cities and towns have, I think, less to do with this question than the mail arrangements of the general government and the business relations of our citizeus. Whether mail service is good or not, does not depend upon the inquiry whether the person to be charged resides within the same legal district, but upon the question whether the notice may be transmitted by mail from the place of presentment or demand to another post-office, where the drawer or indorser usually receives his letters and papers."

In the case of Shelburne Falls National Bank v. Townsley, 102 Mass. 177, decided in 1869, Ames, J., delivering the opinion of the court, says: "The letter was left at the post-office, not for the purpose of being transmitted by mail to any other town or post-office, and not to go into the hands of any official carrier charged with the distribution of letters at the dwellinghouses and places of business of the inhabitants of the vicinity; on the contrary, it did not go into the mail at all, but was simply deposited in the Shelburne Falls post-office, to remain there until called for by the defendant. We do not find that any case has gone so far as to decide that notice through the post-office may be given in the same manner and with the same allowance of time, where both parties reside in one town or resort to the same post-office, as where they reside in different towus communicating with each other by regular mails.

"Thero may be but very little practical difference in this subject between letters left for deposit and those left for transmission; but we do not feel at liberty, for such considerations, to disregard distinctions, even though they appear somewhat arbitrary, or attempt to improve rules that have become settled by judicial decisions and the usage of business # **. In the instructions which were given to the jury these distinctions appear to have been overlooked, and they may have given their verdict under the impression that a drop-letter, left at the post-office after the close of the business day on the 11th, and not likely to be received until the 12th, would be reasonable notice, even though the plaintiff bank had received the same as early as the 10th. In other words, that the rule as to post-office notifications, where both parties reside in the same town or village, and resort to the same postoffice, and where no system of distribution by letter carriers has been established, would be the same as if they lived in separate towns, having regular communication by mail. Upon this point, therefore, the defendant's exceptions must be sustained." In the case of State Bank v. Rowell, 6 Martin (N. S.), 267, the Supreme Court of Louisiana, by Porter, J., who delivered the opinion, say: "The case has been well argued, but the reasoning of the counsel, in our opinion, rested entirely on an incorrect view of the obligation contracted by an indorser of instruments of this kind. The obligation which such an act creates is strictly a conditional one, and that condition is that he will pay the money in case the maker does not, provided due notice is given to him of the default of the former. By the lex mercatoria this fact must be proved by establishing that knowledge of the failure of the principal to pay was communicated personally to the indorser, or that information to that effect was left at his house. A relaxation of this rule has been introduced for the convenience of trade. When the in- | dorsers live at such a distance that their residence is nearer another post-office than where the holder lives, in such cases it is sufficient to send by mail a notice directed to the indorser."

All of these cases, and many others cited in the brief of counsel, seem to hold that where the person whose duty it is to give the notice, and the one to be charged by the notice, both reside within the same post-office delivery a term well understood in this countrythen the notice must be served personally, or left

at the residence or place of business of the person to be charged, and that the post-office can only be resorted to in cases where the person to be notified resides nigher to, or is in the habit of receiving his mail matter at, another post-office, to which the notice may be sent by mail; and this I believe to be the correct rule. It is true that there are many decisions the other way, and as a question of authority, it would be one quite difficult to decide. The Supreme Court of the United States, and those of Pennsylvania, Indiana, Missouri, and as is claimed, South Carolina, have held to the contrary, that when the person to be notified resides outside of the legal limits of the town, city or village where the party giving the notice resides, but nigher thereto than to any other post-office, or is in the habit of resorting to the post-office in such town, city or village for mail matter, then the notice may be legally served on him by depositing the same in such post-office, directed to the person to be notified at the post-office where the same is deposited.

In enumerating the States where this question has been decided either way, I do not include Kentucky, because that State is about equally divided on the question; the former view having been taken by the old Supreme Court, presided over by Chief Justice John Boyle, in 1832, and the latter by the Supreme Court of that State in 1858, in an exhaustive opinion by Judge Stiles. Nor do I include Mississippi, where the question has been several times before the Supreme Court, and where, unfortunately, the holdings have not been uniform. But their two latest, and I think, best-reasoned cases, follow New York, Massachusetts, etc. But all the cases, as well those which hold the latter as the former view, agree in this: that where the person to be notified resides in the same city or village with the person whose duty it is to give the notice, then notice cannot be given through the postoffice.

