
    Amory Houghton, Plaintiff and Appellant, v. William M. Dodge and Charles B. Knudson, Defendants and Respondents.
    1. Where property of a moneyed corporation (viz.: a note made by third persons) is wrongfully taken by one of its officers, and all its claims against Such officer, including its claim for the taking of such note, are subsequently settled, and a release given to such officer ón taking his note for a balance agreed upon; although the persons acting in behalf of the Company in making the settlement and giving the release acted without competent autho-
    ■ rity to bind it, yet if the Company thereafter, with knowledge of such settlement and of its terms, indorses absolutely and appropriates to its own use the note received on such settlement, it thereby ratifies the settlement and vests . in such officer title to the note so wrongfully taken, and he or his vendee can maintain an action on it against the makers.
    2. When the proof is, that “ the Company used the note ” taken on such settlement, and “ paid it to ” a creditor “in payment of a debt which they owed to ” such creditor, and there is no other evidence in respect to such transfer; the presumption is, that such transfer was made in a manner authorized by law and the charter and by-laws of the Company.
    3. The owner of a promissory note can maintain an action on it, under the ' Code, in his own name against the makers, although not so indorsed that he can sue as indorsee by the rules of the common law.
    (Before Bosworth, Oh. J., and Woodruff and Moncrief, J. J.)
    Heard, June 16th;
    decided, November 5th, 1859.
    ' This is an appeal by the plaintiff from a judgment dismissing his complaint. The action was tried before Mr. Justice BosWORTH and a jury in May, 1858.
    The complaint states that on or about the 21st of August, 1855," the defendants made their note of that date for $1,000, payable twelve months after its date to the International Insurance Company or order, at the Irving Bank, and delivered it to the Company-; that the Company indorsed it in blank before maturity and transferred it for a valuable consideration; that the plaintiff afterwards became and now is the holder and owner of it; that it.is past due and unpaid; and prays judgment for its amount with interest from the 23d of August, Í856.
    The defendants admit, in their answer, the making of the note, and say on information and belief that there was not then, and has not been since then, such an incorporation; and they also say that the Company never indorsed the note in blank, nor transferred it for a.valuable consideration. They put in issue the allegations of the plaintiff’s ownership, and aver that he had ho interest or property in it when it fell due, and that if he has any interest in it, he acquired it since its maturity.
    They set up as a third defense that the note was taken from said Company “ by the unauthorized act of one of the officers thereof, who converted the same to his own use, and that the property therein has never passed to the plaintiff or to any other person.”
    “Fourth. And these defendants for further and separate answer say, that they have a defense by way of set-off to the said note, as against the International Insurance Company, for money due to them, amounting to $357 with interest, which amount they claim as a set-off against said note in this action.” The note in suit was produced at the trial, and (including the indorsements on it) reads thus, viz.:
    “$1,000. ' New York, August 21st, 1855.
    “ Twelve months after date we promise to pay the International Insurance Company or order, for value received, one thousand dollars. Payable at Irving Bank.
    (Signed) “ Dodge & Co.”
    (Indorsed.) “ International Insurance Co.
    
      “ By War. E. Rollo, Sec'ty. “P. J. Avery, Pi.”
    " The handwriting of Rollo, and that he was Secretary of the Company from its organization to January 17, 1856, and the .•handwriting of P. J. Avery, and that he had been President of the Company subsequent to the date of the note, having been proved, the note was read in evidence without objection.
    • The only evidence as to the origin and consideration of the note, and in relation to any set-off against it, is that of Charles W. Ogden who was Vice-President of the Company from the 20th of October', 1855, to the dissolution thereof in March, 1856, and that of Starbuck, who was elected President February 5, 1856.
    Ogden says, “I think Dodge had a claim against the Company at the time this note fell due.” * * “I think some six or seven or eight hundred dollars was taken up in premiums on this note before the claim of Dodge accrued.” Starbuck says, “ the note in suit was insured against. I do not recollect the amount earned on it.”
    In relation to the plaintiff’s title, it was proved that the note in suit was in the possession of the Company during the Presi; dency of Marsh. He testified, “I am clear in my recollection of having seen that note in the possession of the Company after I became President. It was kept in a pocket book in the safe; I first found that it had been taken out some three or four weeks after I came in.” He became President on the 15th of September, 1855.
    It was also shown that in January, 1856, C. W. Ogden, who was elected Vice-President in October, 1855, got possession of the pocket book in which the Company kept its bills receivable, “ and found a memorandum that this note and eight others, were in the possession of Avery, (P. J. Avery,) to be accounted for by him.”
    An account was produced with this caption: “ 1855, P. J. Avery in account with the International Insurance Company.” Then follows a series of debits beginning with the date of May 7, 1855, and ending with October 31, 1855, amounting in all to $42,903.49, and which include the note in question. Then follow's a series of credits amounting to $38,542.49, among which is the following, viz.: “C. Expenses, $25,000.”
    At the foot of the account is the following, viz.:
    “ Received of Perez J. Avery, his note at thirty days, for the sum of four thousand three hundred and sixty-one dollars in full, for the above accounts, and in full satisfaction and discharge of all and every claim, of every name, nature and description, on the part or behalf of the International Insurance Company, against the said Perez J. Avery, and also in full satisfaction and discharge of all and every claim, of every name, nature and descriptions against William E. Rollo, late Secretary of the said Company.
    “In witness whereof, the said International Insurance Company has caused this discharge to'be signed by the officers of the said Company, at the office of said Company, this 21st day of April, A. D. 1856.
    “ The International Insurance Company,
    “By M. Starbuck, President
    
