
    Robert B. Williams, Jun., and Horace C. Hall, Plaintiffs, v. John S. Birch, Lucius B. Nutting, William G. Nutting, Benjamin B. Tilt, Thomas Thorp and Solomon Newman, Defendants.
    1. Where goods are purchased by means of fraudulent representations by the vendee and the goods are delivered to him by the vendor, the latter may reclaim the goods from such fraudulent vendee; but one who in good faith, without notice of such fraud, receives such goods from the vendee on consignment for sale, and advances money to the vendee thereon, acquires a valid lien, and such original vendor cannot reclaim the goods from him without repaying his advances.
    2. In such case a purchaser in the like good faith from the consignee acquires a good title to the goods. But it seems that if he have not paid for the goods, Ms title to retain them against the defrauded vendor, will depend upon the validity of the consignee’s title to hold and sell under the consignment.
    3. In an action by the original vendor against such consignees, and a purchaser from them to recover the goods, in which, after a statement of the fraud of the vendor, the only allegation is that the consignees received the goods knowing the circumstances of such fraudulent purchase and “ without paying any consideration therefor,” the plaintiff is not at liberty (when the receiving the goods on consignment without notice, and the making of advances thereon have been proved;) to show that those advances were made upon an agreement by which usurious interest for the advance was reserved to such consignees. (Bosworth, Ch. J., dissenting.)
    3. Although in the course of the trial and in the course of the proofs relating to the advance on the goods by the consignees an account of the advances and of sales by the consignees is produced and read in evidence, and it appears by one of the entries therein, that usurious interest was charged by such consignees, the plaintiff cannot, under such pleadings, recover the goods from the consignees on the ground that such advance was usurious. (Bosworth, Ch. J., dissenting.)
    4. A consignee who makes an advance in good faith on goods consigned to him by a firm which has been in a habit of dealing with him, cannot be prejudiced by proof that one of the partners had withdrawn from the firm
    • before the consignment was made, and a claim thereupon that the goods belonged to all the partners, and the remaining members had no authority to pledge them.
    5. Where propositions submitted to the Court by counsel with a request that they be given as instructions to the jury, are charged in all their just sense and meaning, it is no ground for setting aside the verdict that the Judge did not adopt the very words of the requests. It is enough if the instructions given do clearly and intelligibly embrace the whole rule on the subject.
    (Before Bosworth, Ch. J., and Woodbuff and Moncrief, J. J.)
    Heard, December 12th, 1859;
    
    decided, March 17th, 1860.
    This case came before the Court to be heard on exceptions taken by the plaintiffs on the trial thereof, before Mr. Justice Slosson and a jury on the 12th day of May, 1859, on which trial the jury rendered a verdict for the plaintiffs for $4,877.48 against the defendants, John S. Birch, William G. Hutting and Lucius B. Hutting, (who composed the firm of John S. Birch & Co.,) and against the plaintiffs in favor of the defendants, Tilt, Thorp and Hewman. Such exceptions having been ordered to be heard in the first instance at the General Term.
    The action was brought to recover six bales of silk or the value of any of them which could not be returned, alleged to have been purchased on the 26th April, 1857, from the plaintiffs by fraudulent representations by John S. Birch & Company, which silk the purchasers afterwards consigned to the defendant Tilt for sale, and obtained advances to the amount of $3,800 thereon, the defendant Thorp being the agent of Tilt;, and Thorp, as such agent, sold four of such bales to the defendant Newman, but the latter had not paid the price at the time this suit was brought.
    The complaint averred in relation to Tilt, Thorp and Newman, that 11 John S. Birch & Co. put the silk in the hands of the defendant Thorp, acting as the agent of the defendant Tilt, but that Thorp and Tilt received the same, knowing that it had been obtained under the ” fraudulent “ circumstances ” in the complaint before “ mentioned, and without paying any consideration therefor.” And that Thorp and Tilt still retain two bales, and “ have transferred four bales thereof to the defendant Newman, who was also cognizant of the facts above stated, and paid no consideration for the goods.”
    It was proved on the trial that after the purchase of the silk, William G\ Nutting retired from the firm of John S. Birch & Company, and that they published a notice which is stated in the opinion of the Court. Proof was given on behalf of Thorp, Tilt and Newman, that the silk was consigned to Tilt on the 27th May, 1857, by the remaining partners, and advances thereon obtained to the amount of $3,800, Thorp acting as agent of Tilt. Thorp, when on the stand as a witness, produced an account of the sales of the silk and of the charges and advances thereon by Tilt, which the defendant Birch testified was made up in accordance with the contract between Birch & Company and Tilt, and in that account was a charge of interest at one per cent per month on Tilt’s advances.
    The plaintiffs submitted requests for instructions to the jury stated in their points on the argument of the appeal, and discussed in the opinion of the Court which also recites the facts proved on the trial, and the charge to the jury, as given, so far as material to show the decision made in General Term. The jury rendered their verdict as above stated, and the plaintiffs having taken exceptions, the exceptions were ordered to be heard in the first instance at General Term, and the judgment was in the mean time suspended.
    
