author: By the Court—Robertson, J.

text:
    Robert M. Henning, survivor, &c., Plaintiff and Appellant, v. The New York and New Haven Railroad Company et al., Defendants and Respondents.
    1. The possession, by the transfer agent of a corporation, of the transfer books of its stock, and his authority to allow them to be used, do not constitute the indicia of an authority to make representations as to the ownership of stock, so as to render the company liable for the falsity of such representations made by him.
    2. Nor does mere permission, given by the agent, to enter upon such books a transfer of reputed stock, there being no new certificate given, amount to a representation by him that the person making the transfer was the owner of any genuine stock.
    (Before Robertson and White, J. J.)
    Heard, March 11, 1862;
    decided, April 12, 1862.
    This action was brought by John O. Woodruff and Bobert M. Henning, against the New York and New Haven Bailroad Company, Luther 0. Clark, Edward Dodge, Joseph W. Clark, Jay Cooke, Thomas P. Huntington and John D. Maxwell, to recover for fraudulent representations which plaintiffs alleged had been made by the defendants, through their transfer agent, Bobert Schuyler, and involved the question as to the liability of the company on account of the spurious stock issued by Schuyler. The facts relative to this transaction fully appear in the Mechanics’ Bank case, 4 Duer, 430, and 13 N. Y., 599.
    It appeared on the trial, in substance, that on the 23d June, 1854, E. W. Clark, Dodge & Co., as agents of the plaintiffs, doing business under the name of Woodruff & Co., were applied to by Gouverneur Morris for a loan of $20,000 on a certificate for two hundred and seventy shares of the company’s stock, dated that day, (being one of Schuyler’s fraudulent issues,) and that upon the faith of it, and after insisting that the stock should be transferred to them on the books prior to making the" loan, they agreed to make such loan for sixty days, without any knowledge of the true character of the certificate, and believing it to be genuine. The stock was duly transferred into the name of E. W. Clark, Dodge & Co., the same day, by the usual transfer, executed in the office of the company, the transaction being- superintended and consented to by the usual clerk in the transfer office, but no new certificate was taken out. The loan was then made, and Morris not having repaid it, and the company havifig declined to recognize the certificate or to admit the right of the plaintiffs to the stock, this action was brought, claiming that the company was liable in an action on the case, for the fraud of Schuyler in inducing the loan upon the faith of the false and fraudulent certificate and transfer of the two hundred and seventy shares.
    The cause was tried at a Special Term, held by Mr. Justice Woodruff, without a Jury, on the 14th of January, 1860, and a decision was rendered in favor of the defendants, dismissing the complaint, with costs; the Court holding that the case came within the principles declared by the Court of Appeals in the case of the Mechanics’ Bank against the same defendants, (13 U. Y., [3 Kern.] 599.)
    After judgment had been entered, the plaintiff, Wood-ruff, died, and the action was, by order of Court, continued in the name of Henning, as survivor, and he took the' present appeal from the judgment.

      Walter Rutherfurd, for plaintiff, appellant.
    I. The principal is liable, civilly, to third persons for the frauds, &c., of his agent in the course of his business, although the principal did not authorize or know of them. (Story on Agency, 555, § 452, and cases cited; 2 Strange, 653.)
    II. These corporations act wholly by agents. As a necessary correlative to the principle of the exercise of corporate powers by representatives, is the recognition of a corporate responsibility for their acts. For acts done by their agents, either in contractu or delicto, in the course of its business, and other employment, the corporation is responsible. (Yarborough v. The Bank of England, 16 East, 6; Eastern Counties Railway v. Broom, 2 Eng. L. & E;, 406; Philadelphia, Wilmington & Baltimore Railroad, Company v. Quigley, 21 How. [U. S.], 207; National Exchange Co. of Glasgow v. Drew, 2 Macqueen, House of Lords Cases, 103; S. C., 32 Eng. L. & E., 1.)
    III. Where one of two innocent parties must suffer by the misconduct of another, the party who intrusted that other should bear the loss. (Judge Denio, in the case of Farmers’ & Mechanics’ Bank v. Butchers’ & Drovers’ Bank, 4 Kern., 624.)
    IV. Where a false representation is made knowingly, to which another gives credit, and damage is suffered, he has a remedy by action against the person who has made the representation. (Zabriskie v. Smith, 3 Kern., 323; Mechanics’ Bank of Brooklyn v. Townsend, 17 How. Pr., 569; Cross v. Sackett, 6 Abb. Pr., 247; National Exchange Company v. Drew, 32 Eng. L. & E., 4; Gerhard v. Bates, 20 Id., 130; Denton v. Great Northern Railway, 34 Id., 154.)
    V. Schuyler was the president and director of the defendants, and their sole and only transfer agent in New York. He alone, in New York, could make representations on behalf of the company, as to who, by the books of the company, were the stockholders; in no other way could third persons possibly ascertain that fact. It was directly within the scope of his authority, and within the defined limits of his duty. The company held him out as competent to be trusted, and thereby, in effect, warranted his fidelity and good conduct in all matters within the scope of the agency. (Farmers’ & Mechanics’ Bank v. Butchers’ & Drovers’ Bank, 4 Kern., 624; 16 N. Y. R., 126; Stoney v. American Life Insurance Company, 11 Paige, 635; Hern v. Nichols, 1 Salk., 289; North River Bank v. Aymar, 3 Hill, 262; Thompson v. Bell, 26 Eng. L. & Eq., 536; Northrop v. Curtis, 5 Conn. R., 246; Ang. & A. on Corp., 588; Bulkley v. Derby Fishing Co., 2 Conn. R., 252; Oxford Turnpike Co. v. Bunnel, 6 Id., 552; Bank of Bengal v. East India Co., 2 Knapp P. C., 245; Foster v. Essex Bank, 17 Mass. R., 479.)

      VI. When the purchaser of an instrument not negotiable wishes to exercise extreme caution, he will inquire of the maker, and procure his admission of its validity and his assent to the transfer, and having done so, an estoppel will arise in his favor, not because he has invested his money in the purchase, but because he purchased after procuring such admission or consent, and upon the faith thereof. In this case, the plaintiffs did procure from the defendant an admission of the validity of their shares, in the proper and authorized manner, from the agent intrusted by them with the transfer books of the company, who alone was authorized to make this admission entirely within the scope of his authority, and an assent from this agent to a transfer of the shares to them, and parted with their money on the faith of such admission and transfer.
    VII. The act of Schuyler, in this .case, was authorized by the by-laws, and the company is bound by the act, as to all persons dealing in good faith with the transfer agent.
    1. It is incumbent on a corporation not to permit a transfer of stock until they are satisfied of a party’s authority to transfer. (Angel & Ames on Corp., 588; Pollock v. National Bank, 3 Seld., 274.)
    2. The power to regulate the transfer of stock, was given for the security and benefit of the company.
    3. The object of the Legislature in authorizing the company to make by-laws for the transfer of stock, was to give facility to its transfer. This facility of transfer is one of the advantages of this species of property; and would be entirely destroyed, if a purchaser should, be required to look to the regularity of all previous transfers. (Davis v. Bank of England, 2 Bing., 393.)
    4. The transferring the shares of the capital stock on the books of the company, is a matter of ordinary occurrence, and in the absence of any proof to the contrary, it may be fairly presumed that the principal officer, or clerk in attendance at the transfer office of the company, during the usual hours of business, is authorized to permit such a transfer. The charter of the company in the present case having authorized the owners of stock to sell and transfer it on the books of the corporation, it is the duty of the directors to see that some proper officer of the company is usually in attendance, duly authorized to allow such transfers, when proper to be made, and it is no excuse to say, that they have neglected that duty. (Com. Bank of Buffalo v. Kortright, 22 Wend., 351.)
    5. It is no excuse for the company, that the act of the agent was willfully or fraudulently done without the knowledge or consent of the company.
    6. A corporation must act by agents. The authorized act of those agents within the scope of their authority is the act of the corporation. (Bank of United States v. Davis, 2 Hill, 451; Corn Exchange Bank v. Cumberland Coal Co., 1 Bosw., 434; Oldfield v. New York & Harlem R. R. Co., 14 N. Y. R., 310; Weed v. Panama R. R., 17 N. Y. R., 362; Blackstock v. New York & Erie R. Co., 20 N. Y. R., 48; National Exchange Co. v. Drew, 32 Eng. Law and Eq. R., 9.)
    VIII. The fact that the defendants are liable in this, action has been judicially determined by a Cotfrt'of competent jurisdiction upon this identical stock and transfer, upon the same facts, since the trial of this action. " A -

      William Curtis Noyes, for defendants, respondents.
    I. The certificate given by Schuyler to Morris, dated June 23d, 1854, for 270 shares, was void. (Mechanics’ Bank v. N. Y. & N. H. R. R. Co., 3 Kern., 599; N. Y. & N. H. R. R. Co. v. Schuyler, 17 N. Y. R., 592.) These decisions have been followed by the United States Circuit Court, (Nelson J.) in Illius v. The same defendants.

