author: By the Court—Monell, J. Bosworth, Ch. J.

text:
    Richard Campbell, assignee, &c., Plaintiff and Appellant, v. William Parker, Defendant and Respondent.
    1. A mortgage of real property (with the bond to which it is collateral) is the subject of a pledge. Mortgages are now regarded as mere securities and chattel interests, and may be pledged like other chattels and things in action.
    2. Where a bond and mortgage are transferred by an assignment absolute on their face, but accompanied by a promissory note, made by the assignor, which gives the assignee authority to sell the bond and mortgage, upon default of the assignor to pay his debt, the transaction is a pledge of the bond and mortgage, and not a mortgage or sale of them.
    3. The assignee, in such a case, acquires only a special property in them, and is subject to all the duties and obligations of a pledgee. He has no right to sell them, without, at least, a demand upon the assignor for payment of the debt.

      4. Where, in such a case, the pledgee, without demand or notice,"transferred the bond and mortgage to a third person, for a sum sufficient to pay the 'debt, but grossly inadequate to the value of‘the bond and mortgage, and .the latter canceled them: Held, that this was a conversion of them, and the pledgee Was liable, therefore, in an action in the nature of trover
    5. Such subsequent transfer of the bond and mortgage, having been not a sale bufa device to get the mortgage satisfied, and the plaintiff, the assignor, having tendered the debt due, and demanded a reassignment, it is immaterial whether the assignment be regarded as a pledge or a mortgage, for in either ease a tender would destroy the pledgee's lien, and trover would lie for the refusal to deliver. Per Bosworth, Ch. J.
    (Before Bosworth, Ch. J., Barbour and Monell, J. J.)
    Heard, April 14, 1862;
    decided, May 24, 1862.
    Appeal from a judgment ordered in favor of the defendant, for costs, on dismissing the complaint, at the trial.
    The action was brought for the conversion, by the defendant, of a bond made by Charles. H. Kitchel to Ten Eyck and Cochran, (the assignors of the plaintiff) conditioned to pay, on demand, the sum of four thousand dollars; and also of a mortgage of even date with the bond, upon a house and lot in Brooklyn, which bond and mortgage were alleged to be of the value of four thousand dollars.
    In the year 1858, Ten Eyck and Cochran, the mort- . gagees, borrowed of Kellogg & Parker, (of which firm the defendant was a member,) the sum of $1,000, and deposited with the defendant, in trust for said Kellogg & Parker, and, as a security for the loan, executed and delivered to the defendant, an assignment, absolute on its face, of the bond and mortgage; and cotemporaneously therewith gave the defendant a note, containing a statement of the terms of the loan, with an authority to sell the bond and mortgage, so assigned, upon default of payment of the loan. Ten Eyck and Cochrane made a general assignment of all their property, to the plaintiff, for the benefit of creditors. Upon the maturity of the loan, the defendant, without demand or notice to Ten Eyck and Cochran, assigned the bond and mortgage to one Joshua M. Beach, who after-wards satisfied the mortgage of record. After the transfer of the mortgage by the defendant, to Beach, and after the same had been satisfied of record, but before their general assignment to the plaintiff, Ten Eyck and Cochran tendered to the defendant the amount due on the loan; and after • the assignment to the plaintiff, and before the commencement of the action, the plaintiff also tendered the amount of the loan to the defendant, and demanded the bond and mortgage.

      The canse came on for trial before Mr. Justice Moeceibe aucl a Jury, on the 17th of December, 1861.
    The offer to prove the above facts was overruled by the • Justice, on the ground that they did not''tend to prove a cause of action against the defendant of the kind and nature alleged in the complaint, or in which a Court sitting as a Court of Common Law could grant relief.
    The complaint was dismissed and the plaintiff excepted. The plaintiff further offered to prove, that the defendant did not sell, or offer to sell the bond and mortgage, but concocted the plan with Beach, to enable him to procure the cancelment of the mortgage, and that Beach had some interest, as the real owner, or otherwise, of the property mortgaged. This evidence was also excluded, and the plaintiff excepted.

      C. A. Nichols, for plaintiff, (appellant.)
    I. The tender by the assignee of the amount due on the bond, and his demand of the same, established an unlawful withholding, which constitutes conversion, and it made no difference that the transfer was absolute on its face. He was equally bound to surrender it upon tender of the amount due, and liable for the consequences of not surrendering it. (Wilson v. Little, 2 Comst., 443 ; Stearns v. Marsh, 4. Denio, 228 ; Allen v. Dykers, 3 Hill, 593.)
    The bond was an evidence of debt transferable by delivery, and this was the subject of the conversion. The mortgage was only ancillary to the bond, a mere incident of the’debt. (Runyan v. Mersereau, 11 Johns., 534; Astor v. Miller, 2 Paige, 68; Waring v. Smyth, 2 Barb. Ch., 119.)
    II. The decision that the facts did not warrant an action at common law, necessarily prevented any application to amend the complaint so as to conform the pleadings to the facts, if such amendment was necessary. (Code, § 173; Rayner v. Clark, 7 Barb., 582 ; Clark v. Dales, 20 Barb., 67 ; Bate v. Graham, 1 Kern., 237 ; Bowdoin v. Colman, 6 Duer, 187; Balcom v. Woodruff, 7 Barb., 13.)

      III. Such amendment was not necessary; for defendant is estopped from, setting up his own wrong to defeat the action, and the plaintiff is at liberty to treat the refusal to give him possession as the conversion. (Hall v. Robinson, 2 Comst., 293; In matter of Brig Sarah Ann, 2 Summer, 206.)
    IV. Were it otherwise, and had it appeared that defendant had actually converted the subject of the action prior to the general assignment to plaintiff, so that the right of action passed to plaintiff, instead of the property in the thing converted, the Court would be bound, in furtherance of justice, to allow at the trial an amendment of the complaint which should conform to such proof.

      R. H. Huntley, for defendant, (respondent.)
    I. The assignment was a mortgage, and . defendant thereby became a bona fide mortgagee of the premises described in the mortgage. (Henry v. Davis, 7 Johns. Ch., 40; affirmed, 2 Cow., 324; Slee v. Manhattan Co., 1 Paige, 48.)
    II. And being a mortgage of real property, and the mortgagee taking a power coupled with an interest in respect to the mortgaged estate, it is not the subject of a conversion, and cannot be. Conversion can only be predicated of goods or personal chattels. (1 Chitty Pl., 146, 147; 3 Black. Com., 152.)
    III. A delivery of the bond and mortgage to the plaintiff, by the defendant, would have been of no avail; it was a reassignment, and not a return, that the plaintiff wanted. But this he has not demanded. (Lutweller v. Linneíl, 12 Barb., 512; Fuller v. Hubbard, 6 Cow., 13.).
    XV. The remedy of the plaintiff is in equity to redeem; and the Judge was right in holding that the action could not be maintained on the facts presented. (Slee v. Manhattan Co., 1 Paige, 48, 78, 80; Wilson v. little, 2 Comst., 446.)
   By the Court—Monell, J.

If this action can be maintained for the conversion of the bond and mortgage tinder the facts offered to be proved on the trial, I think the evidence of the conversion was sufficient. The assignment of the bond and mortgage to Beach, without demand or notice to the plaintiff’s assignors, was in violation of their rights, and of itself, a conversion. Besides, it put it beyond the defendant’s power to reassign, and no demand was necessary. (Delamater v. Miller, 1 Cow., 75; Hall v. Robinson, 2 Comst., 293; Dykers v. Allen, 7 Hill, 498.)

Although the assignment of the bond and mortgage was absolute on its face, yet the cotemporaneous note shows conclusively that it was not intended as a sale, but as a security for the loan; and that the assignors designed to retain in themselves the right to redeem upon payment of the sum loaned. It is not to be credited that those / mortgagees could have agreed to sell their security, of the value of $4,000, for the grossly inadequate sum of $1,000. The sale of it by the defendant, without'demand or notice, was an act of great injustice towards the assignors; and no doubt rests in my mind that the law affords them a remedy.

There is no view, it seems to me, in which the transfer of the bond and mortgage by the defendant can be upheld. He made no demand of payment of the sum loaned; he gave no notice of the sale or intended sale; both of which he was bound to do. He sold the bond and mortgage instead of collecting it by foreclosure and sale of the mortgaged premises, and realized the sum of $1,000 only upon it. (Wheeler v. Newbould, 5 Duer, 29.) Thus the rights of the assignors were most grossly violated and invaded.

But the question is, can an action for this unlawful conversion be sustained? or should the plaintiff have resorted to his action in equity, to redeem? The answer to these inquiries depends upon whether a bond and mortgage can be pledged as a security for a debt; for if they can be, then I think the authorities abundantly support the proposition that trover lies.

We have not been referred to a case, nor have I been able to find one, where it is held that a mortgage is not the subject of a pledge. It is true, several of the earlier cases in this State held that the assignment of a bond and mortgage as a security for a debt, is, in itself, a mortgage, but that the right to redeem remains in the assignee. Such was the case in Henry v. Davis, (7 Johns. Ch., 40,) afterwards affirmed by the Court for the Correction of Errors, (2 Cow., 324.) There the plaintiff assigned the bond and mortgage, by an instrument absolute on its face, but it was agreed that the assignment was to be by way of mortgage; and the defendant gave to the plaintiff a writing to reassign the bond and mortgage, on being paid the sum of $225, on a day specified. The plaintiff tendered the debt and interest, and demanded a delivery of the bond and mortgage. The defendant refused to assign, having received the amount of the bond and mortgage and canceled the same of record. The bill was to redeem. The Chancellor says: “The original design of the assignment in this case being admitted to be by way of pledge or mortgage, for a debt, and this design being contained in a collateral instrument, executed concurrently by the defendant, it seems to put an end to all question as to the right of redemption.” And nothing more is established in this case. And in affirming the decree of the Chancellor, the Judge delivering the opinion of the Court, (2 Cow., 334,) says: “Without reference to the construction which the law would put on the transaction, I am satisfied that, at the time, neither party considered the assignment an absolute sale. If it was not, the respondent had a right to redeem, and is not barred by non-payment at the day.” The extent, therefore, of this case is, that the assignment of the bond and mortgage was a pledge or mortgage, in which the assignor had the right to redeem. The dicta of “ once a mortgage, always a mortgage,” has reference to the defeasance contained in it, or in any cotemporaneous instrument, which no agreement of the parties can affect, so as to deprive the party of the right of redemption in a Court of equity.

