§§ 94, 98; Interborough Brewing Co. v. Doyle, 165 App. Div. 646, 151 N. Y. Supp. 325. The uncontradicted evidence establishes that plaintiffs were purchasers in good faith, without knowledge of the equities.

The judgment must therefore be reversed, and judgment directed in favor of plaintiffs for $200 and interest, with costs in this court and the court below, with leave to appeal to the Appellate Division.

WEEKS, J., concurs.

MULLAN, J. (concurring). The defendant makers, on or about August 24, 1917, made their check for $200, dated September 3, 1917, and delivered it to the payees as security for the acceptance by the makers of goods to be delivered to them by the payees on September 1st. The payees on August 31st indorsed and transferred the check to plaintiff, who had no knowledge of the nature of the transaction between the makers and the payees. On September 1st, the payees having refused to deliver the goods, the makers stopped payment of the check. The plaintiff deposited the check on September 1st, and payment was refused upon its presentation to the drawee bank on September 4th-September 3d being a holiday. The decision of the trial court in favor of the defendant makers cannot be sustained, if plaintiff was a holder in due course of a negotiable instrument. The trial justice evidently concluded that the instrument was nonnegotiable at the time of its transfer to plaintiff, and that therefore he, as a mere assignee, took subject to all equities in favor of the makers.

Prior to the enactment of the Negotiable Instruments Law, the cases in which was involved the postdating of checks, though few in number, held unequivocally that one who takes, prior to the day of its date, a postdated check, is not by the mere fact of the postdating put upon such inquiry as to charge him with constructive notice of existing equities. Mayer v. Mode, 14 Hun, 155; Frazier v. Trow's P. & B. Co., 24 Hun, 281; Jacks v. Darrin, 3 E. D. Smith, 557. There are numerous cases, such as Brewster v. McCardell, 8 Wend. 478, Mitchell v. Culver, 7 Cow. 336, Pasmore v. North, 13 East, 516, and others, frequently relied upon to sustain the negotiability of postdated checks prior to their date, but improperly so, as they were cases of postdated promissory notes, and it is obvious that the postdating of such an instrument could have no possible effect upon its negotiability. But has not a change been wrought in the law as to the negotiability of postdated checks prior to their date by the adoption of the statute? The act, designed and purporting to cover the entire subject of negotiable instruments, includes the following provisions:

"Sec. 20.

An instrument to be negotiable must conform to the following requirements: *

*

"3. Must be payable on demand, or at a fixed or determinable future time." "Sec. 26. * An instrument is payable on demand: (1) When it is expressed to be payable on demand, or at sight, or on presentation; or (2) in which no time for payment is expressed. "Sec. 23. *

*

* * * ""

An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable: (1) At a fixed period after date or sight; or (2) on or before a fixed or determinable

future time specified therein; or (3) on or at a fixed period after the occur rence of a specified event, which is certain to happen, though the time of hap pening be uncertain.

*

Under these provisions I do not see how the instrument in question can be said to have been, on August 31, 1917, the date of its transfer to plaintiff, a negotiable instrument. It is quite clearly not payable on demand within the definition of section 26, or at a fixed or determinable time within the definition of section 23. Under section 20, to be negotiable, it must conform to one of those requirements as to time of payment; and confirmation is afforded by the definitions of specific kinds of negotiable paper as set forth in the Negotiable Instruments Law. This instrument clearly is not a promissory note; it must, therefore, be either a check or a bill of exchange, which instruments are defined in the act as follows:

"Sec. 210. * * A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer." A check is a bill of exchange drawn on a bank payable

"Sec. 321. on demand."

The instrument here dealt with meets neither of these definitions in respect of time of payment. On August 31st it was certainly not a check, as it was not payable on demand. Neither was it in form a bill of exchange payable on demand. Nor, I think, can it be regarded as a bill of exchange payable at a fixed future date-that is, the day of its date-as such a construction would make the instrument overdue the day after that day, thus discharging prior indorsers from the claims of a holder who took the paper on the day of its date and presented it for payment on the day following, although the holder may have taken the paper for what it purported to be, a check at that time regular on its face. Can it be said that this paper was, as to holders taking prior to its date, a bill of exchange payable on the day of its date, and, as to holders taking on and after the day of its date, an ordinary check payable on demand upon presentation within a reasonable time? I assume that it was not contemplated to create such an anomaly, with all the doubts and difficulties it would be so obviously calculated to produce, and yet in no other way that I can see would it be possible to impart to a postdated instrument, otherwise resembling a check, the character of negotiability prior to its date.

