(184 N.Y.S.)

I tried, the plaintiff may take judgment, as in case of default in pleading, at the expiration of twenty days after service of a copy of the complaint."

This section is made applicable to the City Court by section 3347 of the Code, subject, however, to the qualifications contained in section 3159. This latter section provides that each of the Code provisions made applicable to the City Court is subject to the qualifications and exceptions expressed or plainly implied in this title. Sections 3165 and 3166, requiring answers to be served within 6 days, are embraced within such title. Notwithstanding the 20-day clause in section 1778, it will be noted that it is also specifically provided that plaintiff may take judgment as in case of default in pleading. Consideration should also be given to the language of section 3159 above set forth, by which the applicability of section 1778 to the City Court is subject to the qualifications expressed or plainly implied in the Code provisions relating to said court.

[1-4] Recognizing the general principle that laws in pari materia must be construed with reference to each other, and also that such construction should be given to the language as will carry the intention of the lawmakers into effect, it appears clearly that the purpose was to permit the judgment to be entered as in case of default in pleading, to wit, at the expiration of 6 days. This view is strengthened by the limitations of section 3159, which clearly sought to render section 1778 adaptable to and in conformity with the general provisions relating to the City Court. The purport of the statute was to limit and not to extend the rights of a defendant sued on a promissory note, and as the failure to serve the order has been held to render the pleading ineffective, and unless waived to place the same in the same position as though the answer had never been served (Watertown Nat. Bank v. Westchester County Water Works, 19 Misc. Rep. 685, 44 N. Y. Supp. 1101), a construction recognizing only the 20day provision would act, not as a limitation, but rather as an extension, for the plaintiff would be unable to take advantage of the defendant's default until the lapse of a period of 14 days beyond the ordinary time.

Schlegel v. American B. & A. Co., 64 How. Pr. 196, was an action on a promissory note brought in the New York Marine Court. The summons was served on October 12 and defendant failed to serve with its answer an order of the judge directing the issues to be tried, whereupon plaintiff entered judgment on October 19. Defendant moved to vacate this judgment on the ground that it was prematurely entered, contending that such right was not complete until 20 days after the service of the complaint. The court held that the right to enter judgment was complete upon the expiration of 6 days after the service of the complaint, and, after a discussion of the section and the rule of interpretation to be applied, said:

"With these principles in mind it seems clear that the Legislature intended that the order of the judge should be served within the time when the answer was due, and when the statute provides that the answer should be due in 6 days, that the order should be served within that time, and it seems unneces

sary to discuss the reasonableness of such a construction, for it is fairly inferable from the section itself, as well as from the general intent and purpose of the provision. This section took the place of 2 Revised Statutes, 458, c. 8, title 4, art. 5, § 8, which authorized the plaintiff, in an action against a corporation founded on a note or other evidence of debt, to apply to the court for judgment on the return day, and the court then rendered judgment in favor of plaintiff, unless it was made to appear that the corporation has a good and substantial defense on the merits. It is clear, therefore, that the return day under the old practice was the essential element of time, and the counsel is bound to construe the present provision in the light of the former legislation and the former practice."

So, also, in Duke v. Mt. Morris Const. Co., 127 App. Div. 294, 111 N. Y. Supp. 303, was the adaptability of section 1778 to the practice of the Municipal Court recognized by the Appellate Division; the court citing with approval the Schlegel Case, supra. In Seabury's City Court Practice, p. 336, the following appears:

"But when this section (1778) is construed in connection with section 3165 it may fairly be assumed that the Legislature intended that when section 1778 was applied to an action in the City Court it should be read as if it permitted the taking of judgment at the expiration of 6 days after the service of a copy of the complaint. Such a construction is reasonable and is in harmony with the long-established practice in the City Court."

Though this statute has been differently interpreted in Smith v. Consumer Fertilizer Co., 172 N. Y. Supp. 598, such decision is not in accord with the authorities above cited, but seems to be based entirely upon the phrase "at the expiration of twenty days after the service of a copy of the complaint," without giving consideration either to the remaining language of the section or to the effect of the limitations set forth in section 3165, and hence I am unwilling to follow

same.