In Slee v. Manhattan Company, (1 Paige, 48,) the complainant had "assigned to the defendants a bond and mortgage as a security for a debt, by an absolute assignment, containing a power to collect. The defendants foreclosed and purchased in the property. Subsequently, the complainant filed his bill to redeem. The bill was sustained. It was claimed by the defendants in theft answer that the assignment was a sale; but that objection was abandoned. The Chancellor says, “It is now admitted by the defendants’ counsel that the assignment to them from Slee, is on its face nothing hut a mortgages The whole of the argument of the Chancellor in this case, is to show that Slee, notwithstanding the assignment and the subsequent foreclosure of the mortgage retained in himself the equity of redemption. He treats the assignment throughout as a , mortgage, containing the right to redeem, which was not divested by the statute foreclosure. It is to be observed, that both the cases of Henry v. Davis, and Slee v. Manhattan Co., arose prior to the Bevised Statutes, when the rights of a mortgagee and his assignee were greater than now. Then, the mortgagee on default, could maintain ejectment to recover possession of the mortgaged premises, (Jackson v. Dubois, 4 J. R., 216), now he cannot do so. (2 R. S., 312.)

There is nothing in the cases to which I have referred, which declares that a mortgage is not the subject of a pledge. It was not necessary to determine anything more than that the complainant had the right to redeem; and the assignment is variously called a pledge or mortgage as distinguished from a sale, it seemingly being unimportant whether a pledge or a mortgage.

By the common law, a pledge is a bailment of personal property as a security for some debt or engagement. It is usually confined to chattels. Where real or personal property is transferred by a conveyance of the title, as a security, it is commonly denominated a mortgage. (Story on Bailments, § 286.) In case of a mortgage, the whole legal title passes conditionally to the mortgagee, and if not redeemed at the time stipulated, the title becomes absolute at law. But in a pledge, a special property only, passes to the pledgee, the general property remaining in the pledger. (Id., § 287.) A delivery is essential to a pledge, it was for along time doubted whether incorporeal things, like debts, money in stocks, &c., which cannot be manually delivered, were proper subjects of a pledge. It is now held that they are. (Wilson v. Little, 2 Comst., 443.) Hence, any species of personal property or chattel interest may be the subject of a pledge; and although the pledger parts with the possession of the pledge, he retains •his general property in it, and the pledgee has but a special or qualified interest.

Let us now see whether a bond and mortgage is or can be the subject of a pledge. Whatever may have formerly been the law, a mortgage is now regarded as a mere security for the payment of the debt due to the mortgagee ; in the language of Mr. Justice Story, (2 Story Eq., § 1015,) “A mortgage is but a pledge or security for the payment of the debt or the discharge of the other engagements for which it was originally given.” In Green v. Hart, (1 Johns., 580,) it is said, “ Courts of equity consider mortgages according to the essential nature of the contract, and give them operation according to the intention of the parties; the debt is, consequently, then esteemed the principal, and the land the incident; and whenever the debt is discharged, the interest of the mortgagee in the land ceases, of course.” So, in Jackson v. Willard, 4 Johns., 41, the Court, quoting from Ld. Hardwicke, who says, “ even the law considers the debt as the principal, and the land as an incident only,” applies the principles of equity to courts of law, as to the nature and effect of a mortgage. Kent, Ch. J., says, “It has been said, and repeated, that it was an affront to common sense to say that a mortgagor in possession was not the real owner; that the mortgagee, notwithstanding the form, has but a chattel, and the mortgage is only a security.” The question in this case was, whether the interest of the mortgagee could be sold under execution. It was held it could not be. That, until foreclosure, or at least until possession taken, the mortgage remained in the light of a chose in action. See also, Runyan v. Mersereau, (11 Johns., 534.) In Waring v. Smyth, (2 Barb. Ch., 119.) After adverting to the restriction of the Revised Statutes in depriving the mortgagee of the power to bring a suit to recover the possession of the mortgaged premises, before a foreclosure, and that the mortgagor is the real owner of the fee, the Chancellor says, “the mortgage, then, is here nothing but a chose in action, or a mere lien or security upon the mortgaged premises, as an incident to the debt itself.”

In The Morris Canal and Banking Company v. Fisher, (1 Stock. N. J., 667), the stockholders, for the purpose of raising money for certain purposes, authorized their directors to issue the bonds of the company, payable to bearer, to be secured by a mortgage of the canal and appurtenances. The mortgage was executed to three trustees, acknowledged and recorded. Afterwards, the directors authorized the president of the company to borrow $30,000 on the notes of the company, and to deposit with the notes, as collateral security, the company’s mortgage bonds, to twice the amount of the notes. The president borrowed of one Lewis, $1,500, gave him the company’s note for the amount, at eight months, and deposited with him $3,000 of their mortgage bonds. The note not being paid at maturity, Lewis, after notice to the company, advertised the bonds for sale, and sold them at public auction. The plaintiff (Eisher) bought them at the sale. The defendants having refused to pay the interest on the bonds, the bill was filed for the foreclosure and sale of the canal property and appurtenances. It was claimed that the bonds were not the subject of a pledge; that Lewis could not sell, but could only collect the company’s note, and that the company had the right to redeem on paying the $1,500 and interest. The Court, however, held that the deposit of the bonds was a pledge; that they passed by delivery, and that no assignment in writing was necessary. The defendants further claimed, that even if Eisher had acquired title to the bonds, yet he was not entitled to the benefit of the mortgage security, inasmuch as the mortgage was not assigned, and being a chose in action, could not pass by delivery. But the Court says, “ it is well settled that the debt secured by the mortgage is the principal thing; the mortgage is only an incident to the debt, and passes with the debt; referring, among others, to Green v. Hart, (1 Johns., 580,) and Langdon v. Buel, (9 Wend., 80.) I am of opinion that the complainant is entitled to the benefit of the mortgage to the extent of the bonds held by him, and to have the amount due paid by a salé of the mortgaged property.” Here, then, both the bonds and the mortgage were regarded as subjects of a pledge, and without assignment in writing passed to the pledgee, subject, of course, to all the usual rights of the pledger.

It seems to me, therefore, that if a mortgage is a “pledge ” or security for the payment of a debt, a “ chattel,” a mere “ chose in action,” according to the cases to which I have referred, it is necessarily the subject of a pledge; and that the contract by which it is pledged, vests the pledgee with only a qualified and special property in it, the pledger retaining the general ownership.

If I am correct in my conclusion that a mortgage may be pledged, I shall have no difficulty in determining in this case, that it was the intention of the plaintiff to give the defendant only such qualified and restricted property in, and right to, the assigned mortgage, as a pledge would bonfer.

In McLean v. Walker, (10 Johns., 472,) anote was delivered, payable in wheat, with an agreement that the plaintiff might redeem it by paying a certain sum, at any time within six months after the note became due. The Court held it a pledge and not a mortgage; that there was no sale; that it was merely deposited with the party, and that the legal property did not pass, as it does in the case of a mortgage. (See, also, Stearns v. Marsh, 4 Denio, 227.)

The ease of Wilson v. Little, (2 Comst., 443,) was in most respects like the present case. There, upon a loan of $2,000 by the defendant, the plaintiff deposited with him, “as collateral security, with authority to sell the same at the brokers’ board, or at public auction, on non-performance of this promise, without notice, fifty Erie.” The action ■ was for the wrongful selling of these shares. The Court say the transaction was a pledge and not' a mortgage; and they reject the idea that it is invariably true, that in all cases where the legal title is transferred to the creditor, the transaction is a mortgage and not a pledge. They held delivery essential to a pledge, but affirm that debts and dioses in action are capable, by means of a written assignment, of being conveyed in pledge.

The assignment of the bond and mortgage by the plaintiff to the defendant, and the cotemporaneous agreement of the parties, constituting, then, the transaction a pledge, the defendant took only such property in the mortgage as an ordinary pledgee acquires, and was subjected to all the duties and obligations imposed upon that class. Upon default in the payment of the sum loaned, he could have demanded payment, and possibly, on giving notice, have sold the mortgage. But he did neither of these. He did not demand payment, as is required by Wilson v. Little, supra, nor did he sell. He received the grossly inadequate sum of $1,000, by collusion with Beach; assigned to him the mortgage, who satisfied it of record. Here was a palpable conversion, a tortious and unlawful violation of the rights of the plaintiff, and for the reasons I have before stated; the defendant is liable in this action. (McLean v. Walker, and Wilson v. Little, supra.)

We think the Judge erred in overruling the evidence offered, and in dismissing the complaint.

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

Babbour, J., concurred in this opinion.

The Ghief Justice also concurred, assigning the following additional reason for reversal.

Bosworth, Ch. J.

We are justified in inferring from the facts offered to be proved that the note in this case, made by Ten Eyck & Cochran, is, in terms, like that in Wilson v. Little, (2 Comst., 443.)

Where an instrument transferring stock operates as a pledge of it, and not as a mortgage, a transfer of a bond by an instrument in the same form will operate as a pledge of the bond. Though secured by a mortgage of real estate, the bond is the principal and the mortgage is incident to it.

I think, therefore, that the facts offered to be proved would constitute a pledge and not a mortgage. But whether the one or the other, is immaterial in this case, the plaintiff’s assignors, and, subséquently, the plaintiff, tendered to the defendant the amount due on the loan, and demanded the bond and mortgage.

The tender destroyed the lien on the bond and mortgage, whether Parker was pledgee or mortgagee; and trover will lie for a refusal to deliver them, or for an actual conversion of them. (Kortright v. Cady, 21 N. Y. R., 343.) If ejectment to recover the possession of real estate will lie against a mortgagee in possession, upon a tender of the amount due, made at any time before foreclosure, it needs no argument to show that a .tender of the amount secured by a mortgage of chattels will destroy the lien, and authorize a recovery of the chattels, or damages for their conversion.

The proof offered was to the effect that, although the defendant had assigned the bond and mortgage to Joshua M. Beach, yet he did not sell or offer to sell them, “ but concocted this plan with Beach to enable him to procure the cancelment of the mortgage,” he having an interest in the mortgaged property.