      
      David Dudley Field, for the plaintiffs (appellants).
    I. The Court erred in refusing to charge that Thorp and Tilt acquired no title from Birch & Company, unless they obtained the goods in “ the usual course of business, and without notice of any circumstances sufficient to put them on inquiry as to Birch & Co.’s title;” and in charging that “Tilt and Thorp were Iona fide purchasers, if they paid value, &c., without notice,” and that the plaintiffs are mistaken, &c. (Snow v. Peacock, 3 Bing., 406; Baynes v. Foster, 4 Tyrw., 65; Pringle v. Phillips, 5 Sandf. S. C. R., 173; Wardell v. Howell, 9 Wend., 170; Saltus v. Everett, 15 id., 475; S. C., 20 id., 277; Exchange Bank v. Monteith, 17 Barb., 177.)
    II. The Court erred in refusing to charge that “ a pledge or consignment upon a usurious advance is not a valid contract,” and that “ the account rendered by Thorp to Birch & Co. is presumptive evidence of a usurious advance,” and in charging that “usury does not arise in this case.”
    1. The account is presumptive evidence of a usurious contract. The interest is expressly charged at one per cent a month. Thorp says this was the account rendered by him, and Birch says it was in accordance with the contract between him and Thorp.
    2. A pledge on a usurious advance is not a valid contract, and the question of usury does not arise here.
    HI. The Court erred in refusing to charge that, after the dissolution of the firm of John S. Birch & Company, the remaining partners had not the power to pledge the property in order to raise money for their own purposes. (Story on Part., §§ 322, 328, 372; Goertner v. Trustees of Canajoharie, 2 Barb., 625; Sanford v. Mickles, 4 John., 224; 3 Kent’s Com., §43, p. 63, 2d ed.)
    A new trial should be granted.
    
      Luther R. Marsh, for the defendants Tilt, Thorp and Newman (respondents).
    I. The defendant Thorp must, of course, be considered out of the case. He might have demurred to the complaint: it did not charge him as principal.
    The averment in the complaint is, that he acted as agent of Tilt, the mere clerk of his principal; and the evidence shows that this averment was true.
    
      II. Usury. Plaintiffs’ counsel requested the Judge to charge “that a pledge or consignment upon a usurious advance is not a valid contractand the Judge refused, and the plaintiffs now claim that this refusal was error. We reply:
    I. We deny the proposition as an abstract one.
    2. There was no evidence to justify any such request or charge.
    3. Usury was a subject foreign to the issue.
    As to the defendant Tilt, the principal, the issue was, whether he received the goods, knowing the alleged fraud of Birch & Company, and without paying any consideration therefor. The jury have found these issues in his favor. No other question could be presented.
    This is the plaintiffs’ proposition on this subject, viz.: “We sued you, Mr. Tilt, for having received these silks from Birch & Company, knowing at the time that Birch & Company had obtained them from us by fraud, and you so received them without paying any consideration whatever for them. You, by your answer, denied this. We went to trial, and it there appeared not only that you did not know anything about the alleged fraud of Birch & Company, but that you actually advanced upon them, as a commission merchant, $3,800, being more than the goods produced. But now, being defeated on the issue joined between us, we claim, though we did not allege it, nor offer to do equity and repay your advance, that there was usury in your advance, and ask the Judge to charge the jury so.”
    We believe that, since the case of McKyring v. Bull, (16 N. Y. R., 297,) pleadings are of some consequence, even under the Code. But if, on the issue here, you may try usury, you may as well retain the inconvenience of pleadings no longer, but sweep them out of existence.
    4. Even if there was usury between Birch & Company and Tilt, the plaintiffs cannot take advantage of it.
    HI. The plaintiffs’ counsel asked the Court to charge “ that after the dissolution of John S. Birch & Company, by the retirement of William Gr. Nutting, the remaining partners had not the power to pledge the property in order to raise the money for their own purposes.” We answer:
    
