongful taking of the property in question, the plaintiff, on the 31st of August, 1856, released them from all causes of action whatever. The present action was commenced about the 1st of July, 1852, after all the executions had been issued to the sheriff, and before the execution of the indemnity bonds.

      Held, that the cause of action against Hoppock was perfect the moment the property was seized on his attachment, by his orders. That Carr & Burnett, not having participated in that wrongful taking, the release to them could not be construed to include and discharge that cause of action, and, consequently, was no defence to it.
    They and Hoppock were not joint wrong-doers, in respect to the taking of the property under Hoppock’s attachment. That taking being the ground of the present action, a release of Carr & Burnett from all claims and demands against them, does not extinguish or affect Hoppock’s liability to the plaintiff.
    (Before Boswobth and Hoffman, J. J.)
    February 8;
    February 21, 1858.
    The complaint charges that on or about the 14th of April, 1852, the defendant forcibly and wrongfully took from the possession of the plaintiff, certain goods and chattels, of the value of $500, and claims damages to the amount of $1000.
    The answer puts in issue the allegations of the complaint. It then justifies the taking under an attachment, in an action in the Supreme Court, brought by the present defendant against Brooks & Hopkins, who, as the defendant alleges, owned the property. The attachment was issued on the 18th of April, 1852, and the goods were seized upon it, on the 14th, by direction of the defendant.
    On the 80th of April, 1856, the defendant was allowed to set up by supplemental answer, that the trespass complained of was committed, if at all, by the defendant and John F. Carr, and Mitford B. Burnett jointly, and not otherwise; and that, on the 31st of August, 1855, the plaintiff, by a sealed release, released Carr & Burnet from all claims, demands, and causes of action whatever.
    The action was referred; the referee found in favor of the plaintiff, and from the judgment entered on his report the defendant appeals.
    The facts are, in brief, these:
    1. Johnson bought the goods in question on the 10th of April, 1852, of Brooks & Hopkins.
    2. On the 14th of April, 1852, they were taken from the plaintiff’s possession, by the sheriff, on an attachment in favor of Hop-pock against Brooks & Hopkins, and were so taken by direction of Hoppock.
    8. Three other attachments, in suits against Brooks & Hopkins, were received by the sheriff before he seized and removed the goods: one in favor of Thomas Jackson; one in favor of Carr & Burnett, and one in favor of S. Y. Moers. They were received in the order in which the plaintiffs therein are here named.
    Carr & Burnett are not shown to have given any direction to the sheriff, as to levying the attachment in their favor on this property.
    Judgment was obtained by Hoppock on the 24th of June, 1852, in his action against Brooks & Hopkins, and execution was issued on it on the 25th, and delivered to the sheriff on the 26th.
    Each of the other attaching creditors obtained judgments in their actions, and issued executions thereon to the sheriff, who received them at the same time he received that in favor of Hop-pock, and marked them as received in the order in which the attachments had been issued.

      , This action was commenced on, or about the 1st of July, 1852, after all the executions had been delivered to the sheriff.

      After all the executions had been received, the sheriff refused to sell under either of them, unless the plaintiff in each indemnified him. Bonds of indemnity, in each action, were given, and were marked by the sheriff as having been received in the order in which the attachments were received. They are all dated the 6th of July, 1852, except the one in the action of Carr & Burnett, and that is dated on the 7th. Carr & Burnett, besides signing the bond in their own action, signed a bond as sureties for Moers, in his action. The bond, in each case, indemnified the sheriff against the consequences of levying and making sale “under and by virtue of the execution.”
    " The sheriff sold the property, and the proceeds paid Hoppock’s execution in full, and left $123.18, to be applied, and which was applied, on Jackson’s execution.
    There was no interference by Carr & Burnett, in any stage of the proceedings, except signing these two indemnity bonds.
    It further appeared that the testator of the present plaintiff brought an action against Carr & Burnett, in which he, plaintiff, declared in the same form as in this, and for taking the same property. Issue was joined in it. On the 31st of August, 1855, the plaintiff having qualified as executor of Johnson, executed to Carr & Burnett a release, general in its terms, of all causes of action whatever, for the sum of $50, as the release stated. It did not, in express terms, release the present cause of action.
    The suit against Carr & Burnett was discontinued, and the consent for the discontinuance of it is dated the 7tn of Hovember, 1855.
    The referee reported that Hoppock took the property on the 14th of April, 1852, its then value, and gave judgment, in favor of the plaintiff, for that value, with interest from the time of the taking. The defendant appeals. The main point made is, that, under the facts found, Hoppock, and Carr & Burnett, were joint trespassers, and that the release of Carr & Burnett, two of such trespassers, is a bar to an action against Hoppock, their co-trespasser.

