text:
    George W. Wallis versus The President and Directors of the Manhattan Company.
    The lunacy of a person who has executed a power of attorney, does not operate to revoke it,—at least, until the fact of his lunacy has been properly established by an inquisition.
    The plaintiff having deposited in the bank of the defendants, certain sums of money, executed a general power of attorney in favor of his brother, and afterwards became lunatic. The attorney attempted to draw the money, thus deposited, out of the bank, by virtue of his power; but the defendants refused to honor his checks, in consequence of the lunacy of the principal, who was then, in an asylum for mad men ; but there had been no inquisition, nor proceedings in chancery, for the appointment of a committee of his estate.
    Held, that the power was not revoked by the lunacy of the plaintiff, and that the defendants were bound to pay interest on the deposits, from the commencement of the suit to the time of the judgment.
    This was an action of assumpsit, brought in the name of the plaintiff, to recover of the defendants a balance of 11,259 dollars, due from them, for deposites made in their bank by the plaintiff, and for collections made by them on his account.
    At the trial of the cause, it appeared that the plaintiff,' at the time the action was commenced, was a lunatic, and in the asylum near New-York; that he was subject to fits of lunacy, but had, during a lucid interval, in the month of December, 1827, and while capable of understanding his own concerns, given a general power of attorney to his brother, William Wallis, authorizing him to transact business for him, and attend generally to his affairs. During the spring of the year 1829, after the power was given, and before the demand, hereinafter mentioned, was made of the defendants by William Wallis, the plaintiff became insane, and was placed by his friends in the asylum, where he remained until the 4th of September, 1829, when he was put on board a ship, which sailed for England, (his native country,) before the time of the trial, which took place in October thereafter. It further appeared, that on one occasion, before the power was executed, the Court of Chancery had been compelled to interfere, in some way, in relation to the plaintiff’s property ; but no committee of his estate was ever appointed, nor were the facts relative to proceedings distinctly shown. It also appeared, that the plaintiff had been insane on two several occasions after the date of the power, and before the bringing of the action.
    On the second of May, 1829, when the balance in the Manhattan Bank, infavor of' the plaintiff, was nearly 7000 dollars, William Wallis filled, up checks on that bank, as attorney of the plaintiff, - to the amount of 5000 dollars, and made application to the defendants to know whether the checks would be paid,—exhibiting, at the same time, his power of attorney. The cashier of the bank, knowing that the plaintiff was a lunatic, and in the asylum, and perceiving that the power was dated at a previous time, declined honoring the checks, until the counsel of the, bank could be consulted. The power being left with the cashier, afterwards, on the 16th of May, William Wallisagain made application at the bank, to know its decision, and was then informed that his checks . would not be paid,- unless the original power of attorney, from the plaintiff to him, was deposited with the defendants. . This the agent refused to do, stating that the power was a general one, authorizing him to act jn other matters,- and that he should have occasion to use it in the state of.Virginia; but he offered to leave an authenticated copy of the original power at the bank, if that would be satisfactory. . The defendants refused to accept a copy, and refused to pay the checks of the agent, if presented, and were then informed, that they would be held answerable for interest from that' time.
    It did not appear that any checks were ever actually presented, or that any other demand of .the money, than that already mentioned, was made of the defendants; but between the second of May and the first of June, the balance in the bank, in favor of the plaintiff, had been swelled, by collections on his account, to 11,259 dollars; and after the last named period, this action was commenced. The officers of the bank made no objection to the paying of the money for the want of a regular demand, but were perfectly ready to honor the agent’s checks, if they could do so with safety to themselves. No indemnity was offered or required, and the sole difficulty in the case, grew out of the lunacy of the plaintiff ; but the defendants proved that it was their invariable usage never to pay money standing to the credit of dealers, except upon checks presented at the counter of their bank. After the foregoing facts had been made to appear by the plaintiff’s witnesses, the defendants moved for a nonsuit; but the presiding Judge (Hoffman) recommended that a verdict should be taken for the plaintiff, subject to the opinion of the court upon a case, either party having leave to turn the same into a bill of exceptions. This course having been assented to by the parties, a verdict for 11,500 dollars was returned in favor of the plaintiff; it being understood that the amount due should be adjusted by the court, (if the plaintiff was entitled to'recover,) so as to give or disallow interest, according as their opinion should be favorable or unfavorable to the plaintiff’s claim therefor ■ but if the court should decide that the action could not be maintained, then a nonsuit was to be entered.
    A case having been afterwards made, Mr. Slosson, in behalf of the defendants, contended, that the actual lunacy of the plaintiff, known to both parties, operated as a revocation of the power previously given. He conceded, that if a lunatic, in a lucid interval, were to give a power which should be afterwards acted upon in good faith, that the rights of the parties under the power, would probably be protected. We do not contend (he said) that insanity in all cases works a revocation of a power previously given; but we insist, as the power is revocable, that where all the parties have actual notice of the situation of the lunatic, his power, as to them, is revoked. [2 Kents Com. 1st Ed. 505.]
    If a power of attorney be revocable, then -the power of revocation must include in it the power also, of exercising the intention to continue it. The person who grants a power, is supposed to exercise, at all times, the intention of continuing.it, until he manifests the contrary by an act of revocation. If a crisis shall arrive in his mind, whereby he cannot manifest a volition to continue the power, then, in contemplation of law, it is revoked. The continuance of the power depends upon the question, whether he who granted it, remains disposed to continue it. Take away the exercise of his will, deprive him of the power of volition, and he can no longer be said to continue the power granted, or wish for its duration ;—as in the feme sole,—while she remains single, she can grant a power; if she marry, she can no longer exercise a control over the subject of the power, and the marriage therefore operates as a revocation of it. [2 Kent’s Com. 506. 5 East, 266. Rol. Jlbr. 331. Aon. W. Jones, 388.]
    So if a will be made by a lunatic during his lunacy, the .will is void. Why 1 Because he has no power of exercising his volition. Every thing depends upon his control over his faculties, and when disqualified to exercise such control, the power previously granted ceases. This position does not extend beyond cases of known and established insanity, and it is not intended to embrace cases of mere phreusy from sickness, or even temporary insanity, originating in incidental causes.
    The facts here, present a case for great caution, on the part of . the bank. The power was dated in December, 1827, yet'there was no attempt to exercise it, so far as the defendants were concerned, until May, 1829. The bank was ready to pay the money if they .could do so with safety, and they will not regret the course pursued, even if the decision of the court should be against them. But, the plaintiff in any event is not entitled to interest. Where money is deposited in a bank, to be drawn out whenever the proprietor of it may think proper, in order to charge the bank with interest, a demand of payment must first be made. Until that shall happen, there is no default, and interest will not be allowed until a wrong of some kind has been done to him who made the deposit. In ordinary cases, it is the duty of the debtor to seek his creditor and make payment of the debt due; but where a bank is concerned, no such duty devolves upon its officers. The proprietor seeks his money where he placed it, and nxo default can happen until demand and refusal take place. [1 Esp. Cas. 115.]

