author: Davies, J. Hogeboom, J.

text:
    William Halliday and W. P. Haskins, Executors, &c., v. Erastus P. Hart and William Beach.
    The performance of an unqualified legal obligation by the payment of part of the amount due upon a promissory note, is not a valid consideration for the extension of payment of the remainder, so as to discharge sureties.
    H. being the holder of two promissory notes made by W.—one for $1,000 and the other for $500, both of which were overdue—W. proposed to pay $100 on the $1,000 note. H. offered to receive the payment on the $500 note, and in consideration thereof to extend the time for the payment of the other note. To this proposition W. declined to accede, but finally, at the instance of H., he agreed to apply $330 upon the $500 note, and $70 upon the $1,000 note. H. agreed, in consideration thereof, to extend the time for the payment of the $1,000 note, and thereupon the money was paid and applied as H. proposed; in consideration of which, he executed a written agreement to extend the time for the payment of the $1,000 note, until the first day of October then next. Held that in making these payments W. only discharged the legal obligations already resting upon him; and that neither the fact of such payments, nor the appropriation thereof, upon the two securities, furnished any consideration for the agreement to give time for the payment of the $1,000 note.

      Held, also, that the referee properly excluded parol evidence, offered for the purpose of showing that the $70 was paid as interest on the $1,000 note; such testimony tending to contradict, vary and alter 'the written agreement.

      Held, further, that it was not competent for indorsers, not parties to the written contract between W. and H., to contradict, vary or alter the consideration expressed therein, by parol evidence.
    This action was commenced by the plaintiff’s testator, to recover of the defendants the amount of a certain promissory note, made by the defendant Wait. It was dated on the 21st of March, 1855, and given for the sum of $1,000, payable one year from date, with interest thereon semi-annually, to the order of the defendant Sayre, at the Elmira Bank, and endorsed by him, and by the defendants Howe, Hunt and Beach. The referee before whom the action was tried found, as matter of fact, that the plaintiff also held another note made by said Wait, for $500, dated April 1st, 1855, payable one year from date, and endorsed by James Sayre; which last mentioned note was given on a contract for the sale, by the plaintiff to said Wait, of a certain lot of land. That after the note mentioned in the complaint became due, the defendant Howe purchased from the defendant Sayre a note for $1,100, made by Sayre, dated April 24, 1856, payable three months after date, and endorsed by said B. S. Sayre, and offered the same to the plaintiff’s testator in exchange for the note mentioned in the complaint, that being the object for which it was given. That the plaintiff’s testator declined to make the exchange, but consented to the request of Howe to hold said note for $1,Í00, as collateral security. That, on the 16th day of June, 1856, the defendant Wait paid to the plaintiff the sum of $400, and, before paying the same, expressed a wish to have it applied on the note mentioned in the complaint, and the plaintiff expressed a wish to apply it on the aforesaid note for $500, except the sum of $35, to pay the back interest on the note of $1,000 (the interest due theron, on the 21st of September, 1855, having been paid). That it was finally agreed between them that $70 should be applied on the said note mentioned in the complaint, and the residue, $330, on the note for $500. That Wait thereupon endorsed the said respective amounts upon the notes, and drew up a writing which the plaintiff’s testator signed and delivered to him, and which was as follows:
    “ In consideration of seventy dollars to me in hand paid, and endorsed on a note of one thousand dollars, made by B. Wait and endorsed by James Sayre, O. B. Howe, E. P. Hart, and William Beach, dated March 21, 1855, and due one year from date, value received, and interest semiannually; also, for the payment of three hundred and thirty dollars, and endorsed on a note by B. Wait for five hundred dollars, same date as above, and due on the first day of April, 1856, with interest annually. I do hereby agree to and with the said B. Wait, to extend the time of payment of the said one thousand dollar note until the first day of October now next ensuing, and give possession of the house and lot on Second street, said money above-mentioned received of B. Wait; also, to take no advantage of, or sue a collateral note in my hands given by James Sayre and endorsed by B. S. Sayre.
    “ (Signed) Selah Halliday.
    “Elmira, June 16, 1856.”
    He also found that Wait and James Sayre were both insolvent when the said note for §1,000 became due, and when the above agreement was made; that the sum of $35, being for the interest due September 21, 1855, had been paid, and that the balance due thereon, with interest and notary’s fees, was $1,077.85. And the referee found, as matter of law, that the moneys so paid by Wait to Halliday. were such as were due to him, and such as he had a legal right to have, and such as said Wait was legally bound to pay; that such payment constituted no good or valuable consideration for the agreement, and that consequently said agreement was void, and did not suspend the right of Halliday to prosecute said note, and was no defense to this action. .The referee' further found, that inasmuch as it appeared that the parties to the agreement had fully discussed and considered the subject of the consideration thereof, and how the $70 paid on the note in suit should be applied, and fully and carefully stated such consideration in said agreement, parol evidence as to what one or the other had said upon that subject before the writing was executed was not admissible for the purpose of varying or contradicting the same, or changing its legal effect. Judgment was entered for the plaintiff upon these reports, and the same was affirmed at the general term. Halliday died, and his executors were substituted in his place as plaintiffs, and the defendants Hart and Beach appealed to this court.

