Chaine a. Coffin.

fendants to William Chaine & Son. Prior to September 11, 1857, defendants had, however, so received from Ball & Moore a very large amount beyond what they had so remitted.

On the 11th of September, 1857, defendants became insolvent, and the next day Chaine & Son, by Ball & Moore as their agents, demanded a delivery to them of the notes and moneys so received and not remitted; at the same time offering to return the receipts and refund any expenses or advances. This was refused.

The greater part of the notes had been collected by defendants, or procured to be discounted, and they had received the proceeds and applied the same to payment of their own debts.

The defendants, by their answer, claimed the right so to use the proceeds of the notes, under their agreement with Ball & Moore. The action was tried at special term, before Mr. Justice Ingraham; his decision was as follows.

INGRAHAM, J.-Even conceding the agreement of Ball & Moore with Coffin & Haydock to have been admissible in evidence, still I am of the opinion that there is nothing in that agreement to devest the plaintiff of his title to the notes, or to the proceeds of his property sold by Ball & Moore. Coffin & Haydock were guarantors of all the sales made by Ball & Moore. The provisions of that agreement, as I understand them, were intended to protect Coffin & Haydock against any misapplication of the funds by Ball & Moore, and for that purpose they agreed that the notes should be received and handed over to Coffin & Haydock for collection; and as they guaranteed the payments of the notes, they assumed the right to sell the notes in their discretion. In either event, the collection or disposal of the notes was for the account and benefit of plaintiff, and not of Coffin & Haydock. The receipts of Coffin & Haydock for the notes acknowledge the notes to have been received on account of the plaintiff.

If the notes are collected, it cannot be denied but that such collection must be for the benefit of the plaintiff. It would be idle to say that Mr. Chaine intended by the agreement that such collection should be for the benefit of Coffin & Haydock. The authority to dispose of the notes can only be for the same

Chaine a. Coffin.

purpose, coupled with the object heretofore suggested, viz., to protect themselves against loss, if the parties to the notes should become of less responsibility by having authority to sell. If it was intended that Coffin & Haydock were to receive the proceeds of sales for their use, a guaranty of payment would have been useless, and in the place of it there should have been an agreement to pay from time to time the amount of sales made by Ball & Moore, absolutely. If the responsibility of Coffin & Haydock was merely that of guarantor, then the debts guaranteed must have remained the property of the party to whom the guaranty was given.

The construction I have given to the agreements of the parties, disposes of this case so far as the matters are before me on trial. It is only necessary to give the proper directions as to the account to be taken by the referee.

Coffin & Haydock are liable for all moneys received by them, either on collection, or sales of the notes received by them from Ball & Moore, and for all proceeds of sales which, in any way, have come to their possession.

They are also liable for any moneys not paid at maturity of the credits for goods sold by Ball & Moore, if any.

The plaintiffs are also entitled to demand and receive from Coffin & Haydock all notes in their possession, the proceeds of the sales of goods of the plaintiffs, which have not been paid for, by Coffin & Haydock, to the plaintiffs.

The plaintiffs are also entitled to any notes which have been transferred to the assignee Brown, under the assignment, and to receive from him the proceeds of all notes which have come into his hands since the assignment.

Coffin & Haydock having authority to sell the notes, the plaintiffs cannot follow any note sold by them for a bona-fide consideration, in the hands of other persons.

Referred to Mr. Yard to take the account, in pursuance of the above directions; and judgment ordered therefor, on filing his report.

The referee reported, and his report was confirmed upon exceptions, after argument at special term, April 14, 1863, and the amount due determined at $87,869.80, with interest from October 20, 1860.

Chaine a. Coffin.

Afterwards, July 27, 1863, before judgment was entered,* an order of arrest was granted upon affidavits setting forth substantially the foregoing facts.

Defendants thereupon moved, upon affidavits, to discharge the order of arrest.

The plaintiff alleged that the agreement of Ball & Moore with defendants had never come to the knowledge of Chaine & Son until after defendants' insolvency; and defendants claimed that it was made by their authority, and they had notice of its contents when it was made.

William Curtis Noyes, for the motion.-I. The plaintiff has adopted the agreement of Ball & Moore with defendants, and is bound by it. (Dexter a. Adams, 2 Den., 646.)

II. This being an equitable action, the defendants are not liable to arrest herein, either upon an order or by ne exeat. (Code, § 178; Fassett a. Tallmadge, 14 Abbotts' Pr., 188.)

III. The defendants' debt is not fiduciary in its character. (Goodrich a. Dunbar, 17 Barb., 644; Angus a. Dunscomb, 8 How. Pr., 14; Bussing a. Thompson, 15 Zb., 97.)

