author: By the Court, Bosworth, Ch. J. Robertson, J.

text:
    Coster vs. Isaacs.
    1. A married woman, who carries on a separate business—as she is allowed to do by Laws of 1860, p. 157, oh. 90, § 2—and who purchases goods for the business, and uses them therein, is liable in an action for the price of such goods.
    2. So, if she leases a store for 'a business conducted by her, on her separate account, and uses it for that purpose, she is liable for the rent.
    3. It seems that a false representation by a married woman, carrying on a separate business, that she was making a contract—e. g. hiring a store—for the uses of such business, would render her liable for the stipulated price.
    4. An averment in the complaint, that the defendant, a married woman who carried on a separate business, represented at the time of making the contract that it was for the uses of such business, is sufficient upon demurrer. If the contract was not in fact for the use of such business, it must be alleged by way of defense.
    (Before Bosworth, Moncrief and Robertson, JJ.)
    Decided May 30, 1863.

      Appeal from an order sustaining a demurrer to the complaint.
    This action was brought by George W. Coster against Mary Ann Isaacs, to recover the sum of $400, as rent of a store in New York city, to he collected out of the separate estate of the defendant, a married woman. The allegations of the complaint, omitting the averments of the lease, entry, and occupation^ and non-payment of rent, were as follows: “ That on and prior to the 26th day of February, 1861, the defendant, Mary Ann Isaacs, was, and she has ever since been, a married woman, being the wife of one Lyon Isaacs, of the city of New York ; and that she was, at the date aforesaid, the legal owner of a separate property, consisting in part of a freehold estate in certain lands in the county of Kings, and in the county of Schoharie, in the state of New York, acquired and held by her under-and in pursuance of the laws of the state of New York, in respect to the separate estates of married women; and that the said Mary Ann Isaacs, at and prior to the date aforesaid, was engaged in carrying on a millinery business in the city of New York, in her individual name, pursuant to the laws in such case made and provided; and upon making application for the premises hereinafter described, represented herself to be a married woman, and that her husband had been unfortunate in business, and was unable to do any thing himself, and that she carried on the millinery business in her own name, and upon her sole and sepárate account, and wanted the premises for such business; that the said defendant is possessed of a sole and separate property, and is the lawful owner of the real estate hereinbefore mentioned, and holds the same as her sole and separate estate.”
    To this complaint the defendant demurred. The demurrer was sustained at special term, before Mr. Justice Monckeif, and the plaintiff appealed.

      Benjamin T. Kissam, for the appellant.
    I. The act of 1849, {Laws of 1849, 528, oh. 375, § 3,)' empowered the defendant to take and to hold the premises to her sole and separate use. (Darby v. Callaghan, 16 N. Y. Rep. 71.) And the act further provides that she shall take and hold in the same manner, and with like effect, as if she were unmarried. One of the effects, of taking and holding by an unmarried woman, is a liability for the payment of rent. Without any agreement, the law implies a promise to pay for the use and occupation. The defendant then, so far as the estate acquired by her under the agreement in the complaint is concerned, is to be treated as a feme sole. (Yale v. Dederer, 18 N. Y. Rep. 265, 271.) ' '
    II. The written engagement of the defendant having been entered into on her own account, for her own business, and her own benefit, her separate estate should be applied to the payment of the consideration for the use and enjoyment of the plaintiff’s premises. (Yale v. Dederer, 18 N. Y. Rep. 265, 273.) Such a consideration was contemplated in the same case. (22 id. 450, 461.) “The consideration must be one going to the direct benefit of the estate.” (Taylor v. Glenny, 22 How. Pr. 240.)
    III. The defendant is also liable under the act of 1860, (Laws of 1860, ch. 90,) authorizing a married woman to carry on any trade or business on her sole and separate account. (Barton v. Beer, 35 Barb. 78. S. C. 21 How. Pr. 309. Klen v. Gibney, 24 id. 31.)
    IV. This action is rightly brought against the wife only. (Code, § 114. Laws of 1860, 158, ch. 90, §§ 7, 8. Taylor v. Glenny, 22 How. Pr. 240. Barton v. Beer, 35 Barb. 78.) And judgment may be given against her for costs and damages, and executions issue. (Code, §§ 274, 287.)

      Thomas D. Sherwood, for the respondent.
    I. The complaint does not set forth with sufficient particularity the separate property of the defendant, or its nature, situation, or value. Without this, no proper decree could be made for its sale. (Coon v. Brook, 21 Barb. 546, 548.)
    II. Ho personal judgment can be recovered against a married woman for a debt contracted by her during coverture. The laws of 1848 and 1849 do not enable femes covert to contract debts or make notes not allowable prior to those statutes (Coon v. Brook, 21 Barb. 546, and cases cited. Morgan v. Andriot, 2 Hilt. 431. Yale v. Dederer, 21 Barb. 286. Switzer v. Valentine, 4 Duer, 96. Cobine v. St. John, 12 How. Pr. 333.) The statute of 1860 has not relieved femes covert of their prior common law disabilities to bind themselves by their contracts at large. (Yale v. Dederer, 22 N. Y. Rep. 450, 460.) The debt of a married woman can only be enforced in equity, • and as a charge upon her separate estate. (Dickerman v. Abrahams, 21 Barb. 551. Coon v. Brook, Id. 546.)
    III. The complaint does not set forth sufficient facts to entitle the plaintiff to a judgment, charging the debt of the defendant upon her separate estate. 1. The complaint does not allege that the debt was contracted in any relation to the defendant's separate estate. 2. It does not allege that the defendant charged or intended to charge her separate estate ; it does not ■ state that there was stated in the lease or contract itself an intention of the defendant to charge her separate estate. 3. It does not appear that the consideration was one going to the direct benefit of the estate itself. All of these allegations, and proof thereof, are necessary to so charge the estate. (Yale v. Dederer, 22 N. Y. Rep. 450. Dickerson v. Abrahams, 21 Barb. 551. Owen v. Cawley, 36 id. 52. S. C. 13 Abb. Pr. 13.)
   By the Court, Bosworth, Ch. J.

By chapter 90 of the laws of 1860, a married woman may “carry on any 'trade or business * * * on her sole and separate accountand “ the earnings,” thereof, will be hers, and “may be used and invested by her in her own name.” (Laws of 1860, 157, ch. 90, § 2.) • She may “sue and be sued in all matters having relation to her property * * * * • in the same manner as if she were sole.” (Id. 158, § 7.) An execution may issue against her, and direct the levy and collection of the amount “ of the judgment against her from her separate property, and not otherwise.” (Code, § 287.)

Hence, if she in fact carry on business on her own account, and purchase goods for and use them in the business, it would seem to follow that she can be sued for goods sold and delivered, and a recovery be had against her, and that such judgment may be collected. Whether her business is profitable, or not, or will benefit or waste her property, is immaterial. She has attained the dignity and possesses the capacity of every trader of an age to make a valid contract, and must pay for her purchases, or submit to a judgment, if sued.

So, too, if she leases a store for a business conducted by her on her separate account, and uses it for that purpose, she must pay the stipulated rent, whether the business be wise or foolish, or likely to be profitable or ruinous.

The only question then is, whether, when she buys on a representation that the goods are to be used in her separate business, or hires a store representing that it is to be so used, a vendor' or lessor, in a suit to recover the price of his goods or the rent due, must allege that the one and the other were in fact actually used in her separate business.

The complaint states that the defendant hired the store for a year, and that she entered and occupied the premises, and represented when she took the lease “ that she carried on the millinery business in her own name, and upon her sole and separate account," and wanted the premises for such business.” And it also alleges that she was at the time in fact carrying on such business.

If the complaint had further alleged that it was true, in fact, that she not only carried on this business upon her sole and separate account, but that she in fact used the demised premises as the place of prosecuting such business, I should consider it clearly sufficient.

It is not to be presumed that a married woman, having a separate property, would misrepresent or practice other deceit to hire premises or purchase goods. And, if inadvertently she should be guilty of such an indiscretion, I do not see that it follows that one relying on her good faith may not press his suit to a judgment against her.

If she did not in fact use the premises in carrying on her separate business, and if that fact should be a defense, I think she must allege and prove it.

I think the complaint sufficient, under the act of 1860, and that the order appealed from should be 'reversed.

Monoreif, J. concurred.

Robertson, J.

.It may readily be conceded that under the act for increasing and extending the liabilities of married women, passed in 1860, (Laws of 1860, 157,) if a feme covert purchase goods or hire a store to carry on a business in which she is engaged, she may make herself and her estate responsible for the value of such goods or .the rent of such store, whether such business, purchase, or hiring be profitable or not. So, too, if she make any contract in relation to and for the benefit of her separate estate, that estate is liable, whether the contract be a judicious one or not.

It does not, however, follow from such liability that every contract made by a married woman who happens to own separate estate, or is engaged in a trade, is binding on her estate or herself; and those which are not, certainly can not be made binding by any form of contract, or any act or declaration of hers, except an absolute transfer of her property. If they could, it would be very easy for a married woman, every time she made a contract not relating to her trade or estate, to bind her estate by signing a written declaration that such contract did so relate. Though an infant can make a contract" for necessaries, and a married woman,can bind her husband as his agent for articles necessary and suitable for her support, where he has made no provision for her, it has never yet been held that such infant could bind himself by a contract for superfluities by representing them to be necessaries, or that such married woman could bind her husband by representing, untruly, goods bought by her to be indispensable and proper for her support. An estoppel can not be raised against a person non sui juris, (McCoon v. Smith, 3 Hill 147,) except where it • operates to sustain a conveyance. (Martin v. Dwelly, 6 Wend. 9. Grout v. Townsend, 2 Den. 336.)

