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"In August, 1893, the new firm made an transaction of business with the public genassignment of all its assets to the plaintiff erally. However that may be, it is clear Fulton, Jr., in trust, to collect the same and that the relation of debtor and creditor bepay the debts of the firm, and in such as- | tween the new firm and the bank comsignment they authorized him in such col menced with the deposit, and it would have lection to use the name of the firm and to continued, even if the certificate had never maintain and continue the bank account in been filed and the firm had never begun to the name of the firm, and otherwise to carry on business generally. The deposit absolutely control the same. The account was neither special nor unauthorized; for was finally closed on October 16, 1893. The a common member of both firms, in the passbook had been balanced and vouchers presence of all the members of the new returned therewith by the bank 15 different firm, indorsed the check "for deposit" and times between the times of opening and signed the firm name thereto. A few minclosing the account. The $60,000 check was utes later the same person went to the bank, not found by the plaintiff Fulton, Jr., with with a member of the new firm who had any of the returned vouchers, although it not been a member of the old, deposited the was shown to have been returned, and Ful check so indorsed, and received a passbook ton, Jr., did not learn of the giving of the in the usual form with the amount of the $60.000 check until several years after he deposit duly credited thereon; both men have had closed the account. After June 22, 1892, ing signed the signature book. No notice the account of the old firm was carried was given that the account could not be for three days, and was then closed; the drawn upon at once, or that the deposit balance being checked out."

was intended for a special purpose. The This action was brought by the general bank was not obliged to look beyond these partners to recover said sum of $60,000 and facts, even if it was notified that the cerinterest, upon the ground that the defendant tificate of limited partnership had not been had no right, under the circumstances, to filed, and that there would be some delay pay the check of the new firm for that in beginning business. It was its duty to amount on the 22d of June, 1892. The pay the check for $60,000 when it was referee held that the defendant was not en presented, and it would have broken its titled to credit for the sum so paid, and contract if it had refused. If the members ordered judgment for the plaintiffs for that

of the new firm who made the deposit had amount and interest. The Appellate Divi.

before they left the bank drawn a check sion reversed and dismissed the complaint, payable to bearer and had presented it for on the ground that such payment was not payment, we see no ground upon which the a misappropriation of the funds of the spe bank could lawfully have declined to pay cial partnership, and, having been lawfully it. Whether the parties had so complied made, did not render the defendant liable with the provisions of the statute relating for the amount thereof. Two of the justices

to limited partnerships as to protect the dissented in part, holding that the judgment

special partner was of no concern to the should be modified by deducting therefrom

bank. That was not its business, for it did the sum of $50,593.79, with interest thereon not affect the validity of its contract. A from December 13, 1895, and affirmed as

limited partnership has the same power to to the balance. The plaintiffs appealed to

make a contract of deposit as a general this court.

partnership, and the case is the same in Augustus C. Brown, for appellants. Wil that respect as if the partnership had been liam B. Hornblower and Hoffman Miller, general, but by the terms of the formal for respondent.

agreement was not to commence until the

day after the transaction in question. If VANN, J. (after stating the facts). When the firm could indorse a check for deposit the new firm indorsed the certified check on June 22d, as it did, all its members befor $200,000 and deposited it with the de ing present, it could sign a check on that fendant, a contract was thereby made be day and bind itself in the one case the tween the parties thereto whereby the bank same as in the other. The question does not agreed to pay that sum or any part thereof arise, as in the cases relied upon by the to said firm upon demand. That contract appellants, whether creditors of the new was not modified by the statement, whether firm could hold the special partner liable as casually made or not, that, although the | a general partner; but the simple inquiry copartnership papers had been signed, the

is whether the new firm, whatever its charcertificate of limited copartnership could not acter, after assuming to make a contract be filed until the next day, and the firm

| with the bank on June 22, 1892, could say, would not commence business for two or

years afterward, when disaster had come, three days. In view of the fact that the “We had no right to make that contract on firm had already commenced to do business that day, for the firm was not authorized with the bank, the statement apparently

to do business until the next day." was intended to apply only to the formal The articles had been signed before the opening of its doors by the firm for the deposit was made, and the bank was so informed by two members of the new firm. | changed by further investigation. Ross V. It was not informed, however, of the provi. | Caywood, 162 N. Y. 259, 56 N. E. 629. sion therein that the firm should "begin The judgment of the Appellate Division on and include the 230 of June," and the should be so modified as to order a new trial, remark, after the deposit was made and the apd, as modified, affirmed, with costs in all contract completed, "that the firm did not courts to abide event. expect to start to do business for two or