Albert Mathews, opposed.-I. The right to have the defendants arrested in this action is grounded upon the cause of action set forth in the complaint. The complaint contains a statement of facts showing one or more of the causes of arrest required by the Code. (§§ 179, 288.)

II. The substantive facts constituting the cause of action cannot be made the subject of dispute, by affidavits, upon a motion to vacate an order of arrest. Unless it is made clearly to appear that the complaint will be dismissed upon the trial, the order of arrest will be retained. (Levins a. Noble, 15 Abbotts' Pr., 475.)

III. The affidavits, etc., produced on the part of the defendants, do not legally controvert the substantial facts set forth in the complaint and affidavits of plaintiff.

IV. The cause has been tried, and all the issues material to the arrest of the defendants have been found in plaintiff's favor. The matters sought to be controverted, both of law and fact, on this motion, are therefore res adjudicata.

* Judgment was entered as against Coffin & Haydock, in December, 1863, for $108,245.02.

Chaine a. Coffin.

V. The indisputable facts of this case, therefore, require that the order of arrest should be retained, and the motion to vacate be denied, upon the principles ordinarily applied by this court to similar cases. (Dunaher a. Meyer, 1 Code R., 87; Ostell a. Brough, 24 How. Pr., 274.) 1. The defendants were never authorized to use the plaintiff's testator's moneys for their own benefit. They received the notes for account of plaintiffs. 2. No credit, in respect to these moneys, was ever given by plaintiff's testator to defendants. (Schudder a. Shiells, 17 How. Pr., 420.) 3. Their sole authority to sell the notes was in order to protect themselves against the insolvency of the makers thereof. 4. They received the notes and proceeds solely for the use and benefit of plaintiff's testator, and in order to remit the proceeds to plaintiff. They had no greater or better rights than Ball & Moore, and stood in the same position. (Frost a. McCarger, 14 How. Pr., 131.) 5. There was no authority derived from plaintiff's testator to make any disposition of the proceeds of the notes and goods, other than to hold the same for the exclusive use of the plaintiffs and remit the same to them. (Holbrook a. Homer, 6 How. Pr., 86.) 6. Defendants never had authority, by consent, or contract, or custom, to use this money. They were mere fiduciary bailees of the notes and trustees of the proceeds, and guilty of a fraud in appropriating them to their own use. (Turner a. Thompson, 2 Abbotts' Pr., 444; Stoll a. King, 8 How. Pr., 298.) 7. The fact that the defendants guaranteed the sales of Ball & Moore, did not destroy their fiduciary relation to plaintiff's testator in respect to the notes and proceeds. They stood in no better plight than if they had been the immediate consignees of the goods, and had guaranteed their own sales. In either case, they are liable to arrest. (Ostell a. Brough, 24 How. Pr., 274.) 8. The defendants were not bankers, but rather like an attorney, to whom plaintiffs' agents delivered the notes for collection and remittance.

INGRAHAM, J.-The question submitted on this motion to vacate the order of arrest was substantially decided on the trial of this cause.

The ground on which the order was granted was, that the debt was of a fiduciary character. It was on that theory that the decision at the trial was made. The notes and accounts

Bolles a. Duff.

were considered the property of the plaintiffs, and placed in the defendants' hands for collection, and payment over to the plaintiffs, so as to limit their liability on the guaranty of the plaintiff. It was on this account that the judgment allowed the plaintiffs, to follow the notes to the hands of the assignees of the defendants, and to recover the possession from them.

I see no good reason for changing that view of the case, and the motion, therefore, must be denied.

BOLLES a. DUFF.

Supreme Court, First District; General Term, March, 1864. APPEALABLE ORDER.-RECEIVER.-SECURITY FOR COSTS.-LEAVE TO SUE.

An order of court requiring a plaintiff acting in a representative capacity to give security for costs, under section 317 of the Code, is not appealable, except for irregularity in granting or procuring it.*

An order of court made ex parte, giving a receiver leave to sue, is not a bar to a motion to require such receiver to file security for costs.

Appeal from an order requiring security for costs.

This action was brought by Jesse N. Bolles, as receiver of John M. Trimble, a judgment-debtor, against Trimble, John A. Duff, and William H. Roberts. The action was brought pursuant to leave from the court. The action was to set aside an assignment and conveyance of real estate in New York city. The defendants moved that the plaintiff be required to give security for costs, the motion papers disclosing that the receiver had no funds in hand belonging to the estate of Trimble, and

* In JULIO α. INGALLS (Supreme Court, First District; General Term, September, 1863; Present, SUTHERLAND, INGRAHAM, and LEONARD, JJ.), it was Held, 1. That an order for the discovery of books and papers, under the Revised Statutes, is appealable. 2. An order requiring the deposit of all the account-books of a party with the clerk for ten days, is not sustainable in an ordinary case. 3. A petition for discovery must show the precise point on which information is desired.