Whether a married woman' can make contracts of any number or extent for the purchase of goods, provided they be such as could be used in the trade in which she is engaged, or can hire any number of stores in which to carry it on, is not necessary to be decided in this case, as it is not alleged in the complaint that the premises hired were either useful, necessary, or proper in carrying on the trade in which the defendant was engaged, or was employed in it. It is true, the complaint states that the defendant occupied the premises hired by her, but not for what purpose, and also that she said when she got the lease that she carried on a certain business, and that she wanted the premises for carrying it on there. But this, at most, would be mere-evidence of the facts represented, and not equivalent to an averment of the facts themselves. ■

Possibly, an averment that the defendant used the premises hired by her as the place of prosecuting her business might be sustained as equivalent to an allegation that it was necessary and proper for it, although it would be at best but evidence of it. If it were conclusive, a married woman might hire a very large building, and, although she used only part for her trade, could make her estate liable for the rent of the whole.

I do not think the statute of 1860 meant to relieve entirely married women from the disability of marriage in making contracts, and make all their contracts good : otherwise it would not have been so minute and exact in its provisions. Parties dealing with them were evidently intended still to be required to use some caution in ascertaining that a contract entered into by them was necessary and proper for the carrying on of their trade or benefiting their estate. I do not see, if a married woman can bind herself for articles not necessary for her trade or estate by representing that they are, why she should not equally be able to do so by representing herself to be unmarried. If those dealing with them are not bound to ascertain ■ whether they are or not in the latter case, they should equally not be in the other.

I therefore think there is great reason why a married woman should not he held liable for a contract not necessary or proper to carry on any trade in which she is engaged, or for the improvement of her estate, by her merely stating that such contract is so. This would break down the last barrier between the disability of a married woman and the ability of a feme sole, by merely requiring a written .representation from the married woman.

The law, however, does. not therefore allow even married women to escape the consequences of practising an imposition ; they, as well as infants, may be sued for frauds perpetrated by misrepresentations, as well as any other torts, to the extent of the damage inflicted. It is true they may not be subject to arrest, and the only remedy of the party injured may be, as in former cases of torts, against' the wife and husband jointly. The statute of 1860 does not subject a married woman's separate estate to liability for torts. The provision of the seventh section was intended only to provide for the cases in which her property was liable under the act, (158,) and the 287th section of the Code was only intended to provide for the mode of enforcing judgments where a married woman was liable under the act of 1860.

But if this were an action for obtaining goods by deceit, the complaint "is not sufficient; it does not allege the falsity of the representations, the defendant's knowledge of them, or the plaintiff's reliance upon the representation in letting the premises, and is therefore defective.

In this case, the complaint contains an entirely unnecessary averment as to the ownership of real estate by the defendant; it does not appear that the contract sued upon was at all intended to benefit such estate; ánd if not, it would not be a charge upon it. (Yale v. Dederer, 22 N. Y. Rep. 460.)

I think the complaint insufficient as it stands, and that the order appealed from should be affirmed, with costs, with liberty to the plaintiff to amend in twenty days, upon payment of costs.

Order reversed.


source: Caselaw Access Project

author: By the Court, Robertson, J.

license: Public Domain

text:
    William Patterson, plaintiff and respondent, vs. William G. Patterson, defendant and appellant.
    1. A complaint in an action to set aside conveyances and other instruments affecting real property, on the ground that they were obtained by fraud, is not sustained by proof that they constitute a mortgage from which the plaintiff has a right to redeem. This is hot a mere variance, but a failure to prove the cause of action in its entire scope and meaning. ,
    2. If this objection be taken on a motion, at the trial before a referee, to dismiss the complaint upon the plaintiff’s evidence, it is available on appeal from a judgment for the plaintiff upon the referee’s report in his favor, although no exceptions were taken to the report upon the ground that the cavtse of action, as found, was' not that set forth in the complaint.
    (Before Moncrief, Robertson and Monell, JJ.)

    Heard October 6,1863;
    decided October 7, 1863.
    This was an appeal by the defendant from a judgment in the plaintiff’s favor entered upon the report of Murray Hoffman, Esq. referee, before whom the issues in the action were tried.
    The complaint alleged, in substance, that on the 9th of November, 1853, the plaintiff was seised of the legal title, and was owner and in possession of premises in the city of New York, known as 313, 315 and 317 Bleecker street. That his son, the defendant, to whom, by reason of his own ill health, the management of his business had been intrusted, fraudulently procured the premises to be sold by the sheriff upon a judgment for costs against the plaintiff, in a suit instigated by the son for that purpose. That the son bought another judgment against him (recovered by one Newell) and also fraudulently induced him to confess a judgment to him, the son, upon both of which the son redeemed the premises from the sheriff’s sale, and subsequently, also, fraudulently induced him to give a quit-claim deed of the premises, upon a promise to reconvey them ; finally, that he incumbered the title, and had refused to reconvey. The prayer for relief was that the defendant reconvey ; that the plaintiff be declared the true owner ; that an accounting be had; and that a certain mortgage described in the complaint be declared a lien on adjoining premises, belonging to the defendant, &c., and for an injunction pending the action, and for costs.
    The answer admitted the making of the conveyances, &c.; but denied the fraud, and also alleged, as a third defense, that the defendant being the owner of adjoining premises, Nos. 319 and 321 Bleecker street, and relying on, the title he had acquired to the premises now claimed by the plaintiff, had erected, with the knowledge and assent of the plaintiff, buildings partly on both premises, and that they could not be ' removed, and would be useless to the defendant without the land in question.
    The particulars of the evidence given upon the trial, which was very conflicting, are sufficiently indicated in the opinion of the court.
    After the plaintiff rested, the defendant moved to dismiss the complaint on the grounds :
    1. That no cause of action had been proved.
    2. That the facts proved would not alone entitle the plaintiff to recover any thing.
    3. That the cause of action alleged in the complaint was unproved in its entire scope and meaning.
    The referee denied the motion, and the defendant excepted.
    After the defendant had rested, the case was closed, and the referee made a decision merely holding the defendant to be a mortgagee in possession. But he reopened the case on the-plaintiff’s motion, to allow him to adduce testimony as to the respective and relative values of the property in question, and the adjoining property of the defendant. After such testimony was admitted, the defendant offered to prove that he received no part of the rents of the buildings No. 313, 315 and 317, intermediate June, 1861, and May, 1862. That during that time he paid all outgoings in respect of the premises’; but the rents were received by the plaintiff and appropriated to his own use. He also offered to prove that for long prior to June, 1861, he did not receive rents enough from said premises, Nos. 313, 315 and 317, to satisfy the actual necessary outgoings in respect of said premises. The referee refused to admit this testimony. To which, refusal the defendant excepted. . The defendant also offered to' prove by his own testimony and that of the plaintiff, that neither party intended by the several transactions between them, by any or either of them, to create the relation of mortgagor and mortgagee, The referee also refused to admit this testimony, to which refusal the defendant also excepted.
    The plaintiff being then recalled in his own behalf, the defendant’s counsel asked him, If when he gave the quit-claim to his son, he intended it as a mortgage ? Also, Was it not in order that he should hold the property in trust ? Both these questions were excluded upon objection, and the defendant excepted to such exclusion.
    The referee, in the written opinion accompanying his report, stated that it was not often that he had had, upon evidence, a more uncertain case to deal with j that he thought, after much consideration, that the conclusion best warranted was, that the relation of mortgagor and mortgagee in substance was the original true relation of the parties to each.other ; that the property was taken and held as security for the advances made by the defendant, and upon that basis the rights and claims of each were to be adjusted and determined.
    As a matter of law, he adjudicated by his report, that the plaintiff was entitled to a judgment, directing the defendant to convey and release to him the premises, now known as Nos. 313, 315 and 317 Bleecker street; upon his delivering to such defendant, a full and sufficient release and discharge of the adjoining premises from the lien of the mortgage specified, and also upon paying to the defendant the sum of $1134.15, being the difference between the sum he had found due to the defendant, from the plaintiff, and the proportion of such mortgage, which the defendant ought to bear. And that the plaintiff should release and convey to the defendant all that part of the property mentioned in the sheriff’s deed not comprised within the boundaries of .the parcels, Nos. 313, 315 and 317 Bleecker street.

      Judgment having been entered accordingly, the defendant now appealed.

      John Townshend, for the defendant, appellant.
    ' I. There was a failure of proof, and the complaint ought to .have been dismissed for that cause, on the defendant’s motion, (Salters v. Genin, 3 Bosw. 250. Walter v. Bennett, 16 N. Y. Rep. 250. Stearns v. Tappin, 5 Duer, 294. Kelsey v. Western, 2 Comst. 500. Texier v. Gouin, 5 Duer, 389. Moore v. McKibbin, 33 Barb. 246.)
    II. The facts proved at the close of the plaintiff’s case did not constitute any cause of action, and the defendant’s motion to dismiss the complaint ought to have been granted.
    (a.) The fact of the defendant’s obtaining the deed on a promise to reconvey; even if it raised a trust for the plaintiff, was a parol trust which the law does not recognize as against the plaintiff’s deed, absolute on its face. (Sturtevant v. Sturtevant, 20 N. Y. Rep. 40.)

