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order of Special Term confirming Martin L. Townsend, for applt. report of referee, affirmed.

Jesse Johnson, for respt. Opinion by Earl, J. All concur. Held, correct; that the right of

L. to be subrogated was perfect and SUBROGATION. V complete; that he occupied the pos

ition of one who was obliged to pay N. Y. COURT OF APPEALS.

to secure himself, and justice and Twombly, applt., v. Cassidy et al., equity required that he should be impl'd with Lott, respt.

entitled to the rights and securities Decided September 28, 1880. of the senior incumbrancer. 66 N. Action to foreclose a mortgage having been Y., 363; 51 id., 333; 18 Abb., N. S.,

commenced, a junior mortgagee, to protect 24; 10 Paige, 595; 5 Johns. Ch., 35; himself, offered to pay the amount due and 8 N. Y., 44; 3 Paige, 117, 122. costs, and requested an assignment of the mortgage to him. This was refused. Held,

Ellsworth v. Lockwood, 42 N. Y., That the right of the junior mortgagee to be 89, distinguished. subrogated was perfect and complete.

Also held, That it was not essenThis action was brought for the tial to give notice of the motion to foreclosure of a mortgage. The re- all the defendants in the foreclosure spondent L., held a subsequent suit. mortgage, and, to protect himself, McLean v. Tompkins, 18 Abb., arranged to take up the mortgage 24, distinguished. in suit, and offered, in writing, to Order of General Term, affirmpay the amount due, interest and ing order of Special Term granting costs, and requested an assignment motion, affirmed. of the same to him. L. then moved Opinion by Miller, J. All concur. for an order compelling plaintiff to assign his mortgage to him. The

RECEIVER. LEASE. affidavit of L.'s attorney on the mo

N. Y. COURT OF APPEALS. tion showed that plaintiff refused to accept this offer, giving reasons The People v. The National Trust predicated entirely upon an inten- Co. tion of not discontinuing the action Decided Oct. 12, 1880. of foreclosure, or giving up said the receiver of an insolvent corporation had mortgage, except upon the amount

deposited a sum sufficient to pay all disputed teing tendered in payment of the debts and leave a surplus. On petition of debt thereby secured, and not for the owner of the premises leased by the corthe purpose of obtaining an assign

poration for an order directing the payment

of rent, Held, That if he showed himself a ment thereof. Subsequently, plain- creditor for the amount claimed, he was entiff offered to pay the full amount titled to payment, without regard to any of Li's mortgage, provided he would liability assumed by the receiver in regard

to the lease. turn over the security to him and

The dissolution of a corporation does not terguaranty the bona fides of the mort

mipate a lease of premises occupied by it; it gage, and that the aniount claimed

can only be canceled with the consent of the was due and owing on the mortgage. lessor, The motion was granted.

This was an appeal from an order of General Term, affirming an order Quain's appeal, 22 Pepn. St., 510, of Special Term denying the peti- distinguished. tion of one L. that the receiver ap- Order of General Term, affirming pointed for defendant should pay order of Special Term denying the rent due upon certain prem- motion, reversed, and motion ises leased by L. to the defendant. granted. It appeared that the receiver had in Opinion by Rapallo, J. All conhis hands a fund ample to pay all cur, except Folger, Ch. J., not voting. debts of the defendant; that he had paid all the admitted debts, and had deposited a sum sufficient to meet

APPEAL. disputed claims, in which he had in- N. Y. COURT OF APPEALS. cluded all the rent that had accrued

The Benedict & Burnham Mfg. and would accrue on the petitioner's Co. v. Thayer. . lease up to the end of the term. It

The People ex rel. Thayer v. also appeared that after the pay- Bowe, sheriff. ment of all claims there would be a

Decided October 5, 1880. large surplus to distribute among the stockholders. The receiver is On appeal in these cases no undertaking was directed in the judgment in the

given, and no return filed. Held, That no

appeal was pending. action to close up the affairs of the

See S. C., 10 W. Dig., 393. corporation, and distribute the assets among the remaining stock

This was a motion to dismiss the holders and creditors.

appeals in the above entitled actions,

on the ground that the undertaking Lewis L. Delafield, for applt.

required by $1326 of the Code of A. J. Vanderpoel, for respt.

Civil Procedure had not been given Held, That if L. has shown him- by the appellant, nor any deposit self to be a creditor of the corpora- made, and that the appeal had not tion for the rent claimed that is suf- been perfected or prosecuted.