      1. That, also, is a question outside of the issue. No intimation of any such question is suggested in the pleadings. Is one issue to be joined, and another tried? Are pleadings under the Code intended to mislead, to induce a defendant to think that he is to try a certain issue, whereas any other question the plaintiff pleases may be sprung upon him?
    2. That the proposition which the Judge was desired to charge was not in itself, as an abstract proposition, true.
    The remaining and continuing partners had a right to sell the goods on consignment, or otherwise.
    3. Eo notice to defendant, Tilt, of any withdrawal from the firm of Birch & Company, is pretended.
    IV. The Judge then proceeded to charge the jury on the real issue raised by the pleadings.
    The plaintiffs’ counsel did not except to what the Judge did say on this subject, but excepts to what the Judge did not say. The question is, whether the charge fairly covered the case.
    We submit that the charge not only was in exact accordance with the law on this subject (Beavers v. Lane, 6 Duer, 232; Smith v. Lynes, 1 Seld., 41,) but that it embraced every proposition that the Judge could be called on to submit to the jury.
    The two requests to charge on this subject are mere attempts to put the language of counsel into the mouth of the Judge, and insist upon his uttering it. It denies all right to the Court to use its own language. All of those requests, so far as applicable to the case, are contained in the charge actually given.
    What right, for instance, has the plaintiffs’ counsel to insist, as he does by his fourth request, that the Judge should call this consignment for sale of goods by Birch & Company to Tilt, and on which Tilt made an advance, “ a pledge ? ”
   By the Court—Woodruff, J.

The complaint herein alleges .that the defendants, Birch, L. B. Nutting and Wm. G. Nutting, under the name of John S. Birch & Company, on the 26th April, 1857, induced the plaintiffs, by false and fraudulent representations, to sell and deliver to them six bales of silk. That the fraudulent purchasers “ put the said silk in the hands of the defendant Thorp, acting as the agent of the defendant Tilt, but that Thorp and Tilt received the same, knowing that it had been obtained under the circumstances above mentioned, and without paying any cons'ideration therefor.”

That Thorp and Tilt have transferred four bales to the defendant Newman, “ who was also cognizant of the facts above stated, and paid no consideration for the said goods.”

The complaint alleges demand and refusal to deliver, and prays judgment that the defendants deliver to the plaintiffs all of the said silk in their possession, and pay to the plaintiffs the price of all the goods not so returned, together with damages, &c.

The defendants all, in some form, deny the fraud in the purchase. The answers of the defendants, Tilt, Thorp and Newman, so far as is material to the exceptions to be considered, allege that Tilt made an advance on the silk consigned to him by Birch & Company, for sale, the repayment to be made out of the proceeds of sale. That neither he nor Thorp had any knowledge that the silk had been obtained under the circumstances alleged in the complaint, or under any circumstances of fraud or false or fraudulent representations whatever; and they deny that they were received without any consideration therefor. And Thorp avers “ that the said goods were received by him as the agent of said Tilt, in good faith, and as a fair business transaction.”

Newman on his part denies that he received the silk from Thorp and Tilt, with knowledge of any fraud or without paying any consideration therefor.

There are other denials in the answers, but the questions to be considered arise out of the issues above stated.