CULLEN, C. J., and GRAY, BARTLETT, three days," fell so far short of notice of that

HAIGHT, and WERNER, JJ., concur. provision as not even to put the bank upon inquiry. Power to do business at once was

O'BRIEN, J., absent. implied from the fact that the articles had

Judgment accordingly. been signed, and was not affected by the expectation of the firm with reference to opening its doors. The bank had the right to

(183 N. Y. 190) assume that if the papers were signed the McCARTHY V. MEANEY et al. firm could do business at once, even if it did

(Court of Appeals of New York. Nov. 21, not expect to formally begin its general busi

1905.) ness for a few days. The deposit is all 1. GAMING - BUCKET SHOPS - RECOVERY OF there is of this case; for an authorized de MONEY LOST-EVIDENCE. posit is an authorized contract, and the de

The clerk, working under the orders of the

manager of a branch bucket shop, telegraphed fendant simply performed the contract. A

the orders received from its customers to the bank need not look into copartnership articles principal office in another city, and, if they to learn the actual authority of the various were accepted, gave the customers memoranda

of such transactions, with the margins paid members; for it has the right to rely on

thereon. Held, that such statements were comtheir apparent authority, and to act on the

petent evidence in an action, under 1 Rev. St. presumption that each is the duly authorized (1st Ed.) p. 662, pt. 1, c. 20, tit. 8, § 9, to agent of the firm. When one copartnership recover against the proprietor of such gambling by a written instrument transfers all its

house the moneys lost or paid on the transac

tions; they being the very contracts under which assets to another, intended to take its place, the money was paid to the defendants. and covenants that they are worth a sum 2. EVIDENCE-ADMISSIONS. stated over all liabilities, and that in one year Where the manager of a branch bucket they will yield that amount in cash, noth

shop was accustomed to telegraph orders of

customers to the main house, and to issue to ing further being said about the debts, such

customers, through a clerk, memoranda or statetransfer is necessarily subject to the pay ments of transactions, with the margins paid ment of the debts of the old firm ; for other thereon, such statements were not competent wise it would be fraudulent, as there would

as original evidence in an action by such mana

ger to recover moneys lost or paid in transbe nothing left to pay creditors. Under such

actions on his own account, as they neither circumstances there is no beneficial transfer constituted contracts nor declarations made in of anything except what remains after the

the course of agency; the clerk having no power

to bind the proprietors by any contract made debts are paid, and the new firm is under

by and for the manager of the branch office. obligation to pay the debts of the old, at least

3. WITNESSES - EXAMINATION - REFRESHING to the extent of what was fairly and in good MEMORY-ADMISSIBILITY OF WRITING. faith realized from the assets. There was

In an action by the manager of a branch

bucket shop to recover from the main house no misappropriation, therefore, of the assets

moneys lost in transactions for his own account, of the new firm by paying the amount of the statements issued by his clerk to him at the time overdraft which was a debt of the old.

of such transaction, in the manner in which Upon the facts found by the learned ref.

statements were issued to other customers, can

not be considered as evidence to supply defects eree, we think his conclusion of law that the

in the recollection of such manager, where he defendant is liable for the sum of $60,000 and did not testify that he was unable to recollect interest was erroneous, and required a re the transactions represented by the statements,

or that the statements were correct, and could versal by the Appellate Division. As to the

not tell whether the money represented by the balance of the deposit remaining in the bank statements as paid to the defendant by him after payment of the check for $50,593.79 we had been paid at all, or were simply charged express no opinion, as the facts may not have against the amount coming to him from gambling

transactions. been fully developed in that regard. We an

(Ed. Note.—For cases in point, see vol. 50, nounce these conclusions to guide the course

Cent. Dig. Witnesses, 88 877, 892.] of the new trial, which we deem it our duty

Appeal from Supreme Court, Appellate to order, without attempting to add to the

Division, Fourth Department. arguments of the learned Appellate Division,

Action by William F. McCarthy against The facts depend mainly upon oral evidence,

John F. Meaney and others. From a judg. and we are not satisfied that all the evidence in existence has been produced, with refer

ment of the Appellate Division (88 N. Y. ence more particularly to the balance of

Supp. 1108, 94 App. Div. 614), affirming a $9,406.21 remaining after payment of the

judgment for plaintiff, defendants appeal. check for the overdraft. The disposition of

Modified. that sum does not appear so clearly as to w. F. Mackey, for appellants. Hull make it certain that the facts cannot be Greenfield, for respondent.