      Mr. J. J. Roosevelt, contra, for the plaintiff, contended,
    that there was no necessity for a specific demand of payment in this case, because the acts of the defendants were tantamount to a waiver of such demand. They did not put their refusal to pay (he said) upon the ground of a want of demand, but upon the agent’s want of power. They proffered their readiness to pay whenever they could do so with safety to themselves, and when called upon.to say whether they would honor the agent’s checks or not, they distinctly refused to recognize his authority, unless he would deposit with them the evidence of his power to draw the checks. This evidence the agent refused to part with, for reasons which must be perfectly satisfactory to the court; and there is no rule of law, which could compel him to give up his power. The suit itself is a sufficient demand to charge the defendants with interest, for if they wished to avoid the consequences of their neglect, they should have brought the money into court. [United States Bank v. The Bank of Georgia, 10 Wheat. R. 333.]
    II. The lunacy of the plaintiff was no revocation of the power. He was competent to make the power when it was granted, and his subsequent insanity could not, per se, revoke it. If the posi-, tion contended for by the defendant’s counsel, were true, there would be no safety in the authority conferred by any power of attorney.
    There can be no lunacy which will revoke a power, until the fact is shown by proper proceedings out of Chancery. When a committee is appointed, the power may cease, but not before.
   Per Curiam.

Although the authority of an agent may be revoked by the lunacy of' his principal, yet the existence of the lunacy, before it can. have that effect, must be established by inquisition. There would be no safety in admitting any 'other evidence of a fact, which is to have an operation so extensive; and sound policy requires us to adopt this rule. It is conceded by the counsel for the defendants, that the mere existence of lunacy, cannot per se, operate as a revocation of the power, because the disease being often of a temporary character, may exist, and yet be removed within any given period of time. If the mere fact of lunacy operated, like death, to revoke the power instantly, then any acts done under it, during the existence of the disease, would be void, even if the parties were ignorant of the principal’s situation. This is certainly not the law upon the subject. The mere existence of lunacy never operates to revoke a power, until the fact is judicially established by proper proceedings in Chancery. In such a case there can be no objection to allowing the effect, which the lunacy thus proved, might have upon the power; for a committee would then be appointed to take charge of the principal’s estate. Due notice would be given, and all the parties having an interest in the subject, would be apprized of the true slate of facts, and thus be put upon their guard.

In this case there is no evidence to show, that any proceedings have been had, to establish the fact of lunacy before the proper tribunals, although it is said, that on a former occasion, some application (the nature of which does not distinctly appear) was made to the Court of Chancery, in relation to the plaintiff’s estate. This evidence serves to show, that during the existence of the power, the plaintiff had been afflicted with this disease more than once, and had, during the same period, a lucid interval; for there could have been no other reason, why the proceedings in chancery were suspended, and finally dropped. Under every aspect of the case then, the only rule which the court can safely adopt, is to consider the power as subsisting and operative, until the fact of the plaintiff’s lunacy shall be established by a proper course of legal proceedings.

In this view of the subject, it is quite clear, that the defendants were bound to honor the checks of the plaintiff’s agent, and that they had no legal excuse for withholding the money deposited in their bank. It could not be necessary for the plaintiff to prove a formal demand, before the commencement of the suit, because the evidence shows, either that there had been a sufficient demand, or a waiver of it on the part of the defendants. It was proved, at the trial, that after some negotiation on the subject, the cashier of the bank finally proposed to pay the money now claimed, if the original power of attorney were deposited with the defendants; and this requisition not being complied with, the refusal to pay, was, in the end, distinctly put upon that ground.

Now it is quite clear, that the defendants had no legal right to require the deposit of the original power. Being a general power, it was the right of the attorney to retain it, and in offering to give an attested copy of it, he did all that the defendants could properly require. Having thus placed their refusal to pay on an untenable ground, the defendants cannot now set up as a defence, the want of a formal demand, which was not alleged by them at the time. They finally recognized the authoiity of the attorney to receive the money, and the plaintiff, upon the evidence in the case, is entitled to recover. There must, therefore, be judgment for the plaintiff, for the amount of his deposits, together with interest thereon, from the commencement of the suit.

Judgment for the plaintiff.

[J. J. Roosevelt, Att’y for the plff. W. Slosson, Att'y for the deft.]

See Kent’s Com. (2. edi.) vol. 2. p. 645, and the cases there cited, namely, Huddleston’s case, cited in 2 Ves. 34. 1 Swanst. R. 514 n. Sayer v. Bennett, 1 Cox’s Cas. 107. Waters v. Taylor, 2 Ves. & Bea. 301. Inst. 2. 12. 1. Bell’s Com. Vol. 1, p. 489.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Joseph Shaffer and Assur Assur versus Lewis Wilcox.
    Where a party, upon an affidavit, sets forth the facts which he wishes to establish; under a commission to a foreign country, and shows that those facts can only be proved by persons in the employment of his antagonist, whose names are unknown to him, the court will either permit the commission to issue generally without the names of the witnesses, or grant a stay of proceedings until their names can be ascertained.

      Mr. J. Anthon, for the defendant,
    moved that a commission which had been granted in this cause, to take testimony at Trieste, should issue generally, without the names of the witnesses to be examined, or that a stay of proceedings should be granted unlil.the plaintiffs would disclose the names of their clerks, in Trieste, who were the witnesses to be examined. He read an affidavit of the defendant, setting forth the facts which he wished to prove, and showing that the clerks of the plaintiffs, at Trieste, were the only witnesses who could give the information sought, as it related to their accounts. It appeared that one of the plaintiffs resided at New-York, and the'other at Trieste; and the defendant alleged, that the transactions out of which the controversy grew, took place at Trieste, and could only be proved by persons in the employment of the plaintiffs there, whose names were unknown to him.

      Mr. Cutting, for the plaintiffs,
    resisted the application, upon the ground that the act relative to commissions, [1 R. L. 519,] requires that the names of the witnesses should be inserted in the commission.
   Per Curiam.

The act in question must have a reasonable construction. If a particular officer were to be examined, whose name was unknown, (the Attorney General of a particular state, for instance, whose testimony might be material,) the commission might be issued generally, to take the testimony of that officer, without inserting his name.

In this case,' the defendant wishes to examine the clerks of the plaintiffs’, at Trieste, whose names are unknown to him. He sets forth by affidavit the facts which he wishes to prove, and asks either for a general commission to take the testimony of those clerks, or for a disclosure of their names, or for a stay of proceedings, until they can be obtained from other sources. This is not a fishing commission, for the facts sought to be proved, are all disclosed. The application, on the contrary, is perfectly reasonable, and if the plaintiff, who resides here, will not disclose the names of his clerks, the defendant may either issue his commission generally, to take the testimony of the clerks at Trieste, or have a stay of proceedings until their names can be ascertained from other sources.

Motion granted.

[F. B. Cutting, Att'y for the plffs. E. Anthon, Att'y for the deft.]

Note.—The defendant, in the first instance, moved for a commission to examine certain individuals, whose names wore set forth';—but the plaintiffs showed that they were persons who were concerned in the transactions in controversy, and directly interested in the event of the suit. The court refused to allow the commission for this reason, and the defendant then made the application above described.


author: Oakley, J.