      John H. Reynolds, for the appellants.
    .1. There was evidence given by the defendants, tending to show that Wait, the maker of the notes, when he made the payment of $400, desired to have the whole amount applied upon the note in suit, but finally consented that $330 might be applied upon the $500 note, and $70 on the note in suit, in consideration of Halliday’s agreeing to extend the time of paying of the note in suit, and this evidence the referee rejected in deciding the cause, and this ruling it is submitted, was erroneous.
    1. Both notes being over due, Wait had the undoubted legal right to make the payment upon which note he pleased, and the plaintiff could not control it. (Allen v. Culver, 3 Denio, 284, 300.)
    2. It was not only his right but his duty to make the payment on the large note, and to that extent relieve his endorsers! (Pattison v. Hull, 9 Cowen, 747; Dows v. Morewood, 10 Barb. 183, 189; Allen v. Culver, 3 Denio, 284, 300; Bridenbecker v. Lowell, 32 Barb. 11, 22, 23, 24.)
    3. And his consenting to waive this right at the instance of the plaintiff, on the agreement of the ptaintiff to extend the time of payment of the $1,000 note was a good consideration for the agreement to extend the time. ■ It was a consideration beneficial to the plaintiff, as the endorsement was made, under this arrangement, upon the note for the payment of which he had the least security.
    II. Parol evidence was admissible to show that the agreement to extend the time was made upon a good consideration, and what the consideration was. (Frink v. Green, 5 Barb. 455, 58, 59; McCrea v. Purmort, 16 Wend. 460, 473; Goodell v. Pierce, 2 Hill, 659, 661; Murray v. Smith, 1 Duer, 412, 428.)
    1. The evidence offered did not contradict the written agreement, or tend to contradict any fact it recited. It tended to supply the consideration which the written agreement wholly omitted to state, and thus to support the contract.
    2. If the court below was right in holding that the written agreement did not on its face, state a consideration, then it certainly follows that the evidence was admissible, to show that there was a good consideration for a contract which expresses none. (Goodell v. Pierce, 2 Hill, 659, 651.)
    HI. The agreement to extend the term of payment being valid, discharged the endorsers. (Fellows v. Prentiss, 3 Denio, 512.).

