Wiltsie v. Northam.

BY THE COURT-MONCRIEF, J. The action was upon a promissory note, made by the defendant, bearing date 16th November, 1855, whereby twelve months after date he promised to pay to the order of P. H. Lalouette, for value received, the sum of $1,648.28.

The complaint alleged an indorsement by the payee to Lalouette & Ashfield, and by the latter to the plaintiff.

The answer admitted the making of the note and the delivery thereof to Lalouette & Ashfield, but denied the indorsement by them to the plaintiff, and also denied that the plaintiff was the lawful owner and holder of the note, &c., &c.

To entitle the plaintiff to recover it was only necessary to produce the note at the trial, and prove the indorsements; possession of the note was prima facie evidence that he was the lawful owner and holder of it.

The plaintiff, when he rested, had shown a bona fide ownership of the note, and the exception taken by the defendant was therefore untenable.

There was no question of fact to be submitted to the jury. It was conceded at the trial that the plaintiff became possessed of the note after maturity; any defense, therefore, that could be urged against other parties to the note, might be maintained against the plaintiff. It was immaterial what consideration was given by him for the note; it was perfectly competent for Lalouette & Ashfield to give it to him.

To my mind it is quite clear that the only consideration for the note was the sale and delivery by Lalouette & Ashfield to the defendant of "all fixtures and appurtenances in, upon and appertaining to the coal-yard, known as 441 Grand street, and now (then) occupied by said Lalouette & Ashfield, and described in the annexed schedule."

The lease, which had "about two years to run," was sold for the consideration of one dollar. It contained "a free privilege to remove all the said fixtures at its expiration."

There is no difficulty in the present case arising from a refusal by the lessor to permit the fixtures to be removed; whether or not he could successfully have resisted the claim of the defendant to remove them can in no way be invoked; (Ombony v. Jones, 19 N. Y. R. 237; Amos & Ferard on Fixtures, 8;) the defendant was

Brookman et al. v. Metcalf.

desired to remove them; no one prevented him. The landlord requested him to take them away; and the defendant did take some of the things specified in the schedule.

By express agreement if a renewal of the lease was not given Lalouette & Ashfield was to refund the one-half the loss on said fixtures.

The jury found, and upon the evidence it could not be questioned, that the value of the fixtures was $702.

It is quite clear that the fixtures were worth one-half that sum if removed and taken away. Thus it is evident that the only damage which the defendant could have sustained, was $351; the extent of the liability of the defendants on that account by agreement, being the one-half of this latter sum, is the sum of on hundred and seventy-five dollars and fifty cents.

The plaintiff should be permitted to enter judgment for the amount of the verdict, less the sum of $175.50. Ordered accordingly.

HENRY D. BROOKMAN et al., Plaintiffs and Appellants, v. BENJAMIN F. METCALF, Defendant and Respondent.

1. A Mutual Insurance Company, for the purpose of increasing its available means, took up a subscription by which its friends agreed to give their notes for premiums in advance of insurances to be effected by them, the subscription not to be binding until $300,000 was subscribed. When the subscription was understood and believed to be made up, no fraud being practised on the defendant, he gave his two notes for $500 each for the amount of his subscription, and he effected actual insurance to an amount for which the premiums were over $900, which was charged to him against his said two notes, and he, in addition thereto, took an open policy upon which the premium considerably exceeded the remaining $100, but no other risks were indorsed thereon except those included in the $900: Held, that the two notes for $500 each were valid binding notes, although it afterwards appeared that the whole $300,000 subscription was not made up; the notes having been voluntarily given and there being no fraud on the part of the Company or its Agent.'

1 Holbrook v. Wilson, (4 Bosw., 64;) Holbrook v. Basset, (ante, p. 147.)

Brookman et al. v. Metcalf.

2. A resolution of the Board of Directors directing the officers to proceed with certain notes, mentioned, to liquidate the indebtedness of the Company, is a sufficient authority to warrant the officers in settling an indebtedness to the plaintiffs by paying a part, appropriating an indebtedness from the plaintiffs not yet payable, in further payment, and transferring to them a portion of such notes as security for the balance on their agreeing to givo further time of payment.

3. Such a transaction makes the plaintiff's bona fide holders for value in such sense that the transfer to them is valid, even without a resolution of the Board of Directors, though it exceeds $1,000, if they have no notice of the want of such resolution.'

4. In such case the maker of the note cannot use as a defense by way of setoff or counterclaim, an indebtedness by the Company to him for losses which did not become payable until after the transfer of his notes to the plaintiffs. (Before WOODRUFF, PIERREPONT and MONCRIEF, J. J.)

Heard, February 10th; decided, December 10th, 1859.

ACTION on a promissory note, dated November 8th, 1855, for $500, made by the defendant payable to his own order, six months after date, and by him indorsed in blank.