The jury found a verdict on the trial, against the defendants John S. Birch & Company; and it is therefore to be regarded as established, that those defendants procured the sale and delivery to them by fraud, and therefore as against the plaintiffs had no title.

For the purposes of the questions before us, it is moreover to be taken as proved that on the 30th of April, 1857, William G. Nutting retired from the firm of John S. Birch & Company, under some arrangement of which the following notice was published by that firm: “Copartnership notice—The interest of William G. Nutting in the firm of John S. Birch & Company expires by limitation this day.” That on the 27th day of May, 1857, the remaining partners obtained from the defendant Thorp, as the agent of Tilt, an advance of $1,000 on a promise to consign the silk to the said Tilt for sale upon receiving another advance of $2,800, and on the 28th of May the silk was delivered to Tilt and Thorp, and the said advance of $2,800 was obtained. Four of the bales of silk were sold by the consignees to the defendant Newman, but he had paid nothing thereon at the time the action was commenced, and the case went to the jury under an explicit instruction that his defense depended entirely upon the title acquired by Thorp and Tilt; that he “ must stand or fall with Thorp and Tilt,” and the case must now be considered on the assumption that this direction was correct under all the circumstances proved affecting him.

What then was the issue made by the pleadings, as against the defendants Thorp and Tilt? Laying out of view, for the purposes of the discussion, the admitted fact that Thorp was a mere agent, that the goods were consigned to Tilt and the advances were made by Tilt, and assuming that Thorp and Tilt are in the same liability, if either is liable, the question raised was this: Did Thorp and Tilt receive the goods from Birch & Company knowing that they had been procured by fraudulent representations, and without paying any consideration therefor ? They did receive the goods. There was not the slightest proof that either of them had any knowledge of the circumstances under which the goods were procured by Birch & Company, or that Birch & Company were not owners in good faith, guiltless of any fraud or unfairness. It only remained to inquire whether Thorp and Tilt paid any consideration for the silk. The charge in the complaint was that they did not. This charge was denied; and the proof showed, without any contradiction, that Tilt advanced $3,800 thereon, or more strictly $1,000 oma promise to consign, and $2,800 upon the consignment of the silk to him for sale.

- It seems to us, that the result was inevitable and the defendants, Thorp, Tilt and ¡Newman, were entitled to the verdict which the jury rendered in their favor, upon the very issue tendered by the complaint.

But in the progress of the trial, an account was produced by the- defendant, which, in connection with the statement of one of the witnesses that it was in accordance with the contract between the consignors and Tilt, tended to show that the advances made by Tilt were usurious. That he was to charge, and did charge, one per cent a month for his advances on the silk in question.

Upon this proof the plaintiffs insisted that the consignment was void, and asked the Court to charge that the pledge or consignment upon a usurious advance is not a valid contract.

To the refusal of the Judge, to charge as requested, the plain-, tiffs excepted. We think the Judge was right in holding that no question of usury had been raised in a manner entitling the plaintiffs to any such instruction. They had brought their action and rested their claim upon a totally distinct ground. The questions were, whether the defendants, Thorp and Tilt, were cognizant of the fraud or had paid any consideration for the goods. Because proof incidentally appeared on the trial of those questions tending to show, that though an advance had been made, it was under a usurious agreement that was not a point in issue. The plaintiffs had not alleged it. The defendants did not come to trial to meet it, and unless we are prepared to say that the Court are at liberty to disregard the pleadings altogether, we think that incidental proof could not avail anything in the plaintiffs’ favor.

This we believe to be the just conclusion from the case of Brazill v. Isham, (2 Kern., 9,) where it was held, that although a valid award of arbitrators upon a cause of action is a bar to a suit thereon, the defendant could not insist upon it if not set up as a bar in his answer, even though the plaintiff himself proved that such an award had been made. McKyring v. Bull, (16 N. Y. R., 297,) and Saltus v. Genin, (3 Bosw., 250,) are also cases which support the principle. The latter is very closely analogous. All the facts alleged in the complaint, and upon which the plaintiffs relied to affect the title of Thorp and Tilt, were disproved; and yet they sought to recover upon a ground not alleged, and which was inconsistent with what was alleged. The allegation was, that the defendants, Thorp and Tilt, had paid no consideration. The claim to recover is, that they did advance a consideration, but that the proof shows it was usurious.

