App. Div.] First Department, March, 1910. ton, at the time I loaned money on it, and when I made my demand I was informed by Mr. Wilson that he had prior to the demand delivered the chassis." * * This judgment was based upon section 629 of the Penal Code. "A person who: 2. Carrying on the business of a warehouseman, wharfinger or other depository of property, who issues any receipt, bill of lading or other voucher for merchandise of any kind, which has not been actually received upon the premises of such person and is not under his actual control at the time of issuing such instrument, whether such instrument is issued to a person as being the owner of such merchandise or as security for any indebtedness, is guilty of a misdemeanor." (See Laws of 1892, chap. 692.) * * Section 632. "A person mentioned in sections 628 and 629, who sells or pledges any merchandise for which a bill of lading, receipt or voucher has been issued by him, without the consent in writing thereto of the person holding such bill, receipt or voucher, is punishable by imprisonment, Section 633. "A person mentioned in section 629, who delivers to another any merchandise for which a bill of lading, receipt or voucher has been issued, unless such receipt or voucher bears upon its face the words 'not negotiable,' plainly written or stamped, or unless such receipt is surrendered to be canceled at the time of such delivery, * * * is The complaint alleges that the defendant is doing business under the name and style of Keyes & Wilson, and also under the name and style of Flandrau & Co., with his principal place of business at 406 Broome street in the city of New York, and is engaged in a general carriage business, making bodies for automobiles and storing automobiles and carriages for hire. And it is conceded that the defendant was engaged as alleged in the complaint. It was proved that judgment was duly recovered by Manny against Archer & Co. and execution returned unsatisfied. In Burnham v. Cape Vincent Seed Co. (142 N. Y. 169) the court said: "In the case at bar the plaintiff held the cargo of peas as security for the Ontario Bank, and if, before the bank's debt was paid, he had wrongfully delivered it to the defendant, he would have been criminally liable under section 633 of the Penal Code, and the bank First Department, March, 1910. [Vol. 137. could have proceeded against him in a civil action for damages. (Colgate v. The Pennsylvania Co., 102 N. Y. 120; First National Bank of Cincinnati v. Kelly, 57 id. 34.)" In Mairs v. Baltimore & Ohio R. R. Co. (175 N. Y. 409) the court, alluding to sections 629 and 633 of the Penal Code, said: "These provisions of the Code were taken from chapter 326 of the Laws of 1858, as amended by chapter 353 of the Laws of 1859, and chapter 440 of the Laws of 1866. Under the statute all persons aggrieved by a violation of the act were given the right to maintain an action at law against the violators thereof to recover the damages suffered; but when some of the provisions of the act were transferred to the Penal Code, that pertaining to the civil remedy was omitted and disappeared from our statute law by a repeal of the statute. At common law the failure to take up a bill of lading did not furnish cause for action, and it follows that the only civil liability remaining exists by reason of the provisions of the Penal Code, which makes the omission unlawful and criminal." After citing the provisions of the statute, the court proceeds: "There, however, can be no recovery unless damages to the plaintiff resulted from the illegal act. Where the Legislature prohibits or requires the doing of an act and prescribes a punishment that shall be inflicted for a violation of its mandate, the punishment furnishes the exclusive remedy for the wrong, so far as the public is concerned, and the act cannot be made the basis of a civil action by an individual for the recovery of damages, unless he has been injured in his person or property and the damages suffered are the direct and proximate result of the illegal act. In this case the defendants negligently omitted to take up the bill of lading when they delivered the goods upon the order of the consignee. The bill of lading did not have the words 'not negotiable' indorsed upon its face, and, therefore, the defendants may be technically guilty of a violation of the statute, but the bill of lading, in fact, was 'not negotiable,' and under the law merchant the defendants would not have been required to take up the bill had it not been for the provision of the statute. * * I think this judgment ought to be sustained. I do not think that the fact that the defendant was to do some work on this machine avoids the liability. He issued a "receipt" or "voucher for merchan App. Div.] First Department, March, 1910. He was a 66 warehouseman dise." or other depository of property." He gave a receipt for some purpose, and its peculiar wording, "to be delivered only on return of this receipt properly endorsed," must be construed to mean what is said. Ordinarily, as between dealer and manufacturer, no such instrument as this passes. It was to identify and secure this particular machine in specie, and this was so well understood that it was indorsed and delivered over to Manny as a muniment of title and as security for repayment of his loan. It seems to me that the transaction. comes fairly within the general purport of the law to secure third persons advancing money or making payments upon the faith of warehouse receipts in their supposed collateral. The plaintiff advanced his money and upon the faith of this receipt extended time of payment, and it was by reason of the defendant's carelessness and disregard of the statute and of the obligations that he had himself taken when he gave the receipt that the damage has accrued. I am in favor of an affirmance. Judgment reversed, new trial granted, costs to appellant to abide event. FANNY FORSCHIRM, Respondent, v. MECHANICS