:

Having carefully examined all the cases cited by counsel I have failed to find any sufficient reason, or indeed any reason, for a distinction in this respect between persons residing within the city or village limits and those who, though living outside of such limits, are within the post-office delivery. Had this court the power to change the law it might be worth considering whether it would not be well to provide that all notices might be served through the post-office; but were any change in that direction contemplated, certainly no one would think of excluding from its operation only those who, from the contiguity of their residence to the post-office, as well as from the nature of their business pursuits, are the most unlikely to be incommoded by such change. Those inhabitants of a city or village who are at all likely to draw or indorse commercial paper, generally keep themselves in daily intercourse with the post-office, and when not absent from home would nearly always receive a notice posted to them at their own post-office the same or the next day. But this cannot be said of those who live in the country. They, as a rule, seldom go to the post-office oftener than once a week to receive their weekly newspaper, or less often, as called for by the needs of family correspondence. Persons thus situated would not generally receive a notice of protest through the post-office in time to answer the purpose for which notices are required, to wit, to give the indorser or drawer a fair start with others in pursuit of the property of a defaulting principal. Again, the inhabitants of cities and villages who draw or indorse commercial paper, are, as a rule, business men, who do it as a part of their regular business, and carefully note and watch the dates of the maturity of such paper, and whether or not it is duly honored. While many farmers and other inhabitants of the country are in the habit of becoming accommodation indorsers for business men, they keep no dates, but rely confidently on their prin

cipal to protect their paper. To such, a prompt and certain notice of dishonor often may save them from ruin.

It is true that the rule is well settled that where the person entitled to notice resides far away from the place of dishonor, that his place of residence is nearer to another post-office, or where he habitually resorts to another post-office for mail matter, then notice may be sent him by mail. This arises from the nature and necessities of the case; and besides, it is a fair presumption, where a person draws or indorses commercial paper payable at a distant bank or place, that he thereby impliedly agrees to receive notice of its dishonor through the post-office- the usual channel of communication between distant points. But not so an indorser of paper payable at a bank situated within his own post-office delivery.

In most of the cases where the courts have come to a conclusion different from that which I have been able to reach in an examination of this question, they give as a controlling reason for such conclusion that to require personal notice, or its equivalent, to indorsers residing outside the limits of cities and villages, would be to lay an additional burden on the holder. I am unable to accord much weight to their reason. Notaries' fees for protest and notice, and including mileage, follow the protested paper, and the costs of sending a notary or special messenger to serve a notice anywhere within the delivery of any post-office in the settled portion of the country would be but trifling compared to the amount generally involved, and I think it affords a fair application of the maxim, de minimis non curat lex.

As to the point that although the plaintiff in error may not have been legally notified, he afterward waived such notice, I have only to say that no such waiver was found by the District Court, and had it been I do not think that there was sufficient evidence to have sustained it.

The judgment of the District Court is therefore reversed and a new trial ordered.

Reversed and remanded.

SALE OF BUSINESS AND GOODWILL.

ENGLISH HIGH COURT OF JUSTICE, CHANCERY DIVISION, MARCH 5, 1880.

GINESI V. COOPER, 42 L. T. Rep. (N. S.) 751. Upon the sale of a business and goodwill, it was agreed that the purchaser should be at liberty to use the name or style of the vendors for a period of two years. After the expiration of the two years the vendors recommenced business under a similar name or style to that under which they had carried on the business they had sold, and also solicited their former customers. Held, that they must be restrained from soliciting or in any way endeavoring to obtain the custom of their former customers. Semble, that they might also be restrained from dealing with their former customers. Crutwell v. Lye, 17 Ves. 335, observed upon.