CULLEN, C. J. This action was brought | as the statements related to transactions under the statute by plaintiff in his own with others than Taylor, they were unquesright and as assignee of others to recover tionably properly received. They were not moneys lost on wagers. The defendants only declarations made by the defendants' were engaged in conducting that kind of agents in the course of the agency, but gambling business denominated by the ref were the very contracts under which the eree and popularly known as a “bucket money was paid to the defendants. So far, shop"; that is to say, ostensibly they were however, as they related to the transactions carrying on business as stockbrokers, but of Taylor a different question is presented. in reality, while they accepted orders of When Mooney telegraphed orders to the customers, they neither bought nor sold Buffalo office he did not give the names of stocks in compliance therewith, but when the customers, but the orders were identified the transaction was closed they either paid simply by numbers. The defendants could to or received from their customers gains not tell in any particular case who was the or losses as determined by the fluctuation person who had given the order. Taylor in prices on the stock exchange in the testified that the defendants said that he city of New York. To use the euphemism might speculate himself; but this gave of one of the defendants on the witness Mooney, who was Taylor's employé, no powstand, they “stood on their trades," taking, er to contract on the defendants' behalf with however, from the amount due their custom Taylor. Doubtless Taylor could recover any ers one-quarter of 1 per cent. as a so-called moneys he had lost to the defendants in his commission. Of course, these contracts be speculations. That, however, is not the tween the defendants and their customers question here, which is whether the statewere mere wagers. Hurd v. Taylor, 181 ments made by Mooney to his immediate N. Y. 231, 73 N. E. 977. . Therefore the par. employer, Taylor, were original evidence ties who lost or paid money to the defend against the defendants. If Mooney had no ants on such contracts were entitled, under power to bind the defendants by any conthe statute, to reclaim the amounts paid up tract with Taylor, then the statements given on them. The judgment of the referee hav Taylor neither constituted contracts nor ing been unanimously affirmed by the Appel were declarations made in the course of late Division, there is no question of fact the agency. Hence they were not evidence, before us, and the only objection now pre nor were they competent to supply the desented is as to an alleged error of the referee fect in the recollection of Taylor or of Moonin admitting certain written statements in ey, the rule as to which is clearly stated in evidence.

Howard v. McDonough, 77 N. Y. 592: . "(1) The principal place of business of the de

A witness may, for the purpose of refreshing fendants was in the city of Buffalo, but they his memory, use any memorandum, whether had a number of branch offices at various made by himself or another, written or points in the western part of the state, printed, and when his memory has thus been among them the city of Auburn, where the refreshed he must testify to facts of his transactions which are the subject of this own knowledge; the memorandum itself not suit took place. There one Taylor was their being evidence. (2) When a witness has manager, or agent, who was compensated by So far forgotten the facts that he cannot permitting him to retain one-half of the so recall them, even after looking at a memocalled commissions that were received at the randum of them, and he testifies that he place; Taylor paying out of such compensa once knew them, and made a memorandum tion the rent and expenses of the office, in- of them at the time or soon after they trancluding the wages of a telegraph operator, spired, which he intended to make correctly, who transmitted the orders received in Au which he believes to be correct, such memoburn to the office in Buffalo. This operator, randum, in his own handwriting, may be Mooney, was hired by Taylor and subject to received as evidence of the facts therein his direction. One of the claims assigned contained, although the witness has no presto the plaintiki is that of Taylor, who alleged ent recollection of them." The testimony that he lost and paid to the defendant brought the case within neither rule. If several sums of money in speculation on his Taylor had, after refreshing his recollection own account. In the course of business from the statements, testified of his own Mooney would telegraph to the Buffalo office knowledge (which he did not) that he had the various orders received in Auburn, when, the transactions therein recited, that would if they were accepted by the defendants, he not make the statements themselves evi. would give the customer a statement show dence. Nor could they become evidence on ing the nature of the transaction and the account of his entire failure to recollect the margin paid thereon. During the trial of transactions, because the memoranda were the action these statements, given to the not made by him, nor verified by him at the plaintiff and to his assignors, were identified time, as was done in Clark v. National Shoe by the persons to whom they had been given & Leather Bank, 164 N. Y. 498, 58 N. E. and received in evidence over the objection 659. The error in admitting these papers and exception of the defendants. As far was not cured by the subsequent testimony of Mooney. To make the statements com- cording to their respective acreage (such parcels petent evidence it was necessary to show, being subject to distinct equities), is erroneous,

in the absence of any finding as to the value first, that after refreshing his recollection

of the land, or that its value is in proportion by looking at them Mooney was unable to to its acreage; but the proceeds of the sale recollect the transactions they represented; should be apportioned in accordance with the second, that he knew the statements were

relative values of the property. correct. Neither fact was shown. On the

Appeal from Supreme Court, Appellate Dicontrary, Mooney's testimony is to the effect

vision, Fourth Department. that often the statements did not correctly

Action by William Hogg and another, inrepresent the facts, and that moneys speci

dividually and as executors of Agnes Hogg, fied in the statements as having been re

deceased, against Eliza R. Rose and others. ceived at the time they bore date were not

