February 25 this draft, which had been raised to the sum of $2,540 and altered in its date and also altered so as to make it payable to the order of the plaintiffs, was offered at the office of the plaintiffs by a person unknown to them in payment of some bonds which the person presenting the draft proposed to purchase. Thereupon the plaintiff sent a messenger to the defendant's banking house with the draft, who presented it to the paying teller, and on behalf of plaintiffs asked the latter if the certification of the draft was good. The paying teller took the draft, looked both on the face and back, and without comparing it with his books answered, "Yes;" whereupon, plaintiffs took the draft in good faith, and delivered in exchange therefor bonds and money to the amount of its face.

March 4, 1879, this draft was presented to the defendant, which refused payment thereof; and plaintiffs brought this action.

On the first trial the plaintiffs recovered a judgment which was affirmed by the general term, but reversed in this court and a new trial granted, for error in the charge to the jury. See 89 N. Y. 418.

On the new trial the complaint was dismissed on the pleadings, and the opening of the plaintiffs. The judgment of the trial court, dismissing the complaint, was affirmed by the general term, and plaintiffs appealed to this court.

Mr. Esek Cowen, with Messrs. Abbott Bros., for appellants:

The trial court had no right to dismiss the complaint, unless it was impossible for the plaintiffs to make out a case on the new trial. This court assumed that they might improve their case, and virtually decided that the complaint contained a valid cause of action, when it granted a new trial, instead of finally dismissing the complaint, on the appeal. It must be presumed, on this appeal, that the plaintiffs would have proved what their counsel, in opening, offered to prove. One of these offers was to prove the accepted meaning, among bankers in the City of New York, of the question put by the plaintiffs to the defendant's teller.

The plaintiffs had a right to make this proof.

Ehle v. Chittenango Bank, 24 N. Y. 548; Wachter v. Quenzer, 29 N. Y. 548; Bissel v. Campbell, 54 N. Y. 357; Brown v. Brown, 8 Met. 576; Story v. Salomon, 6 Daly, 531, affirmed, 71 N. Y. 420; Coit v. Commercial Ins. Co. 7 Johns. 385; Astor v. Union Ins. Co. 7 Cow. 202.

The case should have been submitted to the jury, upon the question of the defendant's negligence.

ment was reversed, and necessarily, there having been manifest error in the charge of the judge. who instructed the jury (in substance) that if the draft was presented to the teller of the defendant and he answered the question of the messenger who presented it in the manner testified to by the messenger, the plaintiffs were entitled to recover. That instruction was in effect a charge that if the messenger asked the teller whether the certification was good and the teller answered in the affirmative, that answer of itself, as matter of law, rendered the defendant liable.

Under that charge the jury were relieved from considering the circumstances proved upon the trial, and from construing the import of the question and answer, and were constrained to render a verdict for the plaintiffs, provided they believed the testimony of the messenger as to the answer which he received. They were not called to pass upon any of the questions arising upon the evidence, as to the notice which the Bank had received in relation to the draft, and the entries relating to it, contained on its own certification book and book of stopped checks, nor upon any question of negligence on the part of the teller in failing to refer to the books mentioned. The charge held that the statement of the teller that the certification was good constituted in itself, as matter of law, an absolute estoppel upon the defendant, which precluded it from disputing its liability upon the certification, for the full amount of the draft as raised subsequent to the certification, without reference to any other question. This, a majority of the court held to be error.

It by no means follows, however, that that decision established that the defendant was absolutely exempt from liability, and could not be held responsible, even if the defendant, at the time the teller said that the certification was good, had notice that it had ceased to be good by reason of the subsequent alteration of the draft or had in its possession the means of ascertaining that fact; and the jury should find that it was guilty of culpable negligence, under the circumstances, in omitting to resort to those means of information, and thus misled the plaintiffs to their injury. That is an entirely different question from the one which was adjudicated on the former appeal.

On the trial now under review the plaintiffs did not rest upon the teller's answer alone, which on the first trial was erroneously held to be of itself sufficient to make the defendant liable. They sought to go further, and to show that before answering the question the teller examined the whole of the draft, both face and back, and everything upon it. It bore plainly

Mr. Wheeler H. Peckham, for respond-on its face the number 73,436. ent:

On a second appeal the decision on the first appeal is the law of the case, and the questions will not be reopened.