MOT

[OTION. The plaintiff, Mr. Samuel Ginesi, about the month of September, 1877, entered into an agreement for the purchase at the price of 6,000l., of the trade and goodwill of the business of stone merchants belonging to Samuel Cooper and John Hampson, and carried on by them at Clarence Wharf and Swan lane, Rotherhithe, under the name or style of "Cooper & Hampson." This agreement was contained in letters which passed between the parties, but on the 12th November, 1877, the defendants entered into an agreement under seal, by which, after reciting that they had contracted with the plaintiff for the sale to him of their trade or business as stone merchants, it was agreed that the plaintiff should have the exclusive right of

carrying on the business or trade of a stone merchant at Clarence Wharf and Swan lane, Rotherhithe, under the name or style of " Cooper, Hampson & Co.," during the period of two years from the 29th September, 1877, and afterward use the name in connection with his own, so as to show that he was carrying on their business.

On or about the expiration of the period of two years the defendants recommenced business as stone merchants in King William street in the city of London, and solicited their former customers by letter, and otherwise endeavored to resume their former business, as appears in the facts sent out in his lordship's judgment.

The plaintiff brought this action for an injunction to restrain the defendants, their servants, etc., from soliciting or in any way endeavoring to obtain the custom or orders for goods similar to those dealt in by the defendants, before the sale of their business to the plaintiff, from such of the plaintiff's customers as were customers of the old business sold by the defendants to the plaintiff, or from attempting to take away any portion of the business purchased by the plaintiff from the defendants.

Davey, Q. C., and J. H. Boome, for plaintiff.

Martin, Q. C., and C. Mitchell, for defendants. We have a good right to set up in the same neighborhood a new business similar to that which we have sold to the plaintiff, unless it has been expressly stipulated to the contrary. Cruttwell v. Lye, 17 Ves. 335; Churton v. Douglas, 33 L. T. Rep. (O. S.) 57; Johns. 174; Labouchere v. Dawson, 25 L. T. Rep. (N. S.) 894; L. Rep., 13 Fq. 322; Hudson v. Osborne, 39 L. J. 79, Ch.

JESSEL, M. R. Lord Justice James has said that the command "Thou shalt not steal," is as much a portion of the law of courts of equity as it is of courts of law. I proceed to consider the proposition, which, as I understand it, has been gravely argued before me. The facts are these: Two traders in London of considerable business, of the names of Cooper & Hampson, had carried on the business of stone merchants for a long time at three places of business, namely, Clarence Wharf, Rotherhithe, the Midland Railway, St. Pancras, and the Great Northern Railway, King's Cross, where they had what they called depots, and had established a valuable business as stone merchants, having formed a considerable connection. A gentleman of the name of Ginesi, who appeared to be a Yorkshireman, came from Leeds and wanted to buy this business. Negotiations then took place by letter, in which the defendants said, "You must pay us for the goodwill quite independently of the wharf and the stock in trade and every thing else." There was in fact a long negotiation, and that long negotiation ended in this Yorkshireman paying upward of 6,000l. for the goodwill, independently of paying a large sum of money for the stock-in-trade and so forth. Thereupon an agreement was made as to the use of the name, and the agreement recites that the defendants have sold the trade or business of stone merchants. Then there was an agreement that the purchaser should have the exclusive right of using the name for two years, that is to say, the name of Cooper, Hampson & Co., and after the two years that he might be described as the successor of Cooper, Hampson & Co., and that he was not to make Mr. Cooper or Mr. Hampson liable as partners; and that is all. Then when they had sold the business, in the month of November, 1877, they sent round circulars to their customers in these terms: "Dear sir. We beg to inform you that we have transferred our business with the whole of our stock and plant to Mr. Samuel Ginesi, of Leeds" (that is, the business and stock-in-trade), "who will carry on the trade in all its branches as heretofore, under the style

