Court, S. D., New York. Februllol'J' 6, 1892.)
BBNEFIT

S.

Tbecbarter and by-laws of tbe New York Cotton Excbange provide that death benefits arisinjf from assessments shall. not extend to a periOn who bad ceased to be a member, and that deaths in tbe membership are to be renorted by tbe trustees to the managers wbo levy the assessments. HeW, that, to levy an appearing to be I'b80lute, the investigation of the trustees is not conolvsive as to whether decedent was a member or not. . lI,v:pothecation ot a membership in the New York Cotton Exohange fora debt, with power ot attorney to transfer the which is not exercised, but tile debt 1s continued on the creditor's books, is not suoh a sale of the membership as will rlllievo the exobangefrom liability to make an assessment on the member's death. In,an action on suoh membership certificate, statements made by the creditor holding the oertificate are admissible for tbe purpose of shOWing the n8turaof his oJ.aim thereto, bUt are not oonclusive · to decedent's title to the membership.
,. ' , ,

OF CERTIFJOATB.

,

BAJtB;

S.

BAMB-EvIDBNCB.,

Action by Nathaniel against the New York Cot,. ton Exchange on a membership certificate. Judgment for plaintiff. 0.,4. Ulement, for plaintiff. , J. MeL. Nash and Stephen P. Nash, for defendant. WUEELJj)R),.District Judge. This suit is brought upon the membership of Horace E. Dillingham in the defendant corporation, and has been heard on waiver in writing of a jury. He became a member, and stood upon the books. as such, but had ,an account with Crosby & Co., and in January, 1886, delivered his certificate of membership, with a power of attorney for transferring it to them, for security, and they, after that, paid the dues on it, and charged them to him. On October 1, '1886, their balance against him was 83,389.25. The membership was worth $1,400. 'they credited his account, by profit and loss, 81,989.25, and carried forward the ball;U1Ce, 81,400, against him. The charter and by-laws provided that the benefits in question here should not extend to a person who had ceased to 'be a member, "by expulsion or by a voluntary or forced sale of his membership." The defendant claims that by this transaction of October 1.1886, he ceased to be a member by sale of his membership. The evidence does not show any express agreement between him and Crosby & Co. that they should then or ever have the membership for 81,400, or for what it was worth; he was not credited with that amount for the membership; but that part of his account which the membership would not be good security for was carried to profit and loss, and that part for which it would be good security was continued against him; the charging of dues paid to him was continued; he continued to enjoy the privileges of a living member, and stood upon the books as such to the time of his death. The trustees of the gratuity fund are to report deaths of members to the board of managers, who are by resolution to levy assessments for the next of kin, which the plaintiff is. The trustees, after investigation, reported that

720'

J'EDERAL RgpoRTE}\1

voL 49.

the deceased was not a member, and the board thereupon decided not to levy any assessment. iThedefendant claims that this investigation and decision were within the discretionary and quasi judicial powers of the trustees and board, and that their decision thereupon was conclusive. But the obligation to the assessment appears to be absolute upon the peath of those who are in fact members, and not to be qualified to those who may pe found by the trustees or board to be members; and the investigation appearsto have been,f9r the information of those acting for the defendant, and not for determining between the plaintiff and defendant the ultimate question of the defendant's liability, and therefore not at allconclusivlIl.. What Crosby & Co. said and wrote about thlf their the certificate and power of while tbeyhad them, is offered-in evidence, and objected to. It seems to be for the purpose of showing what their claim to them was, but .notconchlsive asto.that, and less $0 as to the right of the plaintiff. LaumBky v. Supreme Eodge,24 Blatchf. 533, 31 Rep. 592; When however, this evidence q()es not the facts stated. The uontimmtion oHhe debt, fur which securit¥ has been given is always imporlant'upoll'a'oY't:1uestion 'whether the property in the security had been passed to the tor absolutely. This debt remained; .therefore the membership had'n'ot bec6nie the property of Crosby & Co., and paid it. The power of attorney had not been exercised. It would have been revocable on redemptio'Ilof the certificate, and the membership would :hava remained as before. On the whole, that the membership had not been: sold satisfactorily appears l and is found; that Dillingham was a :meTriber at his death .[(Jt}]:ows,.;and is also found. The other facts entitHug',the plaintiff to reOOverare admitti'ld by the pleadings or agreed to· . The ,plaintiff recovers for 'the failure to perform the duty of levying an assessment upon the other members for him asne:x.t of kin to the deceaSed member. HookinaO'n v. Page, 31 Fed. Rep. 184. If the:· assessment had been made, payment of the SUIll that should" actually be col'lected ,aod received," without liability for interest upon it, would have been, by the express terms of the charter,all that the' defendant (lould be holdenfot. That sum, without interest, is what the plaintiff lost by the failorElto 8.ssess,·andis the measure of damages here. It is stipulated to be $4,000. Judgment for plaintiff for $4.000 damages;