      E. Burloch, for plaintiff.

      E. W. Stoughton, for defendant!
   By the Court. Bosworth, J.

This action is brought to recover damages for the forcible and wrongful taking, by the defendant, of certain personal property, from the possession of the plaintiff. The complaint charges, and the referee finds, that it was taken on or about the 14th of April, 1852. It was so taken, by a deputy sheriff, on an attachment issued at the suit of the defendant against Brooks & Hopkins, and was taken by the direction of the defendant.

There does not appear to have been any actual or constructive interference, by Carr & Burnett, with the taking of the property, at the time it was taken. Nothing was done by them which could be construed into an assent, by them, to that act, or into an adoption of it, until they executed an indemnity bond to the sheriff, on the 7th of July, 1852.

The cause of action stated in the complaint, arose prior to that time. All the acts constituting it had been done before that date, and Carr & Burnett had not, up to the giving of the indemnity bond, on the 7th of July, 1852, participated directly or indirectly in those acts. The case made, states as a fact, that this action was commenced about the 1st of July, 1852, by the service of a summons and complaint. The summons is dated the 30th of June, and the complaint was verified on the 1st of July, 1852.

The complaint was, therefore, drawn and verified before the bond of indemnity which Carr and Burnett delivered to the sheriff was executed, and the fact stated in the case, as to the time this .action was commenced, taken in connection with the date of the summons and the time of verifying the complaint, imports, that this action was brought before that bond was given.

The cause of action, in this case, was complete, on the taking of the property by the deputy sheriff, on Hoppock’s attachment. That act is stated to be the cause of action. In that act Carr and Burnett in no way participated.

The indemnity bond was not required of Carr and Burnett, nor was it given by them to indemnify the sheriff against the consequences of having taken the property on .the attachments, or for his subsequent detention of it.

He declined to sell it on the executions which were delivered to him on the 25th of June, 1852, unless .the several plaintiffs would indemnify him for so doing.

The bond of indemnity given, recites, the recovery of a judgment against Brooks and Hopkins, the issuing of an execution thereon, and in terms, is conditioned to indemnify the sheriff against the consequences of levying and selling “ under and by virtue of said execution.”

This bond, by its terms, cannot justly be said to adopt any act, or to. express the assent of Carr and Burnett to any act of the sheriff anterior to the levying of the execution, described in such bond.

But that act forms no part of the cause of action stated in the complaint. That cause of action, as has been already mentioned, accrued upon the taking of the property on the 14th of April, 1852.

The referee has charged the defendant with the value of the property on that day, and with interest on such value from that date. '

Carr and Burnett were not only, not jointly liable with Hop-pock, for that tort, but they in no way participated in it. The plaintiff could not have maintained an action against them, as being actors in, or parties to, that transaction. The release which the plaintiff gave to Carr and Burnett on the 31st of August, 1855, did not, by its general language, include that transaction. It certainly does not, in express terms, purport to release them from it, or from the damages caused by it.

I think, therefore, that as it not only does not appear that Carr and Burnett had any connection with the act constituting the plaintiff’s present cause of action, but on the contrary, as it does appear, upon the facts as found, that all they did, was done to induce the sheriff to levy an execution in their favor on the property, and to sell under such levy, and that what they did do with that intent, was done after the complaint in this action was verified ; the release given in evidence, does not affect the plaintiff’s right to recover, and that the judgment should be affirmed.