The clerk is directed to enter the judgment.

(193 App. Div. 250)

(184 N.Y.S.)

GILCHRIST TRANSP. CO. v. WORTHINGTON & SILL. (Supreme Court, Appellate Division, Fourth Department. July 6, 1920.) 1. Evidence 21-Judicial cognizance taken that insurance agency looks after adjustment for insured.

Judicial cognizance may be taken of the fact that it is the usual and ordinary practice for an insurance agency having charge of the entire insurance business of a large company to act for the insured in case of a loss and take the matter up with the insurer, look after its adjustment, and turn over the proceeds to the insured.

2. Factors 1-Insurance agents held not factors for transportation company; "supercargo;" "foreign factor."

A "foreign factor," as understood in marine matters, was a person who had charge of the cargo to handle it, dispose of it, convert it into money, or exchange it for other property, but who had nothing to do with the management of the boat when he sailed thereon, at which time he was called a "supercargo," and hence an insurance agency, which took charge of the entire insurance business of a large transportation company, was not a factor.

[Ed. Note. For other definitions, see Words and Phrases, Foreign Factor; Supercargo.]

3. Limitation of actions ~66 (10) -Demand before action for moneys collected by agent from insurer held not necessary.

No fiduciary relation existed between an insurance agency, which took charge of the entire insurance business of a large shipping company, and the shipping company, and, where money was collected from the insurer for the insured, there was no express trust, and a demand by the insured for the money was not necessary before an action could be brought against the agency to recover it, and the statute of limitations (Code Civ. Proc. §§ 380, 382) commenced to run from the time that the agency received the money.

Appeal from Trial Term, Erie County.

Action by the Gilchrist Transportation Company against. Worthington & Sill. From a judgment dismissing the complaint, the plaintiff appeals. Affirmed.

Argued before KRUSE, P. J., and LAMBERT, DE ANGELIS, HUBBS, and CLARK, JJ.

Stanley & Gidley, of Buffalo (Ray M. Stanley, of Buffalo, of counsel), for appellant.

Clark H. Timerman, of Buffalo, for respondent.

HUBBS, J. This is an appeal from a judgment entered in the Erie county clerk's office on the 24th day of September, 1919, in favor of the defendant dismissing the complaint. The jury was excused by. consent and findings of fact were made by the trial court. The action was brought to recover $1,479.25, with interest, being money belonging to the plaintiff which was collected by the defendant while acting as agent for the plaintiff. The plaintiff is an Ohio corporation. The defendant is a New York corporation, which was organized to take over the business of the copartnership of Worthington & Sill, insurance agents, of Buffalo, N. Y. The transaction in question occurred between the plaintiff and the copartnership before the formation of the defendant corporation. The plaintiff owned a large fleet of boats on

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 184 N.Y.S.-6

the Lakes. Worthington & Sill for years had insured those boats. They were the local agents of some of the insurance companies carrying insurance on the boats, and some of the insurance was placed by them as brokers in companies which they did not represent.

[1] The facts in this case are undisputed and found by the trial court, except that it refused to find that said insurance agents were acting in a fiduciary capacity. During the years that said agents had acted for the plaintiff it had been the practice and custom, in case of a loss, for the plaintiff to send the papers, with policies indorsed, to the said agents, who would take the matter of the loss up with the insurance companies, look after its adjustment, and turn over the proceeds of the adjustment to the plaintiff. I think we may take judicial cognizance of the fact that that is the usual and ordinary practice where an insurance agency has charge of the entire insurance business of a large company.