dially agree that "any other matter" does not mean the connection formed in the business. The custom of the business is a matter connected with the carrying of it on. It is the formation of that connection which has made the value of the thing which they sold, and they really had nothing else to sell in the shape of goodwill. Then the other case cited was the case of Cruttwell v. Lye, which was a very peculiar case; it was not like the sale by a man himself, because it was the sale of a thing by the assignee of a bankrupt. I agree that for some purposes there is no distinction, but for other purposes there is a distinction. The assignees can only sell property, but a man can sell not only the property, but if I may so express myself, a negative right as against himself. He can stipulate that he will not carry on the business, but the assignee of a bankrupt cannot do that. They were called assignees then; they are now called trustees. They can only sell the property. The selling a trade or business by the assignees and the selling of a trade or business by the man himself are not quite the same things. This distinction does not apply, however, to the present case, because the decision in the present case will be independent of the peculiarities existing in Cruttwell v. Lye. Lord Eldon says (17 Ves. 341a): "The question is whether upon a fair understanding or representation agreeable to the fact this person is carrying on the plaintiff's trade;" that is the substance. Is he carrying on the business which he has sold? Now there were some curious points raised in that case. The bankrupt did not carry on the carrying trade (being the trade in that case) by the same road. He used the same termini, but he went by a different road. It was the case of a waggon carrier, and the question was about the goodwill which had been sold with the trade by auction in lots, the bankrupt having carried on the trade in two different places; and the point was whether it meant the trade itself or only the goodwill attached to the property sold. Now, as I have often said, I have nothing to do with facts in considering the value of an authority. I have only to deal with the facts as decided by the court to be the facts on which the judgment was founded. Whatever view may be taken of the wording of those particulars which are to be found in the case of Cruttwell v. Lye, Lord Eldon has told us, at page 346, what he considered they meant; "The goodwill which has been the subject of sale is nothing more than the probability that the old customers will resort to the old place." He did not consider that there was any connection except the chance of customers who wanted to go by wagon going to the old wagon yard. That was the sort of business there. He said that that was all that was to be considered as being sold or understood to be sold or intended to be sold. Of course in such a business as that there was really nothing more. Lord Eldon continues: "Fraud would form a different consideration, but if that effect is prevented by no other means than those which belong to the fair course of improving a trade in which it was lawful to engage, I should by interposing carry the effect of injunction to a much greater length than any decision has authorized or imagination ever suggested." Then he says: "What further was done? The bankrupt advertises that he is reinstated in the carrying business, and though that expression may have a tendency to misconception, yet he is in a fair sense reinstated, if being at liberty, he has availed himself of that situation to set up again that carrying business. It amounts to no more than that he asserts a right to set up this trade, and has set it up as the like, but not the same trade with that sold, taking only those means which he had a right to take to improve it, and there is no fact amounting to fraud upon the contract made with the plaintiff." That is the distinction. This, in my opinion, is a fraud on the contract. He goes on to say: "The question whether

under the circumstances the plaintiff is to carry the agreement into execution if the assignees have taken from him actively the benefit of that contract is very different, but whatever opinion may be held on this transaction in that view of it, I do not see the fraud upon which, as a judge in equity, I can lay my hand, and I dare not from this place so deal with it." So that he came to the conclusion that what the bankrupt was doing was not to interfere with that which was sold, and which was simply the chance of customers resorting to the old place, and that he had not committed a fraud on any contract entered into by him or the assignees, and therefore he decided that he could not interfere. How that case bears out the proposition that a man may the next day set up in the same business, that is, he may solicit the same customers and do the same trade, buy at the same place and sell at the same place, and in all respects carry on the identical business which he had sold, I myself do not understand. It is only one illustration of many which have come before me, of what was said by an eminent lord chancellor, that counsel sometimes have sought for an authority for lack of argument. Indeed, if Cruttwell v. Lye is to be rightly considered, it appears to me to show that if Lord Eldon had thought that what the bankrupt was doing was a fraud on the contract, he certainly would have granted the injunction. That, as I have said, is my opinion here, and I have no hesitation in granting the injunction asked for.