On such a state of facts as the plaintiff offered to prove, his action was maintainable, and the dismissal of his complaint was erroneous. The judgment should be reversed and a new trial granted, with costs, to abide the event.


source: Caselaw Access Project

author: By the Court—Bosworth, Ch. J.

license: Public Domain

text:
    Charles B. Hoffman et al., Plaintiffs and Respondents, v. Daniel Miller et al., Defendants and Appellants.
    1. Where bankers and collecting agents receive from their correspondents engaged in. the same business at another place, negotiable paper indorsed to them by the latter, the indorsement being expressed to be “for collection,” and they do not credit their correspondents with it, but enter it in account as received for collection; and the circumstances and the course of dealing are such that they are not under any obligation to credit their correspondents with its amount until it be paid at maturity, and there is no understanding between them and their correspondents that remittances, or a delay to draw for cash balances, are to be influenced by the fact of holding paper sent for collection and not matured; they cannot, as against the owners who delivered the paper to their correspondents for collection, retain it on the ground of an unpaid balance due to them from such correspondents. Delay to draw for a cash balance, and the making of advances or remittances, after receiving the paper for collection, do not, under such circumstances, make them bona fide holders for value, so as to give them a superior title.
    2. In such a case, testimony by the plaintiffs, the collecting agents, that in making remittances after receiving the bill in question, they looked to, and relied on, the unmatured paper in their hands for collection, is not entitled to any weight, if neither any agreement nor the course of dealing between them, authorized them so to rely, and their correspondents had no reason to suspect that any remittance made to them was influenced by any such consideration.
    3. The cases of Warner v. Lee, (2 Seld., 144,) Scott v. The Ocean Bank, (5 Bosw., 192; 23 N. T. R, 289,) and The Bank of the Metropolis v. The New England Bank, (1 How. TJ. S., 234,) examined, and the two former followed, distinguishing the latter.
    (Before Boswobth, Ch. J., and Barbour and Monell, J. J.)
    Heard, April 21;
    decided, May 24, 1862.
    Appeal by the defendants from a judgment. This suit was brought by'Oharles B. Hoffman and John Gelston, on a bill of exchange, dated “ Houston, Texas, September 22,1860,” drawn by John Dickinson on Allan Hay & Co., of Hew York, for $1,100, payable thirty days after sight, to the order of Miller, Cloud & Miller,” and “ Accepted October 5, 1860, payable at the Bank of Commerce, in New York.” When received by the plaintiffs, the bill had the following indorsements: “Miller, Cloud & Miller “Pay Messrs. Hoffman & Co., or order, for collection, Josiah Lee & Co., .eleven hundred dollars.”
    The original defendants in the action were the firm of Allan Hay & Co., the acceptors; but having no defense, except that they were ignorant to whom the bill should be paid, because the plaintiffs, and also Miller, Cloud & Miller, respectively claimed to own it, they were permitted, by an order made in the action, to pay the money into Court, and Miller, Cloud & Miller were made defendants in their stead. The question now was, does the money belong to the plaintiffs, or to the substituted defendants, Miller, Cloud & Miller ?
    The cause was tried before Mr. Justice Bobertsoh, (a Jury being waived by consent,) on the 20th of November, 1861. It appeared that the plaintiffs’ firm, at and prior to receiving the bill, were bankers and collecting agents, doing business in the City of New York; and the firm of Josiah Lee & Co. were also bankers and collecting agents, doing business in the City of Baltimore.
    Miller, Cloud & Miller, on the 20th of October, 1860, doing business in Baltimore, and then owning the bill in question, deposited it with Josiah Lee & Co., for collection, at the same time indorsing it, in blank, as before stated. On the 23d of October, 1860, Josiah Lee & Co., after indorsing it in the form mentioned, inclosed that and another bill for $77.31, in a letter of that date, directed to the plaintiffs, and reading thus:
    “Messrs. Hoffman: & Co.: Dear Sirs—We inclose for collection and credit, bills stated below.
    Bespectfully, yours, Josiah Lee & Co.
    D. S. Cohen,...................... $77 31
    Allan Hay & Co.,.................. 1,100 00”
    The plaintiffs, by letter dated October 24,1860, replied, {inter alia,) as follows :

      “Messrs. Josiah Lee & Co., Baltimore: Dear Sirs—We have received your favor of 23d iust., with in closures as stated.
    $77.31 to your credit, and $1,100 acceptance, Allan Hay & Co., due November 4-7, 1860, which we enter for collection.”
    Charles B. Hoffman, one of the plaintiffs, and the only witness on their part, testified thus: “ There were two accounts in the books of each; we kept an account of all paper sent to them, (Josiah Lee & Co.,) and it was called ‘ our account,’ and drafts drawn against it were entered in that account; all paper received from them and drafts ag’ainst us, constituted the other account, which was called * their account.’ ”
    On cross-examination he was asked:
    • “Was the acceptance in suit' ever passed to the credit of Josiah Lee & Co., upon your books?”
    A. “No, sir; it was never passed upon the ledger; a memorandum of it was kept on the blotter and another small book; it was not our custom to pass paper to the credit of the remitting firm, in those accounts, until the paper matured and was paid, when we passed them on the ledger; of the two acceptances mentioned in the letter of October 22d, one was paid on sight, and immediately passed to the credit of Josiah Lee & Co.; the other, being the acceptance in suit, was treated differently.”
    . [The entry in plaintiffs’ blotter was thus :
    “ 351. October 24, 1860.
    “ Josiah Lee & Co., Baltimore, (their account.) “Their remittance on D. P. Cohn,.. $77 31
    ' - $77 31
    “ Allan Hay & Co.,................ $1,100 00”]
    Q. “Did you ever draw against any particular remittance, payable in future ?
    A. No, sir,
    Q. Did you consider yourself entitled to draw as against remittances for collection, prior to their maturity ?
    A. The question never came up.

      Q. Did you ever do it ?
    A. Eo, sir, we never had occasion to do it.
    Q. You did, at this time, a general collection business for account of customers ?
    A. Yes, sir.
    Q. Any one that chose to deposit paper with you for collection, you forwarded it for collection ?
    A. Yes, sir.
    Q. Was not that the general business of Josiah Lee & Go.?
    A. Yes, sir;‘that was one branch; they were in the habit of receiving paper from other parties and transmitting it for collection.
    Q. Was there any express and positive agreement between you and Josiah Lee & Go., in reference to this acceptance, except by the letter and order given in evidence ?
    A. Eo, sir, there was not.”
    Josiah Lee & Go. failed Eovember 1,1860, and on the 2d of that month delivered to defendants a written order on the plaintiffs, requiring them to deliver to the defendants the acceptance in question, the order stating, “ they (the defendants) being the rightful owners of the same, and we being agents to collect.” This order was presented to the plaintiffs, and the acceptance demanded of them before this suit was brought, and they refused to deliver it to the defendants. The plaintiffs received the acceptance on the morning of the 24th of October. On the 23d
    there was a balance due to them from Josiah
    Lee & Co.,.of,........................... $540 28
    October 24, plaintiffs .paid A. M. Allen, on
    Josiah Lee & Co.’s letter of credit,......... 200 00
    October 24, plaintiffs remitted to Josiah Lee &
    Go., drafts for collection, amounting to,____ 438 57
    October 30, they also remitted to Josiah Lee &
    Go., for collection, a draft for,............. 3,000 00
    They drew on Lee & Co., October 29, for,..... 600 00
    And October 30, for,................*........ 3,000 00

      These drafts’were protested; Lee & Co. collected the remittances of October 29th and 30th, and used the proceeds. They now owed the plaintiffs $3,901.53, excluding from the calculation the acceptance in question.
    On the trial, Charles B. Hoffman was allowed, against the objection and exception of the defendants, to testify that for several months “we always took into account the paper that we had on hand, in remitting for collection, or drawing down our balances with them.”
    The Judge before whom the action was tried, found as facts (among others) that the paper, remitted by the one firm to the other, “always appeared to be the property of the party transmitting the same; each treated the paper so received from the other as the property of the party from whom it was received. * * The plaintiffs, until the 2d of November, 1860, had no notice that said acceptance belonged to any person other than Josiah Lee & Co., and relying upon the possession of said acceptance, and other securities, amounting to $467.50, they paid the $200 October 24th, and made the remittances of $438.67 and $3,000; and from October 24th to October 29th, left the balance in plaintiffs’ favor, arising from the collection of such drafts, and otherwise, in the hands of Josiah Lee & Co., undrawn for.” He held, as matters of law, that the plaintiffs, as bankers, have a lien on the bill in question, for the balance due them from Josiah Lee & Co.; and that they have acquired a valid title to the said bill of exchange as bona fide holders thereof for value; and gave judgment for the plaintiffs for the amount of the bill, with interest, and ordered that the money paid into Court by the acceptors, be applied on said judgment. The defendants excepted to these conclusions, and appealed from the judgment to the General Term.

      L. B. Woodruff and C. F. Sanford; for appellants.
    I. Cited, as to the banker’s general lien on securities in Ms hands, for a general balance due, (2 Kent, 641; 2 Selw., 1385, and cases cited; MeBride v. Farmers’ Bank of

      Salem, 25 Barb., 657; Van Amee v. Bank of Troy, 8 Barb., 312; Lawrence v. Stonington Bank, 6 Conn. R., 521; Arnold v. Clark, 1 Sandf., 491; Scott v. Ocean Bank, 5 Bosw., 192; 23 N. Y. R., 289; Clark v. Merchants’ Bank, 1 Sandf., 498; S. C., (reversed,) 2 Comst., 380; Warner v. Lee, 2 Seld., 144.)
    II. Plaintiffs were not the “hankers” of Josiah Lee & Co., but both were merely agents of the defendants. The acceptance was virtually delivered to the plaintiffs by the defendants. (Lawrence v. Stonington Bank, 6 Conn. R., 521.)
    III. There is no evidence of any agreement that all remittances should be considered as made upon the faith of any prior remittances, unless Notice was given of the interest of others in the first paper remitted.
    IV. The plaintiffs’ knowledge of the general nature of Josiah Lee & Co.’s business, as collection agents, especially in connection with the indorsements on the bill, the correspondence and the other circumstances of the case, was sufficient to put plaintiffs upon inquiry, and should be deemed notice that the acceptance was held for collection, and that Josiah Lee & Co., were not the owners. (Van Amee v. Bank of Troy, Warner v. Lee, Arnold v. Clark, supra.)