      H. Boardman Smith, for the respondents.
    I. By the written agreement the parties applied the $70 upon the principal of the note in question, and hot to the payment of interest in advance. (Hunter v. Osterhoudt, 11 Barb. 33, and numerous authorities cited.) The agreement to extend was therefore nudum pactum. (Gibson v. Renne, 19 Wend. 389; Miller v. Holbrook, 1 Wend. 317; Farrington v. Bullard, 40 Barb. 512; Kellogg v. Olmsted, 28 Barb. 96; Pabodie v. King, 12 J. R. 426; Schroepel v. Shaw, 5 Barb. 580; Converse v. Kellogg, 7 Barb. 590; Keeler v. Bartine, 12 Wend. 110.) And the maker waived no right to apply this payment wholly on the larger note, for- the reason that he had no such right to waive. He could not compel the plaintiff to receive part payment of either note. But what if he could, the application of the payment upon the smaller note (both notes being past due) was only a payment he was theretofore under legal obligation to make, and the making it upon one note instead of the other was no harm to the maker or benefit to the plaintiff, which the law will recognize as a valuable consideration. (Tryon v. Jennings, 12 Ab. 33, and authorities cited; 22 How. 421; 12 Wend. 110.) It was Wait’s legal right to apply this same money to the payment of some other creditor. Will it be claimed that a waiver of that right and payment to plaintiff would constitute, a valuable consideration for an agreement to extend? (See 1 Parson’s Contracts, 363, and cases cited—nss; 2 Parson’s Contracts, 130, 131, and note B; 13 Ab. 101.)
    H. If, then, the written agreement was nudum- pactum
      and void, because it applied the payment upon the principal instead of making it a payment of interest in advance, it was not competent to make a valid instrument out of a void one, by parol proof, which varied and contradicted the written instrument. It was not necessary that .the agreement should be executed by both parties; its execution by the plaintiff, and acceptance by the maker, was an execution by him also. (16 Wend. 466, 465.) It is important to observe that the referee finds that the parties to the agreement had fully discussed and considered the subject of such consideration, and how the $70 paid on the note in suit should be applied, and had fully and carefully stated such consideration in the agreement, &c. It can not be said that the parol evidence was competent, because the contract does not specify in terms that the payment should be applied upon the principal, for no rule of law is better settled than that parol evidence is equally as inadmissible to vary the legal effect of a writing as to vary its express terms. (2 Seld. 33; 9 Cow. 747; 5 Wend. 187; 2 Den. 285; 11 Barb. 592; 8 Johns. 189; 14 Wend. 26; 27 Barb. 489; Cowen & Hill's Motes, part 1, 384.)
    HI. Mo stand could be made by the defendant's counsel upon this point but for the specious pretense that the evidence was competent to vary the consideration clause of the agreement. The authority principally relied on is the leading case of McCrea v. Purmort (16 Wend. 460), in the court of errors. Though the reporter's note of that case reads “ the consideration clause of a deed is open to explanation by parol proof,” the able and exhaustive opinion-of Judge Coweh, marks very clearly the broad distinction between that case and the case at bar. Within that authority this instrument, if valid, created a right (i. e., the right of the maker to the extension), and the expressed, consideration “ gives effect to the operative words of the conveyance.” How then was the parol evidence any more competent than if the stipulations had been inverted, and the instrument had read “in consideration of Halliday's agreement to extend time of payment to such a day, I, Wait, agree to pay $70 upon the principal of this note.” Could Wait tender the money before the day named, and disprove the agreement to extend, because it stands in the writing in the position of a consideration clause? The acknowledgment in a policy of insurance and receipt of the premium cannot be contradicted by parol, because such evidence affects the operative words of the • instrument. (25 Barb. 192.) So Denio, J., in 3 Kern. 517, holds, citing authorities, that the consideration clause of a deed of bargain and sale can not be contradicted by parol evidence which will affect the operative words of the conveyance. But an adequate consideration is no more necessary to a deed of bargain and sale, than to an agreement, to extend time of payment. And while an ordinary receipt, which is mere evidence of a fact, may be contradicted by parol proof, not so a release, which extinguishes a right, and therefore contains the operative words of a contract. (4 Seld. 402; 5 Duer, 294, Oakley, Ch. J.) A receipt of wheat in store is not subject to explanation by parol. (4 Hill, 104.) A receipt of a note on account, without recourse, is not explainable by parol. (5 Sand. 568.) The consideration, clause cannot be varied by parol, for the purpose of altering the effect of the deed. (Morse v. Shattuck, 4 N. H. 229; Gridley v. Grubbs, 1 J. J. Marsh, 388-9-90.) See the authorities digested, and the law stated to be that “ the consideration clause cannot be varied by parol proof 1 to change the legal effect of the instrument.” (Cowen & Hill’s Notes, 216, 217, 1,442.) Though otherwise, where the operative words are not sought to be changed. (Id. 1,441 and authorities.) A receipt in the nature of a contract cannot be varied, by parol. (Cow. & Hill's Notes, 1,439.) “ For the purpose of maintaining the character of the deed, as imported by its operative words, the consideration clause is conclusive.” (Cow. & Hill’s Notes, 1,451, and authorities cited; 16 Wend. 474, Cowen, J.) In the case at bar the written agreement was not only drawn up by Wait, the maker, but the endorsement was made on the note by him, and shows, just what the writing shows, that the talk of applying the $70 as an advance payment of interest, was abandoned by the parties. The parol evidence offered would be incompetent as contradicting the endorsement, let alone the written agreement. (14 Wend. 116, approved; 4 Seld. 406; Hard v. Bissell, 1 Root, 260.)
    IV. But concede that the endorsement could be explained by parol, so far as to disprove the payment of the $70, can it be seriously claimed that parol proof is competent to engraft a special contract upon it as to the particular application to be made of the moneys, when such application is inconsistent with, and directly the opposite of the legal effect of the general endorsement as rhade, and make the endorsement (by reference) a part of the written agreement, even it would be as completely protected from contradiction or explanation by parol proof as any provision of the contract. And by the inexorable rule of law the evidence must be excluded, when, as here, it is inconsistent with the writing. (6 Barb. 458, and authorities cited; Cowen & Hill’s Notes, 1452, 1460, and authorities cited.) Or when it affects the operative words of the instrument. (See authorities before cited.) And the rule rigidly excludes “ any other evidence of the language used in making the contract than that which is furnished by the instrument itself. It excludes the colloquium, or oral negotiation, leading to the contract which the parties consummate by the writing.” (Comstock, J., 3 Kern. 573; 1 Green. Ev. 316, 321, 277, 282, 297; Cow. & Hill’s Notes, 1471, 1473; 1 Mete. [Ky.] 285; 16 W. 474.) In the case at bar we may concede the payment of the $70 might have been contradicted. That was the fact. But the application which the parties contracted should be made of the money was not the fact, but the agreement, the ‘1 colloquium.” So in 7 B. Monroe, 73, parol proof was excluded of the application which the parties had agreed should be made of the moneys. It cannot be replied by appellant’s counsel that the case is subject to any other rule, because he offers the evidence to sustain the instrument rather than destroy it. Parol evidence is no more competent to make a void instrument valid than to make a valid instrument void. In most of the reported cases the evidence was offered to impeach a valid instrument. Hence the language of many cases is, “ parol evidence is incompetent to defeat a conveyance,” or a “ valid-instrument,” &e. . The rule, however, is the same when the evidence is offered to support, as when offered to defeat the written instrument. In 4 Cow. 427, parol evidence was offered to vary the consideration,clause, to support a void deed. The evidence was held equally as incompetent as if the evidence had been offered to defeat a valid conveyance. (3 Kern. 517, Denio, J.; Watts v. Grove, 2 Scho. & Lef. 492, 501.)
    Y. And parol evidence is no more competent for these defendants than for' the maner.. The very question here is whether Wait, the maker, had a defense which he could successfully interpose as against the holder; and the question of parol evidence is tó be determined in the same way as if the action were between the holder and the maker. Besides, parol evidence is incompetent as between the parties and their privies. These defendants are privies of the maker, by well settled rules. (18 N. Y. 463; 15 N. Y. 505; 18 B. 1, 405; Cow. & Hill’s Notes, 1442, and authorities cited.)
    YI. Nor can the defendants say that the parol evidence was admissible to show that, notwithstanding the writing, the maker could have had equitable relief, by reforming the contract. He would have had no status in a court of equity, except upon allegation of fraud, accident or mistake. But
    1. The parol evidence was not offered for any such purpose. No such pretense was made or thought of upon the trial. The right to the evidence was insisted on only as a common law right. If inadmissible at law, but admissible to show an equitable right to reform the writing, the defendants should have put themselves unequivocally upon that ground at the trial or the rejection of the evidence is not error. (24 Barb. 615; 5 Sand. 55; 3 Kern. 583, Denio, J.)
    2. The defendants have not set up any counter-claim or equitable defense in their answer. Before they could have been entitled to the parol proof they must have averred everything which would have been essential in a bill in equity to reform a written agreement. (3 Com. 19, 38, Bronson, J.; Van Sant. PI. 472; 1 Barb. Ch. Pr. 137; 22 Barb. 154; 17 Barb. '530.) They must, in a proper manner, give the plaintiff his day in court, when he is called upon (as he was not here) for what he has to say against the granting of such relief. (15 Barb. 365-95.) And until that is done, certainly the' referee’s rejection of a defense not pleaded would not be subject to review.
    3. The proposed evidence would not have established any claim to such relief. The negotiation in reference to payment of interest in advance was abandoned. The endorsement shows it, and the written agreement also, both drawn by the maker of the note. (3 Com. 19, 37; 29 Barb. 597;' 10 id. 9; 4 id. 279; 8 id. 537; 9 id. 532.)
    4. But concede that this proof offered would have shown a prima facie right to relief, it is manifest it might do very great violence to the plaintiff’s rights to admit it, for when the defendants seek this relief in the proper formal way, the plaintiff may show, for example, 1st. That he never signed the writing. He was not called upon to dispute it, as the case stood; or, 2d. That the sureties assented to the extension. 3d. That he reserved his right of action against the endorsers. (1 Seld. 172.) 4th. That the agreement to extend was procured by connivance with the sureties; or, 5th. Made under a mistake or fraud, as to Wait’s solvency, for example; or, 6th. That the endorsers were indemnified; or, 7th. That they were not in fact sureties; or, 8th. That the $70 was received in ignorance of the law, connected with surprise or misplaced confidence. (Willard’s Equity, 65-66.) Or, 9th. Under a mutual mistake as to the law. (6 Paige, 189, &c.) Or, 10th. Plaintiff did not know the .defendants were sureties. ■ (5 Barb, 378.) Or very many possible reasons, which would in equity prevent the reformation of this contract.
    5. But the proof affirmatively shows that Wait and the first endorser were then insolvent. Would a court of equity entertain a bill to reform a contract made under a mistake, of law, brought by a bankrupt principal for the only purpose of letting out his sureties, under circumstances such as these? And if that be no more than doubtful, will they let in this evidence to accomplish the same thing by indirection? (13 Wend. 377; 8 id. 194.)
    6. Or if the court would entertain such a bill, would it not be upon the primary condition of equitable relief, that the maker, or those for whom he would be acting in such a proceeding, should themselves “do equity” by paying this plaintiff his honest dues.
    7. But how can these appellants have any equity or interest in the question of the reformation of this contract. If they had paid the note and sued their principal, could he have defended against them, by proceeding to reform this contract. This is the only question. (1 Seld. 172; 12 Eng. L. & E. 162; 1 Parson’s Notes and Bills, 241, and authorities cited; 7 Hill, 250; 10 Paige, 11.) But the referee affirmatively finds that there was no mistake here. And it affirmatively appears that the defendants had security.
    VII. But grant that there was accident or mistake here, and of such a character as to entitle the defendants to equitable relief, they niust institute a direct proceeding for relief. (Davy v. Pendergrass, 5 B. & Ald. 187; Eng. Com. L. 7, p. 62; Abbott, Ch. J.; Bulteel v. Parroll, 8 Price, 467; 2 Am. Lea. Ca. 151.)
    VIII. But this written agreement was put in evidence by the defendants, without allegation of fraud or mistake; and having thus offered it themselves, they cannot be allowed to contradict it by parol. “A defendant, after he has introduced paper testimony, cannot contradict it by oral proof, when there is no allegation of fraud in the pleadings.” (22 111. 197.)
    IX. If the parol evidence was inadmissible, it is an end of argument, for the defendants must not only* establish a valuable consideration, but an agreement binding and operative in point of law. (Davy v. Pendergrass, 5 B. & Ald. 187; Bulteel v. Parroll, 8 Price, 467; 2 Am. Lea. Ca. 151, in 4th ed. p. 396; 6 Munford, 6; 7 Leigh, 501; 9 Yerger, 52; 3 Mason, 446-453; 7 Blackford, 240.) The extension must be by a valid common law agreement.
    X. Granting the evidence was competent, that the §70 was an advance payment of interest, it was still not a sufficient consideration to sustain the agreement. (Rayner v. Fussey, 4 Hurl. & Nor. 861; Harnsburger v. Kinney, 13 Gratt. [Va.] 511; 1 Shep. 202; 5 Wend. 501; 8 Pick. 458; 11 Wend. 319; 10 Pick. 129-1.) But both parties proyed upon the trial that the interest was not paid in advance.
    XI. But if the interest were paid in advance, and if that be a valuable consideration for this agreement, then the agreement is usurious and void. (Vilas v. Jones, 1 Com. 274.) Upon negotiable bank paper the law alloAvs interest to be taken in advance for the benefit of trade. This rule has never been extended further. (2 Cow. .678; 2 Kern. 223.) Could interest for five years be taken in advance or for a shorter time, except under the immunities the law extends over commercial paper? “ In a case simply between debtor and creditor, the debt being undisputed and due, and draAving interest, no valid agreement can be made by parol to postpone to a future day the payment of the debt. The debtor’s promising to pay interest will be no more than the law will compel him to do. If he agrees to pay more, the agreement Avill be void for usury.” (28 Barb. 96.) And an agreement for usurious consideration is no defense, though fully executed. (See "the authorities discussed; 10 Ind. 227.)
    XII. The point made, that the complaint states that no part of the principal had been paid, has no force, because