No return has been filed in either ficient to entitle him to payment, without regard to any liability the of the above cases, and no steps

taken in this court. receiver may have assumed in regard to the lease. His rights are as

Beach & Brown, for motion. great as those of any other creditor,

Slearns & Curtis, opposed. and he is entitled to be paid in the Held, That no appeal is pending; regular course of distribution. The that as no undertaking has been dissolution of the corporation did given the appeal is ineffectual for not terminate the lease. It could any purpose. Code, $ 1326; 76 N. not be canceled without the consent Y., 106. of L. R. S., art. 3, Tit. 4, chap. 8, Motion denied, without costs. part 3. The lease was an open and Per curiam opinion. All concur, subsisting engagement on the part of except Folger, Ch. J., and Rapallo, J., the corporation.

dissenting. Martin v. Black, 9 Paige, 644, and

FALSE REPRESENTATIONS. had had dealings with them ; that N. Y. COURT OF APPEALS.

as far as they could judge the Com

pany bad made money; that they said Babcock et al., applts. v. Libbey, they had done better than at any respt.

former period; that they had taken Decided Sept. 28, 1880.

considerable orders ahead for their Plaintiffs wrote to defendant's firm, stating that spring production, and anticipated

they understood the firm was selling the a good season for their fabrics; that goods of a corporation, and had a lien, &c., the Company had nothing to conceal and inquiring as to the credit of the corpo in regard to their position, and would ration. The firm replied that as far as they could judge the company had made money; undoubtedly fairly arswer all the that they could form no opinion of its man- plaintiffs inquiries. It appeared agement; that they had taken orders ahead, that’A. T. Stewart & Co. held a and anticipated a good season, and that the

chattel mortgage upon the personal company would undoubtedly fairly answer all inquiries. The firm held a chattel mort- property of the Woolen Company, gage given by the company, but did not and it was proved that defendant mention it in their reply. Held, That this L. admitted that he intentionally omission would not warrant a finding of a omitted mentioning it in his letter, fraudulent intent; that as to the affirmative statements of the reply, the burden was on

though he did not admit it was plaintiffs to show that at the date of the with any wrong intent. letter they were false.

Henry Smith, for applts. Affirming S. C., 8 W. Dig., 182.

Francis Kernan, for respt. This action was brought to recover Held, That defendants had a damages of defendant and his part- right from plaintiffs' letter to supners, who constituted the firm of pose that they knew of their relations A. T. Stewart & Co., for alleged with the Woolen Company, and did false and fraudulent representations not desire information in regard to and suppressions to induce credit. the liens they had upon the ComIt appeared that plaintiffs on Nov. pany's property, and which appeared 6, 1868, wrote a letter to A. T. upon the record, but an opinion, in Stewart, stating that the Utica view of all existing facts, as to its Woolen Co. wished to purchase a pecuniary ability, and defendant's quantity of wool of them, and that omission to give information respectthey understood Mr. Stewart's firm ing them would not warrant a finding was selling their goods, and had a by the jury of a fraudulent intent; lien, &c., and making inquiries of that the letter could hardly be conthe ability of said company to pay. strued as a recommendation or asserA. T. Stewart & Co. replied to the tion of the solvency or ability of letter, stating that the Utica W. Co the Company. As to the affirmative consigned all its goods to them, statements of the letter, the burden that they had a ready sale for them, of proof was on plaintiffs to show sometimes selling largely ahead of that at the date of the letter they their product or order; that they were false. could form no opinion of their If the statements in defendant's management from the period they letter are not shown to have been

untrue, it is immaterial to the issue as a counterclaim in an action upon evidence of this action what became of the

of debt. property, or whether defendants Appeal from judgment for plainfalsely recommended the Company tiff on verdict by direction. to other parties.