text:
    The Harlæm Canal Company versus Moses B. Seixas.
    A subscriber to the stock of an incorporated company, has, by the act of subscribing, such an interest in the stock of the company, as will furnish a sufficient consideration to support a promise on his part, to pay the amount of his subscription, And the remedy of the company for the'non-payment of the instalments, duly called for, according to the terms of the subscription, is not confined to a forfeiture of the shares,—but they may maintain an action of assumpsit, upon the promise contained in the subscription, for the amount of the instalments.
    The subscriber, who pays the amount of his subscription, can compel the company to furnish him with a proper certificate of his stock; and where, by the terms of subscription, the first instalment was not to become payable, until a certain amount of stock was subscribed for, a call for the first instalment, was deemed tantamount to a notice to the subscriber, that the requisite amount had been taken up.
    Assumpsit to recover of the defendant the amount of his subscription to the capital stock of the Harlaam Canal Company.
    The declaration contained five counts. The first set forth the act incorporating the plaintiffs, [ Vol. 7, L. N. Y. 370 c.,] for the purpose of constructing a canal in the twelfth Ward of the city of New-York, at any point between 95th and 135th streets, so as to open a water communication, across the island, between Harlsem Creek and the North River. That a share in the capital stock of said company was to be fifty dollars; and that the defendant, on the 17th day of September, 1827, “ for the purpose of becoming “ a member of the said company, and interested in the stock “ thereof, promised and agreed, to and with the plaintiffs, to take “ a large number, to wit, sixteen shares of the capital stock of the “ said company, and then and there subscribed for said sixteen “ shares, and agreed to pay for the same at the time and in the “ manner following, that is to say, that as soon as a sufficient “ amount of stock should have been subscribed, to justify the com
      -mencement of the work,” ten per cent. “ of the amount should be paid into the hands of Henry Post, Sylvanus Miller, and “ William Kent, Esquires, as trustees, to be by them paid over; “ on account of the land and expenditures of the canal, from time “ to time, as the work should progress, and as the same might be “ required, but in such manner that the contractors” “ should be “ constantly in advance to the company, in expenditures for land “ and on the canal, to the amount of at least 20,000 dollars, until “ the work should be finished ; the balance of subscriptions, with “ interest, should become due as follows: viz. ten per cent, in two “ months, ten per cent, in four months, ten per cent, in six months, “ ten per cent, in eight months, and ten per cent, in ten months, “ from the time the first instalments were called for; the balance of “ forty per cent, when the canal should be finished.”
    The declaration then averred, that “ afterwards, to wit, on the 17th day of November, in the year 1827,” an amount of stock, sufficient to justify thé commencement of the work, to wit, 8000 shares, amounting to the sum of 400,000 dollars, having been subscribed for, the first instalment of ten per cent, was called for by the said plaintiffs, and directed to be paid on the 4th day of December, then next, into the hands of the said trustees, pursuant to the said terms of subscription, “ of which the defendant after-wards, to wit, on the said 4th day of December, had notice;” by means whereof, and in pursuance of the said agreement and promise, the said defendant became liable to pay for the said shares of stock as follows: to wit, ten per cent, on the said 4th day of December, and five other instalments of ten per cent, each, with interest from the said 4th day of December, in two, four, six, eight, and ten months thereafter. And being so liable, the defendant, in consideration thereof, promised the plaintiffs to pay the said several instalments in the manner above specified. Nevertheless, the defendant, although often requested, &c., had not paid the said several instalments, or any or either of them, or any part thereof, to the said Henry Post, Sylvanus Miller, and William Kent, or either of them, or to the plaintiffs, but to pay the same, had refused, &c.
    The second count set forth, that the defendant, “ in consideration that the plaintiffs would allow him to subscribe for and take “ other sixteen shares in the capital stock of the said company, and to be entitled to the privileges, advantages, and emoluments “ to be derived therefrom,” promised and agreed to pay the plaintiffs 50 dollars for each of the said shares so subscribed for by him, at the times and in the manner specified in the terms of subscription. That the plaintiffs, at the time aforesaid, did allow the defendant “ to subscribe for the said sixteen shares of stock, and to “ become entitled to the privileges, advantages, and emoluments “ arising therefrom, and the said defendant did then and there “ subscribe for the said sixteen shares, in a certain book or paper “ called a subscription book; and by that subscription,” promised to pay the plaintiffs for the said shares, at the times and in the manner specified. The count then alleged, that a sufficient amount of stock having been subscribed for, to justify the commencement of the work, the first instalment was called for by the plaintiffs, and the defendant was required to pay the same to the trustees on the 4th day of December, 1827; but there was no direct averment of notice to the defendant, that an amount of stock had been subscribed for, sufficient to justify the commencement of the canal. In other particulars, the second count did not differ essentially from the first.
    To these two counts, the defendant interposed separate general demurrers.
    [By the 5th section of the act incorporating the Harleem Canal Company, it is provided, that “ it shall be lawful for the directors “ to call and demand from the stockholders respectively, all such “ sums of money by them subscribed, at such times, and in such “ proportion as they shall see fit, under pain of forfeiture of their re- “ spective shares, and all previous payments made thereon, if such “ payments be neglected for the space of ten days after the same “ ought to have been made, and thirty days previous notice of “ said call and demand shall have been given,” agreeably to the provisions of the act.]
    The cause was argued by Mr. Judah and J. B. Tallmadge, Esq. for the defendant, and by Mr. J. L. Mason and Mr. Anthon, for the plaintiffs.

      To the first count, it was objected, I. That it shows no consideration for the defendant’s promise. [14 John. R. 238. 9 Ib. 217. 1 Caine’s Cas. 86. Chit. on Bills, 70. 85. 5 Term R. 482. 7 Ib. 350.]
    II. That the plaintiffs have no remedy by suit for the recovery of money due upon subscriptions for shares of their stock. By the 5th section of the act, their power over this subject is restricted to forfeiture. If the plaintiffs have a remedy by suit, it can only be by a special action on the case,for a non-compliance with the terms of subscription. All the cases which have been decided in our courts, upon this subject, are cases relating to turnpike companies, which have the express privilege, by statute, of suing their stockholders. [1 R. L. 229.]
    III. The declaration contains no averment of a compliance, on the part of the plaintiffs, with the conditions upon which the defendant’s promise rested. These were all conditions precedent, and as the act incorporating the plaintiffs, is a public act, the court may take judicial notice of its requirements. 1. It does not appear that the assent of the Corporation of the city of New-York to a commencement of the work, on the part of the plaintiffs, has ever been obtained. This is made a condition precedent by the 4th section of the act. 2. It does not appear that the work was begun within the time limited by the act of incorporation, nor that it ever has been begun at all. 3. It does not appear that the contractors have been in advance, as prescribed in the agreement.
    IV. There is no mutuality in the contract, and the claim of the plaintiffs cannot, therefore, be enforced. In addition to this, it does not appear that the defendant possessed the shares subscribed for, nor is there any thing in the agreement, upon which an assumpsit can be raised.
    With regard to the second count, the same exceptions were taken, and the want of an averment of notice, was especially urged as an objection. And it was contended that these various defects were the proper subjects of general demurrer. 5 Bos.

      and Pul. 367. Com. Dig. tit. Pleader, c. 73. 1 Chit. Plead. 320. 322.]
    For the plaintiffs it was urged, I. That the interest acquired by the act of subscribing to the shares, in the stock of the company, was a sufficient consideration to uphold the defendant’s promise to pay for them, and that such consideration was sufficiently expressed in the declaration. [1 Caine’s Ca. 86, and the cases cited by the defendant. 1 Binn. R. 70. 8 Mass. R. 138. The Bed. & Bridg. Turn. Co. v. J. Q. Adams.] The character of the transaction, under a public act, (which fully appears on the face of the declaration,) would, for the purpose of fixing a liability on the defendant, be a sufficient consideration to support his promise. But the principle, upon which the objection as to the consideration rests, has already been settled, by adjudications in our own courts as well as those of other states, and it can hardly be considered as open to discussion here.
    II. The remedy of the plaintiffs, is not confined to a forfeiture of the defendant’s shares. The company may waive the forfeiture, and rely upon the promise, and their remedies are cumulative.
    By the very terms of the subscription, money is to be paid before the work is commenced, and this objection to the remedy, would deprive the company of all power to collect the first instalments. The objection, however, is not a new one. It has come up, upon other occasions, and has been disposed of by judicial tribunals. [5 Mass. R. 80. Worchester Turn. Co. v. Willard.]