    II. There was no proof, nor did the Judge find, that any representation whatever was made by the company, or by its transfer agent, or any other of its officers, that Morris was, at the time, the owner or proprietor of the shares he assumed to transfer. Huntington, the, clerk, was simply permitted to execute a transfer in the office of the company under the power given by Morris.

      III. Heither Schuyler, nor any clerk representing him had authority to make any representation binding upon the company in respect of stock or a certificate of stock, beyond the legal capital authorized by the charter of the company. As transfer.agent, Schuyler had no other power than to make a certificate for lawful shares of the company, after an owner of them had duly transferred them to the person to whom the certificate was made; the making of such transfer being a condition precedent to the performance of any act by Schuyler.
    IV. Ho estoppel against the company from the issuing of the certificate by Schuyler, or from the acquiescence of his clerk, in permitting a void transfer to be executed in his presence in the office of the company. Heither of them had any authority to do any act creating an estoppel in reference to the stock or certificates. (Fairtitle v. Gilbert, 2 Durnf. & East, 171; Day v. Green, 4 Cushing, 433; Howard v. Hudson, 2 Q. B., 1; Carpenter v. Stilwell, 1 Kern., 73, 74; Freeman v. Cook, 2 Exch. R., 654; Frost v. Saratoga Mut. Ins. Co., 5 Denio, 157.)
   By the Court—Robertson, J.

The Referee has not found in this case that any certificate of stock was issued to Mr. Morris before the advance by the plaintiff’s agents, and the evidence is clear that such advance was made immediately after, and solely on the faith of, the transfer on the books of the company, by Mr. Morris, to the plaintiff’s agents. The only representation, therefore, by the company or any of its agents, of the holding of any stock by Mr. Morris, was that, if any, arising from the. permission by the transfer clerk to him to transfer reputed stock, on a transfer book kept in the company’s office. Ho subsequent recognition of that, by the issue of a new certificate, operated to deceive the plaintiff’s agents before the advance of the money.

The® case is, therefore, distinguishable from the case of the Mechanics’ Bank against the present defendants, (3 Kern., 599,) solely by the fact that the transfer clerk of the latter permitted an entry, to be made in a transfer book kept in their office, of as much stock as was contained in the spurious certificate. It is true that case may not have gone the length of deciding that the company could not have authorized its officers and agents to bind it by representations as to the ownership of its stock by persons who, in fact, did not hold any, and thus become liable to those injured by reliance on such representations for damages sustained by them. But I understand the Court to have held, that the transfer agent, (Schuyler,) was not so authorized in fact, and that the company did not give him the appearance of having such authority, or hold him out to the world as having it, by placing him in the position of trust and confidence they did. The language of the prevailing opinion is: “ The power of the agent to charge “ Ms principals, by doing a wrong, must be traced dis- “ tinctly to Ms authority, and it cannot be referred to an “ increased facility for imposing on the credulity of others, derived incidentally from his appointment to a situation “of trust” This, of course, is entirely independent of the question whether the false statement was culpable or innocent. *'

The question of fact, therefore, arises in this case, whether the company, in fact, gave any power to the transfer agent or his clerk who had charge of the transfer book, to represent to any one, that another person owned shares of stock in the company. If not, the questions of law arise, whether the possession of the transfer books and ^authority to allow them to be used, constituted the indiefk of an authority so to represent, and whether per-mission to Mr. Morris to enter a transfer on such books, and Ms subsequent entry, constituted such a representa-, tion. There was no evidence of any direct authority to make such representation. In the case already referred to, it was held that even the authority of the agent, who signed the certificates of stock, to do so, being limited by the necessity of actual ownership of such stock, by the person whom he therein certified to.be the holder,, such certificates were not sufficient to bind the company as a representation that such person owned it 5 and that all assumption that the agent appeared from his position to have such authority, was unwarranted. The same reasoning must apply to the possession of the transfer books; and an authority of the transfer agent to permit a transfer, accompanied with such possession, does not amount to such indicia of authority to. certify to ownership of stock, as to fix a liability upon the defendants. Of course, if it does not, the mere permission to enter the transfer would not be equivalent to a representation that Mr. Morris owned the stock in question. Possibly the effect might have been different, had a new certificate been issued after the transfer on the faith of which the advance was made. But-that is not this case.

The judgment, therefore, must be affirmed, with costs.


source: Caselaw Access Project

author: By the Court—Monell, J. Robertson, J.

license: Public Domain

text:
    John W. Geary, Plaintiff and Respondent, v. David D. Page et al., Defendants and Appellants.
    1. The plaintiff having a fund in the hands of the defendants, his bankers, * directed them to place the same to the credit of accounts, to be opened by them for the purpose, in the names of his children, who were of tender years; but, after the defendants had done so, they continued to recognize the authority and directions of the plaintiff in the management of the fund, and it did not appear that he had been indebted to the children or had received any consideration upon the transfer of the credits, or that the children ever had notice thereof or received possession of the securities.

      Held, that, notwithstanding such change in the accounts, the plaintiff could maintain an action in his own name, to recover from the defendants the balance due thereon. **
    2. The change in the accounts, under such circumstances, is neither a "transfer of the fund or securities themselves, nor a gift in presentí nor in futuro. (Per Moneli,, J.)
    3. The defendants having failed in business while indebted to the plaintiff, set apart certain claims as security for the debt, and on compromising them, receiving in part cash and in part a promissory note, wrote to him that they had done so, and remitting the cash, and saying that these “ must be received in full of your debt. * * * You will please send a proper dis- , charge.” The plaintiff replied, acknowledging the receipt of the remittance, and saying, “ I desire this to serve you as a receipt until you forward me the balance and such releases as you desire me to execute.”

