Dana v. Munson.

insure, might very well make his arrangement in anticipation of the future organization of the company, and might, as a matter of convenience, execute his note in advance, without any view to aiding the company in its organization.

A note, given as a mere guaranty note, subject to assessment for losses, although given before the organization of the company, could not be converted into one payable absolutely, simply by its being used as a part of the required capital, without the knowledge of the maker. The statute imposes no liability irrespective of or beyond the presumed agreement of the parties. It provides for a voluntary contract, by which the maker of the note agrees absolutely to pay a certain sum, in consideration of which the company, when organized, is bound to insure for him, until the premiums upon such insurance, at the ordinary rates, shall equal the amount of the note. It is the consent of the maker which binds him; and he cannot be bound without it. The company, when it sues upon such a note, is bound to show, either by the terms of the note itself or otherwise, that the maker has voluntarily agreed to pay its amount, at all events, and irrespective of any assessment for losses. This may, no doubt, be established by simply proving, what was admitted in the case of White v. Haight, viz., that the note was given for the purpose of being used as a part of the one hundred thousand dollars; because the maker must be presumed to be cognizant of the provisions of the statute, and to have contracted with reference to them. But, until it is established, in some form, that the maker has voluntarily undertaken to pay a certain sum absolutely, for which he is to be reimbursed in premiums, there is no unconditional liability upon such a note.

No doubt the giving of a note to such a company, with knowledge that it was still unorganized, would afford some ground for the inference that the note was intended to be used as a part of its preliminary capital; and if there was nothing in the terms of the note to indicate the contrary, this might perhaps be sufficient alone to establish the fact. But, in the present case, the whole tenor of the note tends to repel any

Dana v. Munson.

such inference. It purports to be given, not in consideration of an obligation on the part of the company to insure from time to time until the cash premiums should be sufficient to repay the amount of the note, but of a single specific policy, to be issued, as appears from the application which accompanied the note, for the insurance of a single block of stores, valued at $2,000, the premium upon which, to be paid in hand, was only $9.60. Again, the note was not made payable abso lutely, nor at any specific time, but "in such portions and at such time or times as the directors" might, agreeably to their charter, require.

These features characterize the note so strongly, as one intended merely as an ordinary guaranty note, subject only to assessment for losses, that nothing short of the most conclusive evidence, or of an express admission as in the case of White v. Haight, could be sufficient to establish the fact that it was intended as a note of the other class. There is clearly no such evidence in this case. The testimony is even conflicting upon the question whether Knowlton, the agent who made the arrangement for the defendant, was apprized at all that the company was still unorganized; and that is the only fact that has any tendency to meet the inference to be drawn from the terms of the note. My conclusion therefore is, that the general term was right in reversing the judgment of the special term and ordering a new trial. The defendant is, therefore, entitled to final judgment, pursuant to the stipulation of the plaintiff.

All the judges concurring,

Order granting new trial affirmed, with costs, and judgment absolute for defendant.

Bull v. Sims.

BULL v. SIMS.

A statement in the written warrant of a municipal corporation for the payment of a sum certain at a fixed time to E. S. or order, that the same is payable "out of any funds belonging to the city, not before specially appropriated," and "chargeable to general city fund," does not deprive the instrument of the character of a negotiable promissory note.

APPEAL from the Superior Court of the city of Buffalo. Action against the defendant as indorser of several instruments, in the following words:

"$50.

TREASURY DEPARTMENT. WARRANT, No. 3360. 'MILWAUKIE, August 1, 1859.

"The treasurer will, on or before the 1st day of February next, pay to the order of E. Sims, fifty dollars, with interest at the rate of ten per cent per annum from the date hereof, out of any funds belonging to the city not before specially appropriated; the same having been this day allowed for dredging and chargeable to general city fund.

"R. R. LYNCH, Clerk."

"H. L. PAGE, Mayor.

Upon the trial the defendant insisted that the plaintiff was bound to show the existence of sufficient funds in the treasury of the city to pay the warrants, and not specifically appropriated, at the time of their maturity. The court held otherwise, and ordered judgment for the plaintiff, which having been affirmed at general term, the defendant appealed to this court. The case was submitted on printed arguments.

Charles Daniels, for the appellant.

John Ganson, for the respondent.

Bull v. Sims.

BY THE COURT-LOTT, J. We are of opinion that the instruments on which the action was brought were negotiable, and that the defendant was properly held liable as an indorser thereon. They were made by the city of Milwaukie, and are in the form of bills drawn by its mayor on its treasurer, attested by its clerk and countersigned by its comptroller, and directing the treasurer to pay to the order of the defendant certain sums therein specified, with interest, "out of any funds belonging to the city not before specially appropriated," and then it is added that the same were on the date thereof allowed for dredging, and chargeable to the general city fund.

It is claimed by the defendant that the payment depended on the condition of the funds at the time they became due, and that the city would not be bound to pay them unless there was sufficient moneys in the city treasury at that time, not specially appropriated, to meet the demand. Such is not their meaning. An indebtedness to the amount specified is acknowledged, and it is stated for what it has been incurred, and on what fund it is chargeable, and although it directs the treasurer to pay the amounts "out of any funds belonging to the city not before specially appropriated," no inference can be drawn from this direction that it is chargeable and payable out of any particular or specified fund; on the contrary such an inference is repelled. The financial officer of the city is, in effect, directed that he shall not pay the amount out of any specific moneys appropriated and set apart to other objects, but that he must make the payment out of the general funds of the city, and charge the general city fund therewith in his accounts. It is not contemplated that there will be a deficiency of funds to meet the demands at the time fixed for payment. The order to pay is absolute. It does not direct the payment to be made, if in funds or upon any express condition or contingency, nor do the words which have been mentioned give color to the idea that after acknowledging the indebtedness, the liability of the corporation to pay was in any way to depend on the condition of the city treasury. A presumption to that effect will not be implied against a creditor having a debt chargeable to

Smith v. White.

the city at large, and not against any special fund. The instruments were therefore in the nature of negotiable promissory notes, and could be treated as such. Under the decision of this court in the case of Fairchild v. Ogdensburgh, Clayton and Rome Railroad (15 N. Y., 337), the defendant was properly held liable as indorser. The result of these views is, that the judgment of the court below was right, and should be affirmed, with costs.

Judgment affirmed.

SMITH V. WHITE et al.

No appeal lies to this court from the judgment of the Court of Common Pleas of New York, in an action removed into it from a district court of that city, under chapter 344 of 1857, without an order of the Common Pleas at general term, allowing such appeal.

MOTION to dismiss an appeal. The facts are stated in the following opinion.

William C. Carpenter, for the motion.

N. A. Chedsey, opposed.

BY THE COURT-LOTT, J. This action was commenced on the 20th day of January, 1859, in the District Court of the city of New York, by the service of a summons on the defendants personally. On the return day of this summons the parties appeared and put in their pleadings.

The plaintiff, as the general assignee of William A. Smith, for the benefit of creditors, in and by his complaint alleged that the defendants after the assignment to him, had taken and converted to their own use certain property which had come to his possession as a part of the assets of the bankrupt, and claimed damages to the amount of $250. The answer of