    III. As to the conditions precedent, there were none by the terms of the subscription, except that a sufficient number of ^shares should be subscribed, to justify a commencement of the work, and a compliance with that condition is expressly averred.
    IV. As to the other objections to the declaration, they are not the subjects of general demurrer. If the plaintiffs have neglected their duties, and any defence to this action arise from that source, it should have been pleaded. [1 Chit. P. 229. Com. Dig. Plead. C. 81.] Notice to the defendant is sufficiently alleged; but if not, the want of it, is not the subject of a general demurrer.
   Oakley, J.

[After an abstract of the pleadings.] The principal objection made to the first count of the declaration, is, that it does not set forth a sufficient consideration for the defendant’s promise.

The plaintiffs being a body corporate, with power to create a stock for the purposes contemplated by the act of incorporation, had a right to open a subscription for such stock, on any terms they thought proper to prescribe, not inconsistent with the provisions of the said act. The defendant by the act of subscribing, became interested in the stock of the company, and on paying the amount of his subscription, could at any time, compel the company to give him a proper certificate for the same. It is now the doctrine of the Supreme Court, as I understand it, that the interest thus acquired by the subscription, is a good consideration to support the promise to pay, and that an action may be maintained on such subscription, though the corporation may possess the power of forfeiting the stock for default of payment. [Goshen Turnpike v. Hurtin, 9 J. R. 217. The Dutchess Cotton Manufactory v. Davis, 14 J. R. 238.]

The averments in the declaration, seem to me, to bring the present case within this principle. They are somewhat informal, but they set forth the agreement of the defendant to take the stock, and the fact of his subscribing for it. His interest in the company is thereby shown, and that will support his promise to pay the instalments, according to the terms of the subscription.

The second count of the declaration sets forth the consideration of the defendant’s promise, in a formal manner, and is clearly within the principles of the cases above referred to. It is objected, however, to this count, that notice to the defendant is not averred, that an amount of stock had been subscribed for, sufficient to justify the commencement of the canal. By the terms of the subscription, the first instalment did not become payable until such an amount of stock was subscribed, and the other instalments were to become due at stated periods, after the first should be called for. It is averred, that such a call was made, and that the defendant was required to pay, &c. If any notice of the amount of the stock subscribed was necessary, I am inclined to think, that the call for the first instalment was a sufficient notice. That call could be made, only on the event of the subscription of the requisite amount of stock, and the defendant having notice of the call, was thereby necessarily apprized of the fact, of a sufficient subscription having been made. The demurrer must be overruled.

Judgment for the plaintiffs on the demurrer, with leave to the defendant, &c.

[J. L. Mason, Att’y for the plffs. Judah, Att’y for the deft.]


text:
    The Harlæm Canal Company versus Joseph C. Spear.
    The declaration in this case, was exactly like that in the preceding case against Seixas. The fifth count was a general one, stating that the defendant was indebted to the plaintiffs in the sum of 1600 dollars, “ for moneys due, payable, and owing,” from the defendant to the plaintiffs, “ for and respect of divers, to wit, sixteen shares of the capital stock of the Harlaem Canal Co., of which the “ defendant was proprietor,” “ by virtue of divers calls made by the directors of said company,” for the same.
    To the first, second and fifth counts, the defendant demurred specially, and pleaded the general issue to the third and fourth. The third count was substantially like the second, but more speeific in its averments, and the fourth was a general one, for sixteen shares of stock sold and delivered to the defendant. The causes of demurrer assigned to the first count, were, 1. the want of consideration; 2. that it did not appear from the count, what instrument, if any, the defendant subscribed, nor how, nor with whom he agreed to pay for the shares therein mentioned; 3. that there was no averment, that the work was ever commenced, nor does it appear, that the payment of the first instalment was requisite ; 4. It does not appear, that the contractors were ever in advance to the company, in expenditures for the objects mentioned, to the amount of 20,000 dollars, or any other sum; nor does it appear to whom the five instalments were to be paid. 5. No assumpsit or promise, is laid in the count, to pay the first instalment nor the subsequent ones to the plaintiffs, nor does it appear that any delivery or tender of a certificate of stock was ever made to the defendant, nor that he was in fact a stockholder. 6. It does not appear how, nor by whom the first instalment was called for, nor what notice the defendant had of such a call, nor that he was ever informed that a sufficient amount of stock had been subscribed for, to justify the commencement of the work.
    To the second count it was objected, (in addition to the exceptions taken to the first count,) that in one part of the count it is alleged, that the defendant had promised to pay the first instalment to the plaintiffs, and in another part, that the same was to be paid to Post, Miller & Kent, as trustees, and that the defendant was required to pay the same to them accordingly.
    To the fifth count it was objected, that it was defective for uncertainty, and that it did not show how, nor by virtue of what undertakihg the defendant was indebted to the plaintiffs; nor the amount or nominal value of a share of the stock, nor the defendant’s engagement in relation to the same. 2. That it did not appear that the defendant had ever subscribed for such stock, nor how he became a proprietor thereof, nor how the money was due and payable, nor at what time, nor upon whom the calls for payment were made, nor the nature thereof, nor the time when the money demanded became due and payable under the calls.

      The cause was argued by Mr. J. Greenwood for the defendant, and Mr. Anthon for the plaintiffs.

      Mr. Greenwood contended,
    that the three counts were bad, both upon general and special demurrer, and in support of the additional objection to the second count, he cited, [5 Mass. R. p. 80, 1. Chit. p. 299.] He also commented, at length, upon the points assumed by the causes of demurrer, and upon the cases cited for the plaintiffs.

      Mr. Anthon, contra,

    maintained his original propositions, and contended, that the contract being made with the plaintiffs, the payment was to be made to the trustees, as their agents merely, and that the action was well brought in the name of the company. In relation to the fifth count, he cited, 2 Chit. Plead. 53.
   Per Curiam.

The two first counts of the declaration in this case, are like those in the previous one against Seixas, and the demurrers to them must be overruled, for the reasons there given. The defendant has not made his objections stronger, by assigning special causes of demurrer ; for his exceptions, if valid, would go to the foundation of the action. They assume, that all the matters of duty charged upon the plaintiffs, are conditions precedent to their right of recovery, and that the declaration should contain averments of a performance of those conditions. We do not think so. As soon as a sufficient amount of stock was subscribéd, to justify the plaintiffs in the commencement of the work, the defendant became subject to the call for instalments, and having disobeyed that call, he is liable, in assumpsit, for their amount. The remedy given to the plaintiffs, is not confined to a forfeiture of the stock; it is cumulative, and the plaintiffs may resort to both remedies, if necessary.

As to the fifth count, the objections to it cannot be sustained. It avers, that the defendant being indebted to the plaintiffs in the sum of 1600 dollars, for moneys due and owing from him to the plaintiffs, forsixteen shares of the stock of that company, which were held by the defendant, in consideration thereof, promised to pay the same, when he should be afterwards requested. Here is, no doubt, a valid consideration set forth for the defendant’s promise. It arises from the indebtedness of the defendant, for the stock actually held by him. It was not necessary to set forth the manner in which he became the proprietor of the stock. If he owed the money to the plaintiffs and promised to pay it, he is, no doubt; liable. It will be the proper occasion, on the trial of the cause, to inquire, whether the count under consideration, must not be supported by proof of an actual promise. But upon demurrer, an actual promise, if necessary, may be inferred, for the purpose of supporting that laid in the declaration; and upon the trial, a promise alleged, in general terms, may be ^supported by proof of an express promise. The demurrer, therefore, must be overruled.

