United States . . . for military. . . services is also exempt from levy and sale by virtue of an execution, and from seizure for nonpayment of taxes, or in any other legal proceeding." That statutes of this character are to be liberally construed, with the view of promoting the objects of the legislation, is established by a uniform course of authority; and that their force and effect are not to be confined to the literal terms of the Act has also been held in numerous cases.

In Hudson v. Plets, 11 Paige, 180, it was held that a creditor's bill would not reach the right of action of a judgment debtor for the conversion of exempt property.

In Andrews v. Rowan, 28 How. Pr. 126, it was held that a receiver of the property of a debtor, appointed in supplementary proceedings, did not take a claim or a judgment thereon for damages accruing to such debtor from one who had wrongfully taken and sold his exempt property on execution for debt.

done. Did the Legislature intend to limit the force of their exemption to a pension so long only as it remained an obligation of the government, or consisted of cash in the hands of the pensioner; or did they also intend to protect it after it had been expended in the purchase of articles of property designed to administer to the comfort and support of such pensioner and his family.

If the latter was not intended, we must asIcribe to the law-makers the absurd intention of granting pensions for the purpose of satisfying claims against pensioners, and not to provide for the care and comfort of invalid or aged soldiers. If the soldier is not protected in the act of exchanging his pension for the necessa ries of life, its only effect would be to enable his creditors to take it in satisfaction of their claims. No benefit is conferred if the protection is not extended beyond the possession of the money itself, for its only value consists in its purchasing power, and if the soldier is deprived of that, the pension might as well, so far as he is concerned, have remained ungranted. The plain purpose of the Act was to promote the comfort of the soldier; to secure to him the bounty of the government free from the claims of creditors, and to insure him and his family a safe, although modest, maintenance so long as their needs required it. In the case of an exemption of specific articles from levy and sale upon execution, it seems to be well settled that it extends not only to the protection of such articles while in use or possession, but also to any claim arising out of their conversion by a wrong-doer, or their destruction by fire or otherwise, when insured. Freeman, Executions, § 235.

Justice Grover, writing the opinion of the supreme court in that case, says: "If the judg ment rendered for the injury may be acquired by a judgment creditor, by proceeding supplemental to execution, there would be nothing to prevent seizing exempt property, selling it upon execution, and, when the debtor had sued and recovered a judgment therefor, compelling the application of such judgment to the pay ment of the debt for which the property was seized, thus entirely depriving the debtor of the exemption, end enabling the creditor in this way to collect his debt from property that the law has declared not liable for its payment." The only case in this court bearing upon the subject is that of Tillotson v. Wolcott, 48 N. Y. 188, where it was held that the exemption of a team, provided for a householder, should also apply to a judgment recovered by such householder against one who had tortiously taken and converted it to his own use. It was said by the court that "the judgment when re-emption shall be carried In such case it is covered by the debtor for the wrongful invasion of his privilege of the exemption of his property from levy and sale, represents the property for the value of which it was recovered." While the language of the Statute did not, in terms, cover a judgment, it was held that it came within its spirit and could not be taken by creditors. The opinion of Justice Grover in Andrews v. Rowan, 28 How. Pr. 126, is referred to and approved in the opinion of Judge Leonard.

The General Exemption Laws of the State provide for the protection of specific articles or classes of property with a view of alleviating the condition of the poor by securing to them the use or consumption of the property exempted; but the present law has departed from the ordinary form of exemption and, while seeking to accomplish the same object, provides, in terms, for the exemption of money or its equivalent. It is quite obvious that such an exemption can produce no beneficial effect, unless it is extended beyond the letter of the Act, and given life and force according to its evident spirit and meaning. Like other statutes, the section in question must be construed accord ing to the meaning and intent of the law makers and so as to ellectuate their intention, so far as the language of the Act will permit it to be

The rule seems to be just and reasonable and within the spirit of the exemption. In the case of the exemption of money, or its equivalent, there has been some controversy in the courts with reference to the extent to which the ex

somewhat difficult to lay down a rule in precise terms by which it may be determined in all cases what property is liable and what exempt from levy and seizure upon legal process for the payment of debts, but we entertain no doubt that where the receipts from a pension can be directly traced to the purchase of property, necessary or convenient for the support and maintenance of the pensioner and his family, such property is exempt under the provis ions of this Statute.

Where such moneys can be clearly identified and are used in the purchase of necessary articles, or are loaned or invested for purposes of increase or safety, in such form as to secure their available use for the benefit of the pensioner in time of need, we do not doubt but that they come within the meaning of the Statute; but where they have been embarked in trade, commerce or speculation, and become mingled with other funds so as to be incapable of identification or separation, we do not doubt but that the pensioner loses the benefit of the statutory exemption. These propositions, we think, are fully supported by the cases in this. and other States. See Freeman, Executions, § 235, title Proceeds of Exempt Property.