A claim against the estate of a deceased person was referred under the statute. 2 R. S. 89, 90. The referee reported in favor of the plaintiff and judgment was entered upon his report. The General Term, upon appeal, reversed this judgment and ordered a new trial, which was had before another referee, appointed at Special Term. This referee reported in favor of plaintiff, and upon appeal from the judgment on his report, the General Term reversed the judgment and ordered a new trial. From this decision plaintiff appealed to the Court of Appeals, giving the usual stipulation. Held, that the appeal could not be allowed. The proceeding in respect to claims against deceased persons, under the statute, is not an action but a special proceeding. An action is commenced by the service of a summons in some one of the modes prescribed by law, and it is plain that no proceeding can be an action, unless it be such that it can be commenced by the service of summons on the opposite party and pleadings. The proceeding named cannot be commenced by summons, but only by the consent of parties and approval of the surrogate, and can be tried in no other way than before a referee; there are no pleadings and the representatives of the estate can prove any defense they have without pleading it in any form. It is not made an action because it results in a judgment. See Robert v. Ditmas, 7 Wend. 522; Boyd v. Bigelow, 14 How. Pr. 511; Godding v. Porter, 17 Abb. Pr. 374; Coe v. Coe, 37 Barb. 232; Somerville v. Crook, 9 Hun, 664. Under sections 190, 191 of the Code, where authority must be found for appeals to the Court of Appeals, no appeal to this court in special proceedings is authorized, except from final orders in such proceedings. An order granting a new trial is not a final order, and if made in a special proceeding it is not appealable. Appeal dismissed. Roe, appellant, v. Boyle et al. Opinion by Earl, J. All concur; Miller, J., in result.

wherein it was provided that the representations made should be considered warranties avoiding the policy if untrue, in answer to a question as to the amount of incumbrances upon the property to be insured, applicant stated that there was a mortgage for $2,500. There was, in addition to said sum, accrued interest for a short period, not yet due. Held, not a misrepresentation. (2) At the time of the making of the policy there was a small judgment, which was a lien on the property insured. This was not mentioned in the application. It was paid shortly after the policy was issued. Thereafter the policy was renewed upon the payment of a further premium. The certificate of renewal contained this condition: "Provided, always, that the original policy is in full force." Held, that even if the existence of the judgment would have invalidated the policy, the insurance effected by the renewal was not invalidated. (3) The policy was issued to M., loss payable to plaintiff as mortgagee. It contained a condition avoiding it "if the assured now has or shall hereafter make any other insurance upon the property hereby insured" without consent, etc. Plaintiff, without the knowledge of M., procured other insurance. Held, that the policy was not avoided thereby. Plaintiff, even though there was a clause in the mortgage from M. to him authorizing him to procure insurance in case of the default of M. in doing so, would not, in procuring insurance, act as the agent of M. (4) The policy provided that the insured should, "if required, submit to an examination and crossexamination under oath, by any person appointed by the company." Held, that the insured was bound to answer only such questions as had a material bearing upon the insurance and the loss. (5) Where proofs of loss are received by the company insuring without objection, they cannot afterward object that they are defective. (6) The policy contained a provision rendering it void in case foreclosure proceedings should be commenced against the insured property. Held, that foreclosure proceedings by plaintiff would avoid the policy and the fact that by the policy the loss was made payable to plaintiff as mortgagee did not constitute a consent by the insurance company, that he might enforce payment of his mortgage by foreclosure without invalidating the policy. Pratt v. N. Y. Cent. Ins. Co., 55 N. Y. 505. Plaintiff commenced proceedings of foreclosure during the pendency of which the insured property was destroyed by fire. Thereafter, the company, knowing of the foreclosure, under a provision in the policy allowing them to do so, subjected the insured to a very rigorous examination. Held, that by this action the company recognized the continuing validity of the policy and could not thereafter assert its invalidity by reason of the foreclosure proceedings. If an insurance company, in any negotiations or transactions with the insured, after knowledge of the forfeiture of his policy, recognize the continued validity of the policy, or do acts based thereon, or require the insured, by virtue thereof, to do some act or incur some trouble or expense, the forfeiture is, as matter of law, waived, and it is now settled in this court, after some difference of opinion, that such a waiver need not be based upon any new agreement or on an estoppel. Allen v. Vermont Fire Ins. Co., 12 Vt. 366; Webster v. Phoenix Ins. Co., 36 Wis. 67; Gans v. St. Paul Ins. Co., 43 id. 109; Insurance Co. v. Norton, 96 U. S. 234; Goodwin v. Mass. Mut. Life Ins. Co., 73 N. Y. 480, 493; Prentice v. Knickerbocker Life Ins. Co., 77 id. 483. Forfeitures are not favored in law and the doctrine of waiver is not peculiar to insurance policies. Taylor on Land. and Ten., §§ 287, 497; 1 Smith's Lead. Cas. 20a; Lloyd v. Crispe, 5 Taunt. 249; Doe v. Miller, 2 C. & P. 348. Judgment affirmed. Titus v. Glen's Falls Ins. Co., appellant. Opinion by Earl, J.