I think that the correct construction of such a paper under the statute is that it is nonnegotiable, and therefore subject to all equities, until the day of its date, when, in the hands of subsequent holders in due course, it is a check; but in what seems to be the only case in point decided in this state since the passage of the act, which happens to have been in this court, it was held that section 31 of the act has the effect of imparting negotiability to a postdated check prior to its date. Albert v. Hoffman, 64 Misc. Rep. 87, 117 N. Y. Supp. 1043, followed in Triphonoff v. Sweeney, 65 Ör. 299, 130 Pac. 979. That section provides that:

"The instrument is not invalid for the reason only that it is antedated or postdated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery."

"Instrument," as defined in section 2 of the act, "means negotiable instrument," and even without that definition it appears to us to be plain that "validity" and "negotiability" were not intended to be synonymous. This construction of section 31 does not rob it of vitality or usefulness. This very instrument, for example, from the day of its date, and thereafter for a reasonable time, was a good check; it was not "invalidated" by the fact that the date had been written in 10 days earlier; and, furthermore, section 31 has its distinct purpose in that it prevents the raising of any question as to the negotiability of instruments that are made negotiable by the statute, such as antedated checks, and antedated and postdated promissory notes and bills of exchange.

Nor can it, in my view, be urged that the provision of section 7 of the act, that "in any case not provided for in this chapter the rules of the law merchant shall govern," has any applicability to the situation here. Assuming that, under the common law of this state at the time of the enactment of the Negotiable Instruments Law, the instrument in question was negotiable from the moment it was drawn, I think that section 7 cannot be given the effect of continuing as negotiable such instruments as are not designated as negotiable instruments in the act, but that it was intended merely to apply to the negotiable. instruments named in the act such rules as existed prior to the act, which are not covered by and are not inconsistent with the provisions of the act. If it can be said that in construing the statute the presumption cannot lightly be indulged in that it was intended to curtail the negotiability of an instrument long and apparently quite generally held to be negotiable, the answer must be that, if a casus omissus be met with in a statute, the courts are without power to supply the deficiency by judicial construction. Whether it was intended to change the law, or whether the omission was due to inadvertence, we are without knowledge; but I reach the conclusion that, for whatever reason, a postdated check is not, prior to its date, a negotiable instrument under the statute. The decision of this court in Albert v. Hoffman, supra, requires us, however, to reverse the judgment in defendant's favor; but, because of the doubt as to the correctness of the holding there, we give leave to the respondent to appeal to the Appellate Division.

The payees were also joined as defendants, but defaulted. The judgment, although there were four defendants, two being the makers, and two the payees, is in favor of "the defendant." As the makers alone defended, and as they were doing business under a trade-name, it is quite probable that the trial justice in rendering judgment lost sight of the fact that there were two makers and that the payees had been served; at any rate, the judgment is treated by all parties to this appeal as being against both Vaccaros, and the plaintiffs' notice of appeal brings up for review only such part of the judgment as is in

favor of the Vaccaros, they apparently not troubling to appeal from so much of the judgment as was in favor of the payees, Fine.

I accordingly treat the appeal as relating solely to the judgment in favor of the defendant makers.

(103 Misc. Rep. 259)

ADAMS v. DICK et al.

(Supreme Court, Trial Term, New York County. April 15, 1918.)

1. JUDGMENT 818(2)—FOREIGN JUDGMENT-UNAUTHORIZED APPEARANCE BY

ATTORNEY-COLLATERAL ATTACK.

A suit on a judgment of another state should be dismissed as to defendants, who had never been residents of such state, where they were not served with process and the attorneys who appeared for them had not been authorized.

2. JUDGMENT 815-"PENAL JUDGMENT"-ENFORCEMENT IN OTHER STATES. Rev. Laws Mass. c. 99, §§ 4, 6, provide that whoever upon credit or margin contracts employs another to buy and sell securities or commodities, intending that there shall be no actual purchase or sale, may recover any payment made, where no actual purchase or sale is made, etc. Defendant brought an action in Massachusetts under said statute for money paid to defendant's stockbrokers on account of stock transactions. The court found that the intention mentioned in the statute existed, and that actual purchases or sales were not made by defendant. The plaintiff showed upon the trial, and it is conceded, that during the transactions defendant paid to him a certain sum, which was charged to plaintiff's account with the defendant. Such amount was not allowed, and plaintiff had judgment for the full amount deposited with defendant, plus interest. Held that, while the judgment is penal, in the sense that it is more than compensatory, it is for the benefit of the person wronged, redresses his private grievances, and is not penal in an international sense, so that it will not be enforced in New York, under Const. U. S. art. 4, § 1, as to full faith and credit.