      Held, that this was not an accord and satisfaction, and was no defense to plaintiff’s action to recover the balance.
    (Before all the Justices.)
    Heard, March 8, 1862;
    decided, April 26, 1862.
    This is an appeal by the defendants, Daniel D. Page and Henry D. Bacon, from a judgment entered upon the report of John O. Sargeant, Esq., a Referee, in favor of the plaintiff, against the defendants, on the 16th of May, 1861, for $15,627.98.
    The action was brought against Daniel D. Page, Henry D. Bacon, David Chambers, Henry Haight and Frank W. Page, copartners, doing business as bankers at San Francisco, to recover a balance of upwards of $52,000, alleged to be due from the defendants to the plaintiff, for moneys collected and received by them from and for the account of the plaintiff. It appears that during the years 1852-3-4 and 5, the plaintiff deposited with the defendants large amounts of .moneys, and securities, for collection and investment, and which, from time to time, were received, collected and invested by the defendants. The defendants denied any indebtedness, and alleged that all the collections and investments made by them, were as the agent of the plaintiff and at his risk. They further alleged, that from and after November 1st, 1852, the investments of the plaintiff’s moneys in their hands, and the income and interest upon the same, were made, by the plaintiff’s directions, in the names respectively of M. A. Geary, E. R. Geary and W. L. Geary, the plaintiff’s children, who were minors. That thereupon the accounts between the plaintiff and defendants were closed upon their books, and thereafter they became debtors of said M. A., E. R. and W. L. Geary, respectively. The defendants further alleged, that in May, 1855, they placed in the hands of the defendant, Henry Haight, the note of Henry A. Lyons, for six thousand dollars, and six thousand dollars in cash, to be paid to the plaintiff, for and on account of E. R. and W. L. Geary, and that the same was received and accepted by the plaintiff in full satisfaction and discharge of the indebtedness of the defendants to the plaintiff.
    The Referee found, among other facts, that, by the direction of the plaintiff, a portion of the proceeds of the securities in the hands of the defendants were placed by them to the credit of accounts opened in the names, respectively, of M. A. Geary, W. L. Geary and E. R. Geary, and that the balance was ultimately transferred to an account opened in the joint names of E. R. and W. L. Geary, subject to the directions, orders and agreement of the plaintiff; that neither E. R. nor W. L. Geary was ever in possession of any of the vouchers, moneys or securities, or had any notice of the opening of any account in their name, and that all the moneys credited in these accounts were held by the defendants as the property of the plaintiff and subject to his order. The Referee found due to the plaintiff' the sum of $14,808.43, for which he directed judgment. The defendants excepted to the several findings of fact and conclusions of law of the Referee.
    J. Larocque, for defendants, appellants.
    I. By the correspondence and accounts in evidence by which the engagements of the parties were contracted and their rights were fixed, Page, Bacon & Co. became debtors to E. R. & W. L. Geary, and liable to account to them for all the funds and securities in question, and the relation of debtor and creditor does not exist between them and the plaintiff. (Del. & Hud. Canal Co. v. Westchester Co. Bank, 4 Denio, 97; Weston v. Barker, 12 Johns., 276; Barker v. Bucklin, 2 Denio, 45; Schermerhorn v. Vanderheyden, 1 Johns., 139; Elwood v. Monk, 5 Wend., 235.)
    II. The letters of the plaintiff are conclusive upon him that he procured these engagements to be contracted by Page, Bacon & Co., to E. R. & W. L. Geary, upon full consideration, to wit: An equivalent amount of money 'due by him to E. R. & W. L. Geary, as their guardian, and which he was liable to account for and pay to them; and having procured their engagements to those parties, to be contracted on the faith of those letters and assurances, he is now stopped from, denying or retracting them. (Gilleland v. Failing, 5 Denio, 308; Townsend v. Olin, 5 Wend., 207; Diedrick v. Richley, 2 Hill, 271; Vroom v. Van Horne, 10 Paige, 549; Eastman v. Tuttle, 1 Cow., 248; Miller v. Watson, 4 Wend., 267; Dezell v. Odell, 3 Hill, 215.)
    III. The engagements thus entered into between the. plaintiff and Page, Bacon and Company, would be equally conclusive upon the latter, in a suit by E. R. and W. L. Geary against them, and would estop them to deny that the funds and securities are the property of E. R. and W. L. Geary. (Same cases.)
    IV. Even if the plaintiff, John W. Geary, were at liberty to deny, and had denied, (neither of which is the case,) the fact that he had thus had full consideration for the engagements thus contracted by the defendants to E. R. and W. L. Geary, at his request, and in consideration of the funds thus deposited with the defendants by him, it would be a gift, executed by the delivery to and deposit with the defendants for the benefit of the donees, and equally irrevocable by the plaintiff. (Grangiac v Arden, 10 Johns., 293; Gardner v. Gardner, 22 Wend., 526; 7 Paige, 112; Grover v. Grover, 24 Pick., 261; Smith v. Smith, 7 C. & P., 401; Irons v. Smallpiece, 2 B. & Ald., 551.)
    V. The parol evidence of the plaintiff as to his communication to Henry Haight, on the 31st of January,1853, of his intention of depositing and accumulating a fund with them, in the names of his wife and of his sons E. R. and W. L. Geary, and as to his future designs in the disposition of that fund, is inadmissible, for the purpose of adding to, varying or qualifying the engagements after-wards contracted in writing, between the parties. (2 Phill. Ev., Edwards’ ed., 635, 665, 673, and 767; Egleston v. Knickerbacker, 6 Barb. S. C. R., 458; La Farge v. Rickert, 5 Wend., 187; Creery v. Holly, 14 Id., 26; Ulster Co. Bank v. McFarlan, 3 Denio, 553 ; Parkhurst v. Van Cortlandt, 1 Johns. Ch., 273; Durgin v. Ireland, 4 Kern., 322; Norton v. Woodruff, 2 Comst., 153.)

      VI. Even if it were admissible it would be inapplicable, and could have no effect, as the whole subsequent written correspondence shows that the transactions which' after-wards did take place, were not those contemplated in such prior conversation.
    VII. He nowhere denies in his evidence that he did, in point of fact, owe, as guardian to E. R. and W. L. Geary, the full amount for which he directed his funds and securities to be placed to their credit. All that he does deny is that the identical funds and securities which he deposited were their property, and that he ever intrusted and delivered to them the proceeds and securities received, and that he owed his two sons so large an amount for moneys received from the estate of their maternal grandfather. He may well have owed them the full amount received from other sources.
    VIII. His oral testimony cannot avail him to contradict his deliberate written statements.
    IX. It is impossible for the plaintiff to recover in this suit, brought in his own name, and for his own benefit, not recognizing the existence of E. R. and W. L. Geary, money due to them. For that purpose suit must be brought in their names by their guardian. (Genet v. Tallmadge, 1 Johns. Ch. R., 3; Evertson v. Evertson, 5 Paige, 644; Morrell v. Dickey, 1 Johns. Ch. R., 153; M’Loskey v. Reid, 4 Bradford, 334; Code, §§ 115, 116.)
    ' X. Ho judgment which could be rendered in this suit would protect the defendants against a suit subsequently brought by E. R. and W. L. Geary, who are not parties to the present one, and consequently could not be concluded or in any manner affected by the judgment. (Maybee v. Avery, 18 Johns., 352; Dale v. Rosevelt, 1 Paige, 35.)
    XI. The transaction detailed in the letters of September 18, 1855, September 19, 1855, Hovember 16, 1855, and December 19, 1855, amounted to a good and valid accord and satisfaction of the claim, whether considered as that of the plaintiff or of E. R. and W. L. Geary. (Weed v. Ellis, 3 Caine’s R., 253; Anderson v. Highland Turnpike Co.,
      16 Johns., 86; Frisbie v. Larned, 21 Wend., 450; Evans v. Wells, 22 Id., 324; Douglass v. White, 3 Barb. Ch. R., 621; Webb v. Goldsmith, 2 Duer, 413; Kellogg v. Richards, 14 Wend., 116; Hoyt v. Thompson's Ex’rs, 19 N. Y. R., 207.)
    XII. After the opening of the accounts of E. R. and W. L. Geary, and the closing of his own with the defendants, the plaintiff, in all his correspondence with them, •professed to act in behalf of E. R. and W. L. Geary, and as their guardian. The defendants had a right to rely on his statements in that respect, and to make him the remittances which they did; but this gives him no right of action against them in his own name.

      E. W. Stoughton, for plaintiff (appellant,) argued that the moneys and securities were the property of the plaintiff and at all times remained so, and that there had been no accord and satisfaction.
   By the Court—Monell, J.

