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"although action may have been maintained upon a promise implied by law, yet an action founded on tort was the more proper form of action, and the plaintiff so declared." Fisher v. Supply Co. (N. C.) 38 S. E. 914. This judgment is entitled to full faith and credit. As between the corporation and the plaintiff, it would be conclusive. It is presented in a cause in which mortgagees are parties; and the question is not whether the judgment be valid, but whether it is a judgment of such a character as it will be given priority to the claim of the mortgagees, who were not parties to the suit in which it was obtained. "When such a judgment is presented to the court for affirmative action, while it cannot go behind the judgment for the purpose of examining into the validity of the claim, it is not precluded from ascertaining whether the claim is really one of such a nature that the court is authorized to enforce it." Wisconsin v. Pelican Ins. Co., 127 U. S. 263, 8 Sup. Ct. 1370, 32 L. Ed. 239. In Hassall v. Wilcox, 130 U. S. 503, 9 Sup. Ct. 590, 32 L. Ed. 1001, in a proceeding marshaling claims against an insolvent estate, it was held that the trustees of a mortgage had a right to contest the priority of lien of a judgment rendered in a state court, and compel the intervener to prove affirmatively the existence and priority of his lien. The supreme court of North Carolina, in Fisher v. Supply Co., supra, pressed for a decisión upon this point whether that was such a judgment as was protected under section 1255 of the Code, declined to answer the question. This section of the Code gives priority to the judgments for torts committed by such incorporation, its agents or employés, whereby any person is killed, or any person or property injured. In the case at bar property was injured because of the alleged negligence of the Greensboro Water Supply Company. Would an action for tort lie? The Greensboro Water Supply Company had assumed the obligation of supplying the city and its inhabitants with water for domestic and public purposes, and also for the purpose of extinguishing fires. The supreme court of North Carolina had held in the case of Gorrell v. Supply Co., 124 N. C. 328, 32 S. E. 720, 46 L. R. A. 513, 70 Am. St. Rep. 598, that an action would lie against the corporation as well on the part of the city council as on that of any citizen of the city. The judgments before us establish the fact that such a supply of water for the purposes of fire was not furnished. They also establish the fact that the failure to do so was because of the negligence of the defendants. Is such negligence the foundation of an action in tort? The grand division of causes of action into such as arise ex contractu and such as arise ex delicto-contract or tort-underlies the system of the common law. Under the old practice the forms of action must conform to this division. A contract, as a contract, could not be enforced in an action in form ex delicto. Nor could a tort be relieved in an action in form ex contractu. And although the Code has abolished all distinction between forms of action, still the distinction between causes of action remains. In Code pleading, the action proceeds upon the statement of facts of the case, and on these facts the court draws the conclusion whether the cause of action is founded on the contract or on a tort. Young v. Telegraph Co., 107 N. C. 384,
11 S. E. 1044, 9 L. R. A. 669, 22 Am. St. Rep. 883. The Greensboro Water Supply Company, as has been seen, was under the obligation of a contract to furnish a full supply of water to the city and its inhabitants for sundry purposes, including that of fire. And under this obligation it was its duty to do so whenever needed. Besides this, indeed, to facilitate the performance of this obligation and in consideration of this obligation,-it was clothed with valuable franchises, under which it used the streets of the city in laying its mains. Under its obligations, it was to furnish the city and its citizens with one of the necessaries of life, and was bound to furnish all that desired it, who paid the price imposed. It served the public, and to this extent was a quasi public corporation, bound to the discharge of a public duty. Griffin v. Water Co., 122 N. C. 206, 30 S. E. 319, 41 L. R. A. 240; Coy v. Gas Co. (Ind. Sup.) 36 L. R. A. 535 (s. c. 46 N. E. 17). So it was the duty of the water company to furnish the water for fire, a duty arising out of an express contract, and out of the franchises granted to it for the purposes of public utility and need. It did not fulfill this duty. Chitty, in discussing actions on the case (a form of action ex delicto), and of the injuries for which relief could be had under this form of action, says:
"These injuries may be either by nonfeasance, or the omission of an act which the defendant ought to perform; or by misfeasance, being the improper performance of an act which might lawfully be done; or by malfeasance, the doing what the defendant ought not to do; and these respective torts are commonly the performance or omission of some act contrary to the general obligations of the law, or the particular rights and duties of the parties, or of some express or implied contract between them." Chit. Pl. (11th Am. Ed.) 133.
And in the same volume, in stating the requirements of the declaration, in actions for torts, Mr. Chitty says:
"When the plaintiff's right consists in an obligation on the defendant to observe some particular duty, the declaration must state the nature of that duty, which, we have seen, may be founded either on a contract between the parties, or on the obligation of law arising out of the defendant's participation, character, or situation." 1 Chit. Pl. 383.
Jaggard, in his work on Torts, says:
"While normally a breach of a contract gives rise to a cause of action ex contractu, a contract may impose a duty on the part of the defendant as party to it, for the violation of which the plaintiff may recover ex contractu or ex delicto, at his option." 2 Jag. Torts, 897.
And Add. Torts, § 28, holds the same doctrine.
