the case in 16 App. Div., at page 131, 45 N. Y. Supp. 137, we held that where a new obligation was given by a new party for an old debt of another party, even though the new obligation included the arrears of interest accrued upon the old, the interest on the obligation was not unpaid, within the meaning of the statute. We are not prepared to say that the same rule would not obtain even where the new obligation is only that of the original debtor. But Justice Hatch, in writing the opinion of the court in the case referred to, was careful to limit the rule to cases where renewals were discounted in the ordinary course of business, and where the contract was not renewed for the purpose of evading the statute. In the case then before us there was nothing to show that the renewal was not a fair, ordinary business transaction. If a mercantile firm in good standing should obtain a line of discount with its deposit bank, we think it would be unreasonable to hold that it was in default as to the interest on its notes at one time because a critical examination or analysis of the account might show that at a later period its discounts with the bank were greater than the amount of the previous notes and the interest thereon. So, also, if one should obtain a loan on collateral where the value of the security far exceeded the amount of the loan, it would certainly be a fair business transaction to renew the note, with interest added, if the collaterals would still be reasonable security for the enhanced amount. We held that the form of the transaction was not controlling, but its substance. Ordinary course of business includes such loans as would ordinarily be made by an institution seeking to loan its funds that it might receive the interest thereon; not the taking of new obligations from insolvent debtors, or the carrying along of a bad debt in a new form. The evidence of the inception and subsequent history of the debts represented by the securities we have spoken of was sufficient to require at least the submission of the question to the jury, as one of fact, whether the notes had been taken in the due course of business, and whether the amounts of accrued interest included in the new notes were really loans of money, such as would have been made apart from any prior relation of the debtors to the bank, or whether they were taken merely to cover defaulted debts. We are therefore of the opinion that the direction of the trial court dismissing the complaint was erroneous. As the question will arise on another trial, we think that we should express our view concerning the competence of the evidence offered by the plaintiff as to the custom of extending discounts in other banks. We think the evidence was properly excluded, and that the character of these loans was to be determined by the jury, on proof of their history, and the circumstances under which they were made, and was not the subject of expert testimony as to the custom in other banking institutions. The judgment appealed from should be reversed, and a new trial granted; costs to abide the event. All concur. (34 App. Div. 103.) and 88 New York State Reporter. HALL v. ERNEST OCHS. (Supreme Court, Appellate Division, Second Department. November 3, 1898.) 1. LEASE-GUARANTY-DEATH OF PRINCIPAL-DISCHarge. The death of a principal does not release his guarantor for performance of the conditions of a lease. 2. SAME-FAILURE TO PRESENT CLAIM TO PRINCIPAL'S ESTATE. A guarantor of the payment of rent is not released by failure to present a claim therefor against the principal's estate. 8. SAME-CHANGES IN OBLIGATION. A guarantor of performance of a lease with a covenant against assignments and subletting is not discharged by an assignment whereby its liability was reduced, and to which guarantor's president assented. 4. CORPORATIONS-PRESIDENT'S AUTHORITY. A guaranty of payment of rent, made by the president of a corporation within the scope of his apparent authority, in the form of an individual undertaking, but intended as the act of the corporation, and so recognized by its directors, may be inferred to be the authorized act of the corporation. 5. SAME. The execution of a guaranty by a brewing corporation of payment of rent of a saloon by the lessee thereof is not beyond the authority of the president of the corporation. Appeal from trial term, Kings county. Action by James B. Hall against Ernest Ochs, a corporation. From a judgment for plaintiff, and an order denying a new trial, defendant appeals. Affirmed. Argued before GOODRICH, P. J., and CULLEN, BARTLETT, HATCH, and WOODWARD, JJ. Charles L. Pashley, for appellant. WOODWARD, J. The plaintiff herein is the owner of certain premises used for a saloon, on Atlantic avenue, in the borough of Brooklyn, and the defendant is a domestic corporation engaged in the manufacture and sale of malt liquors, its corporate name being identical with that of its president. In March, 1895, the plaintiff executed a lease in writing, whereby he demised unto one Patrick Casey the premises above mentioned, for a term of five years, beginning May 1, 1895, at an annual rental of $2,160 for the first two years and $2,400 for the last three years of