Judgment for the plaintiffs on the demurrer, with leave to the defendants, &c.

[J. L. Mason, Att’y for the plffs. J. Greenwood, Att'y for the deft.]


text:
    H. V. Garretson versus Benjamin Hemstead and E. Douglass.
    Where an order has been granted for a stay of proceedings, after a trial, in order to enable the defendant, against whom a verdict has been obtained, to make a case upon a bill of exceptions, a Judge, at chambers, may, upon cause shown, so far modify the order, as to enable the plaintiff to perfect his judgment and issue his execution, without a levy, that the same may stand as security.
    In this case, the plaintiff having obtained a verdict against the defendant upon the trial of the cause, an order was granted at chambers, by Mr. Justice Hoffman, staying all proceedings for 14 days, in order to enable the plaintiff to make a case upon a bill of exceptions. Afterwards, upon the application of the plaintiff’s attorney, showing that there was a necessity for perfecting the judgment, that it might stand as security for the final result of the cause, the Judge so far modified the order, as to enable the plaintiff to perfect his judgment and issue an execution, without any authority, however, for levying the same.

      Mr. J. Anthon, for the defendants,
    now moved to set aside the modification of the order, that the plaintiff might thus be prohibited from perfecting his judgment.
   The motion was opposed by Mr. Hawes, for the plaintiff, and denied by the court.

[W. P. Hawes, Att’y for the plff. E. Anthon, Att'y for the deft.]


text:
    The Utica Ins. Co. versus George Pardow.
    The plaintifis loaned to J. L. 500 dollars, upon his check for the same sum, collaterally secured by the deposit of a promissory note, endorsed by the defendant. The sum advanced to L. consisted of small checks, drawn by the plaintiffs on the Tradesmen’s Bank, having the general appearance of bank notes, and being intended to circulate as such. They were not redeemed at the bank on which they were drawn, but by the plaintiffs themselves at their own office. L. having failed to repay the loan, the plaintiffs brought an action on the note, to which the endorsers set up the illegality of the transaction, under the restraining act, as a defence. Held, that the giving of the checks under the circumstances of the case, was not a banking transaction, nor against the restraining act, and that the plaintifis were entitled to recover.
    Assumpsit upon a promissory note for 500 dollars, bearing date the 31st of March, 1828, drawn by one John F. Gannon, in favor of Joseph D. Palmer, and endorsed by him and the defendant.
    The cause was tried before the Chief Justice; and, at the trial, the plaintiffs proved by one Totten that the note in question came into their possession about three weeks before its maturity, having been deposited with them by James Lynch as collateral security for check of the like amount, drawn by him on the Manhattan Company. That the plaintiffs advanced to Lynch 500 dollars upon said check and note, in their own checks, on the Tradesmen’s Bank. These checks, the witness also testified, were drawn for such amounts as are usual in the ordinary emissions of bank notes; they were printed on bank note paper, had the general appearance of banknotes, and were intended to pass, and usually did pass as such. At the time of the loan to Lynch, and for some months previously thereto, these checks were not redeemed at the Tradesmen’s Bank, (from which the plaintiffs had withdrawn their funds,) although payable there, but were redeemed by the plaintiffs themselves, on presentment at their own office in Wall-street, according to a notice for that purpose given to the public.
    Lynch being called as a witness for the defendant, testified, that the note in question, was given in renewal of a previous one discounted by himself out of his private funds, and that the plaintiffs originally had no interest in it. It appeared also, by his testimony, and that of Totten, that the plaintiffs had been in the habit of employing Gannon to circulate their checks, that it was not their custom to discount notes, but they often loaned money on collateral security, and usually paid their losses in checks bearing a general resemblance to bank notes. At the time this note was discounted, Lynch was President of the Utica Insurance Company, and there was some evidence (found chiefly in the testimony of Gannon) from which an inference might be drawn that the note was discounted for the plaintiffs.
    The Chief Justice charged the jury, that if the original note was discounted by the plaintiffs, or if the advance to Lynch was in fact a discount for him, then, that their verdict should*be for the defendant; but that, if Lynch himself discounted the original note; and afterwards borrowed 500 dollars of the plaintiffs, and deposited the note as mere collateral security for his own debt,—then, that their verdict ought to be for the plaintiffs.
    The counsel for the defendants contended, that the facts of the case disclosed an exercise on the part of the plaintiffs of banking powers, and that they could not, therefore, recover on the present note. But the Chief Justice, without expressing any decided opinion upon any of the questions of law, declined charging the jury to this effect, and the counsel for the defendant took excep- - tions to his opinion and charge.
    The jury having found a verdict for the plaintiffs, the defendant how moved for a new trial.

      Mr. C. O’Connor, for the defendant, contended,
    that the loan to Lynch, on the security of his check and the note, was a banking operation. That the contrivance of issuing “ checks’> upon a bank in which the plaintiffs had no funds, was a palpable evasion of the statute. The Chief Justice, (he said,) treated this case upon the trial, as if there was but one proceeding by which the restraining act could be violated, and that is by a discount. The statute, in enumerating the prohibited operations places “ issuing notes” in the fore ground. [2 N. Y. R. L. p. 234. sec. 2.] There was no dispute about the facts. They came out from the plaintiffs’ own witnesses, and the Chief J nstice should have charged the jury that the loan to Lynch, on his check and this note, was a banking operation, in violation of the restraining act.
    II. The discount made by Lynch, for Gannon, being made with the notes of the company, Lynch being at the time President of it, if not strictly and directly a company operation, was indirectly so. It was connected with their unlawful trade of issuing prohibited checks. It was one of the modes by which their officers got their checks into circulation, and was so clearly an act in furtherance of their views in the issuing of the checks, that justice must be blind if she cannot see through the veil. The restraining act was violated by the loan to Lynch from the company, and also in the loan by Lynch to Gannon.

      Mr. J. L. Graham, contra, for the plaintiffs.
    The jury having decided that the original note was discounted by Lynch, and not by the plaintiffs, and that the transaction by which he passed the note in question to the plaintiffs, did not amount to a discount of it, it is difficult to see what question remains.
    It is said by the defendant’s counsel, that the Chief Justice ought to have charged the jury that the loan to Lynch on his check, and this note was a banking operation. From this remark, it would seem that he has not adverted to the case of this company against Kipp, [8 Cowen’s R. 20,] and against Scott, [8 Cowen’s R. 717,] where it is settled that the plaintiffs have a right to lend money on personal security; nor to the case against Hewitt, [1 Wendall's R. 56,] where it was distinctly stated in the plea, that the plaintiffs were engaged in banking business, and that the note declared upon was created with intent to have it discounted by the plaintiffs, and that the plaintiffs, with a knowledge of that fact, did discount it in the usual course of their banking operations.
    If the defendant in this cause, had proved, (which by the by he did not,) that the plaintiffs were engaged in banking business, still, as they had a right to lend them money on a personal security, the only hope he could have of a verdict, was to show that the was not taken on a loan but on a strict bank discount, and this question the Chief Justice put to the jury, though there was scarcely evidence enough on the part of the defendant to warrant the raising of it.
    It is probably unnecessary to allude to the charge requested by the defendant’s counsel, and delivered by the court, and the question reserved upon it—for if this note was not taken by the plaintiffs by the way of a discount, then it was rightfully taken by them, unless indeed giving three checks, having the appearance of bank notes, instead of one for a sum of money, makes a man a banker.
   Per Curiam.