    “ 0. W. Ogden, V. P.
    
    “ Attest, Leo. Del Banco, Secretary.”
    A resolution on page 105 of the minutes of the proceedings of the Financial Committee of the Company was also read by the defendants’ counsel, as follows:
    “We, the undersigned, Financial Committee of the International Insurance Company, having had under investigation and examination the value of the charter of the International Insurance Company, procured and furnished the Company, by Perez J. A very, as well as all charter expenses in procuring the same, and obtaining the amendment by the last Legislature, do report the same at twenty-five thousand dollars, ($25,000,) and agree to give the said Avery credit for that sum.
    “New York, October 29th, 1855.
    “ Alanson Marsh, Pres't.
    
    “ James A. Requa,
    “ Wm. E. Rollo.”
    The gentlemen who signed this resolution continued as the Finance Committee, and acting as such after Starbuck became President; Mr. P. J. Avery was also one of the Finance Committee.
    It was proved that, at the date of that paper, Starbuck was President, Ogden Vice-President, and Del Banco was Secretary of the Company, and that they severally signed the same, and that Del Banco signed it as Secretary, and not as a witness..
    Of the try-laws of the Company, the following were read in evidence, viz.:
    “ 1st. It shall be the duty of the President to attend daily to the affairs of the Company, at the office of the Company.
    “ 2d. He shall be the financial officer of the Company, and, together with James A. Requa and William E. Rollo, shall constitute a Financial Committee. But all moneys for stock and for premiums shall be kept on deposit in some bank, either in the city of New York or Brooklyn; and no moneys shall be drawn out except on the checks signed by the President, and countersigned by the Secretary.
    “ 5th. All papers required to invest and reinvest the funds of the Company, to collect, discharge, and cancel any papers appertaining thereto, shall be signed by the President, and countersigned by the Secretary, and shall be effectual in law to that end, and binding on the Company.
    “10th. All accounts and liabilities of said Company, before the same can be paid, shall be audited by the Financial Committee, and whenever either of said committees are interested in any claim, the report, which in all cases shall be made and recorded by said committee, shall be signed by the two not interested.”
    In relation to. the settlement between the Company and P. J. Avery, Moses Starbuck, who was then President of the Company, testified: “ The settlement with him was an expedient; we made it as the cheapest way to get out of a' scrape; he had got the notes, and we wanted this agreement made in order to get the balance due from him.” * * “ If he had not had the notes, I would-not have made the settlement; I would have stricken out the $25,000; it had been discussed, but not before the Board, but by the parties in interest; Mr. Dodge, one of the defendants, was a Trustee at the time; he was a Trustee when I was elected President,” (which was the 5th of February, 1856.) * * “ The Directors were frequently in the office, and this settlement was frequently the subject of conversation; no attempt was made to keep it private; the items of the settlement were entered in the account books of the Company, not in the book of minutes.” * * “ The Company had sixteen or eighteen Directors;” * "* “I think seven Directors constituted a quorum; no action was ever taken by the Board of Directors in opposition to that resolution,” (the resolution of the 29th of October, 1855.) “No formal demand was ever made by the Company upon Avery for the notes; the Company used the note which Avery gave for the balance of the account; they paid it to the Globe Insurance Company in payment of a debt which they owed to the Globe Company.” (It did not appear whether Avery did or did not pay this note at maturity.)
    