      ■1. It does not appear, from the papers, that the point was raised upon the trial, as it must have been, to be available here. (18 Barb. 522; 19 id. 665; 14 Abb. 75; 20 N. Y. 61; Johnson, J.) It was, at most, a case of variance, which, by section 169 of the code, is not material, unless it has misled, and that must be proved, otherwise it must be disregarded on the trial, and most certainly after judgment. (10 How. 315; 1 Kern. 368; 20 How. 465; .Code, sec. 170.)
    2. Per contra, it does appear affirmatively that it was not made. The application of the $70 was, in effect, the only point to which their proof was directed on the trial.
    3 But-, whether this allegation in the complaint was inserted by the pleader from inadvertence, or from a misconception by the-plaintiff of the legal effect of the agreement, of which the pleader was ignorant, it can have no .effect here. It certainly creates no record estoppel. The judgment is not against the record. No motion could be made in arrest by reason of any inconsistency between this judgment and the pleadings. Nothing can be claimed for it, then, except its asserted effect as evidence.
    4. It can have no effect as evidence, because it does not allege any interest was paid in advance, nor indeed at all, but that “ no part of the principal was paid.” Besides, it is only material allegations which are to be deemed admitted, and a material allegation is one which the plaintiff is bound to .prove to make out his case. (5 Sand. 54; .4 Sand. 668; 15 Barb.. 400.) This negative allegation was surplusage—no ..part of'plaintiff’s cause of action. And an. allegation anticipating or designed to “ head off” a possible defense (as here that some part of the principal had been paid), is not in place in the complaint, or to have effect as evidence if - put' there. ,(36 Barb. 628, Balcom, J.)
    . 5. But granting that it is a material allegation, and proper in the complaint, its alleged effect as evidence is utterly demolished by the proofs of both parties. The plaintiff disproved it (and without objection), by putting in evidence the endorsed note where the $70 is applied generally. The defendants disproved it by putting in evidence the writing, which shows the parties agreed to apply it upon the principal. Then the “ admitted fact” was not a fact, and was so found by the referee, and nothing in law can override the established truth short of a technical estoppel.
    6. But suppose this point were made upon the trial, it was the prerogative of the referee to amend the pleadings or to disregard the variance. Indeed, he is commanded to do so by the peremptory language of the code. (Sec. 170.) And at the most it was a matter in the discretion of the referee, and not subject to review upon appeal.
    XIII. But it affirmatively appears that the defendants had indemnity for their endorsement, by the note endorsed by B. S.- Sayer. And B. S. Sayer (as indeed the law presumes), was responsible. And B. S. Sayer was again indemnified. And having indemnity the defendants are not discharged by the agreement to extend. (12 Wend. 123.)
    XIV. The $1,100 note endorsed by B. S. Sayer, was taken by plaintiff to hold as collateral simply, without any agreement to extend, and constitutes no defense. (5 Barb. 580; 7 Wend. 117, 289; 3 Com. 446; 1 Bos. 411; 36 Barb. 294; 5 Hill, 463; 3 Den. 512; 6 Duer, 294; 13 Wend. 374; Story’s Prom. Notes, 536.)
    XV. The maker of the note. and James Sayre the first endorser, were insolvent before either of the notes became due. All the extension given was for the benefit of the endorsers, and with their assent. They cannot, therefore, avail themselves of this defense. Certainly the plaintiffs’ equities are too strong to allow of any violence to those rules of law which enure to their protection.
   Davies, J.