The finding of the Referee that neither E. R. Geary, nor W. L. Geary was ever in possession of any of the vouchers, securities or moneys deposited by their father, with the defendants, appears to be fully sustained by the evidence. All the dealings with respect to these funds were with the plaintiff. Ho correspondence or other evidence showed any notice whatever to the plaintiff’s children of the deposit in their favor, nor does it appear that their right to the fund, was admitted or recognized by the defendants at any time during the series of years of their dealings with the plaintiff. The instructions of the plaintiff to transfer the accounts to the names of his children were followed by the defendants and were recognized by them as the directions of one haying authority to give them. The defendants never took any steps to apprize the plaintiff’s children of the transfer of these funds to their account, but constantly recognized and admitted, by their acts and correspondence, the absolute dominion and authority of the plaintiff over them. It is not necessary to inquire into the motive of the plaintiff in directing the transfer of the securities, &c., to his children. The most that can be claimed by the defendants, is, that it was intended as a gift from the plaintiff to his children. There does not appear to have been any indebtedness of the pi alp tiff to his sons, or any obligation, express or implied, legal, equitable or otherwise, from which it might be inferred that he designed to pay or extinguish such debt or obligation, and which might have raised an implied assumpsit in their favor. His children, at the time of the transfer, were of very tender- years, and there is no evidence, other than that the transfer was the voluntary act of the plaintiff, without pecuniary consideration, and without losing or intending to lose absolute control over the funds. But the Referee has further found, •that all the moneys at any time due or payable on any of the accounts, were held by the defendants, as the property of the plaintiff, and subject to his order. The evidence shows, that notwithstanding the plaintiff’s directions to the defendants, to open accounts in the names of his two sons, he still continued the owner of the funds and securities. The plaintiff distinctly testifies, that at no time did they cease to belong absolutely to him; and this lfiust be held to be so, unless the law upon the facts adjudges it otherwise. If oral testimony of the intention of the party is to govern, the plaintiff was the owner of the funds. It cannot, I think, be pretended that the mere instruction of the plaintiff to open these accounts in the names of his two children, was a transfer to them, ipso facto, of the funds and securi ties themselves. There was no debt to pay and therefore no consideration for the transfer. The defendants’ counsel has referred us to a number of cases, to establish his proposition, that by the transfer, the relation of debtor and creditor arose between the defendants and E. R. & W. L. Geary, and that they became liable to account to them for all the funds and securities in question. Those were all cases of promises made to another for the benefit of a third person, and it was held that an action for money had and received would lie. But in all those cases, it is to be observed there was a good consideration moving between the person to whom the promise was made and the third person for whom it was made. There was no debt due from the plaintiff to his children, which would be a consideration for the transfer, and which might imply a promise by the defendants to pay. (Judson v. Gray, 17 How. Pr., 289, 295, and cases there cited.) Besides, no case can, I think, be found where this principle has been applied to other than an express promise. The defendants never promised to pay these moneys or securities to the plaintiff’s children, and I cannot see how, upon the principle of an implied assumpsit, they could recover them. The case of Duncan v. Bates, in MSS., decided in the Supreme Court of this State in the first district, was an assignment by L. O. Wilson & Co. to Bates & Wilson for the benefit of the creditors of the assignors. At the time of the assignment, the assignors had $70,000 on deposit with the plaintiffs. ¡Notice of the assignment was given to the plaintiffs, and they were authorized to transfer to the assignees the 'deposit, and it was so transferred on the plaintiffs’ books. Subsequently, creditors of L. O. Wilson & Co. attached the funds in the plaintiffs’ hands, claiming them as against the assignees. The plaintiffs sought to interplead the assignees and attaching creditors, in order that it might be determined to whom the fund belonged. The learned Justice who delivered the opinion in this case, says the transfer of the fund to the. assignees upon the order of the assignors was equivalent to an actual payment of the order to them, and a new deposit by them of the moneys, on their own account.- On this ground it was held the plaintiff had failed to show a case for interpleading the defendants. Although the. ground upon which the learned Justice put his decision does not, in my judgment, aid the defendants’ view of this case, yet I should have been better satisfied if it had been placed upon another, and it seems to me firmer ground. Here was a general assignment for the benefit of creditors, which passed to the assignees all the property, rights and choses in action of the assignors, and gave to the assignees the right to immediate and absolute possession. Upon notice to Duncan & Co. of the assignment, the assignees became vested, not only with a property in I he funds, but with the right to their actual possession. This they held as trustee for the creditors, and could not be divested of by auy one of them. The order was unnecessary, or at most auxiliary to the assignment; the latter conferring all the title needed, and was in itself a perfect defense to the claim of the creditor. The case I am now considering is essentially different from that of Duncan v. Bates. Here there was no assignment of the funds—no rights of creditors to intervene—no taking possession by the plaintiff’s children—nothing upon which they could raise any legal claim whatever; and, therefore, while fully approving of the conclusions in that case, I cannot apply them to the facts in this case.

The next inquiry is, was this a gift to the plaintiff’s children, either in presentí or in futuro. That the plaintiff intended ultimately to make his children the objects of his bounty, is perhaps inferable from the transactions in the case. It is difficult to discern any other motive for the change in the accounts from himself to his children; but that he designed, at the time of the transfer, to donate to his sons the funds and securities, no where appears. In order to constitute it a valid gift, delivery was essential. A mere promise or declaration of an intention to give, however clear and positive, wuuld not be enough. The intention must be consummated and carried into effect by those acts which the law requires to divest the donor of, and invest the donees with, the right of property. The donor must part not only with the possession of, but with the dominion over, the property. (Gilchrist v. Stevenson, 9 Barb., 9, 13; Huntington v. Gilmore, 14 Id., 243, 246; Harris v. Clark, 3 Comst., 113; Van Deusen v. Rowley, 4 Seld., 358.) And if he retains authority or dominion over the subject of the gift, or there remains in him a locus penitentice, there is not a perfect and legal donation. (Hitch v. Davis, 3 Md. Chy. Decis., 266.) That the plaintiff did retain dominion over the securities and moneys in the defendants’ hands, is abundantly supported by the proof in the case. The fund was always held subject to his direction and control; payments of interest, income and principal were frequently and constantly made to the «plaintiff, and no doubt suggested, or question raised as to his absolute right to receive. The transaction, therefore, lacks the principal essential in a gift, namely, delivery, and a loss of dominion over the subject of the gift. Had the question arisen between creditors of E. R. & W. L. Geary and the defendants, the former would, I think, have failed to show any right to these funds; how much less can the defendants in this action set up property in E. R. & W. L. Geary as a defense to the plaintiff’s claim. After so fully and freely admitting the plaintiff’s right to, and control over these funds during the several year’s through which the transactions run, it seems to me it is now too late for the defendants to claim exemption on grounds so hostile to their previous acts. It is not disputed that the defendants were the depositaries of the plaintiff’s funds; nor is it questioned that they owed a duty to some one to discharge the obligations imposed by such deposits. Gan it be doubted to whom, at the commencement óf this suit, they owed that duty? I think not. The plaintiff never having parted with his property in the funds in the defendants’ hands, could maintain his action for their recovery.

The only remaining question I deem it necessary to examine, is the defense of accord and satisfaction set up by the defendants. On the 18th of September, 1855, the defendants, by F. M. Haight, wrote the plaintiff that they had compromised certain claims set apart on the failure of the defendants’ house, as a security for the debt due the plaintiff, at $12,000, cash $6,000, and a note for $6,000, at three mouths, and then say, “ the amount must be received in full of' your debt against Page, Bacon & Co. You will please send me a proper discharge from C. R. and W. L. Geary of the debt due them from Page, Bacon & Co.” To this letter the plaintiff, under date of Nov. 16,1855, wrote the defendants, through Henry Haight, and after acknowledging the receipt of the letter of the 18th of September, says, “ I desire this to serve you as a receipt until you forward me the balance and such releases as you desire me to execute in behalf of my wards, E. E. and W. L. Geary.” Ho other evidence is relied on by the defendants as establishing or tending to establish an accord and satisfaction. It is enough to say that the plaintiff, it seems to me, rejected the proposition to receive the compromise sum in full of his debt against Page, Bacon & Oo. He received the remittances on account only, and sent his receipt, to be held until the balance was forwarded, with such releases as the defendants desired him to execute. He in effect declined to accept the cash and note in full, and nowhere waived his right to claim the balance of his debt. The law is well settled that an accord, without acceptance of that which is offered or agreed to be taken, is not satisfaction. (Allen v. Roosevelt, 14 Wend., 100; Hawley v. Foote, 19 Id., 516; Brooklyn Bk. v. DeGrauw, 23 Id., 342; Tilton v. Alcott, 16 Barb., 598; Day v. Roth, 18 N. Y. R., 448.) Even if there had been an agreement to accept, it was wholly executory, and upon the authority of the above cases, could have been rejected, on a tender of performance by the defendants. It constitutes, in my judgment, no defense to the action.

The Eeferee having found an amount due the plaintiff upon an examination of the accounts between the parties, and it not being claimed that such finding is against the weight of evidence, I can see no reason why we should disturb his report, charging the defendants with the amount in this action, and directing judgment therefor.

I am of opinion that the judgment appealed from should be affirmed with costs.

Robertson, J.

Besides the accord, the only question is, if, on the evidence in this case, the plaintiff’s children'could recover against the defendants. It is not a case of novation whereby, in consideration of the defendants promising to pay such children the amount due, the plaintiff agreed to discharge the defendants, because the children were not present to accept, or parties to the promise. Even if a promise by C. to A. to pay B. a sum of money in consideration of A.’s agreeing to discharge 0. from a prior liability to him be valid, either A. or B. can maintain an action on such promise, if by parol; the former, because expressly made to him, and the latter, by reason of his beneficial interest; and that is the most that can be made of this case. The plaintiff can sue and recover, whatever maybe his childrens’ rights against him. I concur in the other views. *


author: By the Court—Monell, J.

text:
    Ellen O’Rourke, Plaintiff and Appellant, v. Henry Hart, Defendant and Respondent.
    The Street Commissioner of the City of New York, and not the Commissioner of Repairs and Supplies, is the proper officer to authorize the widening of the carriage way in a street in the city.
    The former decision of this Court in this case, (7 Bosw., 511,) that upon the facts disclosed, the defendant was not liable, re-affirmed and followed.
    (Before Barbour and Monell, J. J.)
    Heard, April 7, 1862;
    decided, April 26, 1862.
    This was an appeal from an order denying a new trial, and from the judgment entered thereupon, in favor of the defendant, for costs.
    The action was brought to recover for an injury sustained by the plaintiff, by the alleged careless, negligent and unskillful actg of the defendant and his servants in taking down an iron railing over the sidewalk, at the corner of Chatham and Pearl streets, in the City of Yew York.
    The trial on which this judgment was ordered, was the second trial of the cause. On the former trial, the Jury rendered a verdict for the plaintiff, and upon exceptions taken by the defendant to the charge of the Judge, the Court at General Term, granted a new trial, (see 7 Bosw., 511,) which was had before the Mr. Justice White and a Jury, on the 21st of October, 1861.