      (b.) Moreover, the deed from the sheriff to the defendant being unimpeached, the plaintiff, at the time of the quitclaim, had nothing to convey and nothing to be conveyed.
    III. The sudden finding by the referee, that the parties stood in the relation of mortgagor and mortgagee, was a surprise to both, unwarranted by the evidence, and contrary to the evidence and the whole case made by the plaintiff. It was an hypothesis adopted by the referee merely to reconcile the testimony of both parties.
    IV. If a deed absolute on its face, may be proved by parol to be a mortgage, the defendant ought to have been equally allowed to prove that the deed in this case was not given as a mortgage. (Despard v. Walbridge, 15 N. Y. Rep. 374.)
    V. The defendant proved the third defense set up in his answer, and the facts proved estopped the plaintiff from after-wards insisting that the conveyance to the defendant was other than it purported to be. The defendant’s buying the gore and building was inconsistent with a trust or mortgage. (Palmer
      v. Smith, 10 N. Y. Rep. 303. Hall v. Fisher, 9 Barb. 17. Walter v. Post, 6 Duer, 363.)
    .VI. No attempt was made to contradict the testimony of the defendant, that in some years the property did not make up the expenditures. Yet the referee, in consequence of liis considering it impossible to state an account between the parties with accuracy, concluded to make the defendant no allowance for his excess of expenditure.
    VII. A mortgagor can not at his option, abandon the right to redeem a part of the premises. If he comes in to redeem he must be ready to redeem all. To allow him to elect which part he will redeem, and which abandon, would lead to great injustice.
    VIII. The judgment is so indefinite as to render it impossible to carry it into effect, or to know whether or not it has been complied with,

      Sterne Chittenden, for the plaintiff, respondent.
   By the Court, Robertson, J.

Although no exception was taken to the report of the referee, upon the ground that the cause of action, as found, was not that set forth in the complaint, which seems to be necessary in some cases, (Belknap v. Sealey, 14 N. Y. Rep. 143; Parsons v. Suydam, 3 E. D. Smith, 280;) yet the objection was distinctly taken on the motion to dismiss the complaint, after the plaintiff ■’s evidence had been introduced, that he had not established his cause of action, and, as will presently be seen, all subsequent evidence was admitted for another purpose, that of taking an account. A subsequent finding by the referee of an entirely different cause of action, although fully sustained by proof admitted for the purpose, would still less deprive the defendant of the benefit of such an objection, since in fact it would be an admission that it was well founded.

This becomes the more proper, as the referee, after deciding upon mere circumstantial testimony, that the parties stood in the relation of mortgagor and mortgagee, so as to entitle the plaintiff merely to redeem the premises instead of entirely avoiding the instruments assailed, prevented the defendant from introducing any direct testimony to disprove the existence of such relation. Heither party had charged or admitted it in the pleadings, or apparently attempted knowingly to prove or disprove it. Such an exclusion of evidence involves in the first place the question, how far it was a proper exercise of discretion, and not the deprivature of an absolute right. The order of introducing evidence, the recalling of a witness already examined, to prove a new fact or explain his testimony, and the opening of the case to allow new evidence, is within such discretion. A general introduction of new evidence on one side, as to any particular point not before touched, without a like permission to the other, would not be a fair exercise of it. The cutting off of testimony on one side, as to material points, would thus by the favor of the court to his adversary, after he had closed his case, work great injustice by preventing any rebuttal of that offered to make up such deficiency. Although the plaintiff’s testimony may have been sufficient to sustain the case, as found by the referee, it was equally pertinent to that set out in the complaint, notwithstanding that nothing was said therein, as will appear hereafter, of advances, or a security or mortgage therefor. It is evident that, although the referee had already determined in his own mind, that the transactions between the parties were loans secured by a mortgage, and that he could not decree any relief according to that view, until the value of the different parts of the premises, as well as the amount of advances had been proved; so that the evidence could not be closed, until after such proof of value had been given. Yet evidence of value would have some bearing on the nature of the instruments executed to the defendant. If it greatly exceeded the amounts advanced by him, it might tend to show them to have been intended to be mortgages, or something else than absolute conveyances. The permission given to the defendant, to give proof of value to rebut that conclusion, would not the less render the exclusion of evidence on his part to prove there was no mortgage improper; a.s he was entitled to introduce, if any, all kinds of evidence to do so. He was permitted, it is true, to introduce evidence of advances of money, but that merely affected the terms of redemption and the state of the accounts, although in some measure it might have borne on the question of the nature of the instruments. He was even prevented from showing that the property did not yield enough, part of the time, to pay expenses, or that the plaintiff appropriated the rents, during 'another part, to his own use.

If it be possible, However, that the exclusion of the evidence on the defendant’s part to disprove any relation of mortgagor or mortgagee was a mere exercise of discretion, although stretched to its utmost limits, and as a question of surprise only be available as a motion for a new trial at special term ; there are still questions involving the merits embraced in the appeal taken.

I have been unable to reconcile the cause of action as found by the referee with that made in the complaint. That does not state any money advanced or agreed to be advanced by the defendant; on the contrary, it alleges as evidence of the continuance of the plaintiff's ownership, his payment of the Newell judgments, his furnishing the money to the defendant to pay those of Crosby and McDonald under which the sale was made, and his payment of interest on the mortgage, the taxes, water rates and expenses of repairs and alterations on the property, as-well as his receipt of rents from tenants, and even apparently from the defendant. There were no other moneys advanced or to be advanced but those. The plaintiff alleges in, his complaint that the judgment confessed by him was given to enable the defendant to redeem and on his promise to convey the property to the plaintiff as soon as he had done so. So too he alleges therein that the quit-claim was given to enable the defendant to procure a new loan and on a promise of reconveying immediately afterward. No terms, qualifications or conditions are stated as to such reconveyance; on the contrary, it is alleged to have been peremptorily demanded. There is no pretense of the defendant taking security for any sums to be advanced, or any admission of any advance. The assumption that the instruments assailed by the complaint were taken as security for sums advanced and to be advanced, and valid as mortgages, contradicts the main charges in it. There is no evidence of any promise to reeonvey, except the plaintiff’s testimony ; he does not seem able to state any terms or conditions of reconveyance, and the defendant utterly denies the making of the promise itself.

The referee has found that the plaintiff relinquished his right to the part of the premises on which Nos. 319 and 321 Bleecker street are built, but has not stated whether this was done by writing or orally. There is no evidence of any such written relinquishment. The only ground of inferring one of any kind was that the plaintiff did not not collect the rents of' them, but told the builder (Rodgers) that he did not own the rear ground.

It will not be necessary to inquire minutely into the question whether there is evidence in the case to sustain the referee’s findings, which must ultimately rest wholly upon the superior reliance to be placed upon the plaintiff’s testimony rather than upon that of the defendant, notwithstanding the disproof of the former in various particulars, such as his payment of different judgments, his ignorance as to such judgments, and his never having held himself out as agent or given receipts as such, his contradiction of himself, and the deplorable uncertainty and feebleness of his memory in many particulars, owing perhaps to his age. And yet the most important parts of the defendant’s answer are virtually sustained by the report. That, and the account on which it is based, concede that the defendant bought the Newell judgment, that the moneys' for which the judgment was confessed were really due, that he paid his own moneys to redeem under the sheriff’s sale, employed the moneys received from the savings bank to pay the Loan and Trust Company, bought and paid for the gore, and put up the buildings on it at his own expense, and paid $500 on account of the mortgage on the premises. The plaintiff undoubtedly let the premises and occupied part, received the rent of the rest and expended part of it for the support of himself and family, and furnished moneys therefrom to the defendant to pay taxes and incumbrances. The only question is, in what capacity he so received and expended the rents. The defendants claimed that the plaintiff acted as agent, and he is supported by the plaintiff’s own statements in writing and under oath, and his denial of ownership, and the fact that for nearly two years he made no attempt to get back his title, and did some further act to preclude himself from claiming the land on which 319 and 321. Bleecker steeet stood. The defendant also stated that the plaintiff retained the amount expended on the understanding he was to get his living out of the premises after paying taxes and incumbrances. This does not seem to be a very unnatural arrangement between a father and son, where the latter has twice saved the' property from sacrifice by taking up judgments and redeeming it, and .where the former has no1 means to pay off the latter advances ; and it is at least equally reconcilable with the facts proved, as the existence of a mortgage.

The explanation given by the learned referee of the plaintiff’s statements of being agent, to wit, that the defendant was mortgagee in possession, is unsatisfactory. The plaintiff claims he was never out of possession, he continued to occupy part of the premises, rented the rest, received the rent and paid the incumbrances as owner ; the defendant occupied only a part, and for that the plaintiff says he paid him rent. One or the other statement is clearly untrue. There is a singular deficiency in this case of corroborative testimony apparently within reach on both sides. It would be very dangerous, after the lapse of ten years, to take away a title derived under hostile proceedings-against the plaintiff, by converting an absolute deed from a sheriff into a mere mortgage to the party to whom it was given, solely on the testimony of the supposed mortgagor if so contradictory and contradicted.

The promise to give a deed back, could not convert the defendant into a mortgagee. He might be rendered a trustee, in case he had induced the plaintiff, himself, to abstain from redeeming; but there is no evidence of. that. Any misrepresentation in regard to the quit-claim deed could not deprive the defendant of the title which he acquired by redemption under the Newell judgment, independently of his right to redeem under his own; and which he could havé acquired without any assistance from the plaintiff.