In the case of Fisher v. Supply Co. (one of the judgments proved here) the supreme court of North Carolina held that the complaint stated facts justifying the entry of the judgment "for tortious injury and damage done him by the negligence of the defendant"; that, from the statements of the complaint, "an action founded on tort was the more proper form of action." Fisher v. Supply Co., 128 N. C. 375, 38 S. E. 914. As between the corporation and these judgment creditors, this decision is conclusive. It did not bind the mortgage creditors; nor could the judgments have been enforced against the property of the corporation, as that was in the hands of this court. We have, therefore, examined the record of the case
of Fisher against the water company, and, aided by the arguments of counsel, have inquired into the correctness of the decision therein. rendered. The only question is, will an action, as for a tort, lie against a defendant who has negligently performed an express contract? We have seen that, in entering into this contract, the water company assumed a duty to the public. Mr. Chitty, quoted, supra, says that, under circumstances like these, the plaintiff may proceed either ex contractu or ex delicto. In other words, the negligence in not performing a contract of this character, whereby property has been injured, is a tort, as well as a breach of contract, and that on such a tort action will lie. The judgments in question then are judgments in tort, and are protected by section 1255.
Let a decree be entered giving priority to the lien of these judgments over the lien of the mortgages.
COMACHO et al. v. UNITED STATES.
(Circuit Court, S. D. New York. February 3, 1902.)
CUSTOMS DUTIES-APPRAISAL-FOREIGN MARKET PRICE-METHOD OF DETER
Act June 10, 1890 (26 Stat. 136), makes it the duty of the appraisers of Imports, "by all the reasonable ways and means in their power, to asTcertain, estimate and appraise the actual market value and wholesale ru price of the merchandise at the time of exportation to the United States, in the principal markets of the country whence the same has been imported." Held, that the board of general appraisers, in deducting from the price of merchandise when received in the United States all expenses, in order to determine the wholesale price after exportation in the foreign market, proceeded properly, it appearing that they were unable to find: an open market price.
Appeal from a Decision of the Board of General Appraisers.
Henry C. Platt, Asst. U. S. Atty.
TOWNSEND, District Judge. The material facts are as follows: The importers entered the hides at $5; the local appraiser advanced the value to $6; the appraisal of the general appraiser, affirmed by the board of general appraisers, was $7.50 for each hide. More than a year after the decision of the board of general appraisers the appellants wrote a letter to one of the members of said board, asking him whether the appraising officers in determining the dutiable value of said hides took into consideration the wholesale price at which such or similar merchandise was sold or offered for sale in the United States of America, pursuant to section II of the customs administrative act (26 Stat. 136), as amended by the act of July 24, 1897 (30 Stat. 212). In reply Mr. Sharretts wrote a letter in which he stated that the board did take into consideration, as one of the reasonable ways and means of estimating the market value of said hides, the price at which they were sold in the United States, and gave the reason
therefor. In the report of the board to the collector upon the appraisal of the merchandise they stated: We "do hereby certify that in our opinion the actual market value or wholesale price of the said goods, at the time of exportation to the United States, in the principal markets of the country whence imported, was, and we do hereby appraise the same, as follows: [Then follows a description of the goods in suit.]" Counsel for the importer contends that the letter is legal evidence of the doings of the board of appraisers; that it shows they acted illegally in proceeding under section II of the customs administrative act, which only applies to goods wholly or partly manufactured; and that, therefore, the entry must be liquidated upon the consular invoice.
Even if this letter could be considered as properly in evidence and competent to show the facts upon which the board made this decision, it fails to show any illegal action on their part. Section 10 of the act of June 10, 1890 (26 Stat. 136), made it the duty of the appraiser, "by all reasonable ways and means in their power, to ascertain, estimate and appraise the actual market value and wholesale price of the merchandise at the time of exportation to the United States, in the principal markets of the country whence the same has been imported." It appears from Mr. Sharretts' letter that they were unable to find an open market price, and that they estimated the price of the hides when received in this country after deducting all expenses, for the purpose of determining the wholesale price after exportation in the markets of the country from whence they were imported. It does not appear that this was an unreasonable act on their part. There is no evidence to show that the price was an improper one, or that they acted outside the line of their duty in such appraisement.
The decision of the board of appraisers is affirmed.
YOUNG v. UPSON.
(Circuit Court, S. D. New York. May 8, 1902.)
1. BANKRUPTCY-PREFERENCE-SECURITY FOR PRESENT LOAN.
The transfer by a merchant of notes and accounts as collateral to secure the repayment of a present loan does not create a preference, within the scope of the bankrupt act.1
2 SAME-PRESUMPTION OF FRAUD-CHOSES IN ACTION-GOODS AND CHATTELS— MODE OF TRANSFER.
Choses in action are not "goods and chattels," within the contemplation of Laws N. Y. 1897, c. 417, art. 2, § 25, providing that every assignment of goods and chattels by way of security, not constituting or intended to operate as a mortgage, unless accompanied by an immediate delivery fol lowed by actual and continued change of possession, is presumed to be fraudulent and void as against the creditors of the vendor; and a transfer of choses in action on the books of the assignor, to secure a present loan, is not presumed to be fraudulent under such act.
8. COLLATERAL SECURITY-BILLS RECEIVABLE-MODE OF TRANSFER.
Where, on the transfer of bills receivable as security for a loan, the borrower opened a separate account of such bills on his books, and as
1 See Bankruptcy, vol. 6, Cent. Dig. § 259 [b, c, d, p, ql.w