Clark v.

802).

Keith, 106 U. S. 464 (Bk. 27, L. ed.

Rapallo, J., delivered the opinion of the

court:

When this case was first before us (89 N. Y. 420) it came up on an appeal by the defendant from a judgment rendered in favor of the plaintiffs, on a verdict in their favor. That judg

The complaint stated the facts relating to the history of the draft and the notice to the defendant that a draft bearing that number had miscarried, and requesting the defendant to stop payment of it, and the other facts set forth in the report of this case on the first appeal; 89 N. Y. 420; and on the last trial the counsel for the plaintiffs opened the case stating fully these facts, and, after a motion to dismiss on the complaint and opening, the counsel made a further opening, stating that he expected to prove that in the ordinary usage of banks in the City of New York, it was the duty of the teller,

facts is made, on the specific ground that it is not admissible under the pleadings. No such specific objection appears to have been made. If it had, it might have been met by an amendment of the complaint if necessary.

The judgment should be reversed and a new trial ordered, costs to abide the event.

under the circumstances of this case, before | unless objection to proof of such additional answering the question asked of him, to compare the draft with the entry in the certification book, and with the book of stopped payments and the entries made therein, which identified the draft by its number 73,436, and that the teller was guilty of gross negligence in answering the question without first making the comparison; also that, according to the usage, the question asked the teller in this case related not merely to the marks of certification, but to the draft as certified; and he also asked to go to the jury on the question whether the teller examined the whole draft, and whether his answer referred to the draft as certified, or to the marks of certification only.

After this further opening the defendant's motion to dismiss the complaint was granted, and the plaintiffs' request to go to the jury denied, and the plaintiffs' counsel excepted.

Ruger, Ch. J., Andrews, Danforth, and Finch, JJ., concur; Earl, J., not voting; Peckham, J., not sitting.

Silas D. GIFFORD, Receiver, etc., Appt.,

v.

Michael Augustine CORRIGAN, Exr., etc., of John McCloskey, Deceased, Impleaded, Respt.

We think that the court erred in thus dismiss-1. ing the complaint. Without regard to the admissibility of evidence of usage, the plaintiffs had a right, under the circumstances offered to be proved, to go to the jury on the question whether the inquiry made of the teller was understood by the parties as referring to the validity of the certification at the time it was exhibited to the teller, or only to the genuineness of the marks of certification, and also on the question whether it was culpably negligent, under the circumstances, to answer the question without referring to the certification book and the book of stopped payments, which referred to the draft in question by its number, and would have disclosed the fraud. It was promptly discovered on the following day, when the draft was presented for payment.

Neither of these questions was necessarily involved in the case as presented to us on the first appeal. The judgment then under review could not have been sustained, on the ground that the jury might have found for the plaintiffs on the two questions now referred to; and the reversal of the judgment cannot, therefore, be regarded as an authoritative decision that they were not proper for the consideration of the jury. When the court is divided, as it was ou the first appeal, and the majority concur simply for reversal, it is not safe to treat anything as having been adjudicated, except the precise point in respect to which error in the judgment of the court below was made to appear, which in this case was that the judge charged the jury, as matter of law, that if they found that the question whether the certification was good was asked of defendant's tela and answered as testified to by the messenger, the plaintiff was entitled to recover.

That this charge was erroneous is all that was necessarily decided on the first appeal.

The counsel for the respondent now makes the point that in reviewing the decision dismissing the complaint, we must consider only the facts stated in the complaint itself, and that the further facts referred to in the opening of the counsel and in his offers of proof cannot be considered. We do not think this point ten

able.

Where a complaint is dismissed on the opening of counsel, all the facts referred to in his opening, or offers of proof, should be considered, including facts not stated in the complaint,

2.

A delivery of a deed, not beneficial to the grantee, of property heavily incumbered, without evidence of possession under the deed or of any prior contract or negotiation between the parties, or of any knowledge in fact on the part of the grantee of the existence of the conveyance, cannot be inferred or presumed from the bare record of the deed.