The defendants, Hart and Beach, were the endorsers on the note of the defendant Wait, and they therefore occupied the position of his sureties. He was the principal debtor. Their engagement was that he should pay the note if duly .presented to him, on .the day it became due, and if he did not then pay it, that they, on receiving notice of its dishonor, would pay it to the holder. The only defense set up in this action is that Halliday, the owner and holder of the note in suit gave time to Wait,the maker, for payment thereof after the same became due,without the knowledge or assent of Hart and Beach, the endorsers, and that consequently they have been discharged from their contract created by such endorsement.

If the holder of a note gives the maker further time for the payment thereof, without the consent of the endorsers, he discharges them from all .the liability that they contracted by becoming parties to the note. (Per Best, Ch. J., Philpot v. Briant, 4 Bing. 721.) A creditor, by giving further time .of payment, undertakes that he will not, during the .time given, receive the debt from any surety of the debtor, for the instant that a surety paid the debt he would have a right'to recover it against his principal. The creditor, therefore, by receiving his debt from the surety, would indirectly deprive the debtor of the advantage that he had stipulated to give him. If the creditor had received from his debtor a consideration for the engagement to give stipulated delay óf payment of the debt, it would be injustice to him to force him to pay it to any one, before the day given. If to prevent the surety from suing the principal, the creditor refuses to' receive the debt from the surety until the time given to the debtor for payment by the new agreement, the surety must be altogether discharged; otherwise he might be in a situation worse than he was in by his contract of suretyship. If he be allowed to pay the debt at the time when he undertook that it should be paid, the principal debtor might have the means of repaying him. Before the expiration; of the extended period of payment, the principal debtor might have become ins oh vent. A creditor, by giving time to the principal debtor, in equity destroys the ‘ obligation of the sureties, and a court of equity will grant an injunction to restrain a creditor, who has given further time to the princioal, from bringing an action against the surety. This equitable doctrine the courts of law have applied, to cases arising on promissory notes and bills of exchange. (Per Best, Ch. J., S. C.)

It was formerly held,that any absolute and distinct agreement to give the acceptor time was considered as discharging the drawer and endorsers of a bill of exchange, without any distinction whether or not such agreement was founded on a sufficient consideration to bind the-party making it; because, at least, the acceptor relying on the honor of the party making it, and that he would abide by it, would naturally relax in his endeavors to pay the bill before the enlarged time, and in the mean time might pay less accommodating holders. (Chitty on Bills, 9th Am. ed. p. 446, and cases cited.) But the same author observes, that, of late, a distinction has been taken and a new doctrine has sprung up, and been acted upon, namely, that even an express agreement not to sue, made after giving notice of non-payment, but without sufficient consideration, and without taking any new security, being nudum pactum, will not discharge the other parties, and several authorities are cited to maintain this proposition. Among others, the case of Arundel Bank v. Goble, decided in K. B. in 1817, which was an action by the endorsee against the drawer of a bill. The plaintiffs were the holders when the bill became due, and duly presented the same to the acceptor for payment, and wrote a letter to the defendant in due time, informing him of the dishonor, but that from the promise of the acceptor they expected the sum would be shortly paid. Afterwards the acceptor applied to them for indulgence for some months. They, in reply, wrote to the acceptor that they would give him the time, but that they should' expect interest. The cause was tried on the home circuit before Burroughs, J., where it was contended by Nolan and Comyn for the defendant, that the indulgence to the acceptor discharged the drawer, but the jury found a verdict for the plaintiffs. On motion to the court of K. B. for a new trial, the court held that, as no fresh security was taken from the acceptor, the agreement of the plaintiffs to wait without consideration did not discharge the drawer, because the acceptor might, notwithstanding such agreement, be sued the next instant, and that the understanding that interest should be paid by the acceptor made no difference.