    V. Knowledge that a great portion of the paper mutually transmitted was not the property of the remitter, of itself, forbade any agreement between plaintiffs and Josiah Lee & Co., the effect of which would be to create a general lien upon all the paper remitted; and such an agreement, if made, being known only to themselves, would have been void against these defendants, who confided to Josiah Lee ■ & Co. the collection of this acceptance, without notice, either express or implied, of the existence of such an agreement, or of their peculiar mode of transacting business. (Lawrence v. Stonington Bank, supra.)

    VI. Bor could such an agreement, though subject to the qualification suggested in the opinion of the Court, viz., that such lien should attach “ unless notice was given of the interest of others in the paper remitted,” be upheld between dealers mutually cognizant that each acted as the collection agents tor others, as against third parties, where, as in the present case, no distinction between the two classes of paper was ever pointed out or observed in any single instance; «where all was treated as belonging to the remitting party; where the party claiming the lien does not remember in the whole course of his business of ever receiving any notice of the interest of others in any paper.

      William C. Russell and G. Spring, Jr., for respondents.
    I. The defendants were guilty of laches in indorsing the draft 'unrestrictedly and in blank, thereby misleading the plaintiffs into® the belief that the paper when remitted to them belonged to Josiah Lee & Co.
    The plaintiffs are in nowise in fault; they received this paper in the usual course of their business, and advanced moneys and gave a credit on the faith of it, in good faith and without notice.
    II. The plaintiffs, as.bankers, have, by law, a lien on this acceptance. (2 Kent’s Com., 7th ed., 798, 820, note; Bank of the Metropolis v. New England Bank, 1 How. U. S., 234; S. C., 6 How., 212; Wilson v. Smith, 3 Id., 763; Rathbone v. Sanders, 9 Ind., 217 ; McBride v. Farmers’ Bank of Salem, 25 Barb., 657.)
    III. Independently of their lien as bankers, the plaintiffs are 'bona, fide holders of the acceptance in controversy, and entitled to hold the same against the defendants.
    The test of the character of a holder for value is, whether the party claiming it has, in good faith and without notice, so dealt with the paper and upon the security of its possession, that he will be in a worse position than before such dealing, if it be taken away from him. (Coddington v. Bay, 20 Johns., 637; Stalker v. McDonald, 6 Hill, 93 ; McBride v. Farmers’ Bank, 25 Barb., 657, and cases cited under 2d Point; White v. Springfield Bank, 3 Sandf., 222 ; Youngs v. Lee, 18 Barb., 187; S. C., 2 Kern., 551.)
    IV. The course of dealing between the plaintiff and Lee & Co., proven in this case, and found as matter of fact by the Court below, establishes an agreement between the parties that all remittances made by either to the other should be considered as made upon the faith of prior remittances by the latter to the former, unless notice was given of the interest of others in the paper first remitted. Such an agreement can be established as thoroughly by a continuous course of dealing, as by express contract in terms. (Bank Metropolis v. N. E. Bank, 1 How. U. S., 234; S. C., 6 How., 212; Scott v. Ocean Bank, 5 Bosw., 192; S. C., 23 N. Y. R., 289.)
    V. The plaintiffs had no notice, when they received the draft in question, that it belonged to any other party than Josiah Lee & Co.
    VI. The relations of the.plaintiffs and Josiah Lee &rCo. in regard to this paper were not those of mere principal and agent. These parties' were mutual correspondents, each a principal as to the other, each remitting to the other and drawing drafts, not in reference to any particular remittance, but in reference to general balances and securities in the hands of either, arising from prior remittances.
    VII. Hone of the cases which have been decided in favor of the original owner contain the fact of advances having been made, or securities having been parted with, on the strength of the paper. (Van Amee v. Bank of Troy, 8 Barb., 312 ; McBride v. Farmers’ Bank of Salem, 25 Id., 657; Scott v. Ocean Bank, 5 Bosw., 192, and 23 N. Y. R., 289; Arnold, v. Clark, 1 Sandf., 491.)
   By the Court—Bosworth, Ch. J.

On the facts, which the evidence will justify a Judge or Jury in finding, we think no discrimination, favorable to the plaintiffs, can be made between this case and Warner v. Lee, (2 Seld., 144,) and Scott v. The Ocean Bank, (5 Bosw., 192, and 23 N. Y. R., 289.)

In Warner v. Lee, John T. Smith & Co., with whom the plaintiffs had' deposited for collection a note owned by them, made by Osborn & Whallon, sent it in a letter to the defendant, a banker, which letter stated that it was “ inclosed for collection.” In the present case, the indorsment to the plaintiffs stated that it was “ for collection.” The letter inclosing it (and another draft) stated that they were inclosed “ for collection and credit.” This, in the light of the evidence'given, means that the draft for $77.31 was inclosed to be credited to Josiah Lee & Co., and the one for $1,100, for collection. The small one was paid at sight, and was credited to Josiah Lee & Co. The large one — the one in question—was entered on the plaintiffs’ blotter as received for collection, and was never otherwise credited to Josiah Lee & Co.

In Warner v. Lee, the plaintiffs had received.no advances from John T. Smith & Co. The present defendants received none from Josiah Lee & Co.

In Warner v. Lee, Smith & Co. were largely engaged in making collections of notes for merchants in Sew York, and the defendant was aware of that fact. In the present case, Lee & Co. “ were in the habit of receiving paper from other parties, and transmitting it for collection.” One of the plaintiffs so testifies, and, of course, he was aware of that fact.

In each case the accruing balances were collected in a similar manner.

In Warner v. Lee, the Beferee did not find that any advances were made by defendant to John T. Smith & Co., on the credit of the' note there in question. In the present case, the Judge has found, that the plaintiffs made advances to Josiah Lee & Co., on the credit of the acceptance in question. We shall attempt to show that this finding is not warranted by the evidence. Assuming, for the present, that this is susceptible of demonstration, then there is no difference between the facts of these two cases, except that, in Warner v. Lee, the note there in question was collected, and the proceeds received by the defendant, before any formal notice was given to him that the note was not the property of Smith & Co.; while, in the present case, the plaintiffs did not collect the acceptance in question, and had formal notice before this suit was commenced, that it was the property of the defendants.

In Warner v. Lee, the Court said, that “when the defendant received this note, he had notice, from its indorsement, from the course of business of Smith & Co., with which he was acquainted, and from the letter which inclosed the note to him, that it was placed in their hands for collection only, on account of the owners, the plaintiffs . in this suit. Under these circumstances, if he had made advances upon account of it, he could not have held the note nor its proceeds, against the plaintiffs. (Clark v. Merchants' Bank, 2 Comst., 380.)”

In the present case, the plaintiff had the same notice, except such as the indorsement furnished. In Warner v. Lee, the plaintiffs indorsed the note in blank on delivering it to Smith & Co., and they filled up the blank indorsement with the defendant’s name; whereby it was, in form, specially indorsed by the plaintiffs to the defendant. In the present case, the blank indorsement of the defendants was left as they wrote it, and Josiah Lee & Co. wrote under it a special indorsement by themselves to the plaintiffs, in terms stating it was for collection. The present plaintiffs had notice, therefore, that Lee & Co. had received it for collection, that they sent it for collection for the owners; and the natural inference would be that the payees were the owners, it being indorsed only by them, and by Josiah Lee & Co. Arnold v. Clark, (1 Saudf. S. C. R., 491,) supports these views. If it be thought that the decision in Warner v. Lee conflicts with that in The Bank of the Metropolis v. The New England Bank, (1 How. U. S. R., 234,) it would, nevertheless, be our duty to follow it, it being the decision of the Court of last resort of this State, and controlling upon us. The latter case was cited in Warner v. Lee, (2 Seld., 146,) and of course was not overlooked.

In Clark v. The Merchants’ Bank, (2 Comst., 380,) the Court treated the material and controlling question as being, “ whether the bill in question was transmitted to Smith & Co., for collection merely, or was to be credited to the plaintiffs when received by the former, whether collected or not.” (Id.) And to complete the statement of the material elements entering into the question," Gar-direr, J., added : “As the bill was indorsed in blank by the plaintiffs, the legal title passed to Smith & Co. prima facie, and the plaintiffs must establish the fact that it was indorsed and forwarded for the purpose of collection.”

In the present case, the plaintiffs have proved by evidence which is uncontradicted, that Miller, Cloud & Miller deposited the bill with Josiah Lee & Co. for collection; that the latter indorsed it specially to the present plaintiffs, and stated in the indorsement itself that they indorsed it to the plaintiff's for collection, and that the plaintiffs, on receiving it, entered it in their books as having been received for collection, and, by letter to Josiah Lee & Co.» informed them that they had entered it for collection.

In Clark v. The Merchants’ Bank, (supra,) Gardener, , J., discusses the evidence therein, as to the classes of funds remitted, and came to the conclusion that one class was remitted to be credited as cash when received, and to be drawn against, whether paid or not, at the time of so drawing; and that another class was remitted for collection, and was not to be credited or drawn against, until actually paid.

■ As to the class which was to be credited as cash when received, the Court held that the title passed to John T. Smith & Go,, on their reception of the same, and that their application of the proceeds to the payment of their own debt, could not be questioned in a suit against creditors (of John T. Smith & Co.) receiving "them in good faith.

The error of the Court below was stated to consist in the assumption “ that nothing went into account properly” until collected in the course of business, (or in other words that nothing was to be credited as cash wheii received.) (Id., 385.) Gardener, J., summarily states the position of the parties, inter se, with reference to the different classes of remittances, thus: “ Eor the first class they were to be credited, with the right to draw upon their correspondents; as to the second and third, the Few York firm were the agents of the plaintiff's, and had no other interest in, and control over, the assets, than such as was necessary to the discharge of their agency.” Id., 385.

In Scott v. The Ocean Bank, (5 Bosw., 192, and 23 N. Y. R., 289,) the Court held, that:

1. The property in notes or bills transmitted to a banker by his customer, to be credited the latter, vests in the- banker only when he has become absolutely responsible for the amount to the depositor.

2. Such an obligation, previous to the collection of the bill, can only be established by a contract to be expressly proved, or inferred from an unequivocal course of dealing.