      O. W. Ogden testified: “There .was no resolution of the Board of Directors authorizing me to sign the agreement of April 21, 1856. It was never brought before the Board until after its execution; I had threatened to advertise the notes; Avery was threatening, and as there was an amount due from him over what he claimed, the President assented to it, and so did I, in consideration that he would resign as Trustee; it was a final settlement to get rid of him;” * “ when I signed that agreement, I did
    not consider I was perpetrating a fraud on the Company;” * ® “ I did not conceal it from the Board of Directors; it was not my duty to bring it before the Board; it was the President’s duty; it was known to some of the members of the Board.”
    
      Del Banco testified that he signed the paper of April 21, 1856, as Secretary, and not as a witness.
    
      Starbuch also testified: “Some of the Trustees knew of this transaction at the time, but as a Board I do not think they knew of it until May; the Board was divided upon the subject; some of them thought it best- to let it alone, and did not want it disturbed ; others were opposed to it; I don’t know whether the Company owed defendants for a loss.”
    
      Ogden further testified: “ The Board never knew of it until some time afterwards," (until some time after the settlement;) “they were opposed to it; the Board then adjourned, and before another meeting were enjoined ; Mr. Dodge did not know of the transaction until the 24th of June, 1856;” * * “ at the meeting of the 24th of June no resolution was arrived at about this agreement, or at any other time; before the next meeting, the Company was enjoined.”
    It was proved that the words indorsed on the note, “Internation Ins. Go., by,” were in the handwriting of W. J. Avery, a brother of P. J. Avery, as is also the agreement of the 21st of April, 1856, and that “ he acted for P. J. Avery in effecting that settlement” with Starbuclc & Ogden.
    Also, that the names of Rollo and P. J. Avery were not indorsed on the note when the latter took it from the pocket book of the Company, and that those names were not indorsed while Avery was President; and the evidence tended to show that the letters “Pt.,” at the end of Avery’s name, were not written by him.
    It was also proved that the uniform mode of indorsing the notes of the Company is to add the name of the President to the words, “ International Ins. Co., by,” and that the Secretary never indorsed them.
    It was proved by Charles N. Mills and Josiah Oakes that the former sold this note to the latter, in April, 1856, at a discount of one and a half per cent a month, and that the note was then indorsed in the precise form in which it appeared at the trial, and that it was sold by Oakes to the plaintiff shortly after its maturity.
    When the testimony was concluded, the defendants’ counsel “moved the Court to dismiss the plaintiff’s complaint, on the ground that there was not sufficient evidence of the transfer of the note by the Company, and that the plaintiff had shown no sufficient title to the note.
    “The Court granted the motion, and the plaintiff’s counsel excepted.”
    A judgment having been entered in favor of the defendants, the plaintiff appealed from it to the General Term.
    
      Wm. H. Leonard, for plaintiff, (appellant.)
    I. The note in question must be considered as a business note, and that the defendants are liable, as makers, for the payment thereof. The whole case for the defendants rests on the alleged defect of the plaintiff’s title.
    II. The indorseemnt cannot now be disputed by these defendants, nor by the payee.
    The settlement between the Insurance Company and Mr. Avery, of April 21st, 1856, is a ratification of the indorsement and transfer.
    
      1. The Company have never repudiated that settlement by any action. They have adopted and sanctioned it by receiving and using the note of Avery for $4,361.
    2. The note in suit was charged to Avery on the books of the Company, and a memorandum was in their pocket book show-, ing that all the notes mentioned in the settlement of April 21st, 1856, were in his possession.
    As respects third parties, the Company must be deemed to have acquiesced in and adopted the transfer .of the note in suit. (Angell & Ames on Corp., 167, 168; Conover v. The Mutual Ins. Co., 1 Comst. R., 290; New Hope and Del. B. Co. v. The Phoenix Bank, 3 id., 156; The Bank of Genesee v. Patchin Bank, 3 Kern. R., 309; The Mechanics' Bank v. N. Y. and N. H. Railroad, id., 622, 626 ; Curtis et al. v. Leavitt, 15 N. Y. R., 12.)
    III. The indorsement and transfer being obligatory upon the Company, the defendants are necessarily precluded from any defense on the ground of an alleged defect in those respects.
    IV. Mr. Oakes was a bona fide purchaser of this note for value, and the Company and the defendants are precluded from disputing the transfer, in which the Company are shown to have acquiesced.
    V. The plaintiff has succeeded to and is entitled to enjoy and enforce all the rights which Mr. Oakes acquired in the notes in question. The Court erred in dismissing the complaint.
    