In 1903 the vessel John Craig stranded, while laden with a cargo of corn, bound from Chicago to Meadford, Ont. The form of the policy upon the John Craig was known as the "lake hull" policy. It contained a clause known as the "sue and labor" clause, an ordinary clause in a marine policy. After the disaster to the John Craig, an effort was made to salve her. Those efforts were continued from June 25, 1903, the date of the accident, to June 30, 1903, when the underwriters took charge of the efforts to salve the boat. They continued the efforts for some time thereafter. During that period the plaintiff incurred expenses, which expenses amounted to the sum sued for in this action. After the loss all of the papers and policies were turned over to said agents to look after the adjustment in the ordinary course of business. They procured an adjustment of the loss under the policies and turned over the proceeds to the plaintiff, excepting, however, a claim of the plaintiff under the "sue and labor" clause. The amount of the claim of the plaintiff under that clause was held in abeyance, and not paid over or collected at that time. Some time later the agents collected of the companies the sum claimed in the complaint under the "sue and labor" clause. Meanwhile the plaintiff had gone into the hands of a receiver, and remained in the hands of a receiver for six years, when its financial matters were adjusted and the receiver was discharged. Meanwhile the defendant corporation had taken over the affairs of the copartnership of Worthington & Sill. Thereafter, and in 1913, the plaintiff discovered that the said insurance agents had collected said sum under the "sue and labor" clause about seven years before. The plaintiff made a demand upon the defendant for the amount, it was not paid, and this action was brought.

The trial court found substantially every claim of the plaintiff. It found that the defendant had collected the money under the "sue and labor" clause, while acting as agent, trustee, and attorney in fact for the plaintiff, and that it had failed to turn it over to the defendant, but dismissed the complaint upon the ground that the cause of action was barred by the six-year statute of limitations. The plaintiff requested the trial court to find that the defendant was acting in the transaction in question, in a fiduciary capacity as agent, trustee, and attorney in

(184 N.Y.S.)

fact for the plaintiff. The court found as requested, except that it struck out the words "fiduciary capacity."

The "sue and labor" clause, referred to in the policy, is a clause which does not undertake to indemnify the assured for the loss or any portion of it; but it is a clause inserted for the benefit of the insurance company, to encourage the assured to make an effort to salve the wreck for the benefit of the insurance company and to prevent a total loss, if possible. It is in effect, an agreement outside of the indemnifying clause of the policy, in which the underwriter agrees to pay to the assured the expenses which he may incur in preventing a further loss, which, if it occurred, would fall on the underwriter under the indemnifying clause of the policy. The reason for the clause is that the assured might abandon the wreck and look to the insurers to indemnify him for the loss, if he did not have assurance that he could recover the expenses which he might incur in trying to salve the wreck. It is in addition to the indemnifying insurance provided in the policy.

[2] The first contention of the appellant upon this appeal is that the defendant was the foreign factor of the plaintiff, because the plaintiff was located in Ohio and the defendant was located in another state, the state of New York, and that the position which the defendant occupied in relation to the plaintiff constituted it the plaintiff's factor. It seems to me that there is no force in this argument. A foreign factor, as understood in mafine matters, occupied an entirely different position than insurance agents or brokers. He was a person who had charge of the property, the cargo, to handle it, dispose of it, and convert it into money or exchange it for other property. In olden times he often sailed with the boat. He had nothing to do with the management of the boat. His duties only commenced when the port of destination was reached and the personal property was turned over to him by the master of the boat. Much has been written, in history and in fiction, in regard to the jealousies which existed between factors and masters of boats, and many of the disasters connected with the attempts to colonize America grew out of the jealousies and conflict of authority between factors and masters of the boats, especially in the attempts of the French to found colonies in North America. In those days the factor represented the owner in a distant country, and the owner was compelled to place his property under the charge and control of a factor, and it necessarily followed that a person occupying that position occupied a fiduciary relationship to the owner of the cargo. The question is deemed important by the plaintiff because of a statement in the opinion in the case of Wood v. Young, 141 N. Y. 211, 36 N. E. 193, which seems to indicate that a factor and attorney at law occupied such a relationship that the ordinary rule of the statute of limitations would not apply, and it is for that reason that the plaintiff seeks to establish that the defendant occupied that relation to the plaintiff in this case. It seems to me, however, that such relationship did not exist, as a factor is one who has the possession and control of personal property intrusted to his care by the owner for the purpose of selling the goods or merchandise, is intrusted with the possession, management, and disposal of the goods, and has a special property in