(146 N.E.) may produce, and take their depositions in writing, and cause them to be subscribed by the parties making them." Here the informant was sworn; his deposition was made in writing, and was subscribed by him. The failure of the magistrate to sign the jurat may have been negligence on his part in the performance of his duties, but it was no wrong for which the defendant can be held responsible, nor did it affect the jurisdiction of the magistrate. struction should be indulged in." Swart v. Rickard, supra. We may not hold that either complainant or justice of the peace has committed a legal wrong for which he should respond in damages because he has failed to display a learning which he could not reasonably be presumed to possess. In the present case McGran charged that the plaintiff received felt from Mrs. Leonard Delia, whose husband, Leonard Delia, had stolen said felt from the De Feriet mill of the St. Regis Paper Company. The information fur- [9] Since the warrants upon which the ther states that plaintiff had said felt “in | plaintiff was arrested were not jurisdictionhis possession for the purpose of concealment," and that the plaintiff received the goods "knowingly" and "wilfully" and "corruptly." Certainly these statements are sufficient to allow and perhaps even to require the inference that the complainant charged the plaintiff with receiving and concealing property which he knew was stolen. The justice of the peace was called upon to decide whether a warrant should issue, and the plaintiff's arrest was therefore not unlawful, though his innocence might thereafter appear. Other objections now urged to the form of the warrant and the information have too little substance to require consideration. ally defective, the plaintiff has failed to establish any cause of action against defendant for false imprisonment, even if the defendant caused the plaintiff's arrest under such warrants. It is therefore unnecessary for me to determine whether the evidence is sufficient to sustain a finding that either McGran or the defendant has in fact caused the arrest. The judgment should be reversed and complaint dismissed, with costs in all courts. HISCOCK, C. J., and CARDOZO, POUND, MCLAUGHLIN, CRANE, and ANDREWS, JJ., concur. Judgments reversed, etc. [7, 8] We have analyzed first the information upon which the second warrant was issued, because the plaintiff's trial and conviction was under that warrant. The same considerations which lead us to conclude that that warrant was not jurisdictionally defec- BROAD & LACKAWANNA REALTY CO. v. BREITUNG et al. 1924.) (239 N. Y. 154) Nov. 25, tive lead us to the conclusion that the al- 1. Appeal and error 1091(1)-Defendants' On appeal from judgment affirming judgment on directed verdict for plaintiff, Court of Appeals must assume that defendants' evidence is true. 2. Bills and notes 380-Makers, intrusting broker with apparently valid negotiable notes, cannot escape liability to innocent purchaser for value. Makers, intrusting broker with possession of and apparent right to transfer apparently valid negotiable notes, merely to enable him to open negotiations for sale, cannot escape liability to innocent purchaser for value on ground that broker sold them without notice to makers of such intent, and that they received none of proceeds. 3. Corporations 428 (5) Corporation chargeable with notice to incorporators and directors of invalidity of notes. Corporation, to which notes, purchased for inadequate consideration by sole incorporators and directors, were assigned by them, is charge- | ceived any of the proceeds thereof. At the able with any notice to them of invalidity in close of the defendants' evidence the trial inception. justice directed a verdict in favor of the plaintiff. 4. Bills and notes 537(6)-Holder of notes held not innocent purchaser for value as matter of law. That makers, delivering negotiable notes to broker to enable him to open negotiations for sale, promised to tell prospective purchasers that they were valid, or signed letter asserting validity, did not entitle corporation, to which assigned by incorporators, purchasing them for inadequate consideration, to recover thereon as matter of law, in absence of evidence that purchasers inquired of makers or purchased them in reliance on makers' written representations. [2-4] Upon this appeal we must assume that the evidence produced by the defendants is true. If this evidence is true, it establishes that the notes were delivered to the note broker subject to a condition precedent which was never complied with, and that the notes consequently had no valid inception. Since the defendants chose for their own purposes to intrust the broker with possession of and apparent right to transfer negotiable instruments which were apparently valid, they cannot escape liability, Appeal from Supreme Court, Appellate if the notes were thereafter transferred to Division, First Department. Action by the Broad & Lackawanna Realty Company against Edward N. Breitung and others, copartners under the firm name of E. N. Breitung & Co., and others. From a judgment of the Appellate Division (207 App. Div. 810, 201 N. Y. S. 888) unanimously affirming a judgment for plaintiff on a directed verdict, defendants appeal by permission. Judgments reversed, and new trial or dered. See, also, 207 App. Div. 851, 201 N. Y. S. 889, 207 App. Div. 902, 202 N. Y. S. 918. Otto Sommerich and James M. Snee, both of New York City, for appellants. Samuel R. Golding, of New York City, for respondent. LEHMAN, J. The defendants, in October, 1921, signed three