      It appeared upon this trial, substantially as before, that the defendant was a director of the Third Avenue Bail-road Company, whose track lay through Chatham street; and that he, being directed by the company to procure the street to be widened at that point by setting back the curb-stone, he, after obtaining permission of the Street Commissioner, employed one Carnley, who did iron work for the company, to make the necessary alterations in the awning posts and rails; and Carnley’s workmen caused the accident.

      William M. Allen, for plaintiff, appellant.
    The Street Commissioner had no power to give the permission, therefore all persons who directed, advised, assisted or countenanced the transaction were joint wrongdoers. (11 Johns. R., 285; 1 Ohitty Pl., Springfield ed., 1837, p. 91.)
    The charter of 1849 was then in force, and by it the Superintendent of Bepairs and Supplies Avas the person who had control of this business. (See Session Laws of 1849, page 281, § 13.)

      Clarkson N. Potter, for defendant, respondent.
    I. Defendant is not liable. The workmen ayIio did the injury were not his employees, but Carnley’s. (Blake v. Ferris, 1 Seld., 57; Pack v. Mayor of N. Y., 4 Seld., 227; Kelly v. Mayor of N. Y., 1 Kern., 436; Storrs v. City of Utica, 17 N. Y. R.,108.)
    II. But if there was any superior to Carnley, it was the railroad company.
    III. Had the change in the street been unlawful, (which . it was not,) it would have made no difference. The injury was not an injury by Hart, his servants, or employees. (Same authorities.)
    IV. The proof shows no such negligence as will warsant a recovery.
   By the Court—Monell, J.

The facts disclosed upon the second trial were identical with those proved on the first trial. I cannot perceive, after a careful examination of the evidence given on the first trial, that the plaintiff has made ont any stronger or different case than was presented to the General Term,, when this ease was up before.

The learned Justice who delivered the opinion of the Court on that occasion, decided, and, as I think, correctly, that there was no evidence in the case which would render the defendant liable for any act, negligent or otherwise, of the workmen employed to remove the railing from the sidewalk. They were the servants of Oarnley, who had undertaken to do the work for the Third Avenue Railroad Company, and who alone could exercise control over them, and were not in any sense the employees of the defendant. It was not necessary then, nor is it now, to decide whether the action might have been maintained against the Third Avenue Railroad Company or against Oarnley. It is sufficient that the defendant in this action is not liable. On both trials, the only evidence to charge the defendant, was, that he gave the order to Oarnley to do the work; that he did so by the direction of the railroad company, for whom the work was done, and had no other or further connection with* it. It is manifest, therefore, that the defendant cannot be held responsible for any negligence of the servants of Oarnley, over whom the defendant could not exercise any control, and who were not in any way subject to his direction.

In the view, therefore, taken by the General Term of this Court, the order and judgment appealed from must be affirmed, unless a new point, now, apparently, for the first time taken, should lead to a different conclusion.

It is now claimed, that the removal of the rail was without authority, and, therefore, all persons who directed, advised, assisted or countenanced its removal are to be regarded as co-trespassers, and liable for the injury sustained by the plaintiff, who was in the lawful use of the street where the trespass was committed. The evidence of the authority was, that permission to remove the rail was obtained by the Third Avenue Railroad Company, from the Street Commissioner, and it is now.insisted that such authority should have come .from the Commissioner of Repairs and Supplies, and not from the Street Com- . missiouer. •

The case on the former trial contains the same evidence, b,nt it does not distinctly appear that the objection now taken was then urged; although the learned Justice treated the permission received from the Street Commis* sioner as sufficient authority to render the removal of the rail-lawful, for he says, “ this rail, we must assume, might, lawfully be removed.” And hence I would probably be justified in concluding that this point was considered and passed upon by the Court.

But, assuming that it'was not, can it be of any avail to the plaintiff ?

: We are referred to sections 12 and 13 of the Amended Charter of 1849, (Sess. Laws 1849, 278, 281,) which pro-: vide, (§ 12): “ There shall be an executive department, under the denomination of the ‘ Street Department;’ which shall have cognizance of opening, regulating and paving streets. The chief officer shall be.called the Street Commissioner.” And, (§ 13,) “ There shall be an executive department, to be denominated the Department of Repairs and Supplies,’ which shall have cognizance of all repairs and supplies of and for roads and avenues, public pavements; * * the chief officer thereof shall be called the Commissioner of Repairs and Supplies.”

, The evidence was, that the Third Avenue Railroad Company applied to the Street Commissioner for permission to widen Chatham street at its junction with Pearl street, to afford additional and increased accommodation to their cars in passing that point. The permission was given by the Street Commissioner. In preparing to widen the street, it became necessary to remove the rail in question, the removal of which occasioned the injury to the plaintiff. Even if Chatham street is to be regarded as a “ road ” or “avenue,” within the meaning of the 13th section df the Amended Charter, of which I think there is great doubt, it appears to me to be quite clear, that the permission. applied for Avas not to “ repair,” but rather to “ regulate and pave” the street. The duty of the Commissioner of Repairs and Supplies is confined to repairing roads and avenues, and of the Street Commissioner, to opening, regulating and paving streets, and, in my opinion, the latter officer Avas the proper functionary to authorize an alteration of the character applied for by the railroad company. If the roads or avenues, (by Avhich is meant, I think, the country roads and the avenues, as distinguished from the streets proper,) are out of repair, caused by their use, or by caving, or by flood, or by accident, it is doubtless the duty of the Commissioner of Repairs and Supplies to cause them to be repaired; but Avhere an alteration of the street is to be effected, or it is to be opened, or regulated, or paved, the Street Commissioner is the proper officer to authorize the work.

The permission, therefore, obtained by the railroad company from the Street Commissioner, gave them authority to remove the rail; and they or the workmen of Carnley were engaged in a lawful act when the accident occurred; and neither they nor those by whose direction they were engaged, were trespassers.

The order and judgment appealed from must be affirmed, with costs.


text:
    Jonas Bartlett et al., Plaintiffs and Appellants, v. Charles Robinson, Defendant and Respondent.
    Under the act of 1857, (Sess. Laws, Yol. 1, p. 839, § 3,) which provides that a notice of protest for an indorser residing in the same city or town where the note is payable, inay be served by mailing it there, “directed to the indorser, at such city or town,”—a notice to an indorser residing in a large city, directed merely by his name and the name of the city, is not sufficient, where he has added to his indorsement the designation of his street and number. An indorser still has a right to make it a part of his contract-•that the notice shall be sent to a particular place; and where he designates a specific address within the city, a notice sent by mail must be addressed accordingly.
    (Before Barbour and Monell, J. J.)
    Heard April 16, 1862;
    decided April 26, 1862.
    Appeal from a judgment entered upon the report of H. W. Eobinson, Esq., Eeferee.
    The action was by Jonas Bartlett and Addison B. Gates, against the defendant as indorser of a promissory note. The note, which was given in evidence, was indorsed “ Oharles Eobinson, 214 E. 18th St.”' It was dated at Hew York and was payable at the office of Collins & Brown, 96 Broadway. The defendant served with his answer, an affidavit that he had not received any notice of the non-payment and protest of the note. It was proved on the trial, that the notary mailed a notice of the presentment and non-payment of the note to the defendant; that the same was deposited in the post-office in Hew York, directed “Oharles Eobinson, Hew York,” and the postage prepaid thereon.
    The Eeferee found these facts, and also that the defendant resided in the City of Hew York. He found as conclusions of law, that the plaintiffs were guilty of negligence in neglecting to cause notice of protest of said note to be directed to the defendant at his residence, Ho. 214 East Eighteenth street, in the City of Hew York; and that the notice directed to him at Hew York, was insufficient to charge the defendant as indorser. The Eeferee directed judgment for the defendant.
    The plaintiffs duly excepted to the conclusions of law.

