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Statement of the Case.

BEARDSLEY SCYTHE COMPANY, APPELLANT, v. JOHN C. FOSTER, RESPONDENT.

Assignor's Creditor's right to assert Assignee's claim against Debtor.

A creditor is not relieved from compliance with the requirements of the statute by the alleged insolvency of the debtor, when he seeks to impeach the validity of an assignment as being fraudulent.

A creditor who has in no manner succeeded to the rights of one of the partners, who has become the assignee of the effects of the firm, cannot assert such assignee's rights to redress against those who may be indebted to the firm.

APPEAL from the Supreme Court. The action was for equitable relief, and, on the hearing, the referee dismissed the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The judgment was affirmed at General Term in the Seventh Judicial District, the opinion of the Court being delivered by Mr. Justice Johnson.

The complaint, in substance, alleges the following facts:

In 1857, and the early part of 1858, Wm. H. Osborn and George Clow were partners in the business of manufacturing grain cradles, at Port Byron, conducting it under the firm-name of George Clow & Co. They became indebted to the Plaintiff in the sum of $2,203.34. Afterward, and on the 11th of May, 1858, the partnership was dissolved; and in consideration, among other things, of Osborn's paying the debts of the firm, Clow transferred to him his interest in its assets. In consequence of this arrangement, Osborn became so much involved as to be unable to pay or secure the liabilities so assumed. He made a statement of his affairs to the Defendant, who proposed the following arrangement, with a view of postponing the claims of the creditors that Osborn should execute a bill of sale to him of the property and credits of the late firm; that the Defendant should redeliver the accounts and notes to Osborn for collection; that the latter should go on manufacturing until the property and credits were converted into money; that, with the avails, Osborn

Statement of the Case.

should be at liberty to pay up the liabilities of the late firm, on such terms as he could obtain; that the excess of the avails, beyond the amount required for that purpose, Osborn should invest as his share in a proposed partnership between him and the Defendant, in the milling and lumber business; that, except for the purpose of postponing the creditors of the late firm, its assets were to remain the property of Osborn, and the business of manufacturing should be continued at his expense, and for his benefit, though in the name of the Defendant.

Osborn acceded to this arrangement, and in pursuance of it the Defendant received a bill of sale, and took possession of the assets of the late firm, inventoried at $4,400, together with individual notes and accounts, due to Osborn, amounting to about $240.

In violation of this understanding and agreement, the Defendant unjustly refused to deliver up to Osborn the notes and accounts which belong to him, and has unlawfully converted them to his own use.

On the 15th of October, 1858, the Plaintiff obtained a judgment against Osborn, by confession, for $2,209.93, being the amount of the company's demands against George Clow & Co.

On the 25th of the same month, an execution was issued to the sheriff of Cayuga, the county in which Osborn resided, and he collected thereon the sum of $175.64; and the balance still remains due from Osborn, Clow & Co. He and they are bankrupt, and unable to pay any portion of the claim.

The Defendant has the property transferred to him, or its proceeds, and refuses to pay anything, either to Osborn or his creditors.

The complaint concludes with a demand that the Defendant be required to render an account of the property and its proceeds, and to deliver the same over to a receiver, to the end that it may be applied in payment of the debts due to the creditors of the late firm of George Clow & Co.

Finlay M. King for Appellant.
Amasa J. Parker for Respondent.

Opinion by PORTER, J.

PORTER, J.-The referee was right in holding that upon the facts alleged the Defendant was entitled to judgment. The Plaintiff was not in a position to affirm and enforce a contract, which was not made for his benefit, and to which he was neither party nor privy. It does not appear that he succeeded in any way to the right of Osborn, and he cannot assert the claim of the latter to redress for the wrongs he imputes to the Defendant. He does not demand a judgment declaring the invalidity of the transfer from Osborn to Foster, nor does he allege a state of facts entitling him to that relief. His remedy at law is not exhausted, and his execution is unreturned. The complaint cannot be sustained on the footing of a creditor's bill; and, assuming all its allegations to be true, no cause of action results in favor of the Plaintiff. He is not relieved by the alleged insolvency of the debtor from the necessity of complying with the condition of the statute, if he would impeach the transfer as fraudulent (Crippin v. Hudson, 13 New York, 165; Dunlevy v. Tallmadge, 32 id. 461).