·

JU,.NGOR SAVINGS BANK 11. CITY OF STILLWATER.

lil

BANGOR SAVINGS

BANK

11. CITY OF STILLWATER.

(Circuit Cowrt, D. Mmfl68ota, Thflrd DWr.Bion. March SI, 18112.)
KvmCIPAL INDEBTEDNESS-INVALIt> NEGOTIABLE CBBTIFICATEIf-MOltBY CElVED.

lUD

Al!I'D R.

Where negotiable certificates of indebtedness issued .by a city have been sued upon by the payee, and declared invalid for want of power to issue negotiable instruments, the payee maymilintain an action for money had and received, prov,ided citrhad,power to make the contract out of which the indebtedness arose; and the fact that the payee was not a party to that contract is immaterial when the eel'. tificates were issued to him at the request of the contractor, and lihe money was received city and paid over to the contractor. '

At IJaw. Action by Bangor Savings Bank against the city of Stillwater for money had and received. On demurrer to amended complaint. Overruled. ' F. H.Lemon & Co. made a contract December 21, 1887, with the city of Stillwater, whereby they agreed to "vest" title in the cityto two &trips.afland, each 50 feet wide, and to widen Main ,street 50 feet, a certain distance, and to do all the excavating and that may be necthe 50 feet to the present grade, and to secure the relocation of certain railroad, tracks and certain sewerprivileges. For-the services to be performed and the land so acquired the city agreed to va()ate and, abandon certain condemnation proceedings,l1Dd vacate and surrender:all its right to certain parts of Laurel, Cherry,aJ;ld Linden streets; and, furthermore, on the, completion of the contract by Lemon & Co.,'to pay them $21 ,250, in three certificates of indebtedness, to become due, respecti"ely, on July 1, 1889, July 1,1890, and July 1, 1891. quently ,aD October 27, 1888, the certificates of indebtedness were issued to the Bangor Savings Bank as payee, reciting on their face that they wer,esq i811 ued at the request of Lemon & Co., and that a resolution of the city council was passed, and duly approved by the mayor, authorizjl)gthe making and delivering of the certificates to the bank. An action. to recoV:!lr. on the certificates failed fOJ: the want of power in the city to issue them. Suit is now brought for the money paid to the city of Stillwater, the certificates having been decided illegally issued. A demurrer to the complaint is interposed. Sanders « Bowers and Owen Morris, for plaintiff. Fayelte Marsh, for defendant.
NELSON, District Judge. It is the settled doctrine that if a. municipal corporation has received money for an authorized purpose, derived from the issue of illegal and void bonds. and has applied it to that purpose, an action will lie as for money had and received, although the corporation had no authority to issue the bonds. Louisiana v. New Orleans, 102 U. S. 204; Chapman v. County oj Douglas, 107 U. S. 348, 2 Sup. Ct. Rep. 62; Hitchcock v. Galveston, 96 U. S. 341. The contract with Lemon & Co. was valid. It was within the scope of the chartered powers of the city of Stillwater. (See Judge THAYER'S opinion in this case, v.49F.no.9-46