It was further insisted hy the plaintiffs that after William Gr. Hutting had retired from "the firm of John S. Birch & Company, the remaining partners had no power to pledge the property to raise money for their own purposes.

To this there are several answers: 1st. It appeared by the evidence that John S. Birch & Company were dealers with Tilt prior to the withdrawal of Wm. Gr. Hutting. It was not shown that Tilt had any notice of that withdrawal. He therefore had a right to act in his dealings as if the firm continued unchanged, and is to be protected in so doing; and it appears that he did so, as his accounts are rendered in the name of the same firm down to at least October 1, 1857, long after this advance was made.

As against Tilt, therefore, or Thorp, his agent, this objection, if the proposition on which it rests were sound, could not prevail. 2d. The proof showed that Wm. Gr. Hutting’s interest in the firm had expired. If so, the remaining partners had the right to dispose of the property of the firm as they saw fit. Upon the face of the advertisement given by the plaintiffs in evidence, that is, the presumption and no evidence was given, tending to show that the interest of Wm. Gr. Hutting had not-wholly ceased.

Again, the plaintiffs asked the Judge to charge that if Birch & Company acquired no title as against the plaintiffs, the other defendants acquired no title from Birch & Company, unless they obtained the goods by a valid contract for a fair consideration in the usual course of business, and without notice of any circumstances sufficient to put them on inquiry as to Birch & Company’s title.”

In so far as this request had any reference to a supposed invalidity of the transaction on the ground of usury, it has been considered.

As to all the residue of the proposition we think it was charged, though not in the very words of the request, yet in terms expressive of the whole rule on the subject. Thus, the Judge said:

If Thorp and Tilt are in the position of bona fide purchasers of the silks from Birch & Company, they will be entitled to retain them, notwithstanding the purchase by Birch & Company from the plaintiffs was procured through fraud. They are bona fide purchasers if they paid value for the property by making advances thereon on the faith of Birch & Company’s title, and without notice of their fraud. It is not necessary that they should have had actual notice of the fraud. If they had notice of such facts and circumstances as would lead a man of ordinary care and caution to suspect that Birch & Company had not come honestly by the goods, it is equivalent to actual notice of the fraud; for they were, under such circumstances, bound to have made inquiry.” The Judge then adverted to the circumstance which, as the plaintiffs insisted, was an unusually large advance upon the goods, and added, that, “to constitute the defendants bona fide purchasers, within the rule, so as to protect their title as against the plaintiffs, it is enough that they made actual advances on the credit of Birch & Company’s title to the goods, and without actual notice of anything to impeach or throw doubt on that title, or notice of any facts or circumstances which should have led them, as men of ordinary prudence and caution, to suspect the good faith of Birch’s title, and thus have imposed on them the obligation of further inquiry. If such facts and circumstances did exist in the .present case, and it is proved to your satisfaction that they had notice of them, then Thorp and Tilt are not protected by their having made advances.” He then instructed them that he should not withdraw from their consideration the fact that Birch applied for so large an advance; and “ if that fact, under all the evidence, was enough to have awakened in the mind of a prudent man suspicions of Birch’s title to the goods, then the application for such an advance was a fact which should have put them on inquiry.” ?

We think the Judge, in the fullest manner, satisfied the request which was submitted, and that the plaintiffs have no cause of complaint on that subject.

Judgment should be ordered in accordance with the verdict.

Bosworth, Ch. J. (Dissenting.)

Assuming that it was prima facie established, that the advances made by Thorp for Tilt, to John S. Birch & Company, were usurious, and that the latter obtained the goods by fraud; and that before suit brought the defendants, Tilt, Thorp and Newman, were informed of the fraud, and were required to deliver the goods to the plaintiffs, but refused to do so; then it will follow that the plaintiffs were entitled to recover, unless they are precluded by the pleadings from availing themselves of the fact, that the advance was usurious.