A reversal is claimed on the further ground that the costs awarded at Special Term are embraced in the record of judgment. An affirmance at the General Term was clearly improper, but the correction should be made on motion in the Court below, after the record is remitted.

The judgment should be affirmed, with costs. Judge BOCKES also read an opinion for affirmance.

All the judges concurring,

Judgment accordingly.

JOEL TIFFANY,

State Reporter.

Opinion by PARKER, J.

THOMAS FIELDEN ET AL., APPELLANTS, v. PIERRE FRANÇOIS LAHENS ET AL., RESPONDENTS.

Note, Accommodation

Authority of Partner to make or endorse - Notice.
Code, $136, 274.

As it is no part of the business of a mercantile firm to make or endorse notes for third persons, there is no implied authority for an individual member of such firm to make or endorse such paper in the firm name. Consequently the holder of such paper, with notice that it was made or endorsed for purpose of accommodation merely, without the consent of the firm, cannot recover upon it.

Where the maker of a note, endorsed by a firm, presents the same to be discounted for his accommodation, such fact shows upon its face that it is a mere accommodation endorsement.

PARKER, J.-This action was commenced in the Superior Court of the City of New York, on the 21st of October, 1844, against the Defendants, as alleged endorsers of three promissory notes, all dated May 25th, 1844, two of them payable at ninety days, and one at sixty days from date; one for $14,000, one for $13,500, and the third for $21,221.43, making in all $48,721.43. They were in the common form, signed by Alexander Caselli, as maker, and endorsed with the name of J. Lahens, &c.

The Defendant, Louis Emile Lahens, appeared by one attorney, and the Defendants, Pierre François Lahens and Edward Ernest Lahens, by another, and put in separate pleas of the general issue, and the cause was referred to three referees, who, upon the trial, which commenced February 4, 1858, nonsuited the Plaintiffs.

The referees found as follows:

First. That at the time of the making of and endorsing of the promissory notes in the declaration in this action set forth, Joshua Fielden, John Fielden, James Fielden, Thomas Fielden, Daniel Campbell, and William C. Pickersgill were copartners in trade under the respective firms of Fielden Brothers & Co., at the city of Liverpool, in England, and of W. C. Pickersgill & Co., at the city of New York; that the said Joshua Fielden, John Fielden, and James Fielden have since departed this life, and that the said Thomas Fielden, Daniel Campbell, and W. C. Pickersgill have

Opinion by PARKER, J.

survived them; also, that at the time of the making and endorsing of the said promissory notes, Pierre François Lahens, Edward Ernest Lahens, Edward Gaudard, and Louis Emile Lahens were copartners in mercantile business at Havre, in France, and at the city of New York, respectively, under the firm of J. Lahens & Co.; that the said Louis Emile Lahens was the only one of said copartners then residing in the city of New York, or in the United States; that the said Edward Gaudard has since departed this life, and that the Defendants in this action have survived him.

Second. That the endorsements of the name of J. Lahens & Co. upon the said promissory notes were made and executed in the city of New York by the Defendant, Louis Emile Lahens, one of the members of said firm, and delivered by him to Alexander Caselli, the maker of the said notes, in said city, for the accommodation of said Alexander Caselli, and that no consideration was received by the said J. Lahens & Co. for the same.

Third. That the notes so endorsed were delivered by the said Alexander Caselli, the maker thereof, to the said firm of W. C. Pickersgill & Co. at said city of New York.

Fourth. That the said W. C. Pickersgill & Co., by the fact of such possession and delivery of the said notes to them by the maker thereof, after the same had been so endorsed with the name of said J. Lahens & Co., had notice that the said J. Lahens & Co. had received no value therefor, and that the said endorsements were made for the benefit and accommodation of the maker of the said notes.

Fifth. That the Plaintiffs had failed to prove a joint liability of the Defendants, and further report that, upon the said facts so found, as a conclusion of law, the Plaintiffs, having so failed to prove a joint liability of all the Defendants, cannot recover in this action against the said Defendants, or against any or either of them.

And we do therefore decide and determine that all the Defendants are entitled to judgment against the Plaintiffs, and for their

costs.

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