3. CRIMINAL LAW 18-PENAL STATUTES-EXTRATERRITORIAL EFFECT.

Crimes and offenses against the laws of any state can only be defined, prosecuted, and pardoned by the sovereign authority of that state, and the authorities of other states will take no action in regard to them, except by way of extradition.

4. COURTS 8-FOREIGN STATUTES-CONSTRUCTION.

Where an action is brought as an original matter in the courts of one state upon a foreign statute, the courts may exercise their independent judgment as to whether the statute shall or shall not be enforced. 5. JUDGMENT 823-FOREIGN STATUTES-CONSTRUCTION.

Where an action is founded upon a foreign judgment based upon a foreign statute, the interpretation of the federal Constitution by the Supreme Court of the United States must be accepted, and the judgment enforced, though it is based upon a statute which is contrary to the declared policy of state in which the suit is brought.

6. JUDGMENT 822(3)—FOREIGN JUDGMENT-RES JUDICATA.

In an action on a foreign judgment, where foreign court declined to find that payments made by defendant to plaintiff were a return of any deposits made under marginal contracts, and that there were no valid sales or purchases, which rulings were essential to judgment rendered for plaintiff, it must be deemed adjudicated that transactions between parties were illegal, so that defendant could not counterclaim for payments. 7. JUDGMENT ~822(3)—FOREIGN JUDGMENT RES JUDICATA.

Where a court of another state, in rendering judgment for deposits made under marginal contracts, determined that no valid sale or purchase was For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 170 N.Y.S.-2

made by defendants under such contracts, defendants, in action by plaintiff on judgment, cannot counterclaim for losses upon plaintiff's orders. 8. JUDGMENT 819-FOREIGN JUDGMENT-CONCLUSIVENESS.

Though the interpretation of the New York law by the Massachusetts court was erroneous, such interpretation, being essential to its judgment, is binding upon the New York courts.

Action by Francis W. Adams against Evan R. Dick and others. Judgment for plaintiff against all but defendants Sellers and Geer, and complaint dismissed as to them.

A. G. Maul, of New York City, and William R. Bigelow, of Boston, Mass., for plaintiff.

Harry Baer and William Klein, both of New York City, for defendant Dick.

John K. Clark, of New York City, for defendant Hunt. Harry C. Miller, of New York City, for defendant Sellers. Frank D. Arthur and G. W. Tucker, Jr., both of New York City, for defendant Geer.

SEARS, J. A judgment of the superior court of Massachusetts is the foundation of this action. In that court on the 15th day of January, 1917, the plaintiff recovered judgment against the defendants. for the sum of $31,549.08 damages and $112.26 costs, upon which recovery the plaintiff received in payment on the 5th day of April, 1917, the sum of $8,000 leaving a balance due upon said judgment of $24,082.06, with interest thereon from the 5th day of April, 1917, to recover which sum this action was brought.

[1] The defendants Geer and Sellers, answering separately, set up as a defense that, while they were partners of the other defendants in a business enterprise, they had not at any time been residents of Massachusetts, and had neither been personally served with process nor had the attorneys who appeared for them in the Massachusetts. court been authorized by them so to appear. The issue thus raised upon this defense was submitted to the jury, and upon the special verdict of the jury in their favor they are entitled to judgment dismissing the complaint as to them upon the merits. National Exchange Bank v. Wiley, 195 U. S. 257, 25 Sup. Ct. 70, 49 L. Ed. 184; Famobrosis Society v. Royal Benefit Society, 166 App. Div. 593, 152 N. Y. Supp. 84; Cooper v. Newell, 173 U. S. 555, 19 Sup. Ct. 506, 43 L. Ed. 808; Ferguson v. Crawford, 70 N. Y. 253, 26 Am. Rep. 589.

[2] The other defendants, except the defendants McCall, Wallace, Welling, and Julian J. Dick, have answered that the judgment sued upon is a judgment for a penalty, having no effect beyond the jurisdiction in which it was granted, and consequently that the full faith and credit clause of the federal Constitution (article 4, § 1) is not applicable to it. Under such circumstances it becomes incumbent upon this court to examine into the nature of the claim upon which the Massachusetts judgment was founded. "The essential nature and real foundation of the cause of action," said the United States Supreme Court in Wisconsin v. Pelican Insurance Co., 127 U. S.

For other case; se same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes