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consideration of benefit or harm moving between the newly contracting parties, it is not within the statute.

Farley v. Cleveland, 4 Cow. 434.

An action lies upon a promise made by the defendant upon a valid consideration to a third person for the benefit of the plaintiff.

Lawrence v. Fox, 20 N. Y. 268.

If the Statute of Frauds was applicable in this case, defendant is not in a position to avail himself of it, because the agreement has been fully performed, and defendant has had the full benefit thereof.

A party is not permitted to perpetrate a fraud by availing himself of a statute intended to prevent a fraud.

Sherman v. Scott, 15 N. Y. Week. Dig. 149. II. Where parties in interest testify to a series of personal conversations and transactions with the opposite party, making out their alleged claim, and such opposite party fails to produce the evidence directly within his power to explain or contradict the testimony adduced against him, it is not error to refuse to submit to the jury the question of fact established by the testimony.

Lomer v. Meeker, 25 N. Y. 361; Starkie, Ev. 846; Blatch v. Archer, Cowp. 65; Beccaria, chap. 14; Lawson, Presumptive Ev. 120; The Ville du Harre, 7 Ben. 328; Lumley v. Wagner, 1 DeG. M. & G. 604; Wharton Ev. §§ 1266, 1268. A jury has the right to infer that the evidence of an eye witness to a transaction would not be favorable to a party who voluntarily excluded such witness from testifying in the case.

People v. Hovey, 92 N. Y. 560; Re Laurence, 15 Fed. Rep. 635; Rice v. Common wealth, 102 Pa. 408; State v. Rodman, 62 Iowa, 456; Oregon Steamship Co. v. Otis, 100 N. Y. 452, 453; Gordon v. People, 33 N. Y. 508; Brooks v. Steen, 6 Hun, 516; People v. Tweed, 5 Hun, 387; People v. Grimshaw, 33 Hun, 510; Schwier v. N. Y. Cent. etc. R. R. Co. 90 N. Y. 564.

Finch, J., delivered the opinion of the court:

If we assume that the learned trial judge correctly decided that the plaintiffs' evidence was sufficient to establish the contract pleaded beyond any necessity for submitting that question to the jury, because there was no direct contradiction of the witnesses; and the circumstances tending to raise doubt or suspicion were more than balanced by the silence of the defendant who might have made an effectual denial (an assumption not above criticism, and as to which we do not all agree), there yet remains a material question which, if not decided in favor of the defendant, should at least have been submitted to the jury.

The Statute of Limitations was pleaded as a defense, and confessedly barred the right of recovery, unless the debt was revived by a payment upon it. So far as such payment is sought to be deduced from the collection by plaintiffs of the sums obtained from John O. S. Lynch, through the pressure of an examination and an order of the court, it is quite clear that the effort must fail. The efficacy of a payment to avert the effect of the statute as a bar resides in the conscious and voluntary act of a

debtor, explainable only as a recognition and confession of the existing liability.

But here there was no act of the defendant. He paid nothing to the plaintiffs. The man who did pay was not his agent, or acting or authorized to act in his behalf. The payment which he made was on his own debt to plaintiffs, and not on defendant's contract with them. The very existence of that contract was unknown to him, and the fact of his payments unknown to defendant until after they were made. The debtor paying did so by compulsion, and not in obedience to any direction or request of the defendant. The money paid never belonged to the latter, but passed from the ownership of John O. S. Lynch to that of the plaintiff. Its transfer was in no respect the act of the defendant, and could serve to indicate no purpose or intention of his. One must go outside of the act and busy himself with spoken words and debatable inferences, changing its inherent and obvious character before it can be connected with the defendant; and then it amounts only to a direction that plaintiffs should collect from their debtor a sum due to them and, when that remedy was exhausted, a promise that the defendant would take the security and pay the balance remaining. If those payments operated to reduce the defendant's liability it was not through any act or agency of his, and their existence indicates absolutely nothing as a recognition or admission on his part. They were entirely consistent with a denial by him of any liability whatever and with an utter repudiation of the alleged contract. They might equally have been made if plaintiffs had held the claim in their own right, having no recourse against the defendant, and so open to a complete explanation, in no manner dependent upon any purpose or intention of his. We should infringe a very wise and valuable rule of evidence if we gave to the act of John O. S. Lynch a constructive effect amounting to recognition of a contract by the defendant, the existence of which he could, nevertheless, consistently dispute.

The other payment relied upon was that of $1,800 in exchange for which the plaintiffs executed and delivered to the defendant an assignment of one half of the Slattery mortgage. The consideration for this payment was expressed in writing by the parties concerned, and the terms of that instrument so far from purporting a payment upon the contract pleaded, are on their face and without explanation inconsistent with the existence of that contract. The writing expresses that the payment was made upon a contract of purchase, and in full discharge of that contract. It not only fails to admit that something more might be due or become due, but negatives any such inference. It speaks of the mortgage as being the property of the plaintiffs, and involves the concession that only one half of it became the property of the defendant, and that by a purchase then and there made. Stopping with the written paper, the conclusion is irresistible that the $1,800 was paid upon a contract of purchase made at its date, and not upon a broader one already existing.

But the plaintiffs offer an explanation: having proved a previous agreement, by the terms

of which they were to obtain the mortgage for defendant, and hold and enforce the legal title for his benefit, looking to him for direction and for the reimbursement of their unpaid advances, they further testify that the $1,800 was one half of the $3,600 which that contract called for; and that after such payment they demanded of defendant the balance remaining due, which he promised to pay. They then argue that the assignment made was a transfer of the legal title pro tanto for the protection of the defendant, and that both the assignment and the payment made were consistent with the contract of agency alleged, and were steps in furtherance and in execution of that principal contract. By that process they seek to show that the payment of $1,800 was made and accepted upon the contract pleaded.

part of the mortgagee (plaintiff) was given, to take the case to the jury under a charge which correctly stated that it was incumbent on the plaintiff to show that the mortgage debt was just and that the mortgage was made in good faith and without any intent to defraud; a nonsuit was therefore properly refused.

2. Where notice to the mortgagee of sales of the mortgaged chattels by the mortgagor and of the appropriation of the proceeds by the mortgagor on his own account is only evidence from which a previous agreement to permit such sales and appropriation may be inferred. it is not ground for an absolute direction to the jury to find for the defendant in such case.

The question is not without its difficulties. It cannot be decided in favor of plaintiffs as a 3. pure question of law. The most that they can reasonably claim is that it raised a question of fact, or a mixed question of law and fact. Adhering to the assumption upon which our reasoning has been founded, that the contract of agency was proved beyond contradiction and to be taken as a conceded fact, we have a case in which two contracts have been proved, upon either of which the $1,800 might have been in

A party may be examined as to his own intentions and motives when a question of fraudulent intent on his part is in issue; but he cannot be permitted to testify as to the motives or intent of another party.

(Decided April 19, 1887.)

tended to apply and upon one or both of which APPEAL from the judgment of the General

it must have been applied. The writing indicates one application; the conversations another.

It does not solve this difficulty to say that the assignment was but an incident in the execution of the principal contract, for the defendant may have intended not to recognize or admit it by a payment upon it, and for that very reason have made a special contract of purchase upon which alone his money should be applied and which only he would recognize. The facts proved admit of conflicting inferences; and it seems to us, therefore, that the question (whether the payment made in form upon the contract of purchase was also made and accepted upon the contract of agency within the intent of the parties) was a question which, under proper directions from the court, should have been submitted to the jury.

The defendant asked to go to the jury upon all the evidence in the case as to such matters as the court should direct; but the request was refused, the court holding that there were no questions of fact and directing a verdict for plaintiffs. To this there was an exception which we think points out error.

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

All concur, except Ruger, Ch. J., not sit ting.

MANUFACTURERS & TRADERS BANK of Buffalo, Respt.,

v.

Harriet M. KOCH, Admrx. of Harry H. Koch, Deceased, Appt.

1. Held, in an action of replevin for chattels claimed under a mortgage which had not been accompanied with an immediate change of possession, that sufficient evidence of good faith on the

Term of the Superior Court of Buffalo, affirming a judgment of the Trial Term, on a verdict for the plaintiff in an action for the alleged wrongful seizure of goods. Affirmed. The facts and questions raised appear from the opinion,

Mr. Matthew Hale, for appellant:

There can be no question as to the fraudulent intent of the mortgagors. The intention was to keep the business from interruption, and levy on the judgment obtained by Sutherland.

Plaintiff was not a purchaser in good faith for a valuable consideration. The mortgage was given in renewal of a former mortgage and to secure an antecedent indebtedness.

The plaintiff had notice of the fraudulent intent of the mortgagors, and is therefore not protected by the statute.

The knowledge of the president of the bank acquired in the course of the transaction is the knowledge of the bank.

Holden v. N. Y. & Erie Bank, 72 N. Y. 286, 293, 294; Getman v. Second Nat. Bank, 23 Hun, 498.

The mortgage, not having been accompanied by an immediate delivery and followed by an actual and continued change of possession, is to be presumed to be fraudulent as against creditors; and the fact that there was no such change of possession is conclusive evidence of fraud, unless it was made to appear on the part of the plaintiff, that it was made in good faith, and without any intent to defraud such creditors. 2 R. S. § 5.

The uncontradicted evidence in the case shows that there was an arrangement between the parties to the mortgage, which permitted the mortgagors to remain in possession and to sell the mortgaged property, and use the proceeds for their own benefit.

Edgell v. Hart, 9 N. Y. 213, 219: Griswold v. Sheldon, 4 N. Y. 586, 590; Potts v. Hart, 99 N. Y. 168.

Proof that a mortgage was given to secure a

debt actually owing by the mortgagor does not, as matter of law, disprove the existence of a fraudulent intent on the part of the debtor. Billings v. Russell, 101 N. Y. 226; reversing S. C. in 31 Hun, 65.

The court erred in excluding evidence of the knowledge, by the executive officers of the plaintiff, of the fraudulent intent of the mortgagors.

Parker v. Conner, 93 N. Y. 118, 128; Holden v. N. Y. & Erie Bank, 72 N. Y. 286, 293, 294; Getman v. Second Nat. Bank, 23 Hun, 498.

The court erred in excluding evidence that the mortgage in question was never intended to be enforced, and that the first chattel mortgage was fraudulent.

I Greenl. Ev. § 467, 468; Kaufman v. Schoeffel, 37 Hun, 140, 143, 144.

The proposition of the plaintiff that, having taken possession of the goods, before the levy under the execution by defendant, it is immaterial whether there was fraud originally in the mortgage or not, is untenable. Precisely the contrary has been repeatedly held by the courts of this and other States and of the United States. Dutcher v. Swartwood, 15 Hun, 31; approved in Stimson v. Wrigley, 86 N. Y. 332, 339; Wells v. Langbein, 20 Fed. Rep. 183; Chenery v. Pal6 Cal. 123; Delaware v. Ensign, 21 Barb. 85, 88, 89; Blakeslee v. Rossman, 43 Wis. 116; Stein v. Munch, 24 Minn. 390.

mer,

Mr. John G. Milburn, for respondent: The court charged the jury that if the mortgage was not executed for the sole purpose of securing the plaintiff's debt, but was executed with the view and purpose of defrauding the creditors of Woodruff & Co., it was void. It also charged that if there was any such arrangement or understanding as the defendant claimed, with respect to the sale of the stock by the mortgagors, it made the mortgage void and the plaintiff could not recover.

The charge of the court was a correct presentation of the law bearing on the case.

Brackett v. Harvey, 91 N. Y. 214; Frost v. Warren, 42 N. Y. 204; Gardner v. McEwen, 19 N. Y. 123; Conkling v. Shelley, 28 N. Y. 360; Potts v. Hart, 99 N. Y. 168.

There was no direct proof that the intention of the mortgage was to defraud creditors, or of an agreement that the mortgagors could go on and dispose of the property as their own. All parties disclaimed any fraudulent intention. Thus the existence of such an intention or agreement was purely a matter of inference from the other facts and evidence in the case; and it was the province of the jury to weigh those facts and draw the inference which they warranted. Frost v. Warren, 42 N. Y. 204; Gardner v. McEwen, 19 N. Y. 123; Brackett v. Harvey, 91 N. Y. 214; Potts v. Hart, 99 N. Y. 168.

It was not error to refuse to charge that "The possession of the Bank by Richardson is not such possession by the Bank as to remove the case from under the statute," the refusal of the charge being a refusal to charge otherwise than had been charged.

Rerter v. Starin, 73 N. Y. 601; Morehouse v. Yeager, 71 N. Y. 594.

A party may not testify to motives and intentions of another party.

Stephen, Dig. Law of Ev. Chase's ed. pp. 126, 127; Whart. Ev. § 508 and cases there cited. C. R., V. VII.

N. Y.

43

The plaintiff having taken possession before the levy, it is immaterial whether there was fraud originally in the mortgage or not.

Read v. Wilson, 22 Ill. 377; Brown v. Platt, 8 Bosw. 324; See Jones, Chattel Mort. § 178.

Rapallo, J., delivered the opinion of the court:

This action was brought against Harry H. Koch, in his lifetime, as Sheriff of Erie County. He having died after judgment, it was continued against the present defendant as his administratrix.

The cause of action was the taking and conversion by the sheriff of certain personal property which was claimed by the plaintiff by virtue of a chattel mortgage made to it by Lauren C. Woodruff and Alfred B. Benedict, composing the firm of L. C. Woodruff & Co., of the City of Buffalo, to secure certain partnership liabilities of the firm.

The mortgage covered the stock in trade and other chattels of the firm, and was dated the 30th of October, 1884, and duly filed the same day.

The mortgagee took actual possession of the mortgaged property on the 26th of November, 1884, and continued in possession down to the 26th of December, 1884, when it was levied upon and taken from its possession by the sheriff, who justified the taking under two executions issued on the 19th of December, 1884, upon judgments recovered the same day against said firm of L. C. Woodruff & Co., and alleged that the chattel mortgage under which the plaintiff claimed title was not made in good faith, and was in fraud of the creditors of L. C. Woodruff & Co., the mortgagors.

On the trial the question of fraud was submitted to the jury and they found in favor of the plaintiff, who had judgment on the verdict. That judgment was affirmed by the general term, and the defendant now appeals to this court. As no opinion was rendered in the court below we must state our reasons for affirming its judgment.

The first point urged on the part of the appellant is that the trial court erred in refusing to nonsuit the plaintiff. The ground upon which a nonsuit was claimed was, in substance, that the uncontroverted evidence established that the mortgage was fraudulent as against creditors. The evidence on the part of the plaintiff showed that at the time the mortgage was given, October 30, 1884, there was a valid indebtedness on the part of the mortgagors as copartners, to the plaintiff, to an amount exceeding the value of the property mortgaged; and the president of the plaintiff testified that the mortgage was given to secure then existing indebtedness and any that might afterwards arise.

The indebtedness in question arose out of dealings of the firm of L. C. Woodruff & Co., with the plaintiff, which had continued for several years before the giving of the mortgage; and it appeared in evidence that in the spring of 1884 the plaintiff had required security from the firm and they had given it a similar mortgage, but that after the giving of that mortgage the firm had continued in possession of the mortgaged property, and had carried on its business, in the course of which it had sold a

781

We think the court committed no error in refusing to nonsuit the plaintiff, and that the question was properly submitted to the jury.

large part of the mortgaged stock, and had re- | neither of the mortgagors testified to any arplaced it by new purchases, which were not rangement or understanding allowing such covered by the mortgage, and that the mort- sales. It does not distinctly appear what sales, gage of October 30, 1884, was given with the if any, of mortgaged property were made after view of covering such after acquired property. October 30, 1884, and before November 26, or During the running of the first mortgage and that the plaintiff had knowledge of them, for before the giving of the second the plaintiff had there was property in the store of L. C. Woodmade an arrangement with Mr. Richardson, ruff & Co. not covered by the mortgage. The the bookkeeper of L. C. Woodruff & Co., for court left the question to the jury, charging an agreed compensation, to look after the inter- them that if they found that there was an agree ests of the plaintiff as mortgagee, but no actual ment or understanding that the mortgagors possession was taken by or on behalf of the might sell the mortgaged property and use the mortgagee until about a month after the giving proceeds as they saw fit, it invalidated the mortof the second mortgage, viz: November 26, gage. 1884, when, the mortgage debt having become due, the plaintiff put a deputy sheriff in charge of the property. An arrangement was then made allowing sales of the mortgaged stock, the proceeds to be paid over to the plaintiff as mortgagee and applied on the mortgage, and afterward and before the levy by the sheriff the plaintiff, as mortgagee, gave public notice of the sale of the property under the mortgage. It was claimed on the part of the defendant that the mortgage given in the spring of 1884 was not intended as a security to the plaintiff, but for the purpose of protecting the property against the claims of the creditors of the mortgagors and enabling them to continue their business for their own benefit; that it was agreed that the mortgagors might make sales for their own benefit, and that the mortgage of October 30, 1884, was a mere renewal or continuation of the previous mortgage.

Some exceptions were taken to the charge which are now insisted upon:

First, the court was requested to charge that "The possession of the Bank by Richardson was not such a possession by the Bank as to remove the case from under the statute."

The court refused to charge otherwise than it had already charged. Aside from any criticism of the form of this request, we think the charge asked for, although perhaps correct in substance as an abstract proposition, was quite unnecessary and irrelevant. It does not appear to have been claimed by the plaintiff that by means of the arrangement with Richardson the mortgage was accompanied by an immediateand followed by an actual and continued change of possession of the mortgaged property, so as All these points were controverted by testi- to prevent the application of the statutory premony on the part of the plaintiff, and presented sumption of fraud, arising from the want of questions of fact for the jury. The only evi- such change of possession, or to relieve the dence of actual intent to defraud creditors was plaintiff of the onus of establishing affirmativeto the effect that Lauren C. Woodruff, one of ly the bona fides of the mortgage. On the conthe mortgagors, was indebted on some indivi- trary the cause was tried on the theory that the dual transactions of his own; that L. C. Wood- mortgage was not accompanied by an immeruff & Co. were apprehensive that these indi-diate change of possession. The plaintiff asvidual creditors of Woodruff might interfere with the property of the firm, and that one object of giving the mortgage to the plaintiff was to protect the firm property against these individual creditors; and there was some evidence to the effect that the plaintiff was aware of these facts.

But, on the other hand, the evidence was that the mortgage was demanded by the plaintiff by direction of a committee of its directors, because it had ascertained that a portion of the mortgaged property had been sold, and it required a new security for the indebtedness to it. Even if it did know that the property of the firm was liable to be interfered with by individual creditors of Woodruff, it had a right to demand that it should be secured, so as to have a preference over such individual creditors; and securing such a preference was not a fraud.

All these questions were properly submitted to the jury as questions of fact. The court charged the jury that it was for them to say whether the second mortgage was given for the purpose of securing the defendant to the plaintiff and nothing else; that if given with the view of defrauding the creditors of L. C. Woodruff & Co., it was fraudulent as matter of law. The allegation that permission was given to the mortgagors to sell the mortgaged property was denied on the part of the plaintiff, and

sumed the burden of proving its bona fides, and the court charged the jury that it was incumbent upon the plaintiff to show that its debt was a just debt, and that the mortgage was made in good faith, and without any intent to defraud.

This charge gave to the defendant all the benefit which he could have derived from a charge in express terms that no such immediate and actual change of possession i ad been proved as was required by the statute to relieve the plaintiff from the presumption of fraud, or from the onus of affirmatively proving the good faith of the transaction. The arrangement with Richardson was one of the circumstances of the case which the jury were permitted to consider, not on the question of an actual change of possession, but on this question of good faith. The court had charged on that subject that it was for the jury to say whether the arrangement with Richardson, "if made, was made in good faith, and the intent was a change of possession and control, or on the other hand was a blind as it had been called by counsel."