notes, aggregating $27,000, to their own order, payable six months thereafter. They handed these notes to a note broker, who sold them for the sum of $6,850 to four persons, who immediately thereafter formed the plaintiff corporation and transferred the notes to that corporation, receiving therefor stock of the par value of $27,000. The an innocent purchaser for value; but the The judgments should be reversed and a new trial ordered, with costs to abide the event. [1] In the present action, which has been brought upon one of these notes for the sum of $10,000, the defendants pleaded that the notes were never delivered, and at the trial produced evidence to show that these notes were given to the note broker merely to enable the broker to open negotiations for their sale with prospective purchasers; that such prospective purchasers were then to be put in touch with the defendants in order to enHISCOCK, C. J., and CARDOZO, POUND, able them to close the negotiations; that MCLAUGHLIN, CRANE, and ANDREWS, the broker sold the notes without any notice to the defendants of intention to make such sale; and that the defendants never re JJ., concur. Judgments reversed, etc, (239 N. Y. 158) (145 N.E.) amount of deposit in Russian branch, is amount SOKOLOFF v. NATIONAL CITY BANK OF paid, for which no equivalent has been received, NEW YORK. and, on theory of breach of contract by refusal to pay, is value of rubles, but doctrine of (Court of Appeals of New York. Nov. 25, 1924. frustration is inapplicable in either case, where Motion for Reargument Denied Dec. 19, 1924.) I. International law 4-Possibility of acts and decrees of unrecognized de facto government being valid if justice or public policy demand. While unrecognized government may be viewed juridically as no government, if power withholding recognition so chooses, government de facto, though formally unrecognized because deemed unworthy of place in society of nations, may possibly gain quasi governmental validity for its acts and decrees, if violence to fundamental principles of justice or public policy might otherwise be done. 2. Banks and banking 1881⁄2-Liability of bank for amount deposited in Russian branch held not affected by acts of Russian government. plaintiff makes no claim for profits. 6. Banks and banking 1882-Bank's use of money regarded as equivalent of benefit to depositor. On bank's refusal to pay in Russian rubles amount paid it for deposit in Russian branch as agreed, where interest is not demanded for any period before date of dishonoring depositor's drafts, its use of money paid without interest must be regarded as full equivalent of any benefit to depositor from enjoyment of banking facilities while account was running. Lehman, J., dissenting in part. Appeal from Supreme Court, Appellate Division, First Department. Action by Boris N. Sokoloff against the National City Bank of New York. From an order of the Appellate Division (208 App. Liability of national bank, under executory Div. 627, 204 N. Y. S. 69) reversing an order contract to repay Russian rubles as demanded of Special Term (199 N. Y. S. 355), which in amount paid it with which to open account denied a motion to strike out defenses in in Russian branch bank, held unaffected by de-amended answer, and granting such motion, crees of Russian government nationalizing defendant appeals by permission. Order affirmed, and certified questions answered. See, also, 204 N. Y. S. 949, 196 N. Y. S. banks and confiscating deposits as revolutionary tax. 3. Banks and banking 1882 Liability to .364. National bank's liability to repay amount paid it with which to open account in Russian branch upon its failure to carry out contract to pay in rubles on demand held not defeated by implied condition that latter's business would be permitted to continue by Russian government; consideration failing to extent that performance was frustrated. 4. Banks and banking 1882 - Undisclosed intent that performance of agreement with depositor should be governed by decrees of Russian government no defense to action for restitution. The following questions were certified: "(1) Is the first separate defense contained in the second amended answer herein sufficient in law? "(2) Is the second separate defense contained in the second amended answer herein sufficient in law?" John A. Garver and Carl A. Mead, both of New York City, for appellant. Morris Hillquit, of New York City, for respondent. CARDOZO, J. The case is here upon the pleadings. In June, 1917, the plaintiff paid Undisclosed intent by parties to contract to the defendant, the National City Bank in for deposit in bank's Russian branch that per- the city of New York, $30,225 upon its promformance should be governed by laws of Russia, ise to open an account in favor of the plainand orders or decrees of any government there- tiff in its Petrograd branch, and to repay of, held insufficient to exempt bank from liabili-him this sum in rubles at the rate of 234 ty to make restitution on Russian government's nationalization of banks and confiscation of deposits, in absence of agreement varying parties' obligations; especially as such decrees did not regulate, but thwarted, performance. On Motion for Reargument. 