That case, in all of its material facts, bears a close resemblance to the one before us. And the Court of Appeals says: “ When, therefore, it appears that the bill in question was retained in the possession of the company, (the party to whom it was sent for collection,) after its acceptance, and that no credit had been given for it at the time it was passed to the defendants, and when nothing is disclosed in the whole course of dealings between the parties to show that any bill was ever credited or agreed to be credited in account, before its collection, or that By ell (the remitter) ever drew or was entitled to draw on the company, or that it was bound to accept drafts otherwise than upon and for funds actually received in cash, it must be considered that the company, at the time of the transfer, stood in the relation of agents for its collection merely.” In that case, the defendants received the bill from the company to secure a pre-existing indebtedness, and credited its proceeds to the company after it was paid, and they were held liable to the plaintiff for its amount.

If, therefore, it is clear upon the evidence that the present plaintiffs did not, and were not under any obligation to credit the bill in question to Josiah Lee & Go., when received, and that there was no agreement or understanding between them that remittances for collection, or a delay to draw for cash balances, was to be based upon or influenced by the consideration of holding paper sent for collection and not matured, then it will follow that the judgméut in this case is in conflict with Warner v. Lee, and Scott v. The Ocean Bank, (supra.)

With reference to this question, it may be observed, first, that the learned Judge who tried this cause states in his opinion “ that the only ground upon which the plaintiff’s claim, can rest, is a mutual agreement between themselves and Josiah Lee & Co., that all remittances, made by either to the other, should be considered as made upon the faith of any prior remittances by the latter to the former, unless notice was given of the interest of others in the paper first remittedand, second, that the learned Judge did not find as a fact that any such agreement was ever made.

There is no .evidence that any express agreeuient to that effect was ever made. And we think_ it quite clear that no such agreement can be inferred from the course of dealing between those parties.

Charles B. Hoffman, one of the plaintiffs, testified as to the course of dealing between his firm of Josiah Lee & Co., thus: “We remitted to them, and they to us; they kept an account with us, and we with them ; they drew upon us, and we upon them; sent paper for collection, and so on;' their remittances to us, if at sight, were collected at once and passed to, their credit; the same course was pursued with the paper we sent them.” That the question whether the plaintiffs “were entitled to draw as against remittances for collection before their maturity,” “never came up;” that they never did it, nor had occasion to do it; and that he does not remember that his firm ever drew “ otherwise than against balances ” of collections actually made.

The only circumstances furnishing any evidence of any exception to this, as the uniform course of business, is in the testimony of Mr. Hoffman, to the effect' that he remembered “one insta¡nce where we (his firm) paid a large overdraft by them,” (Jqsiah Lee & Co.) By overdraft, as here spoken of, we understand a draft for a larger amount than the cash balance then standing to the credit of Josiah Lee & Co. Mr. Hoffman testifies, that neither firm was “ ever under obligation to pay any such draft,” and that he thinks there were two or three instances of overdrafts by Josiah Lee & Co.

In opposition to this exceptional transaction, and in support of the understanding being .in accordance with that indicated by the usual and common course of them business, is the fact that bills on time, when received, were entered in the books of the plaintiffs as having been received for collection, and were never otherwise credited, until actually collected; that the bill in question was sent, entered, and by plaintiffs’ letter is admitted to have been received, for collection, and never was otherwise credited-to Josiah Lee & Co.

This evidence.does not in any manner justify the finding of such an agreement as the Court at Special Term held it essential for the plaintiffs to establish in order to recover; nor' does it furnish any evidence of an obligation on the part of the plaintiffs, to give credit to Josiah Lee & Co. for it, until actually paid; or of any assent on their part that it, or other bills received under like circumstances, should be held by the plaintiffs as security for remittances subsequently made by them, or for the payment of any cash balance in their favor, that might then happen to exist, or might subsequently accrue.

Under such circumstances, evidence by. Mr. Hoffman, that we (his firm) always took into account the paper that Ave had on hand, in remitting for collection or drawing doAvn our balances with them, at least we did for several months,” should not be allowed any weight.

The answer imports that this mental operation to which he testifies, was of late occurrence and short duration; there is no pretense that it had been disclosed to- Josiah Lee & Co., or was authorize"! or suspected by them, and so long as it is essential to a valid agreement that there should be at least two parties to it, evidence of what the plaintiffs “ took into account or consideration,” or “ looked to very closely and relied upon,” in making remittances or delaying to draw cash balances, ■ should be disregarded when it is clear that it was unauthorized, and that Josiah Lee & Co. had not the slightest reason to suspect anything of the kind.

We think, therefore, that no discrimination favorable to the plaintiffs, can be made between this case and Warner v. Lee, and Scott v. The Ocean Bank, (supra;) that on the evidence, it is clear that the plaintiffs received the bill for collection, and knowing that Josiah Lee & Co., received and forwarded to them for collection, paper belonging to third persons, as well as paper owned by themselves; that Lee & Co. were not entitled to be credited with the bill until actually collected; and that there is no evidence justi- • fying the claim of a mutual agreement or understanding that remittances for collection by either, were made on the faith and security of paper in their hands, not matured and previously' received for the like purpose, from the house to which such remittances were made.

We do not deem it material or useful to attempt to discriminate between The Bank of the Metropolis v. The New England Bank, and Warner v. Lee, or Scott v. The Ocean Bank, (supra) If it be supposed that no material difference exists, it is none the less our duty to conform our decision to the law, as declared by the Court of dernier resort of this State.

It is not to be denied, however much it is to be regretted, that there is an apparent conflict between the Courts of this and other States, as to the circumstances sufficient to constitute an indorser of paper a hona fide holder for value, so as to exclude the equities of third persons, or defenses that could be made in a suit between the original parties. (Stalker v.McDonald, 6 Hill, 93; Warner v. Lee; Scott v. The Ocean Bank, supra; Swift v. Tyson, 16 Peters, 1; Le Breton v. Pierce, vol. 9, Am. L. R., 737, and note thereto, in vol. 1, Id., N. S., p. 35.)

It may be observed, however, that the head note in Swift v. Tyson, enunciates no rule in conflict with the decisions in this State, and if the fact was proved in that case, (as asserted in the argument of Mr. Fessenden,) viz.: “ That on receiving the acceptance, he (the plaintiff) had given up the note of Norton & Keith, which had been indorsed by one Child,” the decision is in harmony with those of this State.

The learned author of the note upon Le Breton v. Pierce, (1 Am. L. R., N. S., p. 38,) states that “ it has always seemed to us that most of the controversy upon this subject has grown out of the different sense in which the terms are understood. If the term ‘ collateral ’ is understood to import that the bills thus held are not taken on account of the existing debt, but only to be held until due, and if paid, tire amount to be applied, and in the meantime the creditor assumes no responsibility in regard to them, except as the mere agent of the debtor for collection, there could be no ground of claim that any property passed, or that existing equities in former parties were extinguished.”

In The Bank of the Metropolis v. The Bank of New England, (supra,) the Court says: “ There does not, indeed, appear to be any express agreement that those balances should not be immediately drawn for, but it may be implied, from the manner in which the business was conducted; and if the accounts show that it was their practice and understanding to allow them to stand and await the collection of the paper remitted, the rights of the parties are the same as if there had been a positive and express agreement.” This seems to hold that either an express agreement, or one justly inferable from competent evidence, of the actual understanding of the parties, of the character stated, would make a holder of bills, received under that agreement, a holder for value to the extent of any balance due to him.

This may be conceded to be law, and yet, if we have taken a correct view of the evidence in the present case, and of its legal effect, the plaintiffs .have failed to bring themselves within this rule. They have not shown an express agreement of this character; they have not furnished any evidence that it was their practice, or the understanding between them and Josiah Lee & Go., that cash balances should stand and await the collection of paper remitted to the party in whose favor a balance might exist.

The judgment must be reversed and a new*trial granted, with costs to abide the event.

Ordered accordingly.


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

text:
    Isaac H., Seckel and Bernhard Bronner, Plaintiffs and Respondents, v. Samuel Frauenthal, Defendant and Appellant.
    1. In an action to recover for goods sold, the defense being that the sale was not to the defendant, but to one L., it appeared that the plaintiffs, deeming L. to be irresponsible, had refused to sell to him on credit, without security, and he, accordingly, brought the defendant to them as his security, whereupon the defendant bought the goods for L., and they were charged to the defendant. At the trial, a witness to the transaction was asked to state whether he knew, when L. came there, anything concerning his responsibility, and if so, whether he, the witness, made any communication on that subject to the plaintiff?
    Held, that it was not an objection to this question that the defendant was not shown to have been present. The communication, if any, was one proper to be privately made, and the presence of defendant is immaterial. (Barbour, J., dissented.)
    2. It seems that the question is proper, on the ground that evidence having been given by defendant, tending to show that plaintiffs were willing to sell to L., it was competent for them to show that they did not believe him responsible.
    3. Where one witness, being asked where was a note he had indorsed, and which had been delivered back to him, testified: “I don’t know; I expect it is destroyed; after I got it back T tore my name off; I have not got it,” and another witness testified that he once saw the note at a banking house: Held, that parol evidence as to what the indorsement was, was not admissible, without further proof that the note was destroyed or lost.
    4. A witness having testified that a sale of goods by plaintiffs on credit, was to him, and not to defendant, and that his credit was ample at the time of ' sale; was cross-examined as to judgments against him, and, without objection being made, answered as to them in detail, and identified all the judgment rolls.

      Held, that this made it proper to admit the judgment rolls in evidence, both as contradicting the witness and as tending to disprove that the sale was to him.
    (Before Bosworth, Ch. J., Barbour and Monell, J. J.)
    Heard, April 23;
    decided, June 14, 1862.
    This was an appeal by the defendant from a judgment in favor of the plaintiffs for $1,258.54.
    The action was to recover $759.26 for goods sold and delivered by the plaintiffs to the defendant, between the first of September and first of December, 1856. The complaint, after averring the sale, &c., of the goods, also alleged that the plaintiffs were induced to sell the goods upon the representations of the defendant that he was the owner of two houses and lots in Wilkesbarre, Pennsylvania, which were unincumbered, and worth at least $5,000, and that the defendant was worth more than $15,000, over all his debts; which representations the plaintiffs alleged were untrue.
    The defendant, in his answer,. denied the sale of the goods to him, but admitted a sale at about that time, of goods to the amount of $230.44, which he alleged he had paid. He further denied the representations alleged in the complaint. He alleged that, at or about the time stated in the complaint, the plaintiffs sold and delivered to one Samuel Lowenstien goods amounting to $759.26, and that such sale was the same transaction, as the sale mentioned in the complaint, as made to the defendant. The defendant further alleged that in November, 1857, the plaintiffs made a general assignment of all their property to one M. Bronner, whereby the demand mentioned in the complaint passed to the assignee, and the plaintiffs thereafter ceased to be the owners thereof. That the assignee, in December, 1857, for a valuable consideration, sold and transferred the said demand to one Joseph Lowenstein, who afterwards settled the same with Samuel Lowenstein, and that at the commencement of the action the demand was paid.
    The action was tried before Mr. Justice Woodruff and a Jury, on the 13th of December, 1860.
    Exceptions were taken by the defendant to the admission and exclusion of evidence.
    The Jury rendered a verdict for the plaintiffs for $945.25, upon which judgment was entered, with costs.