But the main difficulty still remains, that the referee has given judgment in a cause of action as found hy him, entirely different from that sued upon and set out in the complaint. That .was for fraud in obtaining a deed from the sheriff and a •quit-claim deed from the plaintiff. The fraud claimed, consisted in instigating a suit in the plaintiff’s name, allowing a judgment to be obtained against him for attorney’s fees in such suit, omitting to apply moneys furnished to pay such claim, procuring a sale by a sheriff, using a previous judgment that had been paid by the plaintiff, and 'one newly confessed, to redeem from such sale, inducing the plaintiff to believe that the title was still in him, and procuring a quit-claim on a promise forthwith to reconvey, and a false representation of the object of procuring it. Such fraud not being proved, the referee has found a cause of action on contract, by which the defendant, without any fraud, took the Newell judgment, sheriff’s and quit-claim deeds merely as security for moneys advanced and to be advanced. This is not a case of variance under the 169th section of the Code,' but a failure tot prove the cause of action in its entire scope and meaning. (Saltus v. Genin, 7 Abb. 193. Texier v. Gouin, 5 Duer, 389. Walter v. Bennet, 16 N. Y. Rep. 250. Kelsey v. Western, 2 Comst. 500.) An amendment of the pleadings to correspond with such findings, even if it could now be made, would change, substantially, the claim; an action to set aside entirely for fraud being entirely different from one to redeem from a mortgage.

No stronger case can well be imagined of surprise, than by proving an entirely different cause of action from that set out in the complaint. Had the pleadings been at common law, as formerly, a replication which had set up the cause of action such as that found, would have been such a departure from the complaint as to make the replication defective. The issues were tried on a question of fraud, to which alone the testimony was directed. • The referee, although, held that by indirection and inference it established circumstantially a contract not set up in the complaint, yet refused to allow the defendant to introduce direct testimony to rebut such inference. The report-therefore was unwarranted by the evidence.

The judgment should he reversed, and the order of reference discharged; a new trial to he had, and the costs of the appeal to abide the event.


author: Bosworth, Ch. J. Robertson, J.

text:
    Spencer S. Benedict et al. plaintiffs and respondents, vs. Cornelius Vanderbilt, defendant and appellant.
    1. The statute of this state (laws of 1850, p. 81, cll. 72,) providing for the appointment of harbor masters for the port of New York, to regulate the position of vessels there, and imposing upon every vessel entering the port and loading or unloading,-or making fast to wharves,’ fees to he paid to the harbor masters, in proportion to the tonnage of such vessels, is not in conflict with the provisions of the constitution of the United-States, which give'congress the power “to regulate commerce,” and forbid the several states “to lay duties on imports or exports, or any duty of tonnage.”
    2. It is competent for a state to establish local port charges, for services rendered by its officers to vessels and cargoes within its ports, in carrying out lawful and necessary municipal and police regulations.
    (Before Bosworth, Ch. J. and Robertson and Barbour, JJ.)
    Heard December 20, 1862;
    decided May 30, 1863.
    This was an appeal from an order overruling a demurrer to the complaint.
    The action was brought by the plaintiffs, Benedict, Paten, Hall, Fagan;-1-Barber, Marche, Stagg, Brennan, Schultz, Brainard and Kelsey v. the defendant (Vanderbilt.) The plaintiffs were the harbor masters of the port of Hew -York, and sued to recover double fees under the statute of this state (Laws of 1850, 81, ch. 72,) up.on the refusal of the defendant, who was the owner of several steamships, to pay the fees prescribed by that act, for using the harbor and wharves of the city of Kew York, as therein described:
    The complaint sets forth, that the plaintiffs, from the 7th of May, 1857, to and including the 30th of June, 1857, were harbor masters of the port of Kew York, appointed under a law of that state, and as such entitled to demand and receive from the commanders, owners, and consignees, or any of them, on all ships or vessels of the United States, which shall enter the •port of Kew York and load, or unload, or make fast to any wharf therein, one cent and one half of one cent per ton, to be computed on the tonnage expressed in the register or enrolment of such ships or vessels; with fees to be equally divided among the plaintiffs. That by the law of the state it was made the duty of the master, owner, or consignee of súch ship or vessel to pay such fees within a certain time (forty-eight hours) after the arrival of such ship or vessel, at the office of such plaintiff, such harbor masters, or one of them, and in default of payment on demand, such master, owner, or consignee should forfeit and pay double the amount of such fees, to be sued for and recovered in the names and for the use of such harbor masters in any court having cognizance thereof.
    That the defendant was, during the time before mentioned, the owner of a steamship or- vessel, called the Vanderbilt, a United States vessel, which was, by her registry, of the tonnage of 3360 tons. (The ownership and tonnage of other steamships, Korth Star and Ariel, were in like manner also stated.)
    That about the 7th day of May, 1857, the steamship Vanderbilt, then belonging to the defendant, arrived at the port of Kew York from a foreign port, and made fast to a wharf therein, and loaded and unloaded thereat; whereby the plaintiffs became entitled to demand and receive, and the said defendant became bound to pay, within forty-eight hours after the arrival of such vessel, the sum of $50-40 for such fees.
    Similar averments were made as to an other voyage of the Vanderbilt, and as to voyages of the other vessels named.

      The plaintiffs further alleged in such complaint that long after the lapse of forty-eight hours after the several arrivals of such several steamships in the port of New York, the defendant failed to pay the said fees or any part thereof. A personal demand and refusal of them was then alleged, and judgment demanded for $296.54, being double the aggregate of the fees named.
    To this complaint the defendant demurred, assigning as ground thereof, that it did not state facts sufficient to constitute a cause of action. The objections relied on were, 1st. That the words of the statute were so ambiguous and uncertain that they were unintelligible, and could receive no construction. 2d. That the law was unconstitutional, because it imposed tonnage duties. The demurrer was heard at special term, before Mr. Justice Hoetmaít, who sustained the complaint, and from his order thereon, entered July 1, 1859, the defendant took this appeal.

      Wm. M. Evarts, for the defendant, appellant.
    I. The duty imposed by the fourth section of the statute of New York is a tonnage duty. Its imposition is void therefore as repugnant to the constitution of the United States, prohibiting the imposition of tonnage duties by a state. (Const. U. S. art. 1, sec. 10, subd. 2. Story on Const. §§ 1013, 1016, 1018, and cases cited in subsequent sections.)
    II. That the payment exacted is, in the strictest sense, a duty of tonnage, is apparent from the tenor of the act. That imposes' it upon vessels, not in remuneration of services requested or performed in respect of them, but upon their mere entry into the port, and coming up to the wharf, and apportions it according to the register tonnage of the vessel.
    III. The smallness of the duty does not vary its character. Á duty of ten dollars per ton is, in principle, undistinguishable from the imposition complained of. If the small duty be valid, any larger one would be equally so.
    IY. The application of the revenue raised by the duty to purposes connected with the regulation of the port and the vessels using the same, does not relieve the imposition from invalidity. The power to lay the duty is not dependent upon the application of its proceeds. If the imposition be valid when the duty is applied to compensate the harbor masters, it would be equally so if the duty were appropriated to the salary of the state officers, or the support of common schools.
    V. The whole spirit and effect of this law of the state is at variance with the fundamental purposes of the federal constitution in the control of navigation and commerce, whether in respect of foreign nations, or in respect of uniformity among the states. The act in question in its third section, discriminates, in its burdens, between foreign and domestic vessels. (Const. U. S. art. 1, § 8, subd. 1, 3 ; § 9, subd. 5.)
    "VI. The imposition of the dutybeing void, the double or penal duty, imposed .for omission of voluntary payment, can not be enforced.

      Gilbert Dean, for the plaintiffs, respondents.
    I. The words of the statute are express and clear, and not uncertain or ambiguous. The words are, “one and one half of one cent per ton,” making it fixed and definite.
    In the 5th edition of the Revised Statutes, page 422, it is misprinted as “one and one half of onecer cent, per ton.”
    If, however, the law ■ was as there printed, the meaning would be obvious, and could only be the same that the express terms of the law provide.
    II. There is nothing in the law repugnant to the constitution of the United States.
    1. Harbormasters are necessary local officers,»vested with powers to regulate and station vessels entering the port of New York, using our wharves and piers, and having the protection and advantage of our local laws and authorities. The law simply fixes their, compensation and mode of payment, and in doing so, uses the words, “ per ton,” but in no sense within the meaning of the constitution of the United States imposes “ duties of tonnage.” (Gibbons v. Ogden, 9 Whea

      ton, 1. Mayor of N. Y. v. Milne, 11 Peters, 102. Smith v. Turner, 7 How. U. S. Rep. 283. Norris v. City of Boston, 7 How. U. S. Rep. 285. Cooley v. Board of Wardens of Phila. 12 How. U. S. Rep. 299. Cases cited in 5th edition Kent’s Com. vol. 1, p. 490, note as well as text of marginal page 439. Howell v. State of Maryland, 3 Gill, 14. Cisco v. Roberts, 6 Bosw. 495.)
    2. The state has the right to tax any property or person within, its jurisdiction, having the benefit of its protection, to meet the expenses of such protection. Having the power to tax, it has the right to determine the extent of the taxation, and the character of the property to be taxed. In this case, the complaint alleges that the ships named in the complaint were in the port, at the wharves, and discharged cargo at and used the same.
    3. The imposition of the payment has nothing to do with the question of commerce. The state finds property within its jurisdiction, the owner of which is á citizen and a resident of this state. The property belongs here, and is taxed to support the expenses of the state, not because it is a ship or vessel, but because a ship or vessel is property, and liable to taxation. Any other doctrine would render unconstitutional almost every law which imposes a tax to meet the expenses of administering the state government. The law. wisely makes this kind of property pay the expenses of. its care while within its jurisdiction. With equal force could the objection be applied to wharfage laws, which are always fixed by the tonnage of the vessel.
    III. Great .stress is laid by the defendant upon the fact that any vessel entering the port and making fast to the wharves thereof, is obliged to pay the fees, whether any service is performed by the harbor master or not, for that particular vessel. The answer is obvious. He is always performing service, and is always upon duty, and each vessel has the benefit of the service thus rendered. The same rule of reasoning would hold good in regard to any property taxed, unless it received the actual physical action of some state officer, This is asking too much.