5. Banks and banking 1882-Measure of recovery from bank refusing to pay rubles in amount paid it for deposit in Russian branch stated. Measure of recovery on theory of rescission, with right to restitution of amount paid bank under contract to repay Russian rubles in cents per ruble, or a total of 130,000 rubles, at such times and in such amounts as he by his written orders might demand. The plaintiff, after stating this agreement alleges that the account was opened; that the plaintiff from time to time drew against it till the balance was reduced to $28,365 or 122,000 rubles; and that thereafter, in November, 1917, and again in February, 1918, checks for the balance were presented and dishonored. The questions certified to us for answer are directed to two defenses. The first defense states that there was a revolution in Russia in November, 1917, which resulted in the formation of the Russian Socialist Federated Soviet Republic; that in the same month the said government decreed the nationalization of all private joint-stock banks organized under the laws of Russia or operating therein; that it took possession of said banks by force of arms, and decreed that they be merged in the State Bank of Russia; that all the assets and liabilities of the liquidated banks were taken over by the State Bank acting for the Soviet government; that by force of said decree the government assumed the liability, if any, then owing to the plaintiff; that the defendant's Russian assets consisted of money on deposit in other banks, Russian state obligations, securities held in custody for clients, and certain other assets, of the value of over 240,000,000 rubles; that the liabilities of the said branch to its depositors were over 240,000,000 rubles; that the government following the seizure proceeded to the liquidation of the banks whose activities it had ended; and that by a subsequent decree all deposit accounts were confiscated and were credited to the account of a revolutionary tax. The recital of these happenings is followed by an averment that the plaintiff was fully aware of the probability of future political and governmental changes, and that it was intended by the parties that the agreement should be performed in Russia, and that the performance thereof should be governed by the laws of Russia and by any orders or decrees of any government which might exercise authority therein. By reason of these facts the plaintiff's deposit account is said to have been seized, his title thereto divested, and the defendant's liability discharged. The second defense is the same as the first, except that it pleads the facts as a partial defense rather than a complete one. These judgments are not decisive of the case before us now. The Russian government is not here either as plaintiff or as defendant. A domestic corporation pleads the acts and mandates of that government to excuse a default and discharge an obligation. Courts of high repute have held that confiscation by a government to which recognition has been refused has no other effect in law than seizure by bandits or by other lawless bodies. Russian Commercial & Industrial Bank v. Comptoir D'Escompte de Mulhouse, [1923] 2 K. B. 630, 638; S. C., H. of L., 40 T. L. R. 837; Banque Internationale v. Goukassow, [1923] 2 K. B. 682; A. M. Luther v. James Sagor & Co., [1921] 1 K. B. 456; s. c., [1921] 3 K. B. 532. Cf. White, Child & Beney, Ltd., v. Simmons, [1922] 127 L. T. 571. It would be hazardous, none the less, to say that a rule so comprehensive and so drastic is not subject to exceptions under pressure of some insistent claim of policy or justice. In our own country, Oetjen v. Central Leather Co., 246 U. S. 297, 38 S. Ct. 309, 62 L. Ed. 726, and Ricaud v. American Metal Co., Ltd., 246 U. S. 304, 38 S. Ct. 312, 62 L. Ed. 733, are cited sometimes as pronouncements of equal generality, but in truth the point involved was narrower. 31 Yale L. J. 535. Property in Mexico, hides and bullion, had been seized under requisitions by Villa and Pereyra, generals of Carranza. The ruling was that title had been thus divested, since, following the seizure, the Carranza government had been recognized as the lawful government of Mexico. There was no occasion to determine whether, in default of recognition, a like effect would have been ascribed to a levy of contributions by a commander in the field. O'Neill & Oetjen v. Central Leather Co., 87 N. J. Law, 552, 94 A. 789, L. R. A. 1917A, 276; Ford v. Surget, 97 U. S. 594, 605, 606, 24 L. Ed. 1018. We think the case at hand is not so govern The government of the United States re-ed by authority but that it may be dealt with fuses recognition of the Soviet Republic as upon principle. the government of Russia. Problems not easy to solve have followed in the wake of the refusal. We have had occasion to deal with some of them in cases recently before us. Wulfsohn v. Russian Socialist Federated Soviet Republic, 234 N. Y. 372, 138 N. E. 24, decided that the government of Russia, though unrecognized, was immune from suit in its corporate capacity at the instance of a plaintiff who asserted its existence as a government and sought to hold it to account for governmental acts within its territorial jurisdiction. Russian Socialist Federated Soviet Republic v. Cibrario, 235 N. Y. 255, 139 N. E. 259, decided that the same government had no standing to sue as plaintiff in our courts till recognition was accorded. [1] Juridically, a government that is unrecognized may be viewed as no government at all, if the power withholding recognition chooses thus to view it. In practice, however, since juridical conceptions are seldom, if ever, carried to the limit of their logic, the equivalence is not absolute, but is subject to self-imposed limitations of common sense and fairness, as we learned in litigations following our Civil War. In those liti. gations acts or decrees of the rebellious governments, which, of course, had not been