      T. C. T. Bulkley, for defendant, (appellant.)

      Solomon L. Hull, for plaintiffs, (respondents.)
   By the Court—Monell, J.

The defense was two- . fold: First, that the sale was to Samuel Lowenstein, and not to the defendant; and second, that the plaintiffs’ assignee had transferred the demand to Joseph Lowenstein, to whom Samuel had paid it. Upon both these issues the Jury have found against the defendant. Eo question, therefore, arises on the facts.

The first exception taken by the defendant was to allowing the following question to be put to the witness Bishop:

“ State whether you knew when Lowenstein came there, anything concerning his responsibility, and if so, whether you made any communication on that subject to the-plaintiffs ?” The only objection to this question Avas, “ that the defendant was not shown to be present.” The case shoAvs that Samuel Lowenstein applied to the plaintiffs to purchase goods. The plaintiffs, deeming him irresponsible, declined to sell, unless he would give security. Subsequently, on the same day, he brought the defendant to the plaintiffs’ store, and offered him as security. The plaintiffs objecting that a verbal agreement to guarantee would be void, the defendant directed the goods to be sent to Lowenstein and charged to him, the defendant. The goods were so sent and charged. The Jury, by their verdict, have so found from the evidence.

Bishop was a witness for the plaintiffs, and had testified that Lowenstein came to the plaintiffs’ store to purchase goods, and offered to give security; that on the same day he came again with the defendant, whom he offered as security. The question related to the communication of Bishop’s knowledge of Lowenstein’s irresponsibility, to the plaintiffs, and must have had reference, in point of time, to the occasion of Lowenstein’s first call at the plaintiffs’ store. It was at that time that .he inquired if the plaintiffs would sell to him, if he would give security. It is not pretended that the defendant was then present. He had not then been brought into the transaction, and could not be affected or influenced by any conversation between the witness and his employees. It was a confidential communication to the plaintiffs, from which they were to decide whether to give or decline the credit asked by Lowenstein, and the presence or otherwise of the defendant would be no reason for excluding the evidence. If the communication was proper to be made to the plaintiffs, it was proper it should be made privately, nor was it necessary to show that it was made in the presence of either Lowenstein or the defendant. Indeed, we feel authorized to infer that it was not made in the presence of either. That it was confidential, and was privately made, is to be presumed from its nature, which related to the credit of Lowenstein. It is enough that the defendant was not present, or, if present, had incurred no liability, and that it does not appear that he was influenced, or could have been influenced, in the subsequent part he took in the transactions, by anything that passed between the witness and the plaintiffs. This disposes of the objection on the only ground taken by the defendant. Upon a bill of exceptions we cannot look into grounds not taken at the trial. (Whiteside v. Jackson, 1 Wend., 418; Newton v. Harris, 2 Seld., 345.)

But I think the question put to the witness was proper, for another reason. The question before the Jury was, whether the sale was to the defendant or to Lowenstein. The defendant had given evidence which, unexplained, tended to show that the sale was to Lowenstein, and that the plaintiffs were willing to trust him, believing him to be responsible. It was entirely competent, it seems to us, for the plaintiffs to contradict this evidence and to show that they did not believe Lowenstein was responsible. The communication of Bishop was at least some evidence bearing on that question, and tended to show that the plaintiffs were not willing to trust Lowenstein. The defendant had himself opened the way for this inquiry, and could not close it to the plaintiffs. We, therefore, see no objection to the .question.

It was objected by the defendant, that the question put to the witness, Samuel Lowenstein,- by whom was the note you saw in Eochester indorsed,?” was improperly excluded. The defendant had given in evidence a bill of sale from M. Bronner, plaintiffs’ assignee, to Joseph Lowenstein, of accounts against Samuel Lowenstein, under dates from September to November, 1856, inclusive, amounting to $759.26, 'and acknowledging payment by four notes for $189.82 each, at 2, 4, 6 and 8 months. This bill of sale was signed by Seckel Bronner, in "the name-of M. Bronner, assignee, but without the consent, knowledge or "authority of the assignee. The defendant did not show that these notes, or either of them, were ever delivered to the assignee; on the contrary, it was expressly proved that the assignee repudiated the sale, and refused to receive the notes. Meyer, one of the defendant’s witnesses, testified, that he negotiated the purchase of the accounts with Mr. Fulda, who was the payee and indorser of the notes; that after the assignee refused to receive the notes, he returned them to Fulda, from whom he had received them. The first of the four notes was the one to which the inquiry related. Fulda testified that he did not know where it was. He says, “I expect it is-destroyed; after I got it back, I tore my name off; I don’t know where it is now; I have not got it.” Samuel Lowenstein swears that he saw the note in Husband •& Shirtliiff’s banking house in Eochester; but whether before or after Fulda “ expected” it was destroyed -does not appear. The objection to the question was, that the loss of the note had not been sufficiently proven to let in secondary evidence. I think the evidence failed to prove that the note was destroyed or lost. It was shown to have been last, either in Fulda’s possession or in Husband & Shirtliff’s banking house. Fulda expected it was destroyed. He tore off his name, but did not know where it was. It may have been, and for ought that appears, was, afterwards, in the banking house in Rochester, and I think the. defendant was bound to have shown that search had been made for it in the latter place, and that it could not be found. The loss was a question for the Court and not for the Jury, and I think, on the evidence, the decision sustaining the objection was correct. It is difficult to see the materiality of the evidence sought by the question. The testimony was very strong, if not overwhelming, that the note was not in the plaintiffs’ possession, nor in possession of their assignee. Any evidence, therefore, in regard to it, does not seem to have been pertinent to the issue the Jury were trying. Such objection, however, was not taken.

The objection to the reading of the deposition of the witness Fulda, on the ground that his absence at the time of the trial was not sufficiently proved, is removed by the case of Donnell v. Walsh, (6 Bosw., 621), and was substantially abandoned on the argument.

The only remaining objections urged on the argument, to which exceptions were taken, were to the admission of judgment rolls, of judgments recovered against Samuel Lowenstein, about the time of the sale of the goods, upon indebtedness incurred by him anterior thereto. The objections were, first, that if they were offered to contradict Lowenstein, his attention had not been sufficiently called to them; and second, that they were on a collateral issue. Samuel Lowenstein, the judgment debtor, was under a cross-examination by the plaintiffs’ counsel. He had testified on his direct examination, that he had purchased the goods in question; that they were sold to him, and not to the defendant, and that he was urged by the plaintiffs to buy the g'oods on six months credit. On being asked if anything was said by Bronner or the defendant, to the effect that any goods sold to him should be charged to the defendant, he said no; that he would not have bought goods under that condition, he had credit enough for all he wanted. On his cross-examination, he was interrogated in regard to his responsibility at the time of sale, and was asked without objection, in regard to the several judgments. The judgment rolls were shown to the witness, who answered variously to them, that they were not for his debts, or nob against him, or had been arranged, giving explanations in respect to all or most of them. All the rolls were identified by the witness, and he was subjected to a lengthy examination in reference to the judgments, and the debts upon which they were recovered. The object of this examination, doubtless, was to affect and discredit the testimony of Lowenstein, that he was urged to buy on six months credit, or that he had credit enough for all he wanted, by showing that at the time of the sale he was largely in debt and irresponsible. It was legitimate, it seems to me, for such purpose. At the close of his examination, which had been taken without objection, the judgment rolls which had previously been shown the witness and identified by him, also without objection, were offered in evidence. They were clearly proper. If for no other reason, the previous examination had made them so. After having been testified to by the witness, they became the best evidence, and were entitled to go to the Jury as evidence, both contradicting the witness and as tending to disprove the allegations of a sale to Lowenstein. The first bianeh of the objection that the witness’ attention had not been sufficiently called to them, has no foundation in fact, and the second, that they were upon a collateral issue, is equally untenable. They' bore with force upon the principal questions the Jury were to decide.

The judgment should be affirmed with costs.

Barbour, J.

I cannot concur in the opinion affirming the judgment in this case.

It appears to me that the admission of the testimony of Bishop, touching the communication made by him to the plaintiffs, in the absence of the defendant, respecting the pecuniary standing of Lowenstein, was improper. The only real question in regard to that matter was, whether the plaintiffs refused to sell goods to him upon a credit; and, it may be added, that even this was merely collateral to the main issue in the case; that is, whether the goods were, or were not, sold by the plaintiffs to the defendant. The object of the question, and the effect of the answer upon the Jury, were, probably, to convince them that such communication must so have operated upon the minds of the plaintiffs that it could not, reasonably, be supposed they afterwards sold the goods to him upon credit. The workings of the plaintiffs’ minds upon the subject, or, in other words, their reasons for refusing to sell to Lowenstein, could not, properly, have been given in evidence, even by the plaintiffs themselves; which would, certainly, have been the best evidence; and, a fortiori, they cannot, legally, be established by extrinsic circumstances, thoftgh leading to that result, as an almost inevitable conclusion, through a course of reasoning.

If the probable effect of the testimony upon the conclusions of the Jury was such as is above intimated, and I cannot see how it could have been otherwise, its admission was important, inasmuch as the evidence, upon that subject, given by the plaintiffs and the defendant, respectively, was conflicting, and, to some extent, therefore, balanced, and this, it may safely be assumed, turned the scale. At least, it may have done so, and that is sufficient.

I think the judgment ought to be reversed, and a new trial granted.