AND TRADERS' BANK OF THE CITY OF NEW YORK, Appellant. First Department, March 11, 1910. Banks - suspension of payment caused by action of State authorities — depositor not entitled to interest - acceptance of principal bars claim to interest - principal and agent - authority of clerk to bind bank. A depositor in a bank having an account not drawing interest is not entitled to interest during the period when the bank, though solvent, was compelled to suspend payment while its assets were held by receivers during an action by the People brought at the instance of the State Superintendent of Banks. As the depositor had no contract or statutory right to interest she was entitled to interest only by way of damages for a wrongful detention of the debt, and as the bank was compelled to suspend payment by the State authorities, it was not chargeable with a default. Interest for the wrongful detention of a debt is but an incident to the principal debt, and cannot be made the basis of an independent claim. Acceptance of [Vol. 137. First Department, March, 1910. the principal sum under protest will not save the right to recover interest, unless there be a special agreement to that effect. Evidence examined, and held, that a clerk of the defendant bank had no authority to bind it to pay interest and that the plaintiff's assignor did not rely upon such promise in accepting the principal. The extinguishment of a claim to interest by an acceptance of the principal does not rest upon the doctrine of waiver, so as to involve an element of intent. CLARKE and DOWLING, JJ., dissented, with opinion. APPEAL by the defendant, the Mechanics and Traders' Bank of the City of New York, from an order of the Appellate Term of the Supreme Court, entered in the office of the clerk of the county of New York on the 29th day of June, 1909, affirming a judgment of the City Court of the city of New York in favor of the plaintiff, entered on the 5th day of January, 1909, and also (as stated in the notice of appeal) from the judgment of affirmance of the City Court entered in said City Court on the 8th day of July, 1909. F. Sidney Williams [Frank R. Greene with him on the brief], Edward M. Grout and Paul Grout, attorneys, for the appellant. Joseph Gans, for the respondent. MILLER, J.: The stipulation made at the suggestion of the court at the opening of the case is somewhat ambiguous, as oral stipulations made in the course of the trial are apt to be; but I think the fair inference from it is that the bank closed its doors and suspended payment because the Bank Superintendent "stepped in." In any event, it is plain that the defendant did not intend, and was not understood, to stipulate that the action of the bank was voluntary. The answer distinctly alleged that the defendant's inability to pay was due to no fault of its own, but solely to the acts of the Superintendent of Banks, which it was powerless to prevent. By referring to and annexing a copy of the order appointing temporary receivers the answer did not admit the truth of the recitals in said order, especially in view of the positive averment referred to. But the course of the trial frees this question from doubt. The court at the outset ruled "that no demand is necessary where temporary receivers were appointed." The defendant sought to show that it closed its doors because of an order of the Banking Department, but the evi App. Div.] First Department, March, 1910. dence was ruled out by the court on the distinct ground that it was immaterial. So for the purposes of this appeal we must start with the assumption that the defendant was solvent, able to pay its depositors in full, and that it was compelled to suspend payment by the Superintendent of Banks, who caused the Attorney-General to institute an action for the dissolution of the corporation, in which temporary receivers were appointed, but which was voluntarily discontinued by the Attorney-General on the 17th of August, 1908, when the temporary receivers were discharged and the entire amount of the plaintiff's assignors' deposit was returned to and accepted by them. "Before interest can be allowed in any case it must be by virtue of some contract express or implied, or by virtue of some statute, or on account of the default of the party liable to pay, and then it is allowed as damages for the default." (Per EARL, J., in Matter of Trustees, etc., 137 N. Y. 95, 98.) The case in 4 Metcalf, cited by Mr. Justice CLARKE, arose between the creditors of a decedent and his widow and heirs on the final settlement of his estate. No doubt the equitable doctrine announced by Chief Justice Shaw in that case would be applicable upon the settlement of a decedent's or insolvent's estate as between different classes of claimants, who had unduly been kept out of their money. But it is certain that it would not be applied in this State as between the parties to a contract for the payment of money on demand without interest, for such in effect was the contract in this case. It may be said that it is inequitable for the depositor to be kept out of his money without interest, but the answer to that is that that was not due to any act of the defendant. To be sure, through no fault of its own, the defendant could not have paid, even if a demand had been made, but that is not a reason for penalizing it. If permitted to, it could and would have paid upon demand; and in my view it would be inequitable to subject it to damages for a wrong which it has not committed, to compel it to pay interest on a non-interest bearing debt, due only on demand, in the absence of a demand or of some act of its own excusing a demand. Instead of undertaking to apply general principles of equity and natural justice, upon which we might differ in a case like this, the case should be reduced to the precise legal ground upon which interest is recoverable, if at all, ¿. ., by way of damages for a wrongful detention of the debt. |