In Burgett v. Fancher, 35 Iun, 647, and Stockwell v. Malone Bank, 36 Hun, 583, it was

held that moneys received from a pension and | embarked his pension in business or trade, and deposited in a bank in the name of the pen- in some transactions had made a profit. It sioner were not subject to proceedings on the was impossible to identify the fun in the vari part of creditors to have them applied in pay-ous articles of property in which, through nu. ment of debts, although the relations between merous and successive changes, it had become the depositor and the bank were those of cred- invested, and it was held that the pensioner had itor and debtor. The debt represented the pen- lost his right of exemption. sion and that was exempted by the Statute.

The case of Wygant v. Smith, 2 Lans. 185, when limited, as it must be, to the facts appearing in the case, is not an authority for the plaintiff here. In that case the pensioner had

The order of the General Term should be reversed and that of the County Court affirmed, with costs to defendant in all courts. All concur.

NEW YORK COURT OF APPEALS (2d Div.).

v.

CORN EXCHANGE BANK, Appt., FARMERS NATIONAL BANK of Lancaster, Pennsylvania.

(118 N. Y. 443.)

blank or specially to himself or his own order, the legal title is in him and be is really the party in interest and can maintain an action on the same even though it appears that the transfer is merely colorable between the parties.

Freeman v. Falconer, 12 Jones & S. 132; Case 1. A bank which has charged up to the v. Hall, 24 Wend. 102; King v. Orser, 4 Duer, drawer, canceled and sent a draft in 431; Rogers v. Crandall, 26 Hun, 388. payment of a check received through the In remitting the draft defendant paid the agency of two other banks, which had successive-check and thereby discharged all the indorsers. ly received it for collection, the latter of which, This payment could not be retracted. not knowing that the former was not the owner Whiting v. Rochester City Bank, 77 N. Y. thereof (the payee's indorsement being in blank), 363. having given credit therefor, reserving the right to charge it back if dishonored, and sent it on for collection and remittance, cannot, at the request of the drawer and payee of the check, stop payment of the draft to the correspondent bank, because the bank first receiving the check for collection had become insolvent. The insolvent bank only is the agent of the payee of the check, and the drawee, after signing the draft, is not justified in resisting payment for the benefit of such payee, even assuming that he is entitled to the proceeds thereof.

Messrs. Clark & Sanborn, for respondent: Cameron delivered the check to the Harrisons only for collection. The Harrisons having indorsed it to plaintiff expressly for collection, plaintiff held it only as agent for that purpose, and had no other interest in it. While the check was in plaintiff's possession, Cameron could have demanded and recovered it, or its value, from plaintiff.

Potter v. Merchants Bank, 28 N. Y. 641; Van Amee v. Troy Bank, 8 Barb. 312.

If the money had been collected by plaintiff on the check, Cameron could have claimed and recovered the money immediately from plaintiff.

Dickerson v. Wason, 47 N. Y. 439.

The fact that the proceeds of the check, instead of having been paid to plaintiff in current money, took the form of the draft payable to plaintiff's order, cannot make any difference as to the right to those proceeds. The agency of plaintiff constituted the only consideration for the draft, and the only right of plaintiff to receive payment of the debt represented by the draft; and it matters not whether plaintiff be considered the direct agent of Cameron, or a sub-agent, for in either case Cameron, the principal, had the power to revoke the agency, and when that power was exercised, that consideration at once failed, and that right terminated, and the draft was thereafter of no effect in plaintiff's hands.

Comstock v. Hong, 5 Wend. 600; Atkinson v. Stafford, 20 N. Y. Week. Dig. 49; Sickles v. Gillies, 3 Jones & S. 14; Barker v. Prentiss, 6 Mass. 430.

Defendant, by receiving and retaining the check and returning it to the drawer, became indebted to the owner of the check in the amount named in it.

People v. Merchants & M. Bank, 78 N. Y. 272.

Follett, Ch. J., delivered the opinion of the

court:

In July, 1884, Mary C. Melson resided at Lancaster, Pa., where the Farmers National Bank of Lancaster was located, with which she kept an account. July 9, 1884, she drew a a check on this Bank for $1,871.84, payable to John J. Cameron or order, and mailed it to him at Indianapolis, Ind., who, July 15, 1884, indorsed it in blank and delivered it to a firm of private bankers doing business at Indianapolis under the name of "Harrisons' Bank." The check, though indorsed in blank, was in fact delivered and received for the purpose of collection only. The Corn Exchange Bank was the New York City correspondent of Harrisons' Bank, and they exchanged collections and kept mutual accounts, Harrisons' Bank being accustomed to draw sight bills or checks against its balance with the Corn Exchange Bank. The view we take of this case makes it unnecessary to further consider the manner in which these accounts had previously been kept.

caster Bank to stop payment of its draft, which it did, and the draft was dishonored.