said term, payable in equal monthly payments. The lease contained a covenant against assignment and underletting, without the consent of the lessor, and attached to it was the written guaranty, reading, in part, as follows: "In consideration of the letting of the premises, * * I, Ernest Ochs, of the city of Brooklyn, do hereby covenant and agree to and with the party of the first part, above named, and his legal representatives, that, if default shall at any time be made by the said Patrick Casey in the payment of the rent and performance of the covenants above contained on his part to be paid and performed, that I will well and truly pay the said rent, or any arrears thereof that may remain due unto the said party of the first part, and also all damages that may arise in consequence of the nonperformance of said covenants, or either of them, without requiring notice of any such de fault from the said party of the first part. Witness my hand and seal, this eighth day of April, in the year of our Lord one thousand eight hundred and ninety-five. Ernest Ochs. [Seal.] "Witness: John Steil." The seal was a wafer, and not the corporate seal of the defendant. The lease was twice assigned, notwithstanding the covenant against assignment,-First, two days after its execution, by "Patrick Casey to Ernest Ochs, individually"; and, second, on November 13, 1896, by Ernest Ochs, individually, to H. B. Scharmann & Sons. Patrick Casey occupied the premises and paid the rent until his death, in January, 1897. Then his son took possession, and Scharmann & Sons, the assignee, paid for him the rent stipulated in the lease up to June 1, 1897, when one Philip J. Reilly took possession under arrangement with Scharmann & Sons, and paid the rent for June and July to the plaintiff. After July the premises became vacant. Default was made in payment of the rent for August and September, and the present action was brought upon the above guaranty to recover the rent due for the said months. At the trial it was admitted by the defendant that its president, in signing the guaranty, intended to bind the corporation; and that this was the understanding of the parties, notwithstanding the individual character of the instrument, is clear. The jury found that the president of the defendant was authorized to sign the guaranty, and that there had been no release or surrender of the lease. They rendered a verdict for the plaintiff for the full amount of two months' rent, and from the judgment entered thereon, and from an order denying a motion for a new trial, the defendant appeals. The appellant's first point is clearly untenable, and the cases cited by counsel furnish no support to his novel proposition that the surety was released by the death of the principal. This court, in Holthausen v. Kells, 18 App. Div. 80, 45 N. Y. Supp. 471, Mr. Justice Willard Bartlett delivering the opinion, held that in the case of a guaranty of a lease the consideration was given once for all, and that the guaranty did not cease upon the death of the guarantor. This case was affirmed, on the opinion below, by the court of appeals (154 N. Y. 776, 49 N. E. 1098), and the reasoning of it applies to the case at bar. Nor does a neglect to present the claim against the estate of the deceased principal release the surety. Sibley v. McAllaster, 8 N. H. 389; Villars v. Palmer, 67 Ill. 204. The second point advanced by the appellant is that plaintiff's assent to the changes in occupation discharged the guarantor. As such assent must be considered to have been mutual, and as it resulted in a reduction of the guarantor's alleged liability by just so many months' rent as the new parties paid, it seems that the point is not well taken. The jury were justified in finding that there was no release. There was no surrender in writing, and none by operation of law. Even though third persons entered and paid rent to the landlord after the original lessee quit the premises, the original lease remained in force. Schieffelin v. Carpenter, 15 Wend. 400. With regard to the violation of the covenant against subletting, it is sufficient to say that the defendant, through its president, consented to and 88 New York State Reporter. such subletting, and was clearly benefited thereby. No ratification of the guaranty was needed if the latter was valid ab initio, and defendant consented to the changes. The appellant's counsel further contends that the execution of the guaranty was not authorized, and that the agency was not properly proved. But the jury have found that the defendant's president acted within the scope of his apparent authority, and it is settled doctrine in America that the appointment of an agent may be inferred and implied from the adoption or recognition of his acts by the trustees and directors, or by the corporation. Bank v. Dandridge, 12 Wheat. 64; Danforth v. Turnpike Road, 12 Johns. 