A person from whom chattels have been obtained by fraud, may follow them into the hands of any one not being a bona jide purchaser for value; or not holding under the rights of such a purchaser; and after a demand of them and a refusal to deliver them, may sue such holder and recover their value, or maintain replevin in the detinet. (Ely v. Ehle, 3 Comst., 506; Caldwell v. Bartlett, 3 Duer, 341; Beavers v. Lane, 6 id., 232.)

The plaintiffs alleged in their complaint, that the goods were obtained from them by the fraud of John S. Birch & Company, and'so the jury found.

To make their complaint sufficient as a pleading, they alleged that Tilt and Thorp received the goods from John S. Birch & Company, with notice of the fraud, “ and without paying any consideration therefor.”

The latter allegation, however brief it may be, was sufficient to apprise the defendants, Tilt and Thorp, that one of the grounds on which the plaintiffs would seek to charge them was, that they were not bona jide holders for value paid. To hold that the words, “without paying any consideration therefor,” merely imports that they had not actually parted with value; and if they had, that no question was to be made whether in judgment of law it constituted any consideration which would protect them in their possession is rather technical, as it seems to me, than substantial.

Tilt and Thorp state in their answer, that the two sums of $1,000 and $2,800, were advanced on the security of the goods, and Thorp “ alleges that the said goods were received by him as the agent of said Tilt in good faith, and as a fair business transaction.”

Before the Code abolished a reply to an answer setting up new matter constituting a defense, the plaintiffs might have replied that these advances were made upon an agreement that Tilt should be paid one per cent per month on the sum so advanced.

Thus the issue would have been made, in terms, by the pleadings which, in this case, the Judge at the trial held, did not exist.

. But by section 168, [144,] of the Code, as it now reads, “ the allegation of new matter in the answer, not relating to a counterclaim, * * is to be deemed controverted by the adverse party as upon a direct denial or avoidance as the case may require.”

It was new matter, that the money was advanced and the goods received “in good faith, and as a fair business transaction,” unless the allegations of the complaint import, that no part of such matter is true; and in either aspect it was open to the plaintiffs to prove, that the consideration which the defendants paid, the law does not recognize as a consideration; and that the transaction on which they rest their defense, as being a fair business transaction, was prohibited by law, and absolutely void.

In the admission of such evidence, the right to recover is not only not placed on any ground inconsistent with the case made by the complaint, but on the contrary is placed on the very ground taken in it; that the defendants, Tilt and Thorp, parted with nothing on the credit of the goods which the law regards as a consideration, or which can clothe them with the character of bona fide purchasers,

If the defendants deemed this allegation so uncertain, that the precise nature of the charge in this behalf was not apparent, their remedy was under section 160 of the Code.

But their answer indicates that they understood the pleader as questioning the fact of their having paid any legal or valid consideration ; and hence they state what the consideration was, and affirm that they acted in good faith, and that the transaction was a fair business transaction.

Under such circumstances, and having regard to the plaintiffs’ rights as the complaint stated them, and to the substance and good sense of the issues presented by the pleadings under that provision of the Code which controverts the allegations of new matter in an answer, as upon a direct avoidance of them, I think the Judge erred in holding that the plaintiffs were precluded from availing themselves of proof that the advances were usurious, and from insisting on such proof that Tilt was not a bona fide purchaser for value. (Seeley v. Engell, 3 Kern., 548; [II.;] The People v. Ryder, 2 Kern., 441, 442.)

It does not present the case of a variance between pleadings and proofs by which the objecting party has been misled to his prejudice; nor of a failure of proof of the alleged cause of action in its entire scope and meaning; but a case in which evidence of a fact has been rejected, which fact, being established, shows that in judgment of law, Tilt paid no consideration, (as the complaint avers,) and also that the answer is untrue in its averment, that the advances were made in good faith and in a fair business transaction; averments, which, in common parlance, are equivalent to the allegation that Tilt was a bona fide purchaser for value, within the adjudged meaning of that phrase.

I think the judgment should be reversed as to Tilt, Thorp and Newman, and a new trial granted as to them, with costs to abide the event.

Judgment for the respondents on the verdict.  