From a judgment of the Appellate Division then received. Both Taylor and Mooney tes

(87 N. Y. Supp. 1136, 93 App. Div. 607), tified their inability to tell whether the

affirming a judgment entered upon the report money represented by the statements to

of a referee, defendant George T. Hogg have been paid to the defendants by Taylor

appeals. Modified. had been in reality paid at all, or was sim

George T. Hogg and Ansley Wilcox, for ply charged against the amount coming to . Taylor from the gambling transaction in

appellant. W. W. Waring, for respondents. which both parties were engaged. In any

CULLEN, C. J. From the record before aspect of the case, therefore, the learned

us it appears that in 1890 Wilson Hogg referee erred in admitting this evidence, and it is clear that the error was of a most sub

and his wife, Agnes Hogg, were each the

owners of certain lands in Cattaraugus counstantial character. The judgment should be reversed, and a

ty. The lands owned by Wilson comprised

what was known as the "upper farm” and new trial granted, costs to abide the event,

another tract, which was used and cultiunless the plaintiff elects to abandon bis

vated with the lands owned by Agnes as third cause of action, which is for the

a single farm, called the “lower farm.” On moneys lost by Taylor, and to deduct from

the lands of Agnes there was a mortgage the judgment recovered by him the sum of

for the sum of $1,400. At that time Wilson $1,995, with interest from August 29, 1902,

Hogg, being financially embarrassed, convey. in which case the judgment as reduced is

ed by quitclaim deed to the plaintiffs all affirmed, without costs in this court to either

the lands owned by him under a trust or party.

agreement, the details of which it is unnecGRAY, BARTLETT, HAIGHT, VANN,

essary to recite further than to say that

in substance the grantees were to advance and WERNER, JJ., concur. O'BRIEN, J.,

moneys to discharge Wilson Hogg's debts absent.

and to pay certain annuities to Wilson dur

ing his life and to his wife, if she survived Judgment accordingly.

him, and that for such advances and pay. ments the lands were to stand as security.

In 1895 Wilson Hogg died, devising all his (183 N. Y, 182) HOGG et al. v. ROSE et al.

property to his wife Agnes. In 1902 Agnes

died, leaving a will by which she devised (Court of Appeals of New York. Nov. 21, 1905.)

all her property, which included both the 1. MORTGAGES—TRUST DEED—SALES—APPOB farms, to her children, the defendants in TIONMENT OF INCUMBRANCE. Where, at the time of the execution of a

this action. Thereafter the plaintiffs institrust deed by a husband and wife, a mortgage

tuted this action, praying that the amount covering part of the land of the husband and due to them for their advances should be all of the land of the wife was made by them,

ascertained, and the lands conveyed to them and part of the proceeds thereof was used to pay a prior mortgage upon the land of the wife,

by Wilson Hogg should be sold, and out of and the remainder of the proceeds was turned the proceeds of the sale the plaintiffs should over to the trustees to be applied upon the be paid the amount found due. At the time debts of the husband, and subsequently the trustees brought a suit for an adjudication of

of the conveyance to the plaintiffs, Wilson their claims for advances made by them under

and Agnes Hogg had arranged with the Bufthe trust, and for a sale of the lands to pay such falo Savings Bank to obtain a loan on the claims, a judgment directing the sale of all

"lower farm” of $2,800; the existing mortthe lands, and that the part of the proceeds of the mortgage executed by the husband and wife

gage on Agnes' land to be paid out of the which was applied upon the mortgage on the loan, so that the new mortgage might be wife's land should be charged upon the land a first lien on the farm. The mortgage to formerly owned by the wife, and that the part

the Buffalo Bank had been executed and applied to liquidate the debts of the husband should be charged upon the land owned by

recorded, but the money not yet advanced him, was proper.

by the mortgagee. The agreement between 2. SAME-APPORTIONMENT OF PROCEEDS.