227. In the former case, Mr. Justice Story, at page 70, said: "If officers of the corporation openly exercise a power which presupposes a delegated authority for the purpose, and other corporate acts show that the corporation must have contemplated the legal existence of such authority, the acts of such officers will be deemed rightful, and the delegated authority will be presumed." In fact, the largest class of cases of agency is that which relates to trade affairs, where the agency is proved by inference, from the habit and course of dealing between the parties. Juries have fre quently been advised to infer the grant of authority from the course of conduct and dealing adopted by the principal. 2 Greenl. Ev. (15th Ed.) § 65. That a similar contract was not ultra vires was decided by this court in Holm v. Brewing Co., 21 App. Div. 204, 47 N. Y. Supp. 518. To the same effect is Koehler & Co. v. Reinheimer, 26 App. Div. 1, 49 N. Y. Supp. 755. The judgment should be affirmed. Judgment and order affirmed, with costs. All concur. (24 Misc. Rep. 598.) WILSON et al. v. TOMPKINS et al. September, 1898.) (Supreme Court, Special Term, Orange County. 1. RES JUDICATA. A judgment, in an action by insured, that the policy is void because of a mortgage executed by him on the property covered by it, contrary to the terms of the policy, is conclusive on the mortgagee. 2. ORDER-CONSTRUCTION. A policy was void, as to part of the goods insured, because of a mortgage thereon contrary to its terms. After a loss, insured gave mortgagee an order directing insurer to pay him the insurance on the property burned, as his mortgage interest might appear. Held, that the order did not cover moneys due for the loss of the unincumbered property. Action by George T. Wilson and others against Enoch Tompkins and others on a fire policy. Judgment for defendants. Wilkinson & Cossum, for plaintiffs. Walter Farrington, for defendant Enoch Tompkins. A. M. & G. Card, for defendant William H. Tompkins. Jones, Townsend & Rugg, for defendant fire insurance company. HIRSCHBERG, J. The Hartford Fire Insurance Company insured the horses, oxen, cows, young cattle, and sheep belonging to the defendant Enoch Tompkins against loss by fire, in the sum of $2,400. The policy was in the standard form, containing the provision that the policy should be void if the subject of insurance should be or become incumbered by chattel mortgage. On July 18, 1896, Tompkins, being indebted to the plaintiffs in the sum of $1,263.56, executed a chattel mortgage to them upon all his cows, to secure that indebtedness. On November 24, 1896, Tompkins' barn was destroyed by fire, and 36 cows and other stock were burned. Three days after the fire, Tompkins gave the plaintiffs a written order on the defendant insurance company, as follows: "Amenia, N. Y., Nov. 27, 1896. "Hartford Fire Insurance Co.-Gents: Please pay to Wilson & Eaton, of Amenia, N. Y., as their mortgage interest may appear, the insurance on cows burned on the night of November 24, 1896, in my barn; they (said Wilson & Eaton) having a chattel mortgage on said cows. Enoch Tompkins." This order was delivered to and retained by the insurance company. The insurance company, however, denied its liability on the policy; and an action was brought by Tompkins to enforce it, which resulted in a judgment in his favor, July 27, 1897, for $2,393.70, being the entire value of the property destroyed, and the costs. On appeal the insurance company succeeded in reducing this judgment to $883. See Tompkins v. Insurance Co., 22 App. Div. 380, 49 N. Y. Supp. 184. On the trial the court held that the forfeiture clause in the policy had been waived by the company. The appellate court held that no waiver was proven, and that the policy was accordingly void as to all mortgaged property, but that, being a floating policy, it was good as to property acquired after the giving of the mortgage, and therefore not covered by its terms. This the court held included 11 cows acquired by the defendant Enoch Tompkins between the execution of the mortgage and the fire. On this trial the defendant Enoch Tompkins testified that among the 36 cows burned were 11 which he had acquired after the mortgage, viz. 8 from Smith, 2 from Barton, and 1 from Laughlin. The cows were valued at $50 each. The plaintiffs claim $550 of the insurance money, by virtue of the order or equitable assignment above; and the defendant William H. Tompkins claims. all the insurance money, by virtue of an assignment of the policy and judgment dated August 1, 1897. I think the decision of the appellate division is binding upon and concludes the plaintiffs,—if not by way of estoppel, at least by way of authority. The principle of the decision determines the fact that, of the 36 cows burned, but 11 were insured at the time of the fire, and that these 11 were only insured because they were not included in and covered by the plaintiffs' mortgage. What, then, is carried by the written order? It directs the insurance company to pay the plaintiffs, as their mortgage interest may appear, the insurance on cows burned; they having a chattel mortgage on said cows. It is not an absolute and unqualified order to pay the insurance on cows burned, but on cows burned, mortgaged and insured. At the time both parties doubtless believed the entire loss would be recovered from the insurance company, and that the amount recovered for the cows burned would largely exceed the plaintiffs' claim. The order |