Where the case, on the point on which a judgment is reversed by the general term, may be changed on a retrial, the general term should order a new trial.

3. Although expressions of judges have been found bearing upon it, the question never has been finally adjudicated in this court whether it is competent for a grantor of mortgaged premises whose conveyance was made subject to the mortgage and contains a covenant of assumption by the grantee, without the consent of the mortgagee, to release the grantee from the covenant so as to bar any remedy thereon against him by the mortgagee, and whether it makes any difference whether the release is executed before or after the mortgagee has notice of the covenant, or before or after suit commenced by him thereon.

(Decided April 19, 1887.)

APPEAL from a judgment of the Supreme Court at General Term in the Second Department, reversing a judgment of the Westchester Special Term as to defendant McCloskey (and granting leave to plaintiff to discontinue as to him) in an action to charge defendants with deficiency on a foreclosure sale. Judgment modified. New trial granted.

Reported below, 38 Hun, 350.

Property owned by the Father Matthew's Total Abstinence Society, and mortgaged for its full value to plaintiff's assignor, was by said society conveyed under order of the court for nominal consideration to John McEvoy. The deed contained a covenant on the part of the grantee assuming payment of the mortgage. Thereafter McEvoy executed and recorded a deed of the same premises to John McCloskey,

of appeals can only look at the facts as found and the exceptions taken.

Krekeler v. Thaule, 73 N. Y. 608.

The attempted release by McEvoy's execu

Archbishop of New York, which deed also contained a like covenant on the part of said McCloskey assuming payment of the mortgage. On a sale of the mortgaged premises on foreclosure of the mortgage there was a defi-tor was futile. The grantor, McEvoy, and his ciency, to recover which this action was brought against said McCloskey and William P. O'Connor, executor of John McEvoy, deceased.

At the trial at the special term, before a justice without a jury, judgment was rendered in favor of plaintiff against both defendants. On separate appeals to the general term, which were heard together, the judgment was reversed as to McCloskey, with leave to plaintiff to discontinue the action as to him and affirmed as to defendant O'Connor. The defendant O'Connor appealed to this court from that part of the judgment of the general term which was adverse to him and such judgment was affirmed. See 6 Cent. Rep. 33, in which the facts are more fully stated.

executor, were each powerless to release defendant McCloskey from the covenant of assumption.

Ranney v. McMullen, 5 Abb. N. C. 246; Ranney v. Peyser, 5 Abb. N. C. 259, note; Hartley v. Harrison, 24 N. Y. 170.

This liability, once created, is irrevocable. Garnsey v. Rogers, 47 N. Y. 242; Whiting v. Gearty, 14 Hun, 501.

The fact that the general term affirmed the. judgment as to O'Connor and reversed it as to McCloskey did not prevent a new trial being granted as to McCloskey.

Hubbell v. Meigs, 50 N. Y. 484, 489.

The general term erred in reversing the judgment as to McCloskey and inviting the plaintiff to discontinue as to him. If it was right to reverse the judgment, it should have ordered a new trial.

The plaintiff appealed to this court from that part of the judgment of the general term which reversed the judgment of the special term as to defendant McCloskey. Subsequent to the trial at special term defendant McCloskey died and the defendant Corrigan, as executor, was sub-17 N. Y. 28. stituted in his place.

Further facts appear from the opinion. Mr. Ralph E. Prime, for appellant: The presumption of delivery and acceptance which is inferred from the reading in evidence, as in this case, of the record of the deed, rests on good authority.

Astor v. L'Amoreux, 8 N. Y. 107; Cuff v. Dorland, 57 N. Y. 560; Griffin v. Marquardt,

Mr. E. C. Boardman, for respondent: There is no proof in the case that the deed from McEvoy to McCloskey was ever delivered, or that McCloskey ever took possession of the premises described therein, or that he ever accepted or even knew of the existence of the deed in question or of the fact that it had been

The production of the books of conveyances containing the record of a deed is no proof of its delivery or of its acceptance by the parties sought to be charged.

Day v. Mooney, 6 Thomp. & C. 382; Best v. Brown, 25 Hun, 223.