This charge was not excepted to. The court had in no part of the charge instructed the jury, or even permitted them to find, that the arrangement with Richardson, whatever was its intent, was effectual to bring about the actual change of possession required by the statute, but left it to the jury to determine its intent.

He detailed the circumstances and the

He

only as bearing upon the question of good faith, | gage. and when requested to charge as an abstract conversations which led to its execution, and proposition that it was not such a possession by the Bank as to remove the case from under the statute it did not negative that proposition but declined to charge further on the subject than had already been charged. In this refusal we find no error.

was examined as to his intentions in giving it
and as to his individual embarrassments.
was also examined on his direct examination
with reference to the first mortgage, and stated
that the second mortgage was given as a renew-
al of the first; that the president of the plaintiff
claimed that a great part of the goods covered
by the first mortgage had been sold and new
goods had come in, and it had ceased to be a
security, and requested that a new inventory
be taken and a new mortgage executed, and
that witness assented to the request.

Second, the court was requested to charge that if the jury found that the plaintiff had an agent in the store of the mortgagors during the time the chattel mortgage was in existence, who knew the full facts of sales out of the mortgaged property, and that the mortgagors disposed of the proceeds of such sales for their own account, the jury should find for the defendant. The court declined so to charge, on the ground that the testimony did not warrant the statement of assumed facts. In this refusal we think the court was correct, as well for the reason assigned by it as for the further rea-gage was ever intended to be enforced. Objecson that the proposition applied to the first mortgage as well as to the second and no distinction was made.

Even if Richardson knew of sales during the running of the first mortgage and could be presumed to have assented to them, that would not be a conclusive defense to the plaintiff's claim under the second mortgage and thus authorize a charge that the jury must find for the defendant. No authority was shown to Richardson, in either case, to consent to sales by the mortgagors; nor does it clearly appear that he was cognizant of them, or of the application of the proceeds. But at all events even if the Bank, through Richardson, had notice of sales by the mortgagors and of the appropriation of the proceeds, such notice at the most was only evidence from which a previous agreement to permit such sales and appropriation might be inferred. It was not ground for a direction to the jury to find for the defendant. Gardner v. Mc Ewen, 19 N. Y. 126; Potts v. Hart, 99 N. Y. 168, 173.

Third, the same answer applies to the further request to the court to charge that if the jury found that Richardson was the agent of the plaintiff to look after the mortgaged stock, they must find that the plaintiff agreed to the sales made of the stock during the time.

These are all the exceptions to the charge which are insisted upon in the appellant's points in this court.

There are some exceptions to rulings upon questions of evidence; but we are of opinion that they present no point which requires a reversal of the judgment. Certain questions, relating to the intent or motives of the mortgagors in executing the first and second mortgages, were asked of the officers of the mortga gees and excluded. A party may be examined as to his own intentions and motives when a question of fraudulent intent on his part is in issue, but he cannot be permitted to testify as to the motives or intent of another party.

Exception was also taken, and is now insisted upon, to the exclusion of testimony of Lauren C. Woodruff, offered on his redirect examination, for the purpose of showing that the first mortgage was fraudulent.

Woodruff had been called as a witness by the defendant, and had been examined for the purpose of showing fraud in the second mort

On his cross examination on the part of the plaintiff the witness was not asked anything about the first mortgage, but only as to the second, and his motives for giving it. Being then recalled on the part of the defendant, Mr. Woodruff was asked whether the first mort

tion being made to this question the defendant's
counsel offered to prove that the first mortgage
was fraudulent. The court refused to permit
the proof to be made by the witness then on
the stand, stating to counsel that that was part
of his direct examination. We think this rul-
ing was a proper exercise of the discretion of
the court, and further that the question asked
the witness was, in itself, improper, as he was
not competent to testify to the intention of the
plaintiff with respect to enforcing the mort-
gage. This, if material, must be shown by
circumstances or the declarations of the party.
The judgment should be affirmed.
All concur.

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