      G. Dean, for defendants, (respondents.)
    I. No matter what may be the decision of the Courts as to the necessity of a previous resolution of the Board of Directors, to the transfer of the assets of banks incorporated under the General Banking Law, this Insurance Company was, by its charter, made subject to the provisions of the 8th section of the statute to prevent the insolvency of moneyed corporations. (1 R. S., 4 ed., 1122, §54; Laws of 1844, 233.)
    II. The alleged transfer to the plaintiff was illegal and void, because contrary to statute, and also against public policy.
    1. The transfer was contrary to statute. (1 R. S., 592, §8; Gillet v. Phillips, 3 Kern., 116.)
    
      (a.) Avery being a Director and officer of the Company, precludes him from saying that he had no notice of the want of a resolution of the Board. (3 Kern., 116; id., 599 ; Hood v. N. Y. and N. H. Railroad Co., 22 Conn. R., 502, 508, 512; Wyman v. Hallowell and Augusta Bank, 14 Mass. R., 58, 62.)
    
      (b.) The plaintiff is not within the exception to the 8th section, because he took the note with notice of the want of authority in Avery to transfer it.
    2. The transfer was against public policy, which forbids an officer of a Company to transfer -its assets to pay himself. “A Trustee can never appropriate the- trust funds to Ids own use."
    
    “ This rule is of univeral application, and to be enforced with unrelenting rigor.” (Hill on Trustees, 159, 536; 12 Ves., 372; Conger v. Ring, 11 Barb., 356.)
    («.) A trust will be implied against one who purchases at his own sale.
    
      (b.) Our statutes, which renders one liable to imprisonment for moneys received in a fiduciary capacity, is a legislative declaration of the settled conviction of all minds of the impolicy of permitting a Trustee to deal with the trust funds, except in strict accordance with the terms of the trust.
    III. The plaintiff in this action took the note in suit, with notice of the defect of title, and cannot recover, unless Avery himself, could have sustained the action.
    1. To bring a party within the protection of the law merchant, he must not only be a holder for value, but also without notice. (3 Kent Com., 80.) Here there was no transfer in form by the Company, and the defect was patent.
    2. A citizen who deals directly with a corporation, or who takes its negotiable paper, is presumed to .know the. extent of its corporate power.” (16 N. Y. R, 129.)
    3. He is also bound to know the manner in which the law requires these powers to be exercised.
    4. When a party takes a note, indorsed by a person by virtue
    of a special power, he takes it upon the credit of the person who indorses it, and Ji^sonly reasonable prudence to require the production ty. (Attwood v. Mannings, 7 Barn. & Cres., 278; Alexander v. McKenzie, 6 Mann., Grang. & Scott, 766; Dows v. Perrin, 16 N. Y. R., 830.)
    5. This note did not purport to have been transferíed or indorsed by the corporation.
    
      IV. The transaction between Avery and some of the officers of the corporation was not only void but illegal. No right of action accrued either to him or to any person who received the note through him, while it was not indorsed by the corporation.
    V. There was no ratification by the corporation of this remarkable transaction.
    Ratification or not was a question of fact, which was passed upon by the Judge who tried the cause.
    VI. A corporation, or its stockholders, or Receiver, may, in every case, impeach any contract made by Directors or other officers or agents, in the name and professedly by such corporation, by showing that such contract was made in a manner or for a purpose not authorized by its charter or the laws of the land. (Hodges v. City of Buffalo, 2 Denio, 110 ; McCullough, v. Moss, 5 Denio, 567; 3 Barn. & Ald., 1; 1 Hill, 11; 4 id., 442; 8 Comst., 430; 1 id., 19.)
    1. The defendants can set up this want of title; because,
    
      (a.) They are members of the Company, and have an interest in its assets. (§ 6 of Charter.)
    
      (hi) They are creditors for the return premium.
    (c.) The transfer being contrary to law and public policy, is void, and there is defect of title in the plaintiff. (Johnson v. Bush, 3 Barb. Ch. R, 207; Code, § 111.)
    VIL The fact that the note in suit is for less than $1,000 is immaterial, because the evidence is imcontradicted that Avery, at the time he appropriated it, transferred eff. cts of the corporation exceeding $1,000 in value. (Gillet v. Phillips, 3 Kern., 116.)
   By the Court—Bosworth, Ch. J.