      G. Stevenson, for plaintiffs, (appellants,)
    insisted that the notice was strictly according to the act of 1857, and that upon no construction of that act could anything more have been required.

      W. W. Niles, for defendant, (respondent.)
    I. An indorser has a right to designate where notice of protest shall be sent, and the failure to send notice as directed, discharges the indorser.

      The designation of his residence by the street and number, is a direction to have such notice sent to his residence. Morris v Husson, 4 Sandf. R., 93.)
    II. Where he resides in a large city, a notice directed to him, generally, at such city, is not good, Avhere the holder has the means of giving more exact directions as to the street and number of the indorser. (Story on Promissory Notes, §§ 345, 346; Chitty on Bills, 4th Am. ed., 474.)
    III. This was the rule at common law. The object of the. statute is simply to allow the notice to be mailed through the post-office, instead of being served personally, or being left at the party’s residence, or place of business, as was previously required, and thus assimilate the mode of service to that which prevailed in most other cases. The real question then is, was this so addressed within the 'meaning of the statute, and under the very strict rule requiring all diligence to get the notice to the party ?
    IV. In the construction of statutes the object of the change in the law is to be regarded, and no greater change is to be assumed to have been contemplated than was necessary to carry the particular intent into effect. Although this statute provides that the notice may be directed to the drawer and indorser, at such city or town, it does not attempt to prescribe what shall be a sufficient or proper direction to the drawer or indorser, nor to override, or interfere with, any of the requirements of the common law in that respect.
   By the Court—Monell, J.

The only question in this case is whether the notice of protest was properly served, so as to charge the indorser.

Formerly, service of notice of protest through the post-office was not allowed in any case, wherever the indorser might reside. (Ransom v. Mack, 2 Hill, 587.) The rule was subsequently relaxed. When the person to be served resided in a different place from the one where the note was presented, and there was a regular mail communication between the two places, service by post was allowed. But the notice was required to be directed to the residence of the indorser. Yet it was sufficient if it was directed to a post-office where he was in the habit of receiving his letters. (Montgomery Co. Bank v. Marsh, 3 Seld., 481.) The Act of 1835, (Sess. Laws, 1835, p. 152,) declared that it was sufficient service if directed to the city or town where the indorser resided, at the time of indorsing, unless at the time of affixing his signature, he should, in addition thereto, specify thereon the post-office to which he might require the notice to be addressed. Under this act, if the indorser specified the post-office to which he desired notice to be sent, it would not be sufficient to charge him if it was sent elsewhere. In so far the former rule was changed. In the absence of any such specification, the notice must be sent to the residence of the indorser, or to the post-office where he usually received his letters, if known to the holder. Where the indorser, however, resided in the same city or town in which the note was payable, it was required that the notice should be served on him personally, or by leaving it at his residence or place of business. (Van Vechten v. Pruyn, 3 Kernan, 549.)

The act of 1857, (Sess. Laws, 1857, vol. I, p. 839, § 3,) provides that where the residence or place of business of the indorser is in the same city or town in which the note may legally be presented for payment, notice of non-payment may be served, by depositing the same, with the postage prepaid thereon, in the post-office in the city or town where such note was presented, directed to the indorser at such city or town. The notary in this case has followed the very letter of the statute, whatever may be its spirit and meaning.

I cannot entertain a doubt that an indorser may make it a part of his contract that notice of the dishonor of the note or bill shall be sent to him at a particular place, and that where he does so, and it is known to the holder, a notice sent elsewhere, would be insufficient. There are many cases in the books where it has been held to be a sufficient service if sent to the place indicated by the indorser. (Story on Prom. Notes, § 314; Brent v. Bank of the Metropolis, 1 Peters S. C. R., 89; Morris v. Husson, 4 Sandf., 93.) And it seems to me to follow that a service thus made is not only sufficient, but that it cannot be made at any other place. If the maker of a note makes it payable at a particular place, it must be presented there for payment, and a presentment elsewhere would not be sufficient. (Story on Prom. Notes, $ 227.)

The object of a notice of dishonor of a note or bill to an indorser, is that he may protect himself from loss, and the law requires the greatest diligence on the part of those who would charge him, that he may receive early notice of the protest. The stringency of the common law rule has, as we have observed, been modified by the two statutes-above referred to; but neither of them has intrenched upon the right of the indorser to require notice to be given to him, at a place designated by himself. The act of 1857 must be regarded of doubtful policy in its application to large and populous cities, where hundreds of the same name are to be found, and where a notice addressed to an indorser at such a city, without any designation of street or number, would hardly reach him. Hence the greater necessity on his part of guarding against a failure to receive his notices, by a designation, under his name, of his street and number. I think he has a right to do so, and to require thereby that his notice shall be addressed to him at such place.

The defendant having done so in this case, the notary should have addressed the notice of protest accordingly.

' His failure to do so discharged the defendant, there being no evidence that he received the notice.

The judgment should be affirmed with costs.


text:
    Henry W. Penny, Plaintiff and Appellant, v. Garret C. Black, Defendant and Respondent.
    1. In a copartnership, the partners may stipulate simply as to the profits, where one is to furnish all' the materials, while both may bestow labor; and in such case, the only specific interest of all is in the profits, and, as to the property, the partnership is only in the use or employment of it as an instrument of profit.
    2. Where C. and B. formed a partnership in the business of making, selling and letting chronometers, 0. contributing all the capital, and B. giving his labor only, and receiving his salary and a share of the profits, and 0. agreed to put into the stock of such partnership certain chronometers which were his property, upon a stipulation “ that they should be taken at a fair valuation, as a stock in trade, so that upon a sale of them at the usual market price, the profit usual in that branch of business might be made on them," but this agreement was never reduced to writing, as was intended, nor was a valuation ever fixed upon; and, after dissolution of the firm, both partners remained in the store they had occupied as partners, and 0. let the chronometers in his own name, and kept his own accounts of them, and there was some evidence that it was understood between the parties that 0. was to take the stock and pay the debts:

      • Held that, after such dissolution, the chronometers were the property of 0., and that his lessee of one of them could recover possession of it from B., who had taken it away from him.
    3. Upon such an agreement, the chronometers did not become the property of the firm, but continued always the property of 0., the firm having a permission to use them.