      IV. There is nothing in the spirit of the law antagonistic to the constitution of the United States. The law does not control commerce, or navigation, but simply makes property within the state liable to pay for its protection while so within it. All pilot laws would be equally offensive, and the imposing of' a fine for lying with jib-boom rigged out would be equally objectionable.
    V. The states, before the adoption of the constitution of the United States, had the right to impose taxes. That right has never been surrendered, and they still possess it. Possessing the power to tax, its exercise can not conflict with the constitution of the United States, much less any discrimination in exercise.
    VI. The state having the right to direct the payment of the fee within a limited time, have a right to impose a penalty for a non-compliance.
   Bosworth, Ch. J.

Chapter 72, of the Laws of 1850, (Laws of 1850, p. 81,) provides for the appointment of eleven harbor masters, (§ 1;) specifies the security they are to give for the-faithful performance of their duties, (Id. § 2,) and defines their powers. (Id. § 3.)

Section four, (under which this suit is brought,) regulates these fees ; and section five declares when such fees shall be payable, and by. whom they shall be paid, and the consequences of non-payment.

Section six, in addition to the powers enumerated in section three, grants to the harbor masters certain powers as health officers.

Section three confers on the harbor masters “ authority to regulate andsstation all ships and vessels in the stream of the East or North River, within the limits of the city of New York, and the wharves thereof;” to remove those not employed in receiving or discharging cargoes, to make room for others requiring immediate accommodation; and to determine how far, and in what instances, it is the duty of the masters and others having charge of the ships and vessels, to accommodate each other, in their respective situations.

It is not objected that the powers conferred by this section may not lawfully be conferred by state authority, on harbor masters whom it appoints to exercise them ; nor that the compensation which the statute prescribes for the services, is unreasonable, or disproportioned to their value.

The vessels liable to pay the prescribed compensation, are those “which shall enter the said port of New York, and load or unload, or make fast to any wharf therein.” (Id. § 4.)

The powers granted by section three do not aim to regulate trade and commerce between the port of New York and foreign ports, or in any matter affect it. The statute designed that the exercise of them should effectuate lawful and necessary municipal and police regulations. And that section does not conflict with any act of congress upon the right attempted to be drawn in question, by the defense to this action.

The fees or compensation prescribed by sectioú four, are, in their nature and intent, local port-charges for services rendered to vessels and cargoes in port.

It is no part of the design of the law to levy a tonnage duty, or an impost on imports or exports, under the name of fees or compensation, to be paid to the harbor masters.

The case of Cooley v. Board of Wardens of Port of Philadelphia et al. (12 How. U. S. Rep. 399, 214,) and the opinion of the court are ■ quite pertinent to the present case, and support the plaintiff’s right to recover.

In my opinion the order appealed from should be affirmed, with costs.

Robertson, J.

A statute of this state provides that every vessel entering the port of New York, which “ loads or unloads, or malees fast to any wharf therein,” shall, within a specified time thereafter, pay , certain fees to the officers denominated harbor masters ; which fees are graduated by the tonnage of ■ such vessel, (Sess. L. 1850, ch. 72, p. 81, § 4, 2 A. S. 5th ed. 422.) In default of such payment, a penalty of double the amount is imposed upon the owner, master or consignee of the vessel, who refuses to make'it. (§ 5.)

The constitution of the United States gives congress power to collect duties ; but they are to be uniform throughout the United States, (art. 1, § 8, first clause ;) and to regulate commerce with foreign nations, and among the several states, (Id. clause 3;) while it prohibits states, without the consent of congress, from laying any imposts, or 'duties on exports or imports, except what may. be 'absolutely necessary for executing its inspection laws,” or “ any duty of tonnage.” (Art. 1, § 10, clause 2.) It is claimed that the statute of this state, before referred to, violates all such provisions. •

The power of congress, to collect duties, and regulate commerce, was held in Cooly v. The Port Wardens of Philadelphia, (12 How. U. S. Rep. 299,) not to interfere with any right of the states to levy duties or regulate navigation as a part of commerce for local purposes, if hnoion and practiced at the time of the' adoption of the federal constitution as distinct from levying duties for general purposes of revenue. (Per Curtis, J. p. 312 et seq.) It was also there held, that the enforcement of the payment of sums of money, by way of penalty, to promote an established general policy employed to accomplish, such local purposes, was not an evasion of the restrictions on the state as to imposts or duties, or on tonnage; and even that any indirectness of appropriation of such penalties, by a trust, for the benefit of the officers appointed to carry into effect the local purpose, did not convert such penalties into revenue duties, within the meaning of the constitution. (Id.). In other words, that the statute then under consideration was not a covert attempt ‘ to legislate ” for revenue, under pretence of legislating to enforce a system of pilotage.

In that case a penalty of half pilotage was. imposed by a statute of the state of Pennsylvania, upon persons refusing to take a pilot, and it was held to be a valid mode of carrying out the system of supporting a pilot service, known in all countries, and practiced at the time of the adoption of the constitution, and better regulated in each port according to the laws of the state in which it was situated, than by any general or uniform law, which must necssarily do practical injustice. The duties to be levied by the general government for the general purposes for which it was created, are required to be uniform in all the states ; while the labor and danger of pilots, according to which they should be remunerated, would necessarily vary in every port.

The question, then, in this case is : Whether the payment of the fees in question,- or the penalty for not paying them, tends to support a system of local advantages and regulations, better conducted by the local legislature of the state, known at the time of the adoption of the constitution, as distinct from á revenue raised by means of duties, to support a national government, when that government can make no distinction between states or ports, as to any duties to be raised to defray the expenses of their local use. This Can best be determined by ascertaining the accompanying acts required to be performed to deserve the fees in question.

By the first section of the state act in question, eleven harbor masters are authorized to be appointed, five previously masters of vessels sailing from this port, pilots engaged in piloting vessels therein, or seamen engaged in navigating the waters of New York harbor, They are to have authority to regulate and station all the vessels within' the limits of the city, remove unemployed vessels to render room for those employed, and determine the obligations of masters of vessels to accommodate each other; in all which matters they are to act quasi judicially. (§ 3.) These are certainly duties necessary to be discharged in all commercial ports in the world, and were undoubtedly so at the time of the adoption of the constitution, and duties or fees, whether measured by the tonnage of the vessel or not, when raised by different states to compensate such officers commensurate with the trouble in different ports, were not such duties as were to be raised by the federal government uniformly in all parts of the United States for general purposes. Judge Ourtis, in the case already cited, expressly names charges for wharfage, towage, “or any other local port charges, for services rendered to vessels or cargoes,” as distinct from duties on tonnage, and Judge Daniel, in the same case, holds that the powers delegated to congress in the constitution do “ not extend to the means of precaution or safety adopted within the .waters or limits of a state for safety of vessels or cargoes j” that such means are “essentially locab-^-depend upon local necessity—can not he uniform-^-have no connection with traffic, and belong to the same conservative powers as” those which “direct a vessel’s mooring or position in port, for safety of life and property, in reference to herself or other vessels’ cargoes or crews.” That such “power has been exercised by every state since the dawn of its existence,”, dan be “practically and beneficially applied by local authorities only, is not expressly delegated to congress, and does not necessarily conflict with the right to establish commercial regulations,” and is an original and inherent power.

It is possible that if such statutory provisions should conflict hereafter with any regulation of commerce by congress; they would be compelled to yield ; at present there are no such regulations, and therefore they are not void as interfering with the exercise of that power. (Cooley v. Port Wardens of Phila. ubi sup.)

The harbor masters’ fees are exacted not for entering or anchoring in the harbor, but using' the territory of the state “ by loadiny or unloading or making fast to wharves.” As touch service may he rendered by them in toalring or keeping room for the vessels arriving at the wharves where they unload, as if they had done some positive act in placing them there. A general regulation of the position of vessels in the harbor is a service to all who avail themselves of the wharves. It prevents collisions, disputes, and embarrassments of various kinds, and not only guards their safety, but facilitates the delivery of their cargo. It would be almost impossible to decide in many cases whether the exercise of the privilege of loading or unloading at a- particular wharf had or had not been the result of the action of the harbor masters ; and it was a fair exercise of legislative discretion to determine that the mere fact of loading or unloading or fastening to a particular wharf, was the result of the exercise by the harbor masters of their functions in the particular case and giving them the corresponding compensation. A penalty for not complying with provisions for keeping up a pilot system, partieulary when only appropriated to a charitable fund for pilots and their families, is much farther from a compensation for pilot service, than is the payment of fees to a harbor master for the privilege of loading or unloading at or making fast to a wharf, from compensation for regulating the position of vessels generally in a harbor.

I think the order or judgment appealed from should be affirmed, with costs.

Barbour, J. concurred in the conclusion.