This was an action on a promissory note, dated March 31st, 1828, drawn by one Gannon, and endorsed by the defendant. The defence relied upon is, that the note in question was discounted by the plaintiffs, in violation of the provisions of the act restraining private banking associations, and is therefore void. According to the testimony of Lynch, the note in question was a renewal of a former note, which was discounted by him out of his private funds, the plaintiffs having no interest, directly or indirectly, in the original discount of it. It also appeared that the note in question, shortly before it fell due, was deposited withthe plaintiffs by Lynch, as collateral security for the pay merit of a check, drawn by him on the Manhattan Bank, dated the 22d of May, 1828. The amount of the check was advanced to Lynch, by the plaintiffs, in their own checks on the Tradesmen’s Bank. The Judge charged the jury, that if the advance of the money to Lynch, was a loan on the deposit of the note as a pledge or collateral security, the plaintiffs had a right to recover ; but if it was a discount of the note by the plaintiffs, the action could not be sustained, and he submitted that question to them, on the testimony of Lynch, and,the other proofs in the case. The jury found for the plaintiffs.

The charge of the Judge was in conformity to the decision in the case of the same plaintiffs v. Scott. [8 Cowen’s R. 717.] The Court of Errors there held, that the company was authorized by its charter, to loan money upon notes or bonds; and Lynch’s statement of the transaction (which was adopted by the jury) shows, that in the present case, there was no discounting of the note in the ordinary way of banking, but a mere loan on the deposit of the note, which had been previously discounted, with his private funds.

It is, however, insisted by the defendant, that the advance made by the plaintiffs to Lynch, in their own checks, under the circumstances, was an exercise of banking privileges. The checks in question, were printed on bank note paper, were drawn for small sums, as is usual with bank notes, had the appearance of bank notes, and were issued by the plaintiffs for the purpose of passing) and usually did pass as such. It appears also, that the checks in question, though made payable at the Tradesmen’s Bank, were not paid there, but at the office of the plaintiffs, and that the plaintiffs had no funds at the Tradesmen’s Bank. The statute [2 R. L. 234,] makes void all notes or securities given to any company, which, without authority of law, shall issue notes, receive deposits, make discounts, or transact any other business, which incorporated banks may or do transact, by virtue of their corporate powers. It has been decided, that the Utica Insurance Co. has no right, by its charter to carry on banking business, and with the exception of the power of loaning money by way of investment of its capital, it falls within the restrictions of the act. The question then is, whether the issuing of these checks, is, in truth, an issuing of notes, within the fair construction of the restraining act. That act must be’construed strictly, where it is to work a forfeiture, although the objects of the legislature, so far as they are disclosed, are to be carried into effect. The transaction in this case, cannot fairly be considered as a carrying on of banking business. The plaintiffs made no discount of paper, but merely a loan to Lynch; and the money was to be obtained by a presentment of their checks, the amount of which they were bound to pay. It does not appear, that they gained any thing by the transaction, either interest, or any other benefit. It would be too strict, to declare their security for the loan as utterly void; and, after some hesitation, we have come to the conclusion, that the plaintiffs are entitled to recover.

Motion for a new trial denied.

[J. L. Graham, Att'y for the plff. C. O’Connor, Att'y for the deft.]


text:
    Hugh M‘Keon versus David Lane.
    A petition for a discovery, under the provisions of the revised statutes, (vol. 2, p. 199,) must present a proper case for the equitable interposition of the court, or it will be denied. And where the petitioner can have all the relief the nature of his case requires, by pursuing the ordinary practice of the courts of law, the power of compelling a discovery, conferred by the statute, will not be exercised.
    This was a petition for a discovery, under the provisions of the revised statutes. The plaintiff brought an action of debt against the defendant, to recover of him the penalty of fifty dollars, [1 R. L. 524, sec. 20,] for not appearing as a witness in a certain cause, wherein M‘Keon was plaintiff, and one Caherty was defendant. It appeared by the petition of the plaintiff, (which was verified by affidavit,) that the original subpoena was served upon the defendant, instead of a copy; that the defendant received the original, retained it in his possession, and that the plaintiff had no copy in his possession, or under his control. He, therefore, prayed for an order to compel the defendant to deliver to him a sworn copy of the original, or to deposit it in the office of the clerk of this court, that he might take a copy, to be used as evidence at the trial of the cause.

      Mr. J. R. Whiting, for the defendant, contended,
    that he was not bound to answer, or make any discovery, which might subject him to a penalty. [He cited, 1 Pet. Rep. 100. 104. Bishop v.

      Bishop, Tothill’s R. 17. M. 1638. Cary v. Mildmay, Ib. 7. Bridg. Eq. Dig. tit. Discovery, vol. 1. p. 217.]

      Mr. D. Graham, contra, for the plaintiff,
    relied upon the statute. [2 R. S. 199. 281. He cited also, the 28th rule of the Supreme Court. 2 Arch. Prac. 196. 3 Anstr. 634.]
   Per Curiam.

The statute upon which the plaintiff has brought his action, can hardly be considered as a penal one. If it were, this court, following the practice and adopting the principles of the Courts of Equity, would refuse to grant the prayer of the petition. But the act in question is to be viewed, rather as a remedial act, and we may grant the relief sought, if the petitioner has presented a proper case for our interposition. The courts of law are not compelled, by the provisions of the revised statutes, to grant relief upon all occasions, but they are clothed with a discretion, to be exercised according to circumstances.

In this case, the plaintiff can have all the relief he requires, by pursuing the usual practice. He may give the defendant notice to produce the subpoena at the trial, and if he refuse to do so, the plaintiff can then give secondary evidence of its contents. The prayer of this petition must, therefore, be denied ; but we deny it without costs, and wish it to be understood, that witnesses, who disobey the process of subpoena, must abide the conse. quences of their disobedience, and will not meet with any particular favor from the court.

Prayer of the petition denied, without costs.

[D. Graham, Jun., Att’y for the plff. J. R. Whiting, Att’y for the deft.]