[Decided June 15, 1880.]

NEGOTIABLE INSTRUMENT - HOLDER FOR VALUECREDITOR SURRENDERING NOTE OF DEBTOR IS BUT NOT IF SURRENDERING DISHONORED CHECK-CON

FLICT OF LAW.- - (1) The firm of B., P. & Co. gave to F., in settlement of an account, a check upon a bank where such firm had no funds. The check was presented and payment refused. The firm never had funds at the bank to pay the check. Subsequently the firm, in settlement of the claim against them, gave F. a noto which had been wrongfully diverted from the purpose for which it was put in the hands of the payee, and F., upon receiving it, surrendered the check. Held, that F. was not a holder for value so as to deprive the maker of the note from setting up against him the equities in respect to the wrongful diversion of such note. It is the settled law of this State that prior equities of antecedent parties to negotiable paper transferred in fraud of their rights will prevail against an indorsee who received it merely in nominal payment of a precedent debt, there being no evidence of an intention to receive the paper in absolute discharge and satisfaction beyond what may be inferred from the ordinary transaction of accepting or receipting it on account. The law regards the payment under such circumstances as conditional only, and the right of the creditor to proceed upon the original indebtedness after the maturity of the paper is unimpaired. Rosa v. Brotherson, 10 Wend. 85; Payne v. Cutler, 13 id. 605; Stalker v. McDonald, 6 Hill, 93; Lawrence v. Clark, 36 N. Y. 128; Weaver v. Barden, 49 id. 286; Moore v. Ryder, 65 id. 438; Potts v. Maer, 74 id. 594. Since the case of Coddington v. Bay, 20 Johns. 637, it has been the established rule of law in this State that to constitute an indorsee of negotiable paper a holder for value, so as to exclude the equities of antecedent parties, it is not sufficient that the transfer should be valid as between the indorser and indorsee; but in addition the latter must have relinquished some right, incurred some responsibility, or parted with value upon the credit of the paper at the time of the transfer. In accordance with this principle, and upon grounds which are obvious and satisfactory, it has been frequently held that when a creditor takes from his debtor the note of a third person before maturity in good faith in payment of or as collateral security for the debt, and in consideration thereof gives up collateral securities held therefor, he thereby to the extent of the collaterals surrendered becomes a holder for value of the paper and takes free from the defenses of antecedent parties. Bank of Salina v. Babcock, 21 Wend. 499; Essex County Bank v. Russell, 29 N. Y. 673; Park Bank v. Watson, 42 id. 490; Chrysler v. Renois, 43 id. 209. And it must be regarded as the settled doctrine in this State that the surrender by a creditor of the past due note of a debtor upon receiving from him in good faith before maturity the note of a third person in place of the note surrendered, constitutes the creditor a holder for value of the note thus taken, and protects him against the defenses and equities of the antecedent parties, and that it is immaterial whether the note surrendered was given to the creditor for goods sold or money loaned, or under any circumstances which would leave the original debt represented by the note in existence enforceable against the creditor, or whether, by surrendering the note, the creditor parted with his entire right of action. Youngs v. Lee, 12 N. Y. 551; Day v. Saunders, 1 Abb. Ct. Ap. Dec. 495; Brown v. Leavitt, 31 N. Y. 113; Pratt v. Coman, 37 id. 440; Paddon v. Taylor, 44 id. 371; Clothier v. Adriance, 51 id. 322; Mech. & Trad. Bank v. Crow, 60 id. 85. See, also, Bank of St. Albans v. Gilliland, 23 Wend. 311; Bank of Sandusky v. Scoville, 24 id. 115. The rule established in these cases rests upon reasons rather technical than substantial, so that while the court will not disturb, they will not