Wilson Hogg and the plaintiffs provided that A judgment directing the sale of a tract of

out of the money to be received from the land as an entirety, and providing that the proceeds of the sale should be apportioned be

Buffalo Savings Bank there should be paid tween the different parcels of the land sold ac the mortgage on the lands of Agnes and that the surplus should be applied on Wilson the same extent and in the same proportion Hogg's debts. Subsequently this agreement as they would have been in the hands of was carried out, and $1,456 paid to satisfy Wilson Hogg and said Agnes. In the hands the Agnes Hogg mortgage. The plaintiffs of those parties their respective lands were asked as further relief that the amount due liable in the proportions in which the loan on the savings bank mortgage be apportioned had been received by the parties or appropribetween the two tracts of land. The ap ated to their use. The trial court, therefore, pellant answered, alleging that the lands properly held that the lands of Agnes were embraced in the lower farm had always primarily liable for the amount applied in been used as a single farm, and that a sep satisfaction of the old mortgage thereon. arate sale of that part of the farm owned During the pendency of this action the apby Wilson Hogg in his lifetime would greatly pellant acquired the mortgage of the Buffalo prejudice the interest of the parties to the Savings Bank. He contends that the trial action. He prayed as relief that the farm | court could not, as against the mortgagee, be sold as an entirety and the proceeds of apportion the lien of the mortgage between the sale apportioned between the parties. the two parcels of land. Doubtless, in this The action was tried and proceeded to a position he is correct, for a mortgage of $1,000 judgment, which, having determined the on two pieces of land cannot by any action amount due the plaintiffs, directed a sale on the part of the owner of the equity of of both farms. There is no dispute as to | redemption be transmuted into two mortgages the amount due the plaintiffs, and complaint for the sum of $500 each on the separate is made of the judgment rendered only in parcels. But we do not understand the de two particulars, which we will now consider. cree as having any such effect. The Buffalo

The decree charged on Agnes Hogg's sepa Savings Bank, the original mortgagee, was rate lands that portion of the mortgage to not a party to the action, and the plaintiffs the savings bank which had been applied did not seek any relief against it, but asked to the satisfaction of the prior mortgage on solely for an adjustment of the primary those lands. The remainder was charged liabilities of the owners of the equity of on the lands conveyed by Wilson to the plain redemption as between themselves. In our tiffs. The appellant contends that the whole opinion this is all the decree effects. The mortgage should have been charged on the | question, however, is now of no importance, lands of Wilson Hogg, under the general rule for the “lower farm" was sold as an enin equity that where several pieces of prop tirety, and the appellant's mortgage has been erty are subject to a single and common lien, acquired by one of the plaintiffs. and are conveyed to different persons, such The second objection is to the apportion-, parcels are liable for the satisfaction of the ment wbich the judgment directed to be made lien in the inverse order of their alienation. of the proceeds of the sale of the lower farm, That rule, however, has no application to a in case it was sold as a whole. This obcase like the present, where the separate jection is well founded. The judgment diparcels of the mortgaged premises are owned rected that the farm be first offered for sale by different persons. Commissioners v. Wood. | in two parcels: (1) That previously owned ward, 40 N. J. Eq. 23. Indeed, the rule is by Wilson Hogg; (2) that previously owned not of universal application, even where the by Agnes Hogg-and that then it be offered grantor owns the whole premises. Which for sale as an entirety, and that whichever piece of property should be sold first to satis- | manner of sale produced the largest offer fy the lien of a mortgage depends entirely for the whole tract should be accepted and on the agreement of the parties at the time stand. The judgment then directed that, in of the conveyance. If a grantor conveys a case the farm was sold as an entirety, the portion of the premises with warranty, or proceeds of sale should be apportioned bereceives the whole purchase money, then the tween the two parcels according to their lands conveyed are not to be sold until after acreage, which is specified in the decree. Of the lands retained by the grantor have been course, the plaintiffs had no right to a sale first applied in satisfaction of the mortgage. of the lands of Agnes, no matter bow desirSo, on the other hand, the grantor may by able it might have been to have the lands his conveyance charge the whole or any on which they held a lien sold in connection portion of the mortgage debt primarily on the with hers. But they did not ask for any such lands conveyed. In the present case Wilson sale. That was directed at the request of Hogg, by his conveyance to the plaintiffs, the appellant, made in his answer. Theredid not charge or assume to charge any part fore he cannot now complain that the lands of the mortgagę debt on the lands conveyed of Agnes were sold in an action brought by him. Those lands were subject to the solely to foreclose a lien on the lands of mortgage of the savings bank, and necessarily Wilson. But as to the provision for the so, because no acts of the owners of the apportionment of the proceeds of the sale he equity of redemption could discharge or im is in no way concluded. The direction made pair the mortgagee's lien on any of the mort. | by the court that the apportionment should gaged premises; but between the plaintiffs be made according to area seems to us enand Agnes Hogg or her devisees the lands tirely arbitrary. There is no finding as to were subject to the lien of the mortgage to the value of the land, or that the value was

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