text:
    Jas. K. Hamilton, Administrator of Oliver G. Kane, deceased, versus William T. M'Coun.
    One M.'Kibben, having a claim upon a Fire Insurance Company for a loss, put his policy into the hands of the defendant (an attorney and counsel of the court) for collection,—and the defendant gave him a certificate that the policy was in his possession for that purpose. Upon this certificate M'Kibben made an endorsement, authorizing the defendant to hold the policy subject to the order of Kane, and delivered the same to him.
    The defendant then commenced a suit on the policy, recovered and received the sum of 1400 dollars thereon, and the intestate gave him a written notice of his claims upon M‘K., which appeared to be, chiefly, for certain no íes drawn by him and endorsed by one Hill.
    The defendant, not deeming it prudent to pay over the. money thus received to the administrator of Kane, an action was brought against him by the administrator, to recover the amount collected on the policy.
    At the trial, the plaintiff did not produce the notes, and the Judge, holding that there could be no recovery until the notes were produced or accounted for, nonsuited the plaintiff. Held, that the order made by M’Kibben, with the notice to the defendant of the intestate’s claim under that order, created an equitable assignment of M'K.’s cause of action, and that he had a right, prim& facie, to receive the fund without producing the notes. The nonsuit was therefore set aside.
    Assumpsit for money had and received by the defendant, belonging to the estate of the intestate. It appeared at the trial, that the intestate had held previously to his decease, certain notes of one MTiibben, amounting to 1475 dollars, which he had paid for MTi.’s benefit; but what had become of the notes, at the time of the intestate’s death, did not distinctly appear.
    MTiibben had placed in the hands of the defendant, an attorney and counsel of the court, a policy of insurance for collection, and received of him a certificate in the following words :—“ I “ have taken proofs of Mr. M’Kibben’s loss by the late fire, No. “ 132 Bowery, and have certified to the Brooklyn Fire Insurance “ Company, the amount of his loss to be on stock 3000 dollars, “ and on furniture 300 dollars, and this I believe to be correct “ from the proofs produced before me. The policy remains in my hands to await the answer of the company. (Signed) Wm. “T. M‘Coun, Feb. 14, 1827”
    Upon this certificate M’Kibben made the following endorsement:—Wm. T. M'Coun, Esq.—Sir, I hereby authorize you to hold' the policy of insurance expressed in the annexed note, received from you, subject to the order of Oliver G. Kane, Esq., New-York, 15th Feb., 1827. (Signed) Hugh M’Kibben.
    The certificate, thus endorsed, was delivered by him to Kane, and the defendant having commenced a suit on the policy, recovered a judgment, the net. proceeds of which, amounted to 1400 dollars.
    In the month of June, 1827, Kane gave to the defendant a special written notice and statement of his claim against M’Kibben, amounting in the whole to 1475 dollars.
    At the trial of the cause these facts were proved, but the plaintiff did not produce the notes against M‘Kibben, which laid the foundation of the claim of the intestate against him.. The defendant therefore contended, that norecovery could be had, unless the notes were produced, or a satisfactory reason for their non-production was shown, or until further proof was offered as to the debt due from M'Kibben to Kane. The defendant was ready to pay over the money to the person who had the rightful claim to it, but did not wish to assume the responsibility of paying it over to the plaintiff upon this evidence.
    The presiding Judge (Hofiman) being of opinion that the notes should be produced, or their non-production accounted for, before the plaintiff could recover, nonsuited him, and a motion was now made to set the nonsuit aside.

      Mr. Anthon, for the plaintiff, insisted,
    I. That the order on the defendant was a transfer of the policy of insurance to the intestate, and that after notice of such order, the defendant became the agent of the intestate, and finally received the money for his use. The intestate, he contended, in a controversy with such an agent, was not bound to prove the amount of his debt, but had a right to receive the whole sum, being liable to account to the drawer only.

      II. That the plaintiff could only be required to prove, in this suit, to sustain the action, that there was a subsisting debt. That the quantum was entirely unimportant as between these contending parties, and enough was proved on that head for the purposes of this action. Even if the transfer had been entirely gratuitous, the defendant (he said) had no right to question it. The Judge therefore, instead of nonsuiting the plaintiff, ought to have directed a verdict for the amount in the defendant’s hands. [Peyton v. Mallet, 1 Caine’s Rep. 363. 3 John. R. 71.]

      Mr. Staples, contra, for the defendant, contended,
    that the order did not indicate that any debt was due from M’Kibben to Kane. It was a bare authority, he said, constituting the latter the agent of the former, and this power was subject to revocation at any time. Kane limited his own claim to 1475 dollars, in his notice, whereas M'Kibben’s loss, as indicated by the certificate, exceeded three thousand dollars. It was quite evident, therefore, that the whole amount of the loss was not transferred to Kane, and the evidence did not show that the power was coupled with an interest.
    II. The plaintiff was bound to produce the notes or account for their non-production. They were in the hands of the intestate, who, at most, could only have received the order as collateral security for the notes. If this money be paid to the plaintiff what means will M'Kibben have of resisting the payment of the notes, -in a suit upon them ? The defendant is the agent of M>Kibben for the purpose of defending his rights, and the money ought not to be drawn out of the defendant’s hands upon this evidence.
   Oakley, J.

One M‘Kibben, having a policy of insurance, made by the Brooklyn Fire Insurance Company, and a loss having taken place, lodged it in the hands of the defendant, an attorney, for collection. On the 14th of February, 1827, the defendant gave a written certificate that the policy remained in his hands, and on the next day M‘Kibben endorsed, on the certificate, an instrument, by which the defendant was directed to hold the policy, subject to the order of Kane. On the 4th of June, 1827, Kane made a written statement of his claim against M'Kibben, which appeared to be, among other things, for the amount of certain notes drawn by him, and endorsed by one Hill. A suit was commenced by the defendant on the policy, and in February, 1829, he received the sum of $1400 as the proceeds of it. The defendant was duly notified of the order made by M'Kibben in favor of -Kime^and of the claims of the latter. This action is now brought by the representative of Kane, to recover the money thus collected by the defendant on the policy.

The Judge, at the trial, held, that the plaintiff could not recover unless he produced or accounted for the non-production of the notes, specified in the statement of the claim of his intestate, and nonsuited him on that ground. A motion is now made to set this nonsuit aside. It seems to me, that the order made by M‘Kibben, with the notice to the defendant of the claim of Kane, under that order, created an equitable assignment of the right of action of M‘Kibben against the Insurance Company. Kane became thereby entitled to the fund, to arise from the action on the policy, as a security for his claim against M‘Kibben. The defendant, from the time he had notice of that order, became, in the prosecution of the suit, the attorney of Kane, and when he received the avails of it, he received them for the use of Kane. Such appears to be the plain import and meaning of the whole transaction, and such is its legal effect, according to the principles of adjudged cases, [Peyton v. Hallet. 1 Caine’s R. 379. M‘Menomy v. Ferres 3. J. R. 83.]

It was intimated, on the argument, that the claims of Kane against M‘Kibben, had been satisfied by the latter, If that fact should appear on a future trial, and it should also appear that the defence in this case, is made at the request and for the benefit of M‘Kibben, it may probably be effectual, as it will then, be shown that the plaintiff has no equitable right to the money as against M'Kibben. But as the case now stands, the defendant having collected the money as the agent or attorney of Kane, cannot question his right to recover it, on the ground that a third person who, for any thing that appears, is a stranger to the suit, may have a better claim to it.

Nonsuit set aside.

[F. B. Cutting, Att'y for the plff. E. Anthon, Att'y for the deft.]


author: Per Curiam,

text:
    Jas. K. Hamilton, administrator of Oliver G. Kane, deceased, versus Palmer Canfield.
    The defendant sold a ticket to the intestate, in alottery unauthorized by the laws of this state, which drew a prize of 50,000 dollars. The defendant caused théjprize to be discounted for the intestate, who, upon the close of the transaction, permitted him to retain 10,000 dollars by way of loan, for which the defendant gave his own promissory notes to the intestate. An action for money had and received, being brought to recover the amount thus retained, the defendant set up the illegality of the transaction, under the lottery act, as a defence. Helb, that the loan of the money formed a good consideration for the assumpsit, and that the illegality of the original acts of the intestate and the defendant, in the purchase and sale of the ticket, could not be introduced as a defence to the action.
    Assumpsit for money had and received. Plea, the general issue. It appeared from the testimony, introduced on the part of the plaintiff, at the trial of the cause, that the defendant sold to the intestate, during his lifetime, a ticket in the “ Washington Canal Lottery”—a lottery established for the benefit of a company in the district of Columbia. This' ticket having drawn a prize of 50,000 dollars, on the 27th of December, 1826, the defendant procured it to be discounted by Yates & M‘Intyre, the managers of the lottery, on the 5th of January,following,for Kane; and afterwards, having come to a settlement with him, on the 8th of the same month, in relation to the prize, and the amount received for it, Kane permitted the defendant to retain out of the proceeds of the prize, the sum of 10,000 dollars, as a favor, by way of loan, and for this amount the defendant gave three several notes to the intestate.
    These notes were produced at the trial, and the defendant admitted that they had never been paid ; but contended that the whole transaction was illegal. That the money received of Kane, related to the sale of a ticket in a lottery unauthorized by law, and that the plaintiff could not therefore recover.
    The Chief Justice, (before whom the-cause was tried,) charged the jury, that if the transaction between Kane and the defendant was a mere sale of the ticket, the defendant would be entitled to a verdict; but if it was a payment of the prize, then, that the money borrowed of Kane, after the proceeds of the ticket had passed into his hands, formed a sufficient foundation for the action, and that the plaintiff was entitled to recover. He also charged them to find the fact specially, whether the transaction was a sale or a discounting of the prize.
    The jury returned a verdict for 10,000 dollars in favor of the plaintiff, stating, at the same time, that the transaction between the defendant and Kane, was not a sale of the ticket, but a mere discounting and settlement of the prize.

