The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-11-28

THE GREAT SCHUYLER FRAUDS.
IMPORTANT DECISION OF JUDGE HOFFMAN.
The Liability Of the New Haven Railroad
Company for the Frauduientiy
Issued stock.
INTERESTING DIVORCE TRIAL.
singular Developments in Social Life,
&C., TO-, &c.
Superior Court-Special Term.
Before Hon. Judge Hoffman.


Before Hon. Judge Hoffman.
DECISION OF JUDGE HOFFMAN, THAT THE COMPANY
ARE LIABLE FOB THE FRAUDULENT STOCK ISSUED.
Morris Ketchups, Thomas Rogers and Ed.oard Bement
U.s. John A. Serens President Of e Bank Of Commerce. of
Nee York-This action brought to recover from the
defendants the of SIS o00 with interest paid by the
plaintiffs upon transfer Of $40 shares of stock of the
New York and New Haven Railroad Company. This stock
had been pledged the Bank of Commerce by the Arm
OF r. G. L. Schuyler. Various grounds for the de-
mand set up in the complaint but the main ques-
depends upon the alleged iegslity and valucless
character the stock having been fraudulenty and
falsely issued We merely give general outline Of the
case the facts and material details infinitely stat
ed in the following opinion Of the Judge Of which
gave copous extract in Sundays HERALD.
Messrs. Kctchum and G. Wood for plaintiffs.
Messrs Silliman and D. Lord for defendants.
HOFFMAN, Justice-The course adopted in adducing
The evidence and the arguments Of counse in this
have led to the consideration of the validity OF the stock
vi the New York and New Haven Railroad Company is
sued by the late transfer agent to amount exceeding
Inc million hundred thousand dollars. am now
Sadcd that the cannot be decided without passing
npon that question approach 1t with anxiety and
tisrust Theaterests involved Of startling magni
tude and the questions grave and novel, An obscure
and untodden field is before me- and there are no lights
knded by the wisdom and labors of former judges
mark out the path Such consideration urge me to q
protraced and deliberate examination; but shall fulfil
higher duty to the community by prompt decision,
Observation-Disclosures If the General term of this Court Isha,i
consider the case under the following heads
l. The position and rights of the parties growing out
m the and refusal of the check for $40 600
and The gronnd assumed Inv the Rank OF Commerce for
such refusal
q The facts attending the possession and transfer Of
the securities held by the bank to the plaintiffs and the
nature and evidence OF the apparent title to the $40
shares of stock made to them
a The grouna of the pronositjon of the defendant
that in point of fact the transfer made to the plah
did cover and represent undoubted stock
tharf ha aafta IN hack a van
he maintained upon the assumpton that the stock ac
nirad was ntterIv vod and yastea the naint;s with
M right Or interest wnatsyer r
& If such action can he maintained then what are
the true rights and position of the holders of such
o,s ~ faSr;ca tad a,ocs l.; re,a,or ~ tho counanv
Whether the rs re lila with sucb M
lice Of the character of the stock a. viii vary any rights
IIToon tbe arst noint IF axamination the decision
is in substance a. folowsThat no RIGHT attached to
the plaintiffs by reason Of the check Of r. and G. L.
SCHUYLER for q 900 upon the deposit made after the
and refulsal Of of such CHECK That the
right of The bank to retain the funds in deposit
accrued IN the IA az limo ISha and could not ha M
fec,ea by redemana Of the check ON the morning of
Isl July
Tbt t;s r;,h+ as ,o, gs.tsa ~ rno;rea hv "a. sor
If was no. ts OF ts
on demand and that no EXPRESS demand was proven:
nor by the fact OF the bank in of the
a. Collateral M we'll "a haying the money in hand
Under the second head the facts Attending the
possession and transfer of the securities to the plats
three hundred and seventy shares Of stock the subject of
The action are At sngt ana are nf great nnor
lance in determining the rights of tho parties in
tcuar resnect hut not So mon the
y nd great questions in ~ camsa copcnsor p how
ever stated thai in No event could the nlantT
,,;thout al,w;na Az hanL - Sa1n.t A. sIo onn I'D
amount o1 tbe cSec Maid nnon arranssmant I1e MIN
ripe of rescrin IN pnon which the niaintas nr,cecl
involves the prncinle Of restitution.
The fourth subject Of inourv was whether an action
10 recover the amount cond he unon tho s
sumption that the stock acoured was utterly void
vested the paintfs With no right or interest
II IL in the rst Mace uroed that If this Mad been sale
OF sock by an ayowed dealing AS owner no other
warranty Of title would have been implied than that the
were not coeuizant of any defect in the title But in
INV opinion this proposition cannot be maintained II
is admitted that the general rule as by
Kent il the law of our state that IL the ser is in pos
session Of the article and sells II as his own and not as
.an for sno,hsr and Sor fair mice bs ~ nnderstooi
10 warrant the title and the opinion of Justice Buer
in Paisley vs. Freeman f3 G. r. 5s that if the seller ae
firms the chatte which is not in HIS possession to be
by Chancellor Kent as both rood sense and
eguity In Mickey VS. Cocker "a Barbour s. CT Rep
3e Justice Parker critically examines the authorities
and sustains the rule thus At this period in
the progress of the law relating to trade and
when the Of property money like
t6cates OF stock are SO undoubtedly dealt with the
property itself see no ground for distinction between
the possession of certificate and the possession Of
material chattei Sir John Leach held that bill might
they were the evidences Of legal right and
sary constitute the party proprietor An action at
law would give the property but merely personal
responsibility for damages recovered. (Doloret
Rofhschld Sim and Stilart $685. The Of Morley
VS.. Attenborough welsh. X, and Gordon exch rep.
49e) and Chapman vs. Speiier Queens bench Feb g.
1861 do not shake this proposition The question in
the former related to sale by pawnbroker, and
much ousage introduced into the besides, at
the close of the opinion the following language may
be- that though there is implied warranty of the
title 80 that the vendor would be liable breach
OF il to damages vet the purchaser may
cover back the purchase money n consideration
that failed If ii could be shown that It the under
standing of both parties that the bargain should be put
end to If the purchaser should not have good title
Bat il there is implied warranty Of title crcum
must be shown enable the plaintiff
for money had received This not made at
the trial. and the only question is whether there
implied warranty In Chapman vs. Spelles, the ques-
ton Of warranty right to recover failure of title
to what contracted for did not arise This is the Ian
guage the Court The party had bought only the right
which the vendor bad acquired at the Shers SALE That
merely the title and interest OF the judgment debtor
But the following important authorities closely ap-
plcabie to the present case considered Jones
VS. Ryde. Is taunton, 4ss,) this The defendants
were bill brokers' and possessed Of a navy bill which
purported to have been issued by the Navy Board