Philpot v. Briant (supra), was an action by a holder, against the drawer of a bill of exchange. The defense was that time had been given to the acceptor, and that consequently, the drawer had been discharged. The plaintiff applied to the agent of the executrix of the acceptor, who said there was not sufficient personal property to pay the bill then, but that if the plaintiff would let the matter stand, the executrix would engage to pay the bill out of her private income. The plaintiff promised, provided the interest was paid, to give a reasonable time, and in pursuance of this agreement, interest was paid out of the private income of the executrix. On a motion for a non-suit, ver-, diet having been taken for plaintiff, the common pleas discharged the rule, holding that the time of payment must be given by a contract-that is binding on the holder of the bill; a contract without consideration is not binding- on him; the delay in suing is, under such an agreement, gratuitous; notwithstanding such contract, he may proceed against the acceptor when he pleases, or receive the amount of the bill from the drawer or endorser. - The case of Amndel Bank v. Goble, swpra, is cited with approbation, and it is said that case was stronger than the present. The court said: If the promise made by the executrix of the acceptor, be considered to be a promise to pay the debt with interest, out of the assets of the executrix, it gives no claim to the holder beyond what the bill gave him. The executrix was, before that promise was made, bound to pay principal and interest out of her testator’s effects. If it is to be taken to be a personal promise of the executrix, it is void under the statute of frauds, not being in writing.” The court in its opinion, takes no notice of the fact that the interest was paid by the executrix out of her private income. The interest paid1 being due, the court must have regarded such payment as in discharge of a legal liability already existing, and that it formed no consideration for the new agreement to give time. It must also have been regarded by the court as an immaterial circumstance, that such payment was made out of the private income of the executrix.

Both these cases aré cited by Judge Helsox, with approbation, in his opinion in the case of Gahn v. Niemcewicz (11 Wend. 312). In that case a party holding a bond and mortgage, over due, received from the principal debtor his promissory note at thirty days for the amount of the bond and the accrued interest thereon. The surety claimed that the receipt of such note was giving time to the principal, and therefore discharged the surety. It was held that the giving of the note therefor was of no benefit to the creditor, for she already had a higher and better security, and for the same reason it was no injury to the principal. He was already liable for the same amount on his bond. There was, therefore, no consideration of benefit on the one side, or harm on the other, to raise or give effect to the implied promise of delay relied on. The case of Pabodie v. King (12 Johns. R. 426), is approvingly cited as containing an apposite illustration of the principle that payment, even, of part of a debt already due, furnishes no good consideration for an agreement to defer a demand of the residue. It was in that case decided that payment of a part of a debt is not a consideration which will support a promise to forbear, because the payment of the surety was doing no more than the party was bound to do.

Upon the facts found by the referee in this case, we see that the debtor, Wait, was indebted upon two separate and distinct notes to his creditor, Halliday. Upon Toth he had sureties; and no facts are disclosed which show that the endorsers upon the note for $1,000 had any higher equity for the appropriation of the payment made on the 16th June, 1856, of $400, than the endorser upon the note of $500. Both notes were over due, and Wait, the maker, was legally-bound to pay both; not one more than the other. He made the payment of $400 to his creditor, holding , both securities; and, by the agreement made between them at the time of such payment, which was reduced to writing and signed by Halliday, the person to be bound thereby, the payment was. distributed and .endorsed, $330 on the note of $500 and $70 on the note of $1,000. From the finding of the referee, we are to assume that there was no other or different agreement in reference to the object of such payment and the appropriation thereof, than what is contained in said paper writing. There is no ambiguity in its term's. In consideration of $70 paid and endorsed upon the $1,000 note, and of $330 paid and endorsed upon the $500 note, Halliday agreed to extend the time of the payment of the $1,000 note until October first, then ensuing.

In making these payments, therefore, Wait but discharged the legal obligations already resting upon him; and neither the fact of such payments, nor the appropriation thereof, upon the two securities, furnished any consideration for the agreement to give time for the payment of the $1,000 note. If the $70 had been paid as interest on the $1,000 note, as is contended for by the counsel for the appellants, another and different question would be presented. That amount of interest was not then due upon the note, and its payment would have been a pre-payment of interest—the discharge of an obligation before its maturity. Such pre-payment of interest would undoubtedly have furnished a good consideration for the agreement to give time. We are not embarrassed, however, by that question. The fact is distinctly found by the referee, that after a discussion between the parties, Wait, expressing a wish that the whole sum paid should be applied on the note of $1,000, it was finally agreed that the sum of $70 should be applied on the note; and it is not found that it was to be applied in payment of interest, and we must therefore assume that it was made as a payment, generally, on the note. Upon the facts, therefore, as found by the referee, there can be no doubt that his conclusions of law were correct, and that the plaintiff was entitled to recover.

The question remaining to be considered arises upon the offer of the defendants, and the ruling of the referee excluding the same. The offer was in these words. The counsel for the defendants proposed to show by the witness Wait, the maker of the note, that he requested the plaintiff to apply the whole sum paid on the note in suit, and in consideration that the witness would waive his right to have the same applied on the note in suit, and would allow the plaintiff to apply the sum of $330 on the $500 note, and $70 as interest on the note in suit, the plaintiff agreed to extend the time of payment.

The first objection which presents itself to this testimony is that it is an attempt to set up, by parol evidence, a different agreement between the parties than that contained in the writing produced. This showed the application óf the whole sum. paid, and that the sums paid and endorsed on each note were so paid on account of the amount due thereon generally, and not on account of interest. This could not be done. The written agreement merged all previous conversations and negotiations between the parties, and must be held to express the true agreement made between them, upon the matters therein referred to. (Renard v. Sampson, 2 Kern. 561.)