      4. Held further, that, if this were not so, yet the evidence in this case was sufficient to show that, upon the dissolution of the firm, B. had relinquished any interest in them and retransferred them to them to 0.
    (Before Moncrief, Robertson, White, Barbour and Monell, J. J.)
    Heard, March 15, 1862;
    decided, May 10, 1862.
    This was an action to recover possession of a chronometer, to which the plaintiff claimed to be entitled as bailee for hire of one Frederick Creighton.
    The instrument in question, which was numbered 1,354, had been the property of Mr. Creighton, in the year 1853; prior to that time it had belonged to the firm of Bliss & Creighton, of which he was a member, and which had conducted the business of manufacturing, selling and letting out similar instruments for upwards of twenty years. These instruments were numbered, for the purpose of identification. On the dissolution of that firm, their stock was divided, and the instrument in question, among 150 others, became the sole property of Creighton.
    On the trial the plaintiff introduced in evidence, a complaint verified by the defendant’s oath in an action brought by him against Creighton. In that complaint a verbal agreement was set up between the defendant and Creighton, made about the 18th of April, 1853, to become partners under the name of Creighton & Black, in the business of making, selling and letting out chronometers; by it the defendant was not to contribute any capital, which was all to be furnished by Creighton, both parties equally devoting their time and labor to the business. The defendant was to draw a salary of $1,000 a year to be guaranteed to him, whether there were profits or not, nothing being said about losses, and of the remaining net profits he was to receive one-fifth and Creighton the other four-fifths. The business was conducted under such firm until the 18th April, 1856, when it was terminated by a notice from Creighton. The defendant had further alleged in such complaint that Creighton “put into the stock of such new “partnership” the stock which he derived from the old firm of Bliss & Creighton, but without affixing any price to the chronometers, “ but it was agreed that they should “ be taken at their fair value as a stock in trade, so that ' “ upon a sale of them at the usual market price thereof, the “ profit usual in that branch of business might be made on “ them,” and that it was further agreed that an instrument in writing should be drawn up as soon as convenient, which was never done.
    The defendant being examined in the present action, as a witness for himself, testified, on his cross-examination, that he “ never agreed to the price of any of the chronometers; “they were to be taken at a valuation; no prices were “ affixed to the goods at the time of the commencement “ of the business of Creighton & Black; there never was “ any agreement * * * as to the prices or values, to be put “ upon those articles including the chronometer in question.” A list of sold chronometers was made out by Creighton, assisted by a bookkeeper, (Sayer,) shortly before the dissolution, headed, “A list of chronometers on hand, “ January 1st, 1855,” and prices were affixed thereto; no list had ever been made before.
    The defendant objected to the prices affixed, upon the ground that it was more than they sold for, claiming that it was double their real value. A day or two after the dissolution of the firm \t was agreed between the parties .that persons should be appointed to value the stock, at the prices at which it ought to come in, and what it was worth after the dissolution.
    After the 18th of April, 1856, the dissolution of the firm, the defendant remained in the store previously occupied by it, for some time, until after June, during which time Creighton let out chronometers previously belonging to him, including the one in question, and such agreements were entered in' a private book of his. A son of Creighton’s testified that the defendant, in a conversation with his father, after the dissolution, said “ he had been there “ fifteen or twenty years, and there ought to be something “coming to him,” upon which Creighton said, he “had .“ not put any stock in and could not take any out,” to which the defendant seems not to have made any reply. Another witness (Hawley) testified that before the dissolution, he asked the defendant “what was going to be “ done about the stock and debts of Creighton & Black,” and that the latter said, “ Creighton was to pay the debts “ and continue on in the old place,” and that “ Creighton ■ “ was to keep the stock and pay the debts.”
    . The chronometer in question was fully completed before the formation of the partnership of Creighton & Black, and was let by Creighton in his own name, in June, 1856, to the plaintiff, who undertook, by a written agreement, to return it, “ at the end of the voyage,” on which he was then proceeding, “ or ivithin twelve months.” After the voyage expired, the defendant possessed himself of the instrument in question, from a cook on board of the plaintiff’s vessel, without plaintiff’s assent, and this action was brought in October, 1856, to recover possession of it.
    Evidence was admitted on the trial to prove a usage, by which the written agreement of the plaintiff was made to bind the plaintiff to restore the article hired, at the end of the voyage, or of a year, whichever should sooner happen; and the Beferee found the existence of such a usage. He also found that the chronometer was the partnership property of Greighton & Black, at the time of its bailment to the plaintiff, and that the defendant was entitled to its possession.
    Exceptions were duly filed to the findings of the Beferee.
    On a former appeal in this case, from a report and judgment in favor of the plaintiff, the question decided was the competency of the defendant as a witness. (6 Bosw., 50.)

      C. A. Hand, for plaintiff, (appellant.)
    I. The admission of evidence of custom, to vary the legal construction of the written agreement, was error.
    II. By the clear rules of law, the plaintiff had the election at which period, (the expiration of the voyage or of-twelve months,) to terminate the hiring. (Comyn Dig. “ Cond.” K. 1; Bac. Abr. “ Cond.” P; Id., “ Election ” B.; Chit. on Cont., 729; McNitt v. Clark, 7 Johns., 465.)
    III. The act of the defendant left the plaintiff defenseless against Greighton, whose original title as bailor he was forbidden to dispute. (Marvin v. Elwood, 11 Paige, 365; and see Bates v. Stanton, 1 Duer, 84.)
    IV. Upon the whole testimony of defendant he had no title to the property. The copartnership was in the use only. The only partnership that can be implied, where the capital belonged entirely to one of the partners, is a partnership in the use of the capital. (Vide Chase v. Barrett, 4 Paige, 148.) This ceased with the dissolution and withdrawal of defendant, which was previous to the letting, and thenceforth his interest was solely in the previous profits'; and his leaving the property with Creighton, and other acts, implied, also, a relinquishment of any legal title.

      Benjamin G. Hitchings, for defendant, (respondent.)
    I. All the facts necessary to make out the right of the defendant to the possession of the chronometer are distinctly found by the Referee; and, moreover, there is not even a conflict of evidence upon any material fact in the case.
    II. Upon the facts found, the conclusions of law found by the Referee, among which is that the defendant was entitled to the possession of the chronometer, are unquestionable. Hothing is clearer than that either copartner is entitled to the possession of the partnership property. It is equally clear that a third party cannot recover it from the possession of one partner, in order to give it to another.
    III. The plaintiff, derives no ground upon which to maintain this action, from the fact that the chronometer had been let out on hire to him by Oreighton, or from the terms of the agreement by which it had been so let to him.
    1. After the dissolution, Oreighton could not let out partnership property to hire, so as to give a valid title against his copartner.
    He merely held the partnership property as trustee for settling up the partnership business. He could sell it, but not trade with it, or lease it. (Story on Part., § 322, et seq.; 3 Kent’s Com., 4th ed., 63, 64; Gow on Part., 253; Coll. on Part,, §§ 545, 546.)
    2. Even if plaintiff had an election under his contract to keep the property for a further period after the expiration of the voyage, he made no such claim, and did not put his demand upon any such ground, but simply upon the ground that he wanted to deliver the chronometer to Oreighton.
    3. The agreement or receipt referred to is not to be construed as plaintiff’s counsel contends; but it means that the chronometer is to be returned at the end of the voyage, or, if the voyage is not ended within twelve months, at the expiration of that period of time.
    IV. The evidence of the custom of the chronometer trade, in explanation of the receipt or agreement, was admissible; for if the words of the instrument are not ambiguous, they mean what the parol evidence proved, and, therefore, the explanation of it is immaterial. If ambiguous, the evidence was admissible to explain and give a construction to it. (Coit v. The Commercial Ins. Co., 7 J. R., 385; Goodyear v. Ogden, 4 Hill, 104; Dawson v. Kittle, 4 Id., 107.)
   By the Court—Robertson, J.

It is plain, that the question first passed upon by the Referee, of the property in the article in question, lies at the foundation of the plaintiff’s right of possession.

Unless Creighton, on the formation of the firm of Creighton & Black, actually transferred and delivered the article in question, so as to become the joint property of the partners, he would still remain the owner. Ho mere agreement to contribute any articles, to become the subject of partnership dealings, would be sufficient, without an actual transfer and delivery; nor would even the subsequent employment of them in such partnership business, by itself, establish the sale and delivery of them to all the partners, as partnership stock. It is possible for partners to stipulate simply as to the profits of a business, where one is to furnish all the materials with which it is to be carried on, while both may bestow their labor; the only specific interest of all, in such case, is in the profits, Coll, on Part., §§ 17,18,) and the partnership is only in the use or employment of the articles as instruments of profit, (Champion v. Bostwick, 18 Wend., 183; Chase v. Barrett, 4 Paige, 148; Everett v. Coe, 5 Denio, 180; Coll, on Part.; § 18, n. 1.) The statements of the defendant show that, as to some parts of the agreement of the partners, it was merely inchoate, and the stipulations conditional; thus it was agreed that Creighton should put in his former stock, at- such a fair valuation as would enable the parties to make an ordinary profit; but such price never was settled, and, on occasion of the only attempt to do so, the parties disagreed, and upon the ground, as stated by the defendant, that no profit could be made out of them, thus recognizing in a measure the right of Creighton to retain the ownership of the .articles, provided he did not charge the firm more than was sufficient to leave room for profit; but not only does no price seem ever to have been determined, or written instrument executed, but no credit was given in the books, or entry made, respecting the oWnership of the articles; they remained, except so far as they were used in the business of Creighton & Black, the same as before as to ownership, unless the mere agreement to transfer operated as a legal transfer, which it did not. The joint possession of them by both parties was equally consistent with a transfer of property and permission to use, and by itself was no evidence of an executed transfer. The determination of the value, which was an essential condition to a transfer, never took place; and unless we are at liberty to infer a sale, upon a quantum meruit, and an • agreement to pay upon demand, there was no undertaking by the defendant to pay anything. Besides this, it would be difficult to determine what interest the defendant would take, under the supposed agreement, in the stock when transferred,—what rights he would have in them, if the partnership had been dissolved immediately after it was formed. If it was governed by his interest in the profits, that was $1,000 a year and a fifth of the surplus; the proportions, therefore, could not be determined from that; and the parties must be supposed to acquire an equal interest in the capital stock. If so, the result would have been that the defendant acquired by such an agreement an ownership of one undivided half of the stock of Creighton, without paying anything, upon an undertaking to pay one-half the value, without any provision for deducting that price from his share of the profits,—a result not to be inferred without positive evideuce, or as an unavoidable conclusion from circumstances. It would seem that the effort to arrange the price to be paid Oreighton for the stock contributed by him, was not made until the close of the partnership, until which time the arrangement remained in the same indeterminate condition. The probability that no definite arrangement ever was made as to the transfer of the stock, is strongly increased, if not made certainty, by the testimony of young Creighton, to the effect that the defendant was not to withdraw any stock, because he had put none in; that of Hawley, to whom the defendant admitted that Oreighton was to take the stock and pay the debts; and the fact that the latter dealt with the stock as his own, after the dissolution. The finding of the Referee, that the chronometer in question was the property of the firm of Creighton & Black, is unsupported by evidence, and against evidence.