The Corn Exchange Bank brings this action to recover the amount of the draft, which the Lancaster Bank defends on the ground that the plaintiff did not hold the check for value and is not entitled to its proceeds as against John J. Cameron, the payee. The defense is not placed on the ground that it is necessary to protect the defendant from any present or future liability, for it is conceded that it has exactly performed all of its duties in respect to the check. It does not deny that it became the agent, for a consideration, of the Corn Exchange Bank, and promised by its draft to pay the plaintiff $1,870.

By the law of this State Harrisons' Bank was the agent for Cameron, but neither the plaintiff nor defendant was his agent; and had either neglected to take the necessary steps to collect the check, to Cameron's injury, he would have had no right of action against either, but would have had a cause of action against Harrisous' Bank. Allen v. Merchants Bank, 22 Wend. 215; Montgomery Co. Bank v. Albany City Bank, 7 N. Y. 459; Commercial Bank of Pa. v. Union Bank, 11 N. Y. 203; Ayrault v. Pacific Bank, 47 N. Y. 570; Pittsburg Exchange Nat. Bank v. Third Nat. Bank, 112 U. S. 276 (28 L. ed. 722]; Morse, Banks and Banking, 3d ed. § 272.

In Montgomery Co. Bank v. Albany City Bank and the Bank of the state of New York,

draft to the Albany City Bank for collection, which in turn indorsed and sent it to the Bank of the State of New York for collection, but the latter bank negligently omitted to present the draft for payment, and the drawer and indorsers were discharged. The plaintiff sued both banks and recovered against both at cir cuit, and the judgment was affirmed by the general term; but it was reversed in the court of appeals as to the Bank of the State of New York, and affirmed as to the Albany City Bank. It was said: "The New York State Bank was the agent directly guilty of the neglect. That bank was employed to do the service by the plaintiff's agent, the Albany City Bank, as its agent, to which it was alone responsible for its acts and neglect, and for which the latter, according to the settled rule, was alone responsible to the plaintiff, there being no agreement to the contrary, expressed or implied."

July 15, 1884, Harrisons' Bank indorsed the check to the Corn Exchange Bank for collection and credit and forwarded it by mail. It was received July 17, and credited by the Corn Exchange Bank to Harrisons' Bank, reserving, however, the right to charge it to Harrisons' Bank if it should be dishonored. It was not found by the court, nor was it asserted, that the Corn Exchange Bank knew or had the slightest reason to suspect that Harrisons' Bank did not own the check and was acting only as a col-supra, the plaintiff indorsed and sent a lecting agent for Cameron or some undisclosed owner, and so the Corn Exchange Bank became the holder of the check in good faith, and could, had it been dishonored, have maintained an action thereon for its collection. July 17, the Corn Exchange Bank indorsed the check "for collection and remittance" to the Farmers' National Bank of Lancaster, the drawee, with directions to remit by draft, payable in the City of New York. July 18 the check was received by the Farmers' National Bank of Lancaster, was charged to the account of the drawer, Mary C. Melson, and canceled. For this service the Farmers' National Bank of Lancaster charged the Corn Exchange Bank $1.84, and on the same day drew its check, or sight draft, payable to the Corn Exchange Bank or order, on the First National Bank of New York for $1,870, and mailed it to the Corn Exchange Bank. The check was no longer a valid contract. The liability of the drawer and indorsers thereon was ended and could never be restored. The Lancaster Bank had legally and in good faith discharged its duty to the drawer, the indorsers and the holder of the check, and the Corn Exchange Bank had accepted of the draft of the Lancaster Bank in discharge of the liability of the drawer and indorsers. The Lancaster Bank accepted of the agency tendered by the Corn Exchange Bank, performed the services and received payment therefor. The relation of principal and agent was established, and in discharge of its liability thus assumed the Lancaster Bank mailed the draft. July 17, 1884, Harrisons' Bank failed, and on the 18th, but after the check had been paid and canceled, and the draft given in payment mailed, the drawer of the check, Mary C. Melson, and the payee, John J. Cameron, requested the Lan

It is unnecessary to specially consider the cases which were decided in this State prior to Allen v. Merchants Bank, supra, or those of States in which it is held that the bank receiving payment of the paper is the agent of the owner notwithstanding it may have passed through several banks before reaching the bank making the collection.

The ground upon which the defendant seeks to justify the refusal to perform its contract with its principal seems to be that if the plaintiff receives the money, it ought to pay it to John J. Cameron, but may not, and therefore this defense.

Assuming, but not deciding, that Cameron could maintain an action against the Corn Exchange Bank to recover the amount of the check, such fact would in no wise support this defendant's contention. No contract relation

exists between it and Cameron, nor is there | plaintiff for collection. And it appears that any privity between them.