recognized as governments de facto, were held to be nullities when they worked injustice to citizens of the Union, or were in conflict with its public policy. Williams v. Bruffy, 96 U. S. 176, 187, 24 L. Ed. 716. On the (145 N.E.) a chose in action, the right to receive rubles in the future under an executory contract. This contract the defendant has not performed, yet it refuses to return the dollars that were paid to it by the plaintiff upon its promise of performance. Two acts that must be kept distinct in thought are said to justify this refusal. One is the decree nationalizing the banks of Russia with the accompanying seizure of their assets. The other is the later decree confiscating the accounts of the depositors as a "revolutionary tax." other hand, acts or decrees that were just was not a physical object committed to the in operation and consistent with public policy defendant's keeping, but an intangible right, were sustained not infrequently to the same extent as if the governments were lawful. U. S. v. Insurance Companies, 22 Wall. 99, 22 L. Ed. 816; Sprott v. U. S., 20 Wall. 459, 22 L. Ed. 371; Texas v. White, 7 Wall. 700, 733, 19 L. Ed. 227; Mauran v. Ins. Co., 6 Wall. 1, 18 L. Ed. 836; Baldy v. Hunter, 171 U. S. 388, 18 S. Ct. 890, 43 L. Ed. 208. Cf. Dickinson, Unrecognized Governments, 22 Mich. L. R. 29, 42. These analogies suggest the thought that, subject to like restrictions, effect may at times be due to the ordinances of foreign governments which, though formally unrecognized, have notoriously an ex- The defendant's liability was unaffected by istence as governments de facto. Conse- the attempt to terminate its existence and quences appropriate enough when recogni- the seizure of its assets. A government of tion is withheld on the ground that rival Russia could not terminate its existence factions are still contending for the mastery, either by dissolution or by merger, for it may be in need of readjustment before they was a corporation formed under our laws, can be fitted to the practice, now a growing and its corporate life continued until the one, of withholding recognition whenever it law of its creation declared that it should is thought that a government, functioning end. What a Russian government could do unhampered, is unworthy of a place in the was to deprive it of the privilege of doing society of nations. Limitations upon the business upon Russian soil. But the ending general rule may be appropriate for the pro- of its Russian business was not the ending tection of one who has been the victim of of its duty to make restitution for benefits spoliation, though they would be refused to received without requital. As to this, there the spoliator or to others claiming under would be no dispute if its assets had been him. We leave these questions open. At the left intact. The situation in a legal aspect utmost, they suggest the possibility that a is not changed by the fact that the property body or group which has vindicated by the of the Russian branch has been scattered or course of events its pretensions to sovereign despoiled. Plaintiff did not pay his money power, but which has forfeited by its con- to the defendant, and become the owner of duct the privileges or immunities of sov- this chose in action, upon the security of ereignty, may gain for its acts and decrees a the Russian assets. He paid his money to a validity quasi governmental, if violence to corporation organized under our laws upon fundamental principles of justice or to our the security of all its assets, here as well as own public policy might otherwise be done. elsewhere. Everything in Russia might have [2] We think the defendant, though we been destroyed by fire or flood, by war or were to assume the existence of such ex- revolution, and still the defendant would ceptions to the need of recognition, has not have remained bound by its engagement. brought itself within them. There is room The plaintiff had no means of knowing for debate whether relief from liability whether the assets physically in Russia were would follow if the acts set up in its answer large or small. He might fairly assume, if were those of a government de jure. Wheth- he gave thought to it at all, that the reserve er that is so or not, we find no such injus- in cash or bullion at the disposal of the Rustice or impolicy in enforcing liability as to sian branch would be only a small proportion necessitate an exception to the rule that acts of the Russian liabilities. Even now the deor decrees, to be ranked as governmental, fendant does not state that it kept any more must proceed from some authority recogniz rubles or securities in Russia after its agreement with the plaintiff than before. It states, ed as a government de facto. The defendant is not a bailee for the plaintiff, nor were 240,000,000 rubles, and that its Russian liindeed, that its Russian assets were over any of its assets earmarked to the plaintiff's abilities were over that amount, but it does use. If that were its position, there would not state that the excess was the same for be other tests of liability. Surrender to each. If assets physically in Russia were overwhelming force would excuse the loss less than liabilities, the defendant would be or destruction of the subject of a bailment making a profit by the process of cancellawhether the force that overwhelmed was tion. The defense becomes the more untenlegitimate or lawless. That is not the case able when we mark the description of the asbefore us. The res belonging to the plaintiff sets seized. They consisted in part of securi |