On the evidence presented at the trial, the note in suit must be assumed to be a business note. The evidence tends to show that six, seven or eight hundred dollars of its amount had been received in premiums upon policies issued to the deilndants by the Company. To this extent, at least, it was a valid note in the hands of the Company, without any d.-fense against it. The sale by Mills to Oakes, even though made at a rate of discount exceeding seven cent per atmnrn, would not make the transaction usurious, as the note a vas a business note, made upon a valuable consideration. '

Treating the note as not so indorsed that the plaintiff can, by the rules of the common law, sue in his own name, the important question is, did P. J. Avery acquire such a title to it as would enable him to recover upon it upon the evidence before us, if he were the plaintiff in this action ? If he acquired a valid title to the note, he or his vendee can sue in his own name (under the Code) as being the actual party in interest. The 10th of the by-laws authorized the Finance Committee to settle and audit all,accounts and liabilities of the Company.

.■ As early as the 29th of October, 1855, the Finance Committee audited and allowed the claim of P. J. Avery, for his services and expenses in procuring the charter and amendments to it, at $25,000. A formal resolution to that effect, and of that date, signed by the Finance Committee, was entered on the book of the minutes of its proceedings, (at page 105.) That committee was competent to audit and settle this claim, and was the appropriate committee to make a legal decision in respect to it, which, at the least, would be, prima facie, valid as against the Company.

No action was ever taken or initiated by the Board of Trustees to disapprove of this settlement, much less to rescind or reopen it. None has been taken by the Receiver, if a Receiver has been appointed, nor does it appear by the evidence that he makes any claim to the note.

No testimony was given on the present trial with a view to question the propriety or justice, in whole or in part, of any other'item of credit allowed to P. J. Avery in the settlement of the 21st of April, 1856.

If it be assumed, for the purposes of this trial, that the settlement of the 29th of October, 1855, was valid, then it follows, for aught that has been shown, that the final settlement of the 21st of April, 1856, was just as between Avery and the Company.

At and prior to that time, Avery was possessed of the note in suit, and the fact of such possession, and the manner in which he acquired the note, and his refusal to restore it to the Company, constituted part of their claim against him.

There was not any transfer made or attempted to be made in form by the Finance Committee of the note in suit, and the eight other notes of which Avery had previously possessed himself, and which he insisted upon retaining. In the account with him, as settled on the 21st of April, 1856, they are charged to him under the date of October 81, 1855. It is not an unnatural inference that he had them as early as that date, if not prior thereto. Indeed, the testimony of Mr. Marsh tends to show that Avery had the note at as early a day as that on which it is charged to him.

An action could have been maintained against him for the conversion of these nine notes, or to recover the possession of them. The liability of P. J. Avery for these notes constituted a part of the claim of the Company against him.

On the 21st of April, 1856, all claims, either of Avery against the Company, or of the Company against him, were fully and finally settled. Many of the Trustees were parties to discussions in relation to it, and knew at the time of the terms of the settlement. The settlement was laid before the Board in May, but at how early a day does not appear. Whatever the date, the Trustees, as a Board, were then officially informed of the fact of the settlement and of its details. As a part of the terms of the settlement, P. J. Avery gave his .note, payable thirty days thereafter, to the Company, as, and it was received by the officers acting in its behalf in that matter, “ in full satisfaction and discharge of all and every claim of every name, nature and description, on the part or behalf of the International Insurance Company against the said Perez J. Avery.” This note was for the sum of $4,361.

' Subsequently to this, “ the Company used the. note which Avery gave .for the balance of the account They paid it to the Globe Insurance Company in payment of a debt which they’ owed to the Globe Company.” There was no attempt to prove that this note was not paid at maturity. It matured on the 24th of May, 1856.

Such a use of this note by the u International Insurance Companjq” with a knowledge of the circumstances and agreement under which Avery had given it, and the officers of the Company had accepted it, was a ratification by the Company of the settlement made with Avery on the 21st of April, 1856.

The note thereby became his property, if not previously his. The Company could not compel him to surrender it; certainly’ not without restoring him to the position he was in when the settlement was made.

Proof, uncontradicted and unexplained, that “the Company used the note which Avery gave for the balance of the account that “they paid it to the Globe Insurance Company, in payment of a debt which they owed to the Globe Company,” imports that such transfer was made in a manner authorized by law and the charter and by-laws of the Company. The amount of the note so transferred is $4,361. If a previous resolution of the Board of Directors was essential to a legal and valid transfer of it, the passage of such a resolution authorizing the transfer must be presumed upon such evidence as is above stated.. If the Board of Directors passed such a resolution, then, inasmuch as it appears that some of the Directors knew for what the note was given at the time it was- made, and considering the evidence tending to show that all of them probably knew the nature and particulars of the settlement made with Avery, the act of the Company in transferring the note is such a ratification of such settlement that these defendants- cannot succeed on the mere ground that it was a. nullity as between Avery and the Company. As the case is now presented, that is their only defense; and if that defense is not established, they have no defense.