Jackson v. Perkins, 2 Wend. 308, 318; Law-recorded. rence v. Farley, 24 Hun, 293, 295; Fisher v. Hall, 41 N. Y. 416, 423; Fryer v. Rockefeller, 63 N. Y. 268, 273; Knolls v. Barnhart, 71 N. Y. 474, 478; Jackson v. Bodle, 20 Johns. 184, 187; Spencer v. Carr, 45 N. Y. 406, 410; Wilsey v. Dennis, 44 Barb. 354, 359; Lady Superior v. McNamara, 3 Barb. Ch. 375, 378; Moir v. Brown, 14 Barb. 39, 45; Gilbert v. N. A. Fire Ins. Co. 23 Wend. 43, 46; Van Buskirk v. Warren, 4 Abb. App. Dec. 457, 460; Tompkins v. Wheeler, 16 Pet. 106 (41 U. S. bk. 10, | L. ed. 903); Halluck v. Bush, 2 Root, 26; 2 Greenl. Ev. § 297.

The eighth finding of fact is of the delivery of the deed to McCloskey, and his assumption of the mortgage. McCloskey has never except ed to this finding, nor to the fifth conclusion of law which charges him with the deficiency.

This court will not review questions of fact found when there are no exceptions to the finding.

Hunt v. Chapman, 62 N. Y. 338. In case of no evidence to justify a finding, an exception to that finding is necessary to a review in this court.

Gidly v. Gidly, 65 N. Y. 69; Brush v. Lee, 36 N. Y. 52, 53.

It nowhere appears in the case that the reversal was upon questions of fact; and if there is any evidence at all, if only a presumption to sustain the findings of fact, this court will not review the facts found. Lanigan v. N. Y. Gas Light Co. 71 N. Y.

32.

Where it does not appear from the general term order of reversal that it was on the facts (and so it fails to appear in this case), it will be deemed to be upon the law only; and the court

Andrews, J., delivered the opinion of the

court:

The defendant McCloskey in his verified answer denied that he entered into the covenant of assumption contained in the deed executed by McEvoy, and alleged that the deed was made and executed without his knowledge, and that it was never delivered to or accepted by him. The parties proceeded to trial, upon the issue so presented and the other issues in the case. The plaintiff put in evidence from the register's office in Westchester County the record of a deed dated May 8, 1878, recorded May 10, 1878, from McEvoy to the defendant McCloskey, purporting to convey to "John McCloskey, Archbishop of New York," for the nominal consideration of $1, the mortgaged premises and a lot adjacent thereto, which deed contained a covenant on the part of the grantee to assume and pay the principal sum of $3,900, on the mortgage, with interest from January 9, 1869. The deed was executed by the grantor alone.

The plaintiff rested his case against the defendant McCloskey solely upon the record. The case is bare of any circumstance or evidence showing or tending to show that the defendant McCloskey had any knowledge or information of the existence of the deed, or indeed of the

*See note to this case, Lawyers' edition, and digested citations at the close. [Ed.]

existence of the mortgaged property prior to the commencement of the action, or that he was ever in possession, or that he ever had any conversation or negotiation with anyone in respect to the property. There is no evidence who put the deed upon record, or how it came to be recorded. The bare fact of the record is all that appears connecting the defendant McCloskey with the transaction. The grantor McEvoy died before the commencement of the action, and the defendant McCloskey a few months after the trial.

the conclusion of the general term upon this point was correct. See Jackson v. Phipps, 12 Johns. 418; Jackson v. Bodle, 20 Johns. 184; Church v. Gilman, 15 Wend. 656; Elsey v. Metcalf, 1 Denio, 323.

Construing the exceptions in connection with the issue raised by the pleadings, we think they fairly presented the question whether the | evidence justified a finding that the defendant McCloskey made the covenant upon which he is sought to be charged. But as the case on this point may be changed on a retrial we think the court below should have ordered a new trial, and that its order should be modified in this respect.

There is another question argued by counsel, of great interest, which we do not deem it necessary to decide, as it may not again arise; the question relates to the effect of the release from the covenant of assumption executed by the executor of McEvoy to McCloskey, after the complaint in the action and the notice of lis pendens had been filed, but before the actual service of process on the defendant.

