Faris v. Peck — 40 How. Pr. 484

Majority

p. 484

N. Y. SUPERIOR COURT.

Henry L. Faris and another agt. William H. Peck and Roderick F. Clow.

Headnote

Where the action is one of a class in which the cause of action, and the facts which authorize the arrest, are the same, the court will not, ordinarily, try the merits upon a motion to vacate the arrest.

The true rule is, that if the original affidavits make out a prima fade case against the defendant, of a cause of action authorizing an arrest, the court will not set aside the order, except where the proof adduced by the defendant is so clearly preponderating as to leave no reasonable doubt of his success upon the trial. Where, in an action charging npon the defendants a conspiracy to defraud, the evidence against one of them, is altogether too slight to hold him to bial, and a verdict against him upon such evidence the court would be bound to set aside, he will he discharged.

But where as to the other defendant, there can be no doubt from the evidence that he committed a great fraud, he will be held to bail.

Before Barbour, Ch. J., Monell and Freedman, JJ.

Appeal from an order heard ¡November general term, 1870.

The action was against the defendants to recover damages for a conspiracy to defraud the plaintiffs.

An order to arrest the defendants was granted, which motion was discharged at special term.

The plaintiffs appealed.

The facts disclosed by the affidavits upon which the order of arrest was granted, and others read on the motion, were as follows:

On the formation of the American Merchants’ Union Express Company, one William H. Peck, whose residence was unknown to the company, but who resided at Laurens, Otsego county, in this state, became entitled to ninety .shares of the capital stock of such company.

The scrip or certificate for such stock was made out and

p. 485

kept by the company in readiness for delivery to said Peck upon his calling for it

Peck did not call, and a clerk of the company, who had charge of the matter, after waiting a long time, examined the New York city directory, and finding therein the name of “William EL Peck, 222 Washington street,” in said city, inclosed to such address the scrip for said ninety shares of stock on the evening of the 1st of February, 1869, and sent the same by mail.

The defendant Peck received the letter and inclosure, and on the next day signed the usual power of attorney in blank, and sold and transferred the ninety shares to the defendant Glow.

Clow afterwards negotiated the stock, through McIntyre, a broker, to the plaintiffs for a loan of two thousand dollars, delivering to them the same power of attorney in blank.

In the mean time the true owner of the stock had called at the express company^ office for it, and the mistake was then discovered.

All efforts of the plaintiffs to get their money back failed, and the defendants were arrested on allegations of a conspiracy to defraud.

Moses Ely, for appellants.

A. K. Hadley, for respondent Peck.

James Henderson, for respondent Clow.

The action in this case is one of the class in which the cause of action and the facts which authorize the arrest are the same. In such actions the court will not, ordinarily, try the merits upon a motion to vacate the arrest.'

The true rule is, or should be, that if the original affidavits make out a prima facie case against the defendant, of a cause of action authorizing an arrest, the court will not set aside the order, except where the proof adduced by the

p. 486

defendant is so clearly preponderating as to leave no reasonable doubt of his success upon the trial.-

And another rule'I think should be, that when the court at special term shall have, determind that there was or was not a clear weight of evidence in favor of the defendant, the court at general term ought not to disturb such determination, applying to such'decision the rule which governs the general term upon findings of fact on the trial of an action..

Applying, then, these rules to the case before us, we should not disturb, the decision below so far as it discharges the defendant Clow from the arrest.

The, evidence, charging upon him any conspiracy to defraud is altogether too slight to hold him, and a verdict against him, upon such evidence, I think the court would Tbe bound to set.aside. „

A very different case; however, is presented against the defendant Peck.

There cannot be a doubt that he committed a great fraud. He received the shares of stock through the mail, and on the same day (for it wasposted to him on the evening of the 1st, and transferred by him on the 2d) signed a power of attorney in blank, and sold the stock to Clow.

It would be in vain for him to assert his innocence in the transaction. No one would believe himj and his feeble attempt at justification, by swearing that he-sold the stock to Clow “without any knowledge or intimation from any source whatever that the said certificate was not bona fide his legitimate and lawful property,” adds to, rather than diminishes, the strength of the charge.

He knew the stock was not his property, and instead of, like an honest man, endeavoring to ascertain and correct the mistake, he dishonestly forged the name of the true owner, and, with intent to deceive and defraud some one, sold and transferred the stock.

Such a signing of the name of the true owner was a forgery (2 Pars. on Prom. Notes, 584 ; Graves agt. American

p. 487

Exchange Bank, 17 N. Y. R., 205; People agt. Krummer, 4 Park. Cr., 217 ).

By means of which forgery, the defendant Peck has made himself liable, and the question is whether these plaintiffs can maintain the action.

There can be no doubt that Clow, who transferred the stock to the plaintiffs, is liable to them, upon his implied warranty of the genuineness of the transferrer’s signature to the power of attorney. This is upon the principle af implied guarantees in negotiating' bills and notes. Nor can there be a doubt that Clow could recover from Peck for the fraud.

Why not, then, the plaintiffsí Peck intended to injure some one,and he did injure the plaintiffs | and having done a wrong, he should be held responsible for such wrong to any one who by means of it has been injured.

The principle which holds Peck is analogous to that which governs notes and bills, where a person paying value for a forged bill may recover from any party warranting the bill either expressly or by implication of law (2 Pars, on Prom. Notes, 601; Coggill agt. American Exchange Bank, 1 N. Y. 113 ) ; or, where the maker of a note puts it in circulation with a forged indorsement of the payee’s name, a bona fide holder may recover against the maker as upon a note payable to bearer (Foot agt. Meacker, 3 Hill, So. Car., 227 ; and Riley's Law Cas., 248).

There is another analogy in principle between Peck’s liability and the class of cases where consequential damages are recoverable for injuries arising, not immediately from the act, but-in consequence of it, as where an obstruction is wilfully or wrongfully placed upon the highway, and a wayfarer falls upon it. There the injury being the consequence of the unlawful act, although not immediately arising from it, an action will lie against the wrong-doer.

So in this case the injury to the plaintiffs was in consequence of the unlawful act of Peck -, and he who did the

p. 488

wrong must be held responsible for all injuries arising from it, whoever may be the injured person.

The complaint in the action is not before us, and we do not know what cause of action is stated, but I cannot see any difficulty upon the facts, of sustaining an action against Peck for fraud and deceit, under the last paragraph in the fourth subdivision of section 179 of the Code, and in such an action he can be held to bail.

I am in favor, therefore, of affirming the order as to the defendant Clow and reversing it as to the defendant Peck,

lío costs.

Cases cited

Coggill v. American Exchange Bank 1 N. Y. 113 N.Y. p. 487