One W. applied to plaintiff to exJudgment of General Term, af- tend his line of discount, and profirming judgment on nonsuit, af. cured and delivered to plaintiff in firmed.

presence of defendant a written inOpinion by Rapallo, J.; Andrews, strument executed by defendant and Miller and Earl, JJ., concur. Fol- upon which this suit is brought, ger, Ch. J., and Danforth, J., dis- whereby, in consideration of loans sent.

and advances by plaintiff to W., defendant promised and guaranteed

to plaintiff all pledger of property, GUARANTY. CONSTRUCTION. warehouse receipts and other vouUSURY. COUNTERCLAIM.

chers which might from time to N. Y. SUPREME COURT. GENERAL

time be given by W. as collateral TERM. FOURTH DEPT.

security to plaintiff for advances,

discounts and loans, and promised The Farmers and Mechanics' Na- also that property so trausferred tional Bank of Buffalo, respt., v. and set over to plaintiff, should not Gerhardt Lang, applt.

be misapplied or diverted to any Decided October, 1880.

other purpose while such loans or

advances remained unpaid, and that A written instrument executed and delivered if any default or misappropriation

to a bank whereby defendant promises and of property so pledged should be guarantees to said bank all pledges of property, warehouse receipts and other vouchers made, he, the defendant, would make that may be given by W. as collateral secur- good to plaintiff any deficiency and ity, and promises that the property so set fully satisfy stipulations contained over shall not be misapplied, and that if in any receipts or vouchers thereany default or misappropriation thereof

for. shall be made, defendant will make good any deficiency, and fully satisfy the stipula- Between the time of delivery of tion in receipts, does not render defendant said guaranty and his failure in liable only to make good a deficiency caused business, W. procured notes to be by diversion, but is also a guaranty of the existence of the property proposed to be discounted by plaintiff, and attached pledged.

to each one a warehouse receipt, as Defendant is not released from liability under collateral security, and by a separate such guaranty by renewal of the note.

writing certified that the property Where an answer sets up usury in that notes

therein described had been paid for were discounted at a rate of from ten to fourteen per. cent. per annum, evidence that and was unincumbered, and that the rate of discount was sixteen per cent he hereby transferred the title was properly excluded.

thereof to plaintiff. At the time of A claim for a penalty under sec. 6198, U. S.

the trial, plaintiff held a large amount Rev. Stats., for payment of excessive interest can be enforced only by action brought espe of W.'s notes unpaid- and proved cially for that purpose, and cannot be set up demand on W., and his refusal to deliver the property described in merely to collateral pledges of propthe receipts, and subsequent demand erty, without regard to the time of on defendant to make good the de- payment or term of credit of the inficiency.

debtedness which the pledges were Plaintiff had renewed Wi's note intended to secure. from time to time, the receipt at- Held also, That the evidence as to tached to the original note being usury was properly excluded. There attached to the renewals.

is authority for saying that the The answer sets up usury in that variance between the allegation in the notes were discounted at a rate the answer and the testimony ofof from ten to fourteen per cent., fered, was fatal. 31 Barb., 100; S.C. and testimony offered to show that Affd., 2 Abb. Ct. App. Dec., 291. the notes were discounted by plain- Held also, That the penalty pretiff at rate of sixteen per cent. was scribed by the U. S. Revised Statexcluded as incompetent and imma- utes in cases where illegal interest terial under the pleadings.

has been paid cannot be set up as Defendant claimed as a set-off a counterclaim in an action upon the penalty of double the interest the instrument or evidence of debt; paid, given by sec. 5198, U. S. Rev. the only redress the party making Stats., which prescribes that a party such payment has is by a penal by whom excessive interest has action brought especially for that been paid, or his legal representa- purpose. 8 N. Y. W. Dig., 378. tives, may recover back, in an action Judgment affirmed. in the nature of an action of debt, Opinion by Smith, J.; Talcott, P. twice the amount of interest thus J., and Hardin, J., concurring. paid, &c. Testimony in support of this claim was excluded.

CO-TENANTS. SETTLEMENT W. H. Gurney, for applt.

UNDER MISTAKE. Spencer Clinton, for respt.

N. Y. SUPREME COURT. GENERAL Held, That under the above instru

TERM. FOURTH DEPT. ment defendant was not only liable to make good any deficiency caused

George Brisbane, respt., v. Albert by a misapplication or diversion by Brisbane, applt. W. of property pledged to plaintiff, Decided October, 1880. but he also guaranteed the pledges Where, in an action for money had and received, and receipts themselves; that is to å settlement between the parties has been say, he undertook that W. actually

proved, it cannot be avoided by testimony had in his possession the property

that one party was ignorant of certain mate

rial facts at the time. The settlement is which he professed to pledge.

binding until impeached and opened for Held also, That the renewal of fraud or mutual mistake on pleadings framed the notes did not release defendant.

for that purpose. He was not holden for payment of When a party to such settlement had previous

opportunity to acquaint himself with the the notes or of the debt evidenced

facts, quære, whether his neglect to inform by them; his guaranty related himself would not be a bar to an action to

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