But even were such conclusion untenable, the same evidence would go to make out a case of transfer or release of the stock, after the dissolution, to Oreighton. The defendant had not paid for his interest in it, if any, and it was not unreasonable to believe he had relinquished such interest, upon an agreement to protect him against the debts; and his subsequent acquiescence in the resumption by Creighton of his entire ownership of the articles forming such stock, without any formal release, completed the retransfer in the same informal way in which the original transfer had been made.

The report of the Referee was, therefore, erroneous on one of those two grounds, and should be set aside. It, therefore, becomes unnecessary to pass upon the question of the different interpretation of the agreement made by the plaintiff, by means of the usage found by the Referee.

The judgment must be reversed, the report of the Referee set aside, the order of reference discharged, and a new trial had, with costs to abide the event.


author: By the Court—Bosworth, Ch. J.

text:
    Owen O’Connor, Plaintiff and Respondent, v. George Such et al., Defendants and Appellants.
    Where an action upon an official bond, e. g., the bond of an administrator, is brought in the name of an individual plaintiff, and not in the name of the people, the judgment should not be for the amount of the penalty, but only for the amount of the damages and costs.
    (Before Bosworth, Ch. J., and Barbour and Monell, J. J.)
    Heard, April 11, 1862;
    decided, May 10, 1862.
    This action was brought upon an administrator’s bond against Such, the administrator, and William F. Cary and Charles A. Heckscber, his sureties.
    The Surrogate of the City and County of Hew York having made an order requiring Such, as administrator, to pay Owen O’Connor $2,240, on account of a claim of the latter against the intestate, and to pay the proctor of the latter seventy-five dollars costs, and the fees of the Surrogate accrued upon the accounting; and Such having failed to comply, the decree was docketed with the County Clerk and execution issued thereon, according to the statute, for the sum of $2,331.83, with interest. The execution being returned unsatisfied, O’Connor applied to the Surrogate for an order assigning the administration bond to him to prosecute, which being granted he brought the present action thereon. The complaint alleged these facts and demanded judgment for $20,000, the penalty of the bond, and that plaintiff’s damages be assessed and he have execution therefor, with costs.
    The action was tried at a Special Term, held on the 17th of January, 1862, by Mr. Justice Robebtsom without a Jury, a Jury trial having been waived by the consent of the parties.
    The Court found the facts to be substantially as above stated; and it was adjudged “that the plaintiff recover of the defendants twenty thousand dollars of debt, and eighty-two -r,ro dollars costs, disbursements and allowance; and, further, that the plaintiff have judgment and execution against the said defendants for his said damages, together with the costs of this action; which, together, amount to the sum of two thousand four hundred and sixty-eight dollars and eighty-eight cents.”
    The defendants duly excepted to the decision; and appealed from the judgment to the Court at General Term.

      D. B. Eaton, for defendants, (appellants.)
    I. If the action had been brought by the people, to whom the bond was made payable, and had been on behalf of all parties interested therein, there would have been plausibility in giving judgment for the whole $20,000, provided there had been proper provisions for only collecting the amount for which the sureties were really liable, and for the discharge of the judgment at the proper time. But the plaintiff has sued for himself alone, (and not in ■the name of the people even,) and though Ms interest in the security is only $2,468.80, he has an absolute judgment in Ms favor for $20,082.64, in addition to the $2,468.80.
    II. There is no provision by which the plaintiff can be compelled to satisfy the $20,082.64 on the payment of the $2,468.80; but the larger sum would remain a lien on the property of the defendants.
    III. There is no reason perceived why any other creditor may not sue the defendants and recover like judgments, though this excessive judgment remains of record.
    IV. Judgment should be given only for the amount really due the plaintiff. (Dayton on Sur., 2d ed., 548.)

      H. Brewster, for plaintiff, (respondent.)
    The Revised Statutes, as to bonds for performance of covenants, are not repealed, and have been followed here properly; but if not, the party should have raised the question on motion to correct the judgment, not by an appeal on the merits.
   By the Court—Bosworth, Ch. J.

The judgment is in the form prescribed by 2 R. S., 378, § 10, [sec. 9.] That statute, except as it is modified by the Code,, regulates the proceedings to be had in an action upon a bond for the breach of any condition other than the payment of money. This bond is of that character, not containing a condition in terms to pay money. (Lyon v. Clark, 4 Seld., 153.)

That statute allows but one suit on the bond; and provides that, if there be further breaches after judgment, a scire facias issue on the j udgment, &c., and also prescribes the mode of ascertaining thereby the damages. These provisions are intelligible and consistent where the party recovering the judgment is entitled to the damages for the subsequent breaches, or where the action may be brought, and all proceedings had, in the name of the obligee, although different persons are separately interested in the several breaches.

But if every person whom the bond is designed to protect may, in case of a breach violating his rights, sue in his own name and recover a judgment, it would seem that the judgment should be only for the amount of his damages. Otherwise there may be, in form, as many judgments for the amount of the penalty as there are suits and recoveries.

If the suit should have been brought in the name of the people, (the obligees,) the defect appeared on the face of the complaint. The defendants did not demur, but controverted some of the material allegations contained in it. This Court held in Baggott v. Boulger, (2 Duer, 160,) on a state of facts quite similar, that this defect, if it be one, cannot be availed of by an objection taken, for the first time, at the trial.

The only objection taken by the appellant on the argument of the appeal, is to the form of the judgment. It is insisted that the judgment should not have been given for the amount of the penalty, but only for the amount of the damages awarded, with costs.

There is no difficulty in assenting to this view, if it be law, that on a further breach occurring to the prejudice of the plaintiff, he may bring another action on the bond. It seems to have been assumed in Baggott v. Boulger, (2 Duer, 170,) that a new action maybe brought on each successive breach,.whether the suit be in the name of the people or in the name of the actual party in interest. This, possibly, may not be accurate, if the suit be in the name of the people; and that it may be, has been held, since the decision of Baggott v. Boulger, (supra,) in The People v. Norton, 5 Seld., 176.

If a suit on such a bond may still be brought in the name of the people, (and The People v. Norton, supra, so holds,) there may be some difficulties in the proceedings in respect to breaches occurring after judgment, which the facts in The People v. Norton would not necessarily suggest, and which are not considered in that case. The Code, (% 428,) abolishes the writ of scire facias, and provides that the remedies heretofore obtainable in that form, may be obtained by civil action under the provisions of chapter two of title XIII, of part two of the Code.

Section 471, [390,] of the Code does not retain the remedies prescribed by article 2, of title 6, of chap. 6, of part 3 of the Bevised Statutes. It is difficult, therefore, to see how any remedies can be had under sections 13 and 14, [sections 12 and 13,] of that article, and it may be that § 428 of the Code would make a new suit necessary, in case of a. breach subsequent to judgment. We recently had occasion-to consider the effect of that section on the remedy by scire facias, as it existed prior to the Code, to revive a judgment. (Ireland v. Litchfield, 8 Bosw., 634.)

In this condition of the statutes, and in view of the decisions made under them, I see no objections to holding that the plaintiff may recover in this action the amount to which he is individually entitled by reason of the facts found, and that the judgment should be for that sum, with costs. In the case of an order of the Surrogate requiring different sums to be paid to different creditors, and a total failure to comply with the order, whether all the persons entitled to resort to a remedy upon the bond" should unite in the action, or may sue separately, are questions that do not now arise. (See Dayton’s Surrogate, [2d ed., p. 548, or 3d ed.J p. 582.)

The judgment should be amended by striking out the words “ twenty thousand dollars of debt,” and inserting in lien thereof the words, “ the said snm of two thousand three hundred and eighty-six dollars and twenty-four cents,” and by striking out, after the word “ allowance,” all that follows down to, and includingthe words “ costs of this action,” and by adding to the end of the judgment, as it now reads, the words, “ and that the plaintiff have execution therefor,” and as thus amended, it should be affirmed, without costs of this appeal to either party.