In Fellows v. Prentiss (3 Denio, 512), it was held that if a principal debtor gives the creditor his note for the debt payable on the day after date, the surety is thereby discharged. It was offered to show that the note was intended as a mere memorandum note, giving no extension of credit, and was intended only to.fix the balance of the account. This evidence was excluded. The chancellor, in his opinion, says the written receipt and the notes showed that those notes were received in payment of the original account and interest thereon to that date. The circuit judge very properly refused to allow evidence to contradict the written statement, and to show that one of the notes was a mere memorandum note, which gave no extension of credit. The referee, therefore, properly excluded the parol evidence offered to show that the $70 was paid as interest on the note of $1,000. Such testimony tended to contradict, vary, and alter the written agreement, and was inadmissible. But it is insisted, on the part of the defendants, that it is competent for them to show, by parol, that the consideration expressed in the written .contract for giving time for the payment of the $1,000 note was not- the true consideration for such extension, but that the same was the waiver of the right of Wait to have the whole.of said payment endorsed upon the note of $1,000, and his consent to have $330 of said amount endorsed upon the note of $500. And it is urged, on behalf of the defendants, that such waiver and consent formed a good consideration for such extension, as such payment was beneficial to the plaintiff; and it is claimed that he had no security therefor. I think it may well be doubted if this would make out a good consideration, upon the facts developed in the referee’s report and in the agreement. It would appear that the note for $500 was given on -a contract for the sale by Halliday to Wait of a certain lot of land, and the inference is strong that possession of the land sold was retained by Halliday as security-for the payment of the balance of the purchase money. It may, also, be inferred from the language used in the agreement of June 16, 1856, that Halliday there agreed to give up the possession of the lot sold to Wait, and that the consideration for such surrender was the payment of the $330 on the $500 note. He would seem to have been paid subsequently • thereon the sum of $110— leaving only due of principal the sum of $60.

The case of McCrea v. Purmort (16 Wend. 460), and the authorities there cited, fully sustain the position that the utmost latitude is permitted to áscertain the true consideration named in a deed, and proof is allowed, to show the actual consideration, although it be different in its nature and amount, from that named in the instrument. But Judge Cowen says in his opinion in that case, that enquiry is allowed “whenever that shall become material to a personal action between the parties.” That this enquiry is restricted to the parties to the instrument is also apparent from the case of Murray v. Smith (1 Duer, 412.) The court in its opinion by Bosworth, J. says: “We think the law must be deemed to be well settled in this state, that either party is at liberty to show for any purpose, except to prevent its operating as a valid and effective grant, that its consideration was different, greater or larger than that named in it, and not wholly or at all pecuniary in a suit, by the vendor against the vendee to recover the actual consideration agreed to be paid, or in a suit brought by the vendee against the vendor on the covenants of seizin, or against incumbrances.” To the same purport is the case of Bingham v. Weiderwax (1 Coms. 509.) All of the cases referred to, where the consideration has been enquired into, were between the parties to the instrument, and I have not found á case where such an enquiry has been permitted by persons not parties to the instrument or contract. In Greenvault v. Davis (4 Hill, 643), the supreme court held that such enquiry could only be permitted to the parties to the instrument. Bronson, J. in delivering the opinion of the court, recognizing the rule that the consideration clause is open to explanation by parol proof, observes: “ Whatever the rule might be if the question were between the original parties .to the- deed, the defendant is not at- liberty to set up this defense against the plaintiff. The original parties knew of course, what was the true consideration for the grant, but it is not so with third persons. They have no means of knowing what consideration was paid, but from what the parties have said by the conveyance.” That was an action on a covenant of warranty contained in a deed executed by the defendant, the plaintiff’s grantor. On the trial, the defendant offered to prove that the consideration money, paid by Price, the plaintiff’s grantor, to the defendant, was less than the amount expressed in the deed. The judge excluded the evidence, and such ruling was sustained by the supreme court.

It follows that it was not competent for the appellants, not parties to the written contract between Wait and Halliday, to contradict, vary or alter the consideration expressed therein, and the testimony offered by them for that purpose was properly rejected.

■ The ruling of the referee upon such offer being correct, the judgment must be affirmed.

Hogeboom, J.

The sureties were not discharged. There was no valid agreement for the extension of the time of payment. There was no payment of any sum which the party paying was not obliged to pay. The performance of an unqualified legal obligation by payment of part of a sum due upon a note, is not a valid consideration for the extension of payment of the remainder.

The written agreement shows no legal ground fór a valid extension of payment. That agreement probably concludes the parties. They have put their contract in writing, and ought to be bound by it.

But even if the parol proof of consideration is admissible, it makes out no valid consideration for the extension of time. It merely shows that the debtor altered his mind about the mode of applying the payments, influenced, it may be, by the persuasions of the creditor, but not surrendering any legal right for any consideration paid. ■ The proof does not come up to the offer. The extension of time was not purchased by the change in the application of the payments. If it had been, I am not prepared to say that such a change, where both debts were over-due, would be a sufficient consideration for a valid agreement to extend the time of payment. The judgment, should be affirmed.

Judgment affirmed.


source: Caselaw Access Project

author:
      Davies, J.
      Hogeboom, J.