It must be borne in mind- that no- evidence wa§ given tending to show that any person has preferred any claim against the defendants as makers of the note in question, and that their whole and only defense is that the note in suit “ was taken from* the International Insurance Company by the unauthorized act of one of the officers thereof, who converted the same to his own use, and that the property therein has never passed to* the plaintiff or to any other person.”

The evidence given not only fails to establish the alleged fact on which the defense is rested, but, on the contrary, it proves am ownership of the note by Avery on the 21st of April, 185-6, prima facie valid.

A suit, instituted by the Receiver of the International Insurance Company, on the 31st of October, 1856, (the time this suit was brought,) to recover the possession of this note from Avery, (if he had then held it,) on the ground that it belonged to the Company, could not be maintained on the evidence given in this action, if there were no other evidence in support of such action.

The case of Houghton v. McAuliff et al., (decided in February, 1859,) is unlike the present in this respect. In that case there was no evidence that the Company had ever negotiated the note received from Avery, or had done any act by which they had treated or recognized it as the property of the Company, or as having been accepted with the sanction or by the authority of the Company.

The note, although not indorsed by the Company, could be sold to Avery and made his property; and although not indorsed so that an action would lie, at common law, in his name or in the name of a subsequent holder, yet any such holder, who was the actual owner, could sue upon it, in his own name,, under the Cbde. (§111.)

It cannot be denied that it is competent for such a Company to sue any person who has- wrongfully converted a note which belongs to it. Nor can it be denied that such a suit, followed by a judgment in favor of the Company and payment of the judgment, would vest in the person thus converting it, (after judgment and payment of the judgment,) exclusive property in the note as owner of it.

If he were to sue the1 maker subsequently,, it cannot be possible that the maker could set up, as a defense, that it had been transferred to such plaintiff without the authority of a previous resolution of the Board of Trustees authorizing the transfer.

It was not intended by 1st Revised Statutes, (p. 591, § 8,) to incapacitate a moneyed corporation from settling claims for a conversion of or injury to its property, as natural persons may do; or through the action of such committees or officers as the Company might select forthat purpose; or in any manner which, by the rules of the common law, would be obligatory and conclusive upon both parties.

The time of the transfer by the International Insurance Company to the Globe Company of Avery’s note of the 21st of April, 1856, is not stated. The inference from the testimony given is, that the transfer was made before the maturity of the note, as the evidence is that it was transferred “ in payment of a debt which they owed to the Globe Company.” The testimony is that the International Insurance Company transferred it; and the only presumption admissible is, that .the transfer was regular and in all respects according to law, and valid. The inference must also be, as the contrary was not alleged, that the' note was paid at maturity.

It is difficult to conceive of any act of ratification more explicit and decisive, short of a formal resolution of the Board of Trustees, in terms approving of and confirming the settlement.

We think that the negotiation of this note by the Company, according to law and its charter and by-laws, with a knowledge of the circumstances under which, and of the particulars of the settlement as part of which, it was given and accepted, perfected Avery’s ownership of it.

At all events, it establishes, prima facie, that the title to the note was in Avery on and after the settlement between him and the Company; and more evidence is necessary than was given to prove the fact that the Company was never divested of its title to such note.

[ The title of P. J. Avery to the note being, as between him and ■; the Company, prima facie, absolute and perfect, the title of the present plaintiff is apparently complete.

There is, certainly, no such defect of title as will enable the defendants to succeed on that ground alone. As the case is now presented, the only defense that can be pretended is that the title to the note is still in the Company, or in the Receiver of its property and effects, if one has been appointed. That defense •not having been proved, the dismissal of the complaint was erroneous.

We reverse the judgment, on the grounds that, upon the evidence given, it must be deemed to be proved that the Company ■negotiated the note received from Avery, with a notice of the terms upon which it was given and accepted, and thereby ratified the settlement made between its officers and Avery, and vested :in him a title to the note in suit, prima facie valid; and that no evidence was given to impair the prima facie title thus established.

Judgment reversed and new trial granted, with costs to abide -.the event.  