In determining the question whether the plaintiff made out a prima facie case of the delivery to and acceptance of the deed by the grantee, certain other facts need to be noticed. McEvoy was a Roman Catholic priest. He acquired title to the mortgaged property in 1870, from the trustees of "The Father Matthew's Temperance Benefit Society of Tuckahoe," a society incorporated under the Act of April 12, 1848, for the incorporation of benevolent, charitable, scientific and missionary societies." The conveyance of the property by the society to McEvoy was made under the order of the court, which authorized the conveyance to be made to him "for the use of the Roman Catho-to lic Church, or the people of Tuckahoe," and the deed referred to the order as the authority under which it was executed. It appeared by the petition upon which the order was granted that the society was unable to pay the mortgage, and that the value of the premises did not exceed the amount due thereon.

The plaintiff, to maintain his claim that the deed from McEvoy to McCloskey was delivered and accepted, invokes the presumption that a party has accepted a benefit attempted to be conferred upon him, and that the record of a deed beneficial to the grantee is prima facie evidence of its delivery. The property was conveyed to McEvoy for church purposes; and it cannot be doubted that in executing a deed to the defendant McCloskey it was his intention to vest the title in him as archbishop, for the same purposes, whatever may be the legal effect of his conveyance, and not to vest in his grantee a personal, beneficial interest in the property. It is well known that the title to church property in the Roman Catholic Church is frequently vested in the bishop. This tends to explain a transaction which would otherwise be peculiar, and how McEvoy may have executed a deed of the land to his ecclesiastical superior without his knowledge.

Is it competent for a grantor of mortgaged premises, whose conveyance was made subject the mortgage and contains a covenant of assumption by the grantee, without the consent of the mortgagee, to release the grantee from the covenant so as to bar any remedy thereon against him by the mortgagee, and does it make any difference whether the release is executed before or after the mortgagee has notice of the covenant, or before or after suit commenced by him thereon? This question has never been finally adjudicated in this court, although expressions of judges are to be found bearing upon it. Hartley v. Harrison, 24 N. Y. 170; Garnsey v. Rogers, 47 N. Y. 233; Dunning v. Leavitt, 85 N. Y. 30; Knickerbocker Life Ins. Co. v. Nelson, 78 N. Y. 150.

Prior to Burr v. Beers, 24 N. Y. 178, as is shown by Rapallo, J., in Garnsey v. Rogers, the right of a mortgagee to avail himself of the benefit of a covenant of payment, made by a grantee of the mortgagor, was regarded as an equitable right only, and was founded on the theory that "The undertaking of the grantee to pay off the incumbrance is a collateral security acquired by the mortgagor, which inures by an equitable subrogation to the benefit of the mortgagee." Denio, J., Burr v. Beers, supra.

Assuming this to be the true foundation of the rule, the question arises, When does_this equitable right of subrogation attach? It is The ground of the presumption from the clear that it cannot be enforced by the mortbare record of a deed, that it has been delivered gagee until default of the covenantor to pay the and accepted, wholly fails in this case. The mortgage according to the terms of his covedeed was not beneficial to the grantee. The nant. But does not the equitable right of the property was heavily incumbered, probably to creditor to the benefit of the covenant spring its full value. As has been stated there is no into existence contemporaneously with the evidence of any possession under the deed, or covenant itself, although he cannot then avail of any prior contract or negotiation between himself of it, and although he may never be in the parties, or of any knowledge in fact on the a situation which renders a resort to it necespart of the grantee of the existence of the con- sary? This right does not rest on privity of veyance. In most of the cases where delivery contract between the covenantor and mortgagee. of a deed has been sought to be established, It is the application of an equitable principle without proof of the actual fact, there are cir-long recognized, to work out the real justice cumstances which support the presumption of of the transaction. If the right of the creditor a delivery, in addition to the bare record of the to the collateral security springs into existence deed. We are of the opinion that under the concurrently with the origin of the relation of circumstances of this case, a delivery cannot principal and surety between the mortgagor be presumed from the record alone, and that land his grantee, ought the immediate parties

IV. On general principles, and unless there Herman HAHLO, Impleaded with Eben C. was an agreement to the contrary, the common