40 Barb. 179 | N.Y. Sup. Ct. | 1862
Lead Opinion
The referee has found, as matter of fact, from the evidence before him, that the draft in question, in action designated No. 1, was drawn for the defendant by James R. Wilson, who was then its president, in his official capacity, and was used in the purchase of a locomotive engine for the defendant, who took and owned the same and used it upon its road, with full knowledge on the part of its officers and managers of the manner of its purchase; and that the defendant had ratified and confirmed the act of the purchase, and that of making the draft on its account and behalf. In regard to the notes, in the action designated No. 2, the referee finds that they were all made and taken on account of a then existing indebtednesss from the maker, the Arbon Coal Company, .to the defendant; and that they were used, after being indorsed by the defendant, to borrow and raise money for the purpose of paying its own debts; and that the defendant was in no respect an accommodation indorser.
It is claimed, on the part of the defendant, that the referee should have found the other way, and that the evidence before him does not warrant this finding of facts. But it seems to me that it would have been far more difficult to vindicate the finding, had it been the other way. The facts, as found, are in accordance with the testimony of two witnesses, each of whom was in a situation to know how the fact was, and each of whom testifies, unreservedly and unqualifiedly, and there is no witness and no evidence, as far as I can see, to show a contrary state of facts. The statement made by the
As matter of law it is claimed, on the part of the defendant, that the draft in action Ho. 1, is not the draft of the defendant, but that of Wilson individually. The referee held that it was the draft of the defendant, and in this I think he was clearly correct. It is dated at the defendant’s principal office, in Philadelphia, signed by “James R. Wilson, Prest. T. N. Co.,” directed to and accepted by “ Hiram H. Bostwick, Treas. Tioga Coal, Iron, Mining and Manufacturing Co.,” and upon its face contains the direction to “charge to motive power and account.” It thus appears plainly, as I think, upon the face of the instrument, that it is and was intended to he the draft of the defendant and not of the individual who drew and signed it. (Bank of Genesee v. Patchin Bank, 19 N. Y. Rep. 312. Babcock v. Beman, 1 Kern. 200. Choteau v. Suydam, 21 N. Y. Rep. 179. Dewitt v. Walton, 5 Seld. 571. Many v. Beekman Iron Co., 9 Paige, 188.)
In addition to this, the evidence in the case shows affirm
That the defendant has power to give a valid note or draft in payment of a debt, or in the purchase of property for legitimate use, has been settled not only in this court but in the court of appeals, in the case of Mallory against this defendant, our decision having, as it is understood, been affirmed in-that court.
The indorsements upon the several notes, in action No. 2, purport upon their face to have been made by the defendant and are proved to have been made by its authorized agent or officer. Having been used to borrow money to pay debts, of course the defendant is bound if it has been properly charged by demand and notice. Certainly if the defendant can make a valid note or draft, to turn out in payment of a debt, it can make a valid indorsement upon the notes of others which it has received in the course of its business, for the same purpose.
As to the authority of Wilson, as president of the defendant, to bind it by such instruments for such purposes, the question upon the evidence is too plain for argument. Even if he had not the necessary authority, originally, his long and uniform exercise of it, without objection or dissent from any one interested, would be sufficient when his acts are within the scope of the powers of the body represented. (Conover v. Mu. Ins. Company of Albany, 1 Comst. 290.)
It is also objected, on the part of the defendant, that the evidence before the referee was insufficient to show that the defendant had been charged as indorser, by notice of the due presentment and the non-payment of the notes, by the maker. The objection is that the notice to the defendant, though under the hand, is not under the seal, of the notary by whom it is given. The statute (3 R. S. 5th ed. 474, § 35) provides that in all actions at law the certificate of the notary, under his hand and seal of office, of the presentment,, non-payment and service of notice, shall be presumptive evi
The evidence offered, as to the value of the property contained in the chattel mortgage, was, I think properly excluded by the peferee. The mortgage, as is conceded, had been regularly foreclosed, and the avails arising from the sale
It may be that a person who "holds property in pledge
Some stress was laid upon the argument by the defendant’s counsel upon the provision of the statute, in case of a-foreclosure of a mortgage upon real estate, by virtue of a power contained in such mortgage, which expressly confers upon the mortgagee and his assigns the right to purchase upon such foreclosure sale. But in such case the title to the land, until sale, is in the mortgagor like a pledge, and the mortgage is a mere lien by way of security for the debt, and the power of sale exercised is in the nature of an agency to dispose of the property for the mortgagor. Of course the agent or attorney exercising this power for another could not, upon general principles, purchase for himself without the.consent of the mortgagor or the aid of the statute. This was so held in Dobson v. Racey, (4 Seld. 216,) where the sale was not by foreclosure but by the mortgagee privately, and in virtue of a power not in the mortgage. But the case of a chattel mortgage is wholly different. The mortgagee has the legal title from the beginning, which is rendered absolute and indefeasible at law by the failure to pay the debt, and the power of sale after the debt has become due and the title fixed and absolute, so far from being a power to be exercised for the benefit and advantage of the mortgagor, is generally given wholly for the benefit of the mortgagee, and for the purpose merely of fixing the price or value of the chattels to be applied upon the debt. It is given to the owner of the property, to be exercised at his option. The object of a notice of the sale is to enable the mortgagor to attend and see that the best possible price is obtained, and then if the mortgagee is the highest bidder his purchase is beneficial instead of being injurious to the mortgagor. But in no sense is this power in the nature of an agency or trust; it is a simple arrangement in the nature of an agreement by which the mortgagee may determine .the price of the chattels in case he elects not to keep them in satisfaction of the debt, if they
I am of the opinion that none of the objections to the evidence upon the trial are well taken, and that the judgment should be affirmed.
Welles, J. concurred.
Concurrence Opinion
I concur in the result expressed in the opinion delivered by Justice Johnson in this case, while I dissent from a portion of his reasoning in respect to the question whether the mortgagee should account for the value of the mortgaged property instead of the sum bid by him therefor. As the mortgagee took a conveyance with a power of sale, I think he is to be regarded as a trustee for sale, (Jickling’s Anal. 67, note; Downes v. Grazebrook, 3 Mer. 200,) and as such he would be disabled from purchasing, were it not for the fact that being interested to the amount of his mortgage, he is also a cestun que trust, and should be permitted to purchase in order to avoid a loss to himself by a sale to another at a less price. It may well be doubted whether the rule of equity against a trustee’s purchasing the subject matter of his trust, can ever apply where the trustee stands in the relation of cestui que trust also.
Judgment affirmed,
Johnson, Welles and J. C. Smith, Justices.]
Decision affirmed by the Court of Appeals, September, 1863.