Order affirmed.


author: Monell, J. Robertson, J.

text:
    Calvin Huntington, plaintiff and respondent, vs. Charles and Thomas Douglass, defendants and appellants.
    1. In an action for damages for the conversion of goods bought by the plaintiff of the defendant, but left in the possession of the latter, under a special agreement, if the only proof of a conversión is a demand and refusal, evidence is admissible that, at the time of the sale, the plaintiff knew that the goods belonged, not to the defendant, but to a third person, who, before such demand, took the goods away from the defendant against his will.
    2. So is evidence that before the demand they were seized by the sheriff, on an attachment against such true owner. ■ a
    3. The ordinary warranty of title, implied in a sale of chattels, does not estop the seller, in an action for non-delivery or conversion, from setting up that he had been deprived of their possession by paramount title. (Per Robertson, J.)
    (Before Moncrief, Robertson and Monell, JJ.)
    Heard October 9, 1863;
    decided November 14, 1863.
    This was an appeal from a judgment entered on a verdict for the plaintiff.

      The action was to recover damages for the conversion of certain goods, alleged in the complaint to have been “ converted” by the defendants to their own use. The defendants, .by their answer, denied the plaintiff’s ownership of the property. They also denied any conversion thereof by them.
    The cause was tried on the 25th of March,. 1853, before Mr. Justice White and a jury.
    The plaintiff read in evidence an agreement signed by the defendants, in the following words and figures:
    “We, the undersigned, have sold to .Calvin Huntington,' and delivered, as per invoice rendered this date, four thousand five hundred and forty-nine AA dollars, tools and mdse., for the sum of two thousand two hundred and fifty dollars, cash paid to Harlow Huntington, on debts due him from the Douglas Manf’g Co.
    • The aforesaid- goods are all stored in the northeast side of the upper basement of the store now occupied by us, No. 68 Beekman street, N. Y., insured in the name of Calvin Huntington, and held subject to his order, any portion of which he may order sold, on consignment, by us, for which sales we agree to pay monthly, in cash, the amount the goods cost him. The proceeds of the goods, over and above the-costs and charges to Calvin Huntington, to go to the payment of other liabilities of Harlow Huntington, for N. R. Douglass.
    June 21, 1861.”
    The plaintiff also introduced in evidence, an invoice or bill of parcels of the goods, mentioned in the foregoing agreement rendered by the defendants, which was headed:
    “ Mr.% Calvin Huntington,
    Bought of Thomas Douglass.”
    After which followed the items of goods sold, with their prices, amounting in the aggregate to $4549.53. Such bill of parcels bore date on the same day as the agreement. Below it was a receipt signed by the defendant Douglass, as follows, viz : “Rec’d payment on the condition specified in the agreement.”
    There was no manual, delivery of the goods, or any other than that (if any) evidenced by the before mentioned written instruments, and their being separated and placed by themselves in a part of the defendants’ store. The papers were signed at the store of the defendants, in whose basement the goods in question then were.
    Subsequently such goods were demanded by the plaintiff of one of the defendants, (Charles Douglas,) who refused to deliver them.
    The defendants offered at the time to prove that the goods in question belonged to one Ames, and that the plaintiff knew, this at the time of the sale to him, and that before any demand was made by the plaintiff of the defendants, he (Ames,) notwithstanding the opposition of the defendants, took possession of the projoerty and removed it from their premises. This evidence was excluded by the judge, and the defendants excepted.
    There was some conflicting evidence as to the delivery of the bills of sale to the plaintiff; the defendants testifying, substantially, that the person (Bottom) to whom the paper was delivered, as the agent of the plaintiff, was not to deliver it until the money was paid, and that the'money had not been paid. This was contradicted by both Bottom and the plaintiff.
    The defendants also offered to prove that before the plaintiff demanded the goods, a portion of them had been taken and removed by the sheriff, under an attachment against Ames.
    ' This evidence was also excluded by the judge, and the defendants excepted.
    At the close of the evidence the judge directed a verdict for the plaintiff, instructing the jury to assess the damages from the evidence before them. To this the defendants excepted.
    The jury found a verdict for the plaintiff, and assessed the damages at $5112.10.
    From the judgment entered upon the verdict the defendants appealed to the general term.

      Thomas Nelson, for the defendants, appellants.
    I. To sustain this action, which would have been an action of trover at, common law, the plaintiff must prove a title to the property either general or special, with the right to its immediate possession, and a conversion by the defendants.

    II. The plaintiff had no general property in the goods. The answer contains a special denial of his title, as well as of a conversion.
    At most he had but a special property as security for such money as he had advanced. Aside from the relation of vendor and vendee, the relation of bailor and bailee is created by the express terms of this contract. The surplus of such sale was to be applied for the benefit of Harlow Huntington. The plaintiff had no interest in that surplus. The contract expressly provides for the amount to be paid to the plaintiff; thus by express provision cutting off all personal claim of the plaintiff on that surplus, or upon the goods, after repayment to him of the sum he had advanced.
    III. The plaintiff had no special property in the goods which will enable him to sustain this action.
    (a.) The contract or bill of sale was never delivered; the conditions upon which its delivery to the plaintiff was to be made, were never performed by him.
    The defendants are not estopped from proving those facts by the execution of that bill of sale. (1 Greenl. Ev. § 284. Clark v. Gifford, 10 Wend. 310.) The evidence of them contradicts no provision of the writing. Its effect is to show how the money was to be applied, which in the writing the plaintiff agreed to advance. It is the proof of a collateral contingency unprovided for in the agreement; which is admissible even where the existence of the contract is not denied. (1 Greenl. Ev. § 89.)
    IT. The fact that the goods were taken from the possession of the defendants ■ by Ames, under a • prior paramount title, before the commencement of this suit, or a demand made, is a bar to this action. (Shelburg v. Scottsfield, Yelv. 23. Bates v. Stanton, 1 Duer, 79. Wilson v. Anderton, 1 Barn. & Ad. 450.)
    V. If property be sold by one in possession, but without title, the proper remedy of the purchaser is upon the implied warranty of title only. An action of trover is not the appropriate remedy in such case when the purchaser was informed at the time of his purchase of the defect of title. Ho fraud has been committed upon him, and he has sustained no injury for which an action in form ex delicto can be sustained. (Hawkins v. Hoffman, 6 Hill, 588. Whitney v. Slauson, 30 Barb. 276.)

    VI. There was no conversion of this property by the defendants, and for that reason, there was error in directing a verdict for the plaintiff.

      (a.) The demand was not made until after the goods had been takeh from the possession of the defendants.

      (b.) It is not pretended that the defendants have used the goods, or in any way appropriated any part of them to their irse and benefit. A conversion is a positive tortious act, and it is not sufficient for the plaintiff to prove mere ngligence. (3 Phil. Ev. Cowen & Hill’s and Edw.’s Notes, p. 539. Andrews v. Shattuck, 32 Barb. 396. Whitney v. Slauson, 30 id. 278. Polley v. Lenox Iron Co., 2 Allen, 184.)
    VII. Hor can the plaintiff sustain his judgment by saying that his proofs show a cause of action, if it is other than, and different from that set out in the complaint. (Moore McKibbin, 33 Barb. 246.) And see Hawkins v. Hoffman, (6 Hill, 588.)
    VIII. There was error in the direction of the court, that a verdict be rendered for the plaintiff for the whole amount and interest, instead of merely for the extent of the plaintiff’s lien or claim upon the property. The value of the goods taken on the attachment should have been deducted. (Story on Cont. § 742, note a. See also Ogle v. Atkinson, 5 Taunt. 759 ; Larschman v. Machin, 2 Stark. 311.)

      C. A. Nichols, for the plaintiff, respondent.
    I. The testimony offered, to prove a title in Oakes Ames prior to the conveyance to the plaintiff, is wholly inadmissible, as it would allow a bailee to dispute the title of his bailor, and a vendor to set up his own fraud against his vendee. (Marvin v. Elwood, 11 Paige, 365. Bates v. Stanton, 1 Duer, 79.)
    II. The inquiry as to what conversation occurred prior to the execution of the papers was plainly irrelevant; the writing was the best and only admissible evidence of the intention.
    III. The offer to prove that the consideration was to be paid to the defendants could not be entertained, for, by the agreement the plaintiff was to pay it to the creditors of the defendants.
    IV. The court offered the defendants an opportunity to prove that there never was an absolute delivery to the plaintiff of the bill of sale.
    V. The court was correct in charging that the recovery of the plaintiff must be for the actual value .of the goods, and was not limited to the amount of consideration paid.
   Monell, J.

It was error to exclude the evidence offered by the defendants, that at the time of the sale Ames was the owner of the property in question; and that subsequently, and before the demand, he took possession and removed it from the defendants’ premises and control.

The demand and refusal, upon which alone the plaintiff rested as proof of conversion, was prima facie evidence merely, and could be repelled by proof that a compliance with the demand was impossible. (Kelsey v. Griswold, 6 Barb. 436. Hill v. Covell, 1 Comst. 522. Whitney v. Slauson, 30 Barb. 278. Andrews v. Shattuck, 32 Id. 396.)

The offer was to show that at the date of the bill of sale Ames was the owner of the property; that the plaintiff knew it, and that subsequently, and before the plaintiff’s demand, Ames took possession, and removed the property against the wishes and in spite of the remonstrances of the defendants.” If this evidence had been admitted, it would have repelled the proof of conversion, resting in the refusal of the defendants to deliver the property to the plaintiff, they not then having the possession, or any control over it.

Of the same character was the evidence subsequently offered by the defendants, that before the demand, a «portion of it had' been seized and removed by the sheriff, under an attachment against Ames. As is well settled by the cases above cited, such proof would have shown that the defendants could not deliver the property, and hence there was no conversion.

There must be a new trial, with costs to .abide the event.

Robertson, J.

There was conflicting evidence as to the absolute delivery of the instrument of the 21st of June, 1861; also, as to the waiver of any condition upon which it was' placed in the hands of Bottom. The direction of the learned judge to the jury, to find a verdict for the plaintiff, was peremptory. Unless the condition, upon which the evidence tends to show that the delivery of it was made, was one which.could not have been imposed because contrary to the face of the agreement, the charge was erroneous.