      Mr. Jay, on the part of the defendant,
    now moved for a new-trial. He contended, that the whole transaction was illegal, and that no cause of action could arise out of it. By the statute of this state, [ss. 42. ch. 206. sec. 3.] it is declared (he said) that any person who shall either sell or purchase a ticket in any lottery unauthorized by the laws of the state, shall be liable to be indicted for the offence, and On conviction, shall be subject to a fine and the costs of prosecution. The selling and purchasing of the ticket in question, was, therefore, by the force of the statute, an illegal - transaction. Kane acquired no title to the ticket by the purchase, and having no legal claim to the prize, he "could not maintain an action to recover the proceeds of it in any shape. To give him a right to claim the money, would be to give validity to a purchase prohibited by law. Kane could claim the money only upon the ground that he was the owner of the ticket; but as Ms claim to that is void by law, so his claim to the proceeds of it must be void also.
    Suppose the managers of the lottery had refused to pay the prize, could any action for it have been maintained by Kane? It is very clear, that he could not support any such pretence in a court of justice, considering the provisions of the statute; and as he had no legal claim to the prize, or the ticket, it is difficult to understand how he could maintain an action for the money received out of it, by the defendant. The illegal act lies at the bottom of the whole transaction, and if this action can be maintained, then the purchase of the ticket is made valid. The consideration for the implied promise in this case, springs from the sale of the ticket, or its transfer. But that is not a valid consideration, and it will not, therefore, support the assumpsit. [Carman v. Bryce, 3 Barn. and Ald. 179.]

      Mr. Anthon, contra, for the plaintiff, contended,
    that although the transaction, as between the original vendor and vendee might have been illegal, and in violation of the lottery act, yet that a third person, who had received a part of the proceeds of the ticket, after the lottery was drawn, by way of loan, could not set up the illegality of the original transaction by way of defence. Kane (he said) before the lottery was drawn, was the owner of the ticket.— After it was drawn, he procured his prize to be discounted by the managers. The defendant, as his agent, received the money, and then, Kane, by way of favor, loaned to the defendant the sum of ten thousand dollars, taking his promissory notes as evidence of the debt. Now, it can never be maintained, that he who borrows money of another, can protect himself against repaying it, by showing that the lender obtained the money by an illegal transaction. The money, as between the newly contracting parties, is not contaminated with the original taint,—and to allow such a defence, would disclose a source of fraud which would not long be left unexplored. [Tenant v. Elliott, 1 Bos. and Pul. 3. Farmer v. Russell, 1 Bos. and Pul. 296. Petrie v. Hannay 3 Term Rep. 418.]
   Per Curiam,

It is very clear, from the facts of this case and the finding of the jury, that the money obtained by the defendant from Yates & MTntyre, as the proceeds of the prize, was money had and received by him for the use of the plaintiff. It was obtained by him as the money of Kane, and so it was treated by the parties. Kane was evidently the owner of the ticket antecedently to the drawing of the lottery, and after the ticket was declared a prize. As the agent of Kane, the defendant undertook to convert the prize into money, and having succeeded in that undertaking, Kane loaned to him 10,000 dollars, being a part of the proceeds of the prize. Whatever there was of illegality in the transaction, as to the sale or purchase of the ticket, was perfectly past at the time of the transaction between the defendant and Kane.

The consideration of the new contract was wholly independent of the sale of the ticket, and in no way connected with that transaction, except that Kane obtained the money loaned to the defendant from that source. This action may, therefore, be maintained, without affirming the illegal transaction; and although Kane could not, perhaps, have enforced his claims for the prize against the managers, yet, having obtained the money for it, a borrower of that money cannot set up the illegal act of Kane in obtaining it, as a legal reason for not repaying the sum borrowed.

The defendant, after he had closed the whole transaction as to the sale of the ticket, and the collecting of its proceeds, borrowed a sum of money of Kane, for which he gave his notes. These notes are evidence of a new contract, arising subsequently to the the illegal transactions connected with the ticket. They remain unpaid. The plaintiff brings them into court, surrenders them up, and demands a repayment of the money loaned. His claim does not rest upon the transaction connected with the ticket, but upon a mere loan of money.

The money borrowed by the defendant, it is true, was at one time, incidently connected with a sale of a ticket in a lottery, unauthorized by the laws of this state, because it was the produce of that ticket. Kane and the defendant may have been liable to an indictment for a violation of the lottery act, and their conduct, in relation to the sale and purchase of the ticket, may have been entirely illegal. But it is too much to say, that the defendant can resist this claim upon the ground that Kane had violated the laws by the purchase of a ticket, and that, therefore, he is exonerated from the repayment of the money borrowed, because it was at one time the fruit of an unlawful transaction.

We are satisfied that this defence cannot be maintained, and the motion for a new trial must therefore be denied.

Motion for a new trial denied.

[E. Anthon, Att’y for the plff. P. A. Jay. Att'y for the deft.]


text:
    John Jones versus Cornelius R. Van Ranst.
   A motion for a retaxation of costs in this case was allowed, with directions, that in all cases where the opposite party requires it, the names of the witnesses who attend at a trial, or reference, shall be inserted in the affidavit of attendance; and that no fees be allowed to attorney or counsel, for attending at any adjourned meeting of referees, unless such adjournment shall be made on the application of the adverse party, or shall have taken place after a long interval of time, when from the absence of a referee, or other sufficient cause, no meeting has been held.


text:
    Mitchell Bomeisler and Lewis Bomeisler, versus The National Ins. Co.
    Where foreign plaintiffs become insolvent after the commencement of a suit, and the 100 dollars, required by the 55th rule of this court, are deemed an inadequate security for the costs which may accrue, the court will compel the plaintiffs to file proper security for the costs, and will stay proceedings until the security be furnished.

      Mr. J. Anthon, in behalf of the defendants in this cause,
    showed to the court, that the plaintiffs, (who resided in Philadelphia,) had become insolvent since the commencement of the suit, and he moved that proper security for the costs, which might accrue, should be filed ; alleging that the one hundred dollars, required by the usual rule, furnished an inadequate security. There were two causes, he said, pending between the parties, and his motion extended to both.

      Mr. Geo. T. Talman, contra, for the plaintiffs insisted,
    that there were no good grounds for the demand of additional security, as the cause had been long at issue, and the principa! part of the expenses of it had already accrued.
   Per Curiam.

The security furnished under the ordinary rule is not sufficient to indemnify the defendants for their costs, if they should in the end prove successful; and the plaintiffs must, therefore, furnish security to the amount of 200 dollars in each suit. In the meantime, the proceedings must be stayed for 20 days, in order to give the plaintiffs an opportunity to furnish the security required.

[Hoffman & Talman, Att'ys for the plffs. E. Anthon, Att'y for the deft.]