The answer set up as a defense, that the note was given to the Atlas Mutual Insurance Company in pursuance of a subscription made by the defendant and others, by which they were to give their notes when $300,000 was subscribed, and that the Company obtained the note from the defendant by fraudulently representing that the amount had been subscribed when in truth it had not. Also that the Company was insolvent when the note was transferred to the plaintiffs; that the plaintiffs took the note with knowledge of the circumstances and of the insolvency of the Company, and received it as collateral security for a preexisting indebtedness and parted with no value therefor, and are not the lawful and bona fide holders or owners of the note for value paid before maturity.

The answer then avers that the Company are indebted to the defendant in the sum of $2,300 for losses on property insured, &c., which sum the defendant will set up by way of set-off and counterclaim.

The issues were referred to MURRAY HOFFMAN, Jr., Esq., upon whose decision judgment was rendered for the defendant. He found the following facts, viz.:

1 Scott v. Johnson, (ante, 213;) Smith v. Hall, (ante, 319;) Houghton v. Dodge, (post,)

Brookman et al. v. Metcalf.

"That the defendant made his promissory note in the pleadings mentioned, dated November 8th, 1855, for $500, payable six months after date, to his own order, which was by him indorsed and delivered to the Atlas Mutual Insurance Company, in the manner and at the time hereafter stated.

"That the said Atlas Mutual Insurance Company, a corporation created under the laws of this State, caused to be circulated among its friends and customers a subscription, dated 8th November, 1855, whereby the subscribers agreed to give to the Company their notes in advance for premiums of insurance, payable at six and twelve months, in equal amounts, for the sums set opposite their names respectively, it being understood, that in consideration thereof, the subscribers were to be allowed by the Company, at the maturity of the notes, five per cent on the amount thereof, and that such subscription should not be binding unless $300,000 were subscribed. That the defendant, at or about that time, subscribed $1,000, the plaintiffs subscribed $2,000, and many others subscribed different amounts.

"That having so subscribed, the defendant afterwards, and on or about the 12th day of November, 1855, effected a special insurance with the Company, and received a policy therefor, bearing date the day and year last aforesaid, the premium whereof amounted to the sum of $401.25. That afterwards, and on the 24th of November in the same year, he obtained an open policy from the Company, the premium whereof amounted to $500, on which the premiums of insurances subsequently taken out by the defendant amounted to $113.63; and that afterwards, and on or about the 1st December, 1855, he effected another special insurance with the said Company, and received a policy therefor, dated the day and year last aforesaid, the premium whereof amounted to the sum of $386.25. That the defendant did not pay the premiums aforesaid, but the same were charged to him in account.

"That at a meeting of the Board of Directors of the Company, held on the 30th November, 1855, a resolution was adopted, whereby, after reciting that it was understood that $300,000 had been subscribed, it was resolved that the officers commence to collect the notes to that amount, and proceed in liquidating the liabilities. of the Company.

Brookman et al. v. Metcalf.

"That the defendant, after the insurances had been effected by him as aforesaid, was called upon for his premium notes, whereupon he gave the Company his two promissory notes for $500 each, one of which is the note in controversy in this suit. That the defendant was charged in the books of the Company with the aforesaid premiums of insurance, and credited with the notes last mentioned.

"That on the 10th December, 1855, the Company was, and for more than a month previously thereto had been, indebted to the plaintiffs in this action upon three several promissory notes, amounting to the sum of $10,139.27, two of which notes, amounting together to $5,574.56, were then past due, but the third had not yet matured.

"That the plaintiffs received from the Company, at that time, in payment of the two notes which had so matured, $2,000 in cash, with a credit for their subscription of $2,000, and the Company's note, payable in four months from date, for $1,751.95, being the balance of the said two notes, together with the defendant's two notes, so given by him as aforesaid, as collateral security for the payment of the Company's new note for $1,751.95 above mentioned, and thereupon the plaintiffs gave up to the Company the said two notes which had so matured as aforesaid.

"That the Company's note for $1,751.95, so given to the plaintiffs as aforesaid, has not been paid, nor have the plaintiffs collected the amount thereof from the securities aforesaid, and the note is still held and owned by the plaintiffs.

"That there was no resolution of the Board of Directors authorizing such transfer of the notes to the plaintiffs, except what is contained in the aforesaid resolution of the 30th November, 1855, at which meeting four of the five directors constituting the Finance Committee were present and voted in favor of the resolution.

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"That this transaction was conducted in good faith on the part of the plaintiffs, and under the belief that the notes were valid, and that the Company had power to make a valid transfer of the same to the plaintiffs for the purposes intended, and neither the Company nor the Receiver thereof has hitherto, in any way, repudiated the transfer thereof