Judgment affirmed.


author: Robertson, J.

text:
    Jacob C. Cook et al., Plaintiffs and Appellants, v. John Kelly, Sheriff of the City and County of New York, Defendant and Respondent.
    1. Where a factor, having possession of goods consigned to him, on which he has a lien for charges, makes a valid general assignment for the benefit of his creditors, and delivers such goods to his assignee, and they are subsequently seized by the Sheriff under process against the factor, the assignee is the proper person to whom the owner of the goods should tender the charges, in order to acquire a right to their possession.
    2. The owner having made such tender to the assignee, and having taken the goods from the Sheriff's possession, a subsequent retaking of them by the Sheriff is tortious, and makes him liable to an action for their conversion,
    3. The testimony of a witness, that himself and partner, having a special property in certain goods, executed a chattel mortgage thereon, whifch he thought was not delivered, without proof of delivery of the goods or the filing of the mortgage, is not evidence of a mortgage which will affect the rights of the general owner of the goods or of the mortgagor’s assignee.
    . (Before all the Justices.)
    Heard, May 24, 1862;
    decided June 14, 1862.
    This action was brought by Jacob C. Cook and Andrew Nellis, to recover damages for taking and converting to the®use of the defendant twenty-five bales of hops. The goods in question, in November, 1858, belonged to the plaintiffs, and were then sent by them from Montgomery-county, in this State, to a firm in New York named Harvey & Dunn, to be sold on commission, receiving from them, as an advance thereon, their acceptance of a draft for $300, dated November 22d, 1858, and payable ninety days after date, to the order of a Mr. Young. Harvey & Dunn also paid nearly fifteen dollars for freight on such goods, and received them into their store, where they remained until seized by the defendant. In 1859, on the 23d of February, Harvey & Dunn made an assignment of all their property to an assignee, (Eunyon,) and put the goods in question in his possession, telling him they were commission goods. On the next day, (the 24th of February,) two warrants of attachment were issued out of the Marine Court of this city, against the property of Harvey & Dunn, by virtue whereof the defendant, who was Sheriff of the City and County of Hew York, on the same day seized the hops in question. The draft became due on the 23d of February, when it was protested, but was paid by the plaintiffs within a day or two afterwards. In March following, the plaintiffs tendered to the assignee, Bunyon, the amount of freight paid by Harvey & Dunn, and their charge for storage, and offered to deliver them such draft; they then obtained possession of the goods during the absence of the defendant’s storekeeper, and removed them to another store, where the defendant repossessed himself of them.
    Judgments were obtained in the actions in which such attachments were issued, and executions issued thereon, under which the defendant held such goods at the time of .the commencement of this action, and sold the same during its pendency. One of the firm of Harvey & Dunn testified that on the 23d of February, 1859’, whether before or after the assignment to Bunyon did not appear, himself and partner executed a mortgage of the hops in question to Messrs. Gardner & Myer, which he thought was not delivered, to secure them for certain liabilities assumed by them to a creditor of the former, as sureties for the mortgagors, to be payable on demand, after their payment of any sums as such sureties. There was no other evidence of its delivery, and no evidence of any delivery of the hops, or record of the mortgage.
    On the trial, before Mr. Justice MoítoeAíf and a Jury, March 18, 1861, the complaint was dismissed, to which decision the plaintiffs’ counsel excepted. A new trial was moved for at Special Term, and denied.

      L. S. Chatfield, for. plaintiffs, appellants,
    argued that the mortgage was unauthorized and could not bind the goods; that the title was in the plaintiffs, not in the consignees, citing Winter v. Coit, (3 Seld., 288,) Covell v. Hill, 2 Id., 374,) Gardiner v. Suydam, (3 Id., 357.) That the consignees’ lien was not a leviable interest, Ransom v. Miner, (3 Sandf., 692.) Grosvenor v. Allen, (Clarke, 275,)

      Wilkes v. Ferris, (5 Johns., 335,) Handy v. Dobbin, (12 Id., 220,) Holmes v. Nuncaster, (Id., 395,) Bogert v. Perry, (17 Id., 351,) Denton v. Livingston, (9 Id.; 96,) Ingalls v. Lord, (1 Cow., 240,) Ferguson v. Lee, (9 Wend., 258,) Bailey v. Burton, (8 Id., 339;) that if they had an interest it passed to the assignee, and was satisfied by the tender, citing 2 Rev. Stat., 4th ed., 184; Gouverneur v. Warner, (2 Sandf., 624;) and that the case was therefore the ordinary case of trespass or trover against the Sheriff for seizing the goods of A. to satisfy the debt of B., and such an action can always be maintained. (Chitty’s Pl., 129, 130 ; Wintringham v. Lafoy, 7 Cow., 735; 10 Wend., 349; 4 Johns., 450; 8 Wend., 610; Stimpson v. Reynolds, 14 Barb., 506.)
    The second seizure, after the owner had obtained peaceable possession, was a trespass for which this action will lie. {Hall v. Tuttle, 2 Wend., 475.)

      A. J. Vanderpoel, for defendant, respondent.
    To the point that the right of the consignees was leviable, cited Saul v. Kruger, (9 How. Pr., 569,) 3 R. S. 76, § 1, 5th ed., and insisted that the tender to Runyon could not affect the rights of the- Sheriff.
   Robertson, J.

At the time of the tender to Runyon, he was entitled to the possession of the goods in question, if he was bona fide assignee, as against every one but the plaintiffs. The plaintiffs were entitled to the possession as against every one but him, if he was the lawful assignee of the claim of Harvey & Dunn. The assignment to him being prima facie valid, and no evidence offered impeaching it, he was the proper person to whom to make such tender, and upon that tender the plaintiffs’ right to the possession was complete and free from any incumbrance. (Kortright v. Cady, 21 N. Y. R., 343.)

The subsequent taking of the hops by the defendant was tortious, and makes him liable,“in this action, for their value.

There was no evidence of any delivery of the hops in question to the mortgagees, or filing of the mortgage to Gardiner & Myers, or even of its delivery, the only witness examined as to its execution, testified that he thought it was not delivered; and it was therefore inoperative as against the assigneé or these plaintiffs.

The judgment, therefore, ought to h.e reversed and a new trial take place, with costs to abide the event.

Bosworth, Ch. J., concurred in this opinion.

Babbour, J., concurred in the conclusion.


author: By the Court—White, J.

text:
    Samuel A. Swinnerton et al., Plaintiffs and Respondents, v. The Columbian Insurance Company, Defendants and Appellants.
    1. In an action to recover on a policy of insurance on a vessel, the plaintiff proved, among other things necessary to make out their case, that the vessel, being at the port of Norfolk, Virginia, in April, 1861, was seized and sunk in the channel, by a body of men assuming to act under authority of the State of Virginia, but without any offense on the part of the master, or any charge against hitn, and that he attempted to obtain both civil and military protection, but without success.

      Held, that this was not within the usual exception in the policy by which the insurers were warranted “free from loss or expense arising from capture, seizure, detention, or the consequences of any attempt thereat;” but was an act of lawless violence, by persons coming within the description in the policy of “pirates, rovers and thieves.”
    2. In such a case, evidence on the part of defendants, that at the same time a number of vessels were sunk in that channel by order of Governor Letcher, of Virginia, is inadmissible, because the obstruction of such channel without authority of the United States, would be criminal, and the seizure of plaintiffs’ vessel for such a purpose is lawless.
    3. Even if such fact were admissible, it is not of a nature which renders it competent for a witness who had no personal knowledge of it, to testify to it as a matter of public history. Such testimony is within the general rule excluding hearsay evidence.
    4. Held further, that the so-called secession ordinance of the State of Virginia, offered in evidence by defendants, was inadmissible, because, 1.