The instrument, on its face, purports to be executed for a certain'sum as “cashpaid to Harlow Huntington, on debts due him from the Douglass Manufacturing Company.” The defendants testified that the depository (Bottom) was not to deliver it, until that money was paid and efforts were made to procure it, There is nothing in the condition contrary to any stipulation in the agreement. If it had been absolutely delivered, it would have been evidence of the payment, and the defendant would have been obliged to disprove it.

If the instrument had been absolutely delivered, it was clearly not an absolute sale of the goods. By it the defendants were only bound to repay to the plaintiff, what is called the cost of the goods, and which was money paid to Harlow Huntington for debts of the Douglass Manufacturing Company ; all the residue was to go to the payment of other liabilities of. Harlow Huntington for H. R. Douglass. It probably was intended to be an assignment in trust to secure first the debt due to the plaintiff, and afterwards other liabilities of H. Huntington, for a third person, and possibly may have vested the whole title in the plaintiff.

I do not understand that a warranty of title on a sale of chattels can he so far implied as to estop the vendor from setting up the deprivation of possession by paramount title. Such a warranty is a mere executory covenant, the breach of which entitles the injured party to damages. The law will not tolerate the absurdity of implying both a warranty, to enable the party to recover damages for its breach, and an estoppel, which presupposes that the vendor is able to comply with the warranty. If sued, for not delivering the property as mere bailees, the defendants of course must be excused by the enforcement of a paramount title in another who had a right to the possession. The cases cited by my brother, Monell, fully establish this. There was evidence offered to show such taking possession, and it was excluded.

The delivery of the goods to the plaintiff was entirely constructive, and depends upon the delivery of the instrument of June, 1861.

I concur in thinking the judgment should be reversed, and a new trial granted, with costs to abide the event.

Judgment reversed accordingly.


text:
    The Bank of the State of New York, plaintiffs and respondents, vs. Jacob W. Vanderhorst, defendant and appellant.
    One who discounts a note, receiving at the same time as collateral security for its payment, a note made hy a third person for the mere accommodation of the borrower, becomes thereby a bona fide holder of such accommodation note, for value, and may recover thereon against the maker,
    (Before Moncrief, Robertson and Monell, JJ.)
    Heard October 9,1863;
    decided November 14, 1863.
    This was an appeal from a judgment against the defendant. The defendant was sued as the maker of a promissory note made payable to the order of Kolff & Persuhn, for whose accommodation it was made. The payees, before maturity, indorsed the note in blank, and through one Stange, their attorney in fact, delivered the same to the bank (the plaintiff) as collateral security to their own note discounted by the bank for them.
    Kolff & Persuhn, through their attorney Stange, applied to the bank'in writing to discount their note for $5000, offering the note in suit and other bills receivable as collateral. The discount was made, the bank receiving the note in suit and holding it as sedurity,. until maturity, when this suit was brought.
    The cause was tried before Samuel E. Lyon, Esq. as referee.
    The conclusion of law of the referee was that the plaintiff was a bona fide holder of the note for value, and although such note was made without consideration, and had no validity in the hands of Kolff & Persuhn, yet that the plaintiff was entitled to recover:

      James Maurice, for the defendant, appellant,
    I. The plaintiffs have not shown themselves bona fide holders for value of the note in suit, within the principle of the adjudged eases.
    II. The referee having held that the note was made without consideration, and had no validity while in the possession of Kolff & Persuhn, it was incumbent on the plaintiffs to show that they had given value for it. This they did not do.
    1. They did not discount it; no representations were made to them in relation to it, and they parted with nothing on the credit and security of this note.
    2. The transaction, as shown by the proof, was simply this: Stange, without any authority, sent the note in suit to the bank, and offered it, with two others, as collateral to a discount of Kolff & Persuhn’s own note. The credit of Kolff & Persuhn at the bank being very good, the discount was made solely upon their credit, without inquiry as to the collaterals.
    3. The utmost that can be made out of this transaction is, that the collateral notes were left with the bank for collection, and the avails, when received, were to be applied on Kolff & Persuhn’s account, and could not be withdrawn from the bank without its consent. There was no transfer of title or change of ownership, but the bank was constituted the agent of Kolff & Persuhn to collect the collaterals and hold the avails for a specified purpose, and to this effect is the indorsement in pencil on the note in suit, to wit: “Collection—Kolff & Persuhn ■—special account.”

    4. All notes and negotiable paper held by a bank consist of notes discounted and paper deposited for collection. Collaterals are embraced in the latter class. In that description of paper the bank has only a qualified interest to collect the amount and credit the proceeds to the proper account.

      5. The deposit of the note in suit as collateral was a breach of trust. Kolff & Persuhn never had any property in the note, and their attorney could do no valid act in respect to such note. His power extended only to those matters in which the firm had an interest.
    III. Bona fide holders of negotiable paper are only those who show affirmatively that they have paid value for it, or relinquished some available security or valuable right on the credit of the note. Those only who can bring themselves within that description, can maintain an action upon the note, because the right of property passes absolutely, by delivery, to such holders. (Stalker v. McDonald, 6 Hill, 93, and, cases cited.)

    IV. A note valid in the hands of the payee may be negotiated as collateral, and the pledgee thereby acquire the exclusive right to collect it; but the pledgee of .a note invalid in the hands of the pledgor^ is not entitled to collect it. (Clark v. Dearborn, 6 Duer, 309.) Kolff & Persuhn had no right of action upon the note, and could pledge none with the bank ; which, taking it simply as collateral, succeeded only to the possessory right of Kolff, and equally with him was bound to return the note before maturity, on demand.
    V. The individual note of Kolff given to the defendant, was but a mere memorandum to take the place of an agreement. Neither note had any validity, and it was not intended that either should get into circulation. The referee’s ruling as to the validity of the noté in the hands of Kolff & Persuhn is conclusive upon this point.
    VI. The pledge of the note in suit as collateral, (assuming that it was so pledged by Kolff’s direction,) did not change the title to the note. The general ownership remained in the pledgor, and the plaintiffs are mere trustees, succeeding only to the rights the pledgor possessed, and can not set up a claim as owners for value. (Jenness v. Bean, 10 N. Hamp. 266. Williams v. Little, 11 id. 66.) When promissory notes or commercial paper are pledged as collateral security to a loan, the pledgee must hold the paper until maturity, and collect and apply the money to the payment of the loan or debt. This is the extent of his authority. (Wheeler v. Newbould, 5 Duer, 29-38, citing 12 John. 146, and 15 Mass. R. 534. Brown v. Ward, 3 Duer, 660.)
    In Wheeler v. Newbould, (16 N. Y. Rep. 392,) the court ruled that the pledge of commercial paper as security for a loan did not change the ownership so as to authorize the pledgee to sell it. If the plaintiffs hold the note in pledge as collateral security, they can not set up a claim as bona fide owners. They succeed to the rights of the pledgors, (their cestuis que trust,) and a defense available against the pledgors is equally available against such pledgees.
    VII. The policy of the law does not favor the hypothecation or pledge of commercial paper, but only the sale, and then protects the bona fide owner, although it may have come through an invalid or tainted channel, but only provided he show that he took it in good faith before maturity, and gave value for it.
    The distinction between commercial paper pledged as collateral, and the same paper transferred or taken in the usual course of business, is this: In the latter case, the right of disposition following the ownership is perfect. The paper may be again, at any time, put in circulation, at the pleasure of the holder. It performs an important function in a commercial community in payment of debts. It passes from hand to hand, the title following delivery. Hence the reason for the rule of protection of the bona fide owner. In the case of paper pledged as collateral, all this is changed. It can no longer be circulated, or lawfully sold, but must remain with the person to whom it is pledged, until maturity. Its assignability is gone, and it ceases to perform any useful function in the payment of debts. Its holder is a mere trustee, not its owner, and therefore not within the reason for the rule which protects bona fide owners. The rule itself, therefore, has no application to the case. ■
    VIII. The plaintiff’s counsel contended before the referee, that the bank must be presumed to make the discount on the strength of the collaterals. If this be so, it is an affirmative fact which must be proved, and can not be presumed. (6 Duer, 309.) In this case, the proof is clear and explicit the other way. .Besides, if the theory before advanced is correct, the bank took the collaterals at its own risk. They only were valid in their hands, if valid in the hands of the pledgor. If they had no validity in the hands of the pledgor, they acquired none by the transfer in pledge to the bank.
    IX. The power of attorney, under which cheeks drawn on the 19th April, for the sum of $1294.05' on deposit, belonging to Kolff & Persuhn, was revoked by the death of Kolff. • By which, also, the firm was dissolved. Ho person, consequently, could rightfully use the firm name in drawing out this money. If the bank chose to pay it, they did so in their own wrong, and can not charge it over to the defendant. Such power of attorney was improperly admitted in evidence, to which an exception was taken in due season.
    Other points, made by the' counsel upon questions of fact, are omitted.

      A. W. Clason, for the plaintiff, respondent.
    I. The question of fact in this case is settled by the testimony.
    II. The question of law turns upon the meaning of the word “ value.” The counsel for the defendant insists, that it does not imply merely some consideration, or inducement, but that it means discount only.
    When bona fides are proved, the amount of consideration is unimportant. (5 Duer, 260.)
   Monell, J.

The result of a careful examination of the cases is, that in this state the law seems to be now settled, that a promissory note, taken in payment of an antecedent debt, and the prior indebtedness extinguished, is deemed to be taken for value, so as to constitute it a valid security in the hands of the holder. (Rutland Bank v. Buck, 5 Wend. 66. Grandin v. Le Roy, 2 Paige, 509. Lathrop v. Morris, 5 Sandf. 7. Mohawk Bank v. Corey, 1 Hill, 513. Youngs v. Lee, 12 N. Y. Rep. 551. Boyd v. Cummings, 17 id. 101. Stettheimer v. Meyer, 33 Barb. 215. .Spencer v. Ballou, 18 N. Y. Rep. 327.)

The principle is, that if the" holder parts with any thing at the timé he receives the note, it affords a sufficient consideration, to make his holding bona fide. If, therefore, he extinguishes the prior debt, or surrenders á prior security, or advances money upon the credit of the new, it will, within the cases cited, constitute him a holder for value.. .1 do not find that our courts have yet reached the point, that merely receiving a promissory note or bill of exchange of a third person, as security for a precedent debt, without extinguishing the' prior debt, or parting with-any money or security at the time, is sufficient to constitute a holding for value. In a recent case, (Cardwell v. Hicks, 37 Barb. 458,) a majority of. the court, against, I think," a clear weight of authority, has faEen back upon the old doctrine, that even the extinguishment of the old debt will not afford a consideration to the new transfer. But this case stands by itself, and is in direct antagonism to a large number of uniform decisions the other way. (Purchase v. Mattison, 3 Bosw. 310.) .•

. I can not find that the precise point involved in this case has been decided in any adjudication in this state. In some of' the neighboring states it seems" to have been. (Griswold v. Davis, 31 Vt. 2 Shaw, 450.) Also, substantially, by the Supreme Court of the United States. (Gerdman v. Simonds, 20 How. U. S. Rep. 343.)

No question arising under commercial law has been more extensively discussed, or produced a greater variety—perhaps I might say a greater confusion—of decision, than as to what shall constitute a holding of commercial paper for value, so as to shut out the equities existing among the original parties.

And in a community where all collateral securities are daily resorted to, to bolster credit and procure moneyed facilities in the uses of trade, it is very desirable that the courts of this state should settle the rights of parties, in respect to such securities.

I think a careful reading of the numerous cases in this state, where the question of the bona fides of commercial paper is examined, will show that the current of decision has been, and continues to set strongly in favor of the sufficiency of the consideration, whether the new security is taken in payment of an antecedent debt, or as collateral to a first loan. If any thing is parted with at the time—either money or an old security'—it is sufficient to uphold the transaction as against the defenses of the first parties.

A reference to a few of the more recent cases will, I think, show the correctness of the above deduction.

In Stettheimer v Meyer, (supra,) the defendant was the accommodation maker of a note, which the payees transferred to the plaintiff in payment of a prior debt; the plaintiff delivering up a prior note not yet due. It was held that the plaintiff was a holder for a valuable consideration.

In Spencer v. Ballou, (supra,) the plaintiff had been charged as the indorser of Hollister’s note, and received.the note in suit, indorsed by the defendant as an accommodation indorser. '

The note was made for the purpose of taking up the protested notes, and was left at the bank for that object, but was not discounted by the bank. The court, in answer to the objection that the note could not be made available to the plaintiff otherwise than by applying it to the purpose of taking up the notes in the bank,, say, if the plaintiff had borrowed the money on the credit of this note, and had paid the notes in the bank, the security would be valid. “ So, if the plaintiff had advanced the money to pay and take up the notes in the bank, retaining this note for the advance, it is not prescribed that the maker, or the defendant, would have .any legal defense to the note.”

The pre-existing debt does not strengthen or invigorate the consideration. The advance constitutes the consideration, not the prior indebtedness.

The case of Goodman v. Simonds, supra, fully sustains this view. The learned court there say that if there is a present consideration at the time of the transfer, it is sufficient to constitute a bona fide holding.

And a late elementary writer, of profound learning, and great research, (1 Parsons on Notes and Bills, 219,) declares it a sufficient consideration when the note is received as collateral security for a debt or contract,- which is simultaneous with the transfer of the paper.

In the case before us, the plaintiff, at the time of the transfer of the note in suit, gave to the holders of the note.five thousand dollars in money. Upon what security did the bank part with this amount of money ? Surely not upon the note of Kolff & Persuhn alone, else why did they receive collaterals ? The advance was made at the time of the transfer, and, although it was nominally a discount of Kolff & Persuhn’s note, yet the money was loaned upon the strength and credit of the collaterals, which, upon the principle of all the cases, constituted the bank the holders for -value of the note in suit, and deprives the defendants of the right to interpose as a defense any equities existing between the previous parties.

I.t would not" be difficult, I think, to point to a difference between a consideration growing out of the extinguishment of a pre-existing debt, or the surrender of prior securities and a present loan. In the latter case, the. lender parts usually with more value and directly upon the credit of the collateral security. In the former, the creditor, presumptively at least, loses less, and the borrower gains but little,

If there is any reason, -therefore, for upholding the consideration in the one case, there is a stronger one in the other, where money is advanced at the time the transfer is made, and where the lender looks to his securities for payment.

There was sufficient evidence, we think, that the application for discount was made by direction of Mr. Kolff, to sustain the finding of the referee that it was made by his direction and upon his authority. At least, such finding is not against the clear weight of the evidence. Besides, the authority contained in the written power,, of attorney to Stange, was ample to clothe him with all the power necessary to transfer the note.

The plaintiffs were not bound indeed, they had not the right, to retain Kolff & Persuhn’s deposit. Their note was .not due when the deposit was drawn out, and the bank could not have set off the note in a suit to recover the deposit.

' Upon the whole, we do not see that the referee has committed any error, and we think the judgment should be affirmed.

Barbour, J. concurred.

Robertson, J.

The findings of the referee upon conflicting evidence, set at rest all contested questions of fact: The single question remains, whether- accommodation notes delivered as collateral security for the repayment of a loan of money, at the time it was lent, upon the faith of their delivery as such security, can be sued upon and the amount recovered by the lender. I speak simply of accommodation notes, without reference to any diversion of them by such deposit from any special purpose for an application to which they, were created, because it will be found that the argument against the liability of such makers wholly disregards such purpose and diversion from it, and is irrespective of the sufficiency of the. consideration upon the transfer. There could be "no doubt, that money lent on the faith of the double security of the borrower’s responsibility and the simultaneous delivery of property as security, or even on the faith of the latter alone, would form a sufficient consideration, for the transfer of such property; otherwise no mortgage or pledge of personal chattels could be given.

But the whole argument in this case may be reduced to the single proposition, that because a pledge of promissory notes, including those given for the accommodation of the holder, or of any choses in action, differs from the pledge of all other personal property, in this, that the pledgee must wait to the maturity of such notes and make them available by collecting them, but can not sell them on notice. He therefore can not be said to be the owner of them, either in good or bad faith, because the entire power of disposition has not been vested in him. Consequently where the. promissory notes were so made that such an action could not have been maintained upon them by the pledgor, they can not be sued upon by the pledgee.' That in fact the pledgee in so collecting, acts simply as the agent of the pledgor, with merely the right to apply the money when collected to the payment of this debt to himself.

The doctrine in regard to the want of power oil the part of a mere pledgee of choses in action to do any thing but collect the amount due on them, was first decided in Garlick v. James, (12 John. 146,) where it was held they could not compromise them. This limitation was extended by the case of Wheeler v. Newbould, (16 N. Y. Rep. 392,) and Atlantic Fire Ins. Co. v. Boies, (6 Duer, 583,) to sales of them. But in both these cases it was recognized that the pledgee had a special property in such choses in action, an. interest in the moneys to be collected coupled with the power of collecting, and the rule was established as being for the benefit of the pledgor alone, and not of other parties liable on the choses in action. The right of the pledgee was even so far recognized, and protected, that it was held that upon a collection of the moneys due on a chose in action by a pledgor, to whom the same had been redelivered for the purpose, he collected them in a fiduciary capacity for the pledgee, (White v. Platt, 5 Denio, 269;) and upon the same principle it was held that the pledgee of a bond could even recover its value in an action of trover against a pledgor, to whom he had delivered it in order to obtain and substitute stock for it as security, but such pledgor applied it to his own use. (Hays v. Riddle, 1 Sandf. 248.) All these cases concede that the pledgee acquires an interest in or lien on the moneys agreed to be paid by the instrument pledged, to the extent of his loan. His special property is therefore a species of ownership of the choses in action however limited or qualified, and he is only prevented from being considered as entire owner in order to protect any rights of the pledgor from being sacrificed by a sale, compromise, or other disposition of the note for less than its face. He does not therefore the less continue to be owner as to the maker of a note, to the extent of whatever loan he has made on the faith of such note being valid and binding.

In this case, too, the defendant, by becoming the maker of a promissory note payable to the order of Kolff & Persuhn, and leaving it in their hands; furnished them with the means of inducing the plaintiffs to believe that it was a business note capable,of being pledged by them to secure loans made to them. Except in cases tainted with usury, or other positive prohibitions of the contract made, they would be estopped by such signing from denying the business character of the note.

It- will be observed that any diversion of the note from its original purpose does not affect the question of ownership by the plaintiff, but only the bona fides of this transfer; that doctrine has been clearly settled not. to apply to advances of mopey in ignorance of the original purpose. On all other points my views coincide with those of my associate,- and I concur in affirming the judgment, (a)

(a) The judgment in this case has since been affirmed on appeal by the Court of Appeals. (32 N. Y. Rep. 553.)