      There was %o proof connecting it with the seizure. 2. There was no proof that it had been adopted by vote of the people of Virginia, which, by its own terms, was required before it could take effect. 3. No such national sovereignty as Virginia is recognized by governments or known to the law. 4. The ordinance was unlawful and treasonable against the United States, and could confer no lawful authority.
    (Before all the Justices.)
    Heard, May 24, 1862;
    decided, June 14, 1862.
    This action was brought by S. A. Swinnerton and Thomas W. Dawson, on a policy of marine insurance. It was tried on the 14th of March, 1862, before Mr. Justice Monobief and a Jury.
    It appeared from the testimony produced by the plaintiffs • on the trial, that in September, 1860, they were the owners each of one-sixteenth part of the schooner “Lawrence Waterbury.” On the 7th of that month, S. 0. ¡Nelson effected an insurance with the defendants, of the said two-sixteenth parts of the vessel “ on account of whom it may concern,” for one year from that date; the policy containing the usual exception in favor of the insurers,- that they were warranted “free from loss or expense arising from capture, seizure, detention, or the consequences of any attempt thereat.”
    In February 1861, while the vessel was on a voyage from • St. Marks, Florida, to ¡New York, and while the policy was still in full force, she was disabled in a storm at sea, and forced to put into Hampton Roads, where she was stranded (it being thick weather) on the beach, and remained there until about the thirtieth of March, 1861, when the master and wreckers, with great difficulty, succeeded in getting her off and taking her into ¡Norfolk, in Virginia, for repairs.
    On April 21st, 1861, while the schooner was undergoing these repairs at ¡Norfolk, sixty or eighty men seized her, broke open her cabins, filled her with stones, took her down about a mile below ¡Norfolk, towards Fortress Monroe, and sunk her in the channel or entrance of the river. The captain of the schooner,- (who was also part owner and one of the plaintiffs — Swinnerton,) remonstrated with the men who were engaged in this act, stated to them that he was master, and resisted their proceedings by ordering them to desist and leave, but without effect. The man who was giving orders to the others to throw the stones aboard, and who, Swinnerton testified, appeared “ to be the boss or head man,” paid no attention to the protest and remonstrances of the captain, but merely remarked, “ that the State of Virginia was good for it; ” and when asked by what authority he had possession of the schooner, replied, “that it was by authority of the State of Virginia.” The captain also applied to a lawyer for legal assistance, and to a military man to whom several persons referred him, but could get none. He also applied to see if he could get the vessel up, but could get no satisfaction. “ It was all,” Swinnerton said, “ confusion then in the place. * * * It was a perfect madhouse.” The persons engaged in this work, cut through the schooner’s decks, and put about one hundred tons of stones on board her. A steamer lay alongside her all the time while she was being filled, and, when filled, took her away to the place where she was sunk, as before stated. There was a great deal of cheering and hurraing when she went off. The captain testified further, that he had not violated any law or regulation of the port, and was not notified that he had, nor charged with having done so. The vessel was never recovered. Due notice of abandonment of the vessel to the defendants was served upon them in proper time by the plaintiffs; and due proof of interest in the vessel, and of her loss, was in like manner made and delivered by the plaintiffs to the defendants in Hew York, on May 7th, 1861, the captain of the vessel not being able to leave Horfolk until the 27th of April, 1861.
    The whole amount of the plaintiffs’ claim, with interest, was $1,065 f<nr-
    The defendants’ counsel moved for a dismissal of the complaint, on the ground that the testimony in connection with the history of the times, showed that the seizure and detention of the vessel was by direction or permission of the authorities of the State of Virginia, or of the City of Norfolk, in which case, they alleged, the loss would fall within the exception of the policy, or else it showed that the plaintiffs did not make a proper resistance to the seizure, or a sufficient effort to procure the protection of the authorities.
    The Court denied the motion and the defendants excepted.
    Andrew C. Morris was then called as a witness, by the defendants. He testified, that about the time of the seizure of the plaintiffs’ vessel, several vessels were sunk in Norfolk harbor by order of Governor Letcher, of Virginia. The witness, on cross-examination, stated that he was not then in Virginia, and had no personal knowledge of the fact testified to by him ; but that he stated it as a matter of public history and general notoriety! The Court thereupon, on the plaintiffs’ motion, struck out this testimony, to which defendants’ counsel excepted.
    The defendants’ counsel then offered to read what he called “the Secession Ordinance passed by the State of Virginia” on the 17th day of April, 1861.
    The plaintiffs’ objected to the reading of the ordinance as matter of evidence, on the ground that it was immaterial and irrelevant. The Court sustained the objection, but permitted it to be read to fix its date.
    It was read accordingly. It purported to be a declaration and ordinance by “ the people of Virginia,” that the union between the State of Virginia and the other States, under the Constitution of the United States of America, was thereby dissolved, and that the State of Virginia, was in the full possession of all the rights of sovereignty which belong and appertain to a free and independent State, and that the Constitution of the United States of America was no longer binding on any of the citizens of Virginia; and the same ordinance further declared, that it should take effect and be an act as of its date when ratified by a majority of the votes of the people of Virginia, cast at a poll, to be taken thereon on the 4th Thursday of May, 1861, in pursuance of a schedule to be thereafter enacted.
    The protest of the master of the vessel (Swinnerton) made at Hew York, on April 30, 1862, detailing the circumstances of the loss of the vessel, was read in evidence by the defendants. The facts which it alleged or recited are substantially those above stated to have been established by the plaintiffs’' testimony, and nothing more.
    This was all the testimony the defendants’ counsel introduced or offered. He then requested the Court to charge the Jury, that if the seizure and detention were by the authorities of the State of Virginia or the City of Horfolk, it was within the exception of the policy, warranting the insurers free from loss or expense in case of seizure or detention, and the plaintiffs were not entitled to recover.
    The Court refused to do so, decided that there was no question for the Jury, and directed a verdict for the plaintiffs, to the amount of their claim as proved. The defendants’ counsel excepted; and the Jury found a verdict for the plaintiffs, as directed, for $1,065 fW.
    From the judgment entered upon this verdict, the defendants brought the present appeal.

      A. C. Morris, for defendants, appellants,
    cited, as to the meaning of the word “seizure” and “detention,” 2 Arn. on Ins., 812, and cases cited, Green v. Young, (2 Ld. Raym., 840; 2 Salk., 444,) Hagedorn v. Whitman, (1 Stark., 157,) Black v. Marine Ins. Co., (11 Johns., 292,) Dalgleish v. Brooke, (15 East, 294,) Nesbitt v. Lushington, (4 T. R., 783,) and argued, that the fact that the act was unlawful, with reference to the general government, had nothing to do with the matter, the exception in the policy not being against unlawful seizures, &c., but against all seizures, without qualification. (Powell v. Hyde, 34 Eng. L. & E., 44; 2 Arn. on Ins., 808.) The clause is sometimes restrained by the word “ unlawful.” (McCall v. Marine Ins. Co., 8 Cranch, 59; Olivera v. Un. Ins. Co., 3 Wheat., 183.)

      Daniel Lord, for plaintiffs, respondents.
    I. The loss is within the risks insured against and covered by the terms of the policy.
    1. It falls properly within the term “pirates, rovers and thieves.” (3 Kent Com., 303; Brown v. Smith, 1 Dow, 349; Bondrett v. Hentigg, 1 Holt’s N. P., 149; Nesbitt v. Lushington, 4 T. R., 783; 2 Arn. on Ins., 821; Brown v. Smith, 1 Dowl. Parl. C., 349; Dixon v. Reid, 5 B. & Ald., 597; 1 Phil, on Ins., 640, $ 1106; 2 Pars, on Mar. Law, 236.)
    2. If not within the perils specially enumerated, it is within the general term “ all other perils, losses,” &c. (2 Arn. on Ins., 846; 2 Pars, on Mar. Law, 236, 252; Naylor v. Palmer, 8 Exch., 739; S. C., 10 Id., 382.)
    II. The loss does not fall within the terms of the warranty against “ capture, seizure or detention,” for,
    1. It was not a “ capture.” (2 Arn. on Ins., 811, § 303; see also Wheat, on Cap., 52, § 10; 1 Phil, on Ins., 3 ed., 643, § 1108, &c.; Emerigon, [Meredith ed.,] 420; Pars, on Merc. Law, 450; Marsh, on Ins., 495.)
    2. It was not a “ seizure.” (1 Phil, on Ins., 643, § 1108; Mellish v. Andrews, 15 East, 13; Carrington v. Merchants' Ins. Co., 8 Peters, 493; Mumford v. Phenix Ins. Co., 7 Johns., 449; Bradstreet v. Neptune Ins. Co., 3 Sumn., 601, 615; Magoun v. New England M. Ins. Co., 1 Story, 165.)
    3. Kor was it a “detention.” (2 Pars, on Mar. Law, 247; 3 Kent Com., 303; 2 Arn. on Ins., 817.)
    4. Kor was it an arrest or detainment by “ people.” (2 Arn. on Ins., 817; Nesbitt v. Lushington, 4 T. R., 783; Marsh, on Ins., 506; and see Judge Kelson’s charge, in the Case of the crew of the “Savannah.”

    III. The exceptions taken by the defendants to the rulings of the Court were properly disallowed.
   By the Court—White, J.

There was no error in-any decision or direction of the Justice, at the trial of the cause.

According to the general current of authority on the subject, a seizure, which is a mere act of lawless violence, is not within the exception in the policy upon which the defendants rely for a defense. The seizure contemplated by that exception is a seizure by some lawful acknowledged government for some probable cause, sanctioned by the law of nations; Carrington v. Merchants' Ins. Co., (8 Peters R., 516-518,) Smith v. The Delaware Ins. Co., (3 Serg. & Rawle, 74,) Faudel v. The Phænix Ins. Co., (4 Id., 29,) Johnston v. Ludlow, (2 Johns. Cases, 481,) Magoun v. N. E. M. Ins. Co., (1 Story Rep., 165;) and the proof offered by the defendants was insufficient to establish, in this case, any seizure of that character.

The statement of the witness, A. 0. Morris, that at about the time of the seizure of the plaintiff’s schooner, several vessels were sunk in Norfolk harbor by the order of Governor Letcher of Virginia, would not establish a seizure that would constitute a defense to the plaintiffs’ claim, even if the statement had been made upon the personal knowledge of the witness. The office of Governor Letcher, conferred upon him no authority to sink vessels, the only purpose of which could be to destroy or obstruct a harbor, the enjoyment of which, the Court will take judicial notice, belongs to the United States, and to the use of which, with free right of ingress and egress, every citizen of every one of the United States is entitled, under the National Constitution and laws. Such an act of destruction would be criminal, and the seizure of the plaintiffs’ vessel for the purpose of accomplishing it, would be a mere lawless violence.

But, further, the testimony of Mr. Morris was not competent evidence. He testified that he had no personal knowledge of the fact that any vessels were seized or sunk by order of Governor Letcher. He said that he only stated the fact as a matter of public history and general notoriety. This was not admissible. There was no reason for resorting to mere public fame or history for proof of the fact alleged. Neither its nature, nor any special circumstances appearing in the case, rendered such evidence of its existence proper, or would justify its exception from, the general rule, excluding hearsay testimony; and Mr. Morris’ testimony was nothing more. It was incompetent evidence, therefore, and was properly excluded.

The proposal of the defendant to give the so-called Secession Ordinance of the State of Virginia in evidence, was equally inadmissible. The ordinance would have been no justification of Governor Letcher’s alleged act, if it had been proved (as it was not) that he had done the act alleged:

First. Because there was no proof that the ordinance, even if it were a lawful act, had any connection whatever with the seizure and destruction of the plaintiff’s vessel;
Secondly. Because the ordinance, by its own terms, was to be of no effect unless it should be ratified by a majority vote of the people of Virginia; and it was not shown, or proposed to be shown, that it was so ratified;
Thirdly. Neither the United States, nor any other nation or government, has acknowledged or recognized any such national sovereignty as “Virginia,” or “The People of Virginia,” and there is none such known to the law of nations or of the United States, or of this State;
And fourthly. Because the ordinance, if it were shown that the plaintiffs’ vessel had been destroyed in pursuance or by virtue of it, was an unlawful, treasonable act against the sovereignty and Oonstitution of the United States; and, being so, instead of giving validity to, or legalizing acts done in obedience to, or in execution of it, only rendered them more unlawful and criminal. The exclusion of it, therefore, as evidence at the trial by the Judge was correct.

There is nothing, then, in this case, either in the testimony admitted, or in that which was offered by the defendant and excluded, that could show the seizure and destruction of the plaintiffs’ vessel to have been a lawful act of an acknowledged government, or public authority, and within the exception of the policy. It was the act of a mere tumultuous, riotous assemblage of unknown persons, coming within the description inf the policy of “pirates, rovers, thieves,” against whom it expressly assures the plaintiffs. (Nesbitt v. Lushington, 4 Term R., 783.)

The judgment must, therefore, be affirmed with costs.