license: Public Domain

text:
    Smith A. Dewey, survivor, &c., v. Hiram G. Hotchkiss.
    After a defendant has availed himself of the plaintiff's hooks of account, to establish certain credits. in his favor, it is competent for the plaintiff to read from the same books charges and entries which show that those credits have been exhausted by counter charges of debit, made at about the same time and afterwards.
    The defendant can not use the books to establish credits in his favor, and uno Jlatu deny to the plaintiff the full benefit of the charges therein against him.
    He must take the whole or none; and having elected to put the books in evidence, for his own benefit, he cannot afterwards be permitted to deprive the plaintiff of the benefit of any charges therein in his favor.
    In such a case it is wholly unimportant whether the whole or any portion of the entries are in the handwriting of the plaintiff,
    This action was brought to recover a balance for goods sold, arising out of merchants’ accounts, part in favor of the plaintiff and Philip C. Wells—the interest of Philip C. Wells in which had been assigned to John Wells—and part in favor of the plaintiff and John Wells, A portion of the demands consisted in charges of cash to the defendant. John Wells died after the commencement of the action. On the trial before the referee, the plaintiff proved accounts, commencing April 27, 1848, and ending September 30, 1851, amountingto $1,269.72. These accounts were proven by the plaintiff’s calling several persons who had been their clerks, and on their examination placed in their hands the day books of said plaintiffs, and proved by said clerks items of charge against the defendant, which were upon said books, fully by recollection independent of said books, and partly by recollection refreshed from said books, and partly by charges in said books, being in the handwriting of said clerks. The plaintiffs also placed in the hands of said clerks a certain other book, called a cash book, and proved by said clerks charges of cash against the defendant upon said cash books, in like manner as they had proved the charges upon said day books. The total amount of the plaintiff’s account as thus proved was $1,269.72. The defendant on cross-examination, proved the books so produced to be the books of original entry of the plaintiffs, and proved certain entries upon said books to be in the hand-writing of Dewey, one of the plaintiffs. The defendant then offered to read in evidence from said day-books the said items of credit, amounting to $152.09, proved to be in the handwriting of Dewey. The same was admitted, and the defendant’s counsel then read from said books said items in evidence. The defendant then offered in evidence said cash book for the purpose of proving items of cash which were credited to him on said cash book, and the same was admitted; and the defendant’s counsel then read in evidence from said cash book eight items entered thereon of cash credited to said defendant, the first of which bore date July 21, 1848, and the last of which Nov. 19, 1851, and amounting, in the whole, to $152.09. The plaintiffs’ counsel then offered in evidence the day-books of plaintiffs, and to read therefrom in evidence the several charges against the defendant made thereon, which had not been proved by the plaintiffs’ witnesses, which were mostly in the handwriting of the plaintiff Dewey, commencing on the 27th, day of April, 1848, and ending September 30, 1851, on the ground that the defendant having read in evidence the above-mentioned items from said day-books, the whole of said day-books were made evidence for the plain tiffs, to which the defendant objected, and the referee admitted the same, and the defendant excepted. The items so admitted amounted to $137.49,. and were allowed to the plaintiffs by the referee, who reported a balance due to the plaintiffs of $299.62, and judgment entered on his report was affirmed at general term. The defendants, thereupon appealed to this court. The cause was submitted on printed points, by

      Wm. Clark, for the appellants.

      T. R. Strong, for the respondent.
   Davies, J.

The only question made is whether the referee decided correctly in admitting the books in evidence on the part of the plaintiffs. This point would seem to have been distinctly disposed of by this court. In the case of Low v. Payne (4 Coms. 247), the court said: The rule undoubtedly is that the private entry of the party himself, in his favor, is not available to sustain a charge for cash lent, but only those entries which are made in the regular and usual course of his business. In that case, however, the books comprise a series of entries made in the usual course of business, in the midst of which, at considerable distances apart, are the two exceptionable items. The defendant made n'o proof, but would appropriate to himself the benefit of the credits appearing in his favor, upon the same books, while he denies to the plaintiff the full benefit of all his charges. The court below were right in the position held by them, that if the defendant would make the books evidence in his favor, he can not do so without taking the whole account together. The accounts are received in that case in like manner as the oral admissions of the party, the whole of which, or none, must be received. The defendant is precluded by it, unless he wholly disproves the items. In the case at bar the defendant availed himself of the plaintiffs’' books, to establish certain credits in his favor. Clearly the plaintiff was at liberty to use the same books to show the amount of charges against the defendant, also contained therein. He can not use the books to establish credits in his favor, and uno flatu deny to the plaintiff the full benefit of the charges therein against him. He must take the whole or none, and having elected to put the books in evidence for his benefit, he can not be now permitted to deny the plaintiff the benefit of any charges therein in his favor.

In Pendleton v. Weed (17 N. Y. 72), upon the trial the plaintiff called a bookkeeper who testified that he had examined the books of the two firms of the defendants, and then referred to certain entries in the ledger, and also in the journal of one of the firms of the defendants. On his cross-examination, he testified that he had examined all their books that contained notes mentioned in the entries referred to Would in a regular course of business be entered in the-bill book, and that one of the entries "referred to a cash book. . The witness was then asked to turn to the cash book and read the entry referred to; also to the bill book, and read the corresponding entries in it in regard to the notes. Objection was made, but overruled by the court, and the plaintiff excepted, and. the entries were read. The counsel for the plaintiff then called for the books of Rhodes, Weed & Co., .the other firm of defendants which were produced, and the bookkeeper read certain entries in the ledger and journal of that firm. On his cross-examination, the witness was permitted by the court, under an objection and exception, to read from the cash and check books of that firm, upon the subject of the payment of the judgment in controversy; the court ruling that the witness might read from any of the books that were kept cotemporaneously. In the opinion, concurred in by all the judges of this court except one, upon this point, it .is said: The entries which were objected to as evidence, in the books of R. &. H. Weed & Co., proved nothing material -beyond what had already been proved by the plaintiff; but in regard to all the entries, the reading' of which was objected to, both those in the boobs of R. <fe H. Weed & Co., and those in the books of Rhodes, Weed & Co., the plaintiffs having given in evidence entries in some of the books of each firm on the question of payment, it was proper to allow the defendants to refer to other entries \on the same subect, about the same time, in other books essential to a complete system of bookkeeping then kept and used by those firms respectively. The books of each firm must be regarded as one for the purposes of evidence, and the question is the same as if the entries objected to had been in the same books with the entries used by the plaintiff. If a party uses nooks of account against his adversary, he makes them evideuce for him on the same subject. They are like any declaration ¿r admission, by writing or orally; if part is used, the whole relating to the same matter is admissible.' In the case now under consideration the plaintiffs’ offer was to read from the same books which the defendant had read from. The portions proposed to be read by the plaintiffs related to the same subject matter as the parts read by the defendant, namely, the dealings between the parties. The defendant had read entries forming a part of the plaintiffs’ account with the defendant. Other entries, in the same books, containing items of said account were pertinent to a full understanding of the accounts and to their completeness. The defendant had read items of credit to him from the books, and it was clearly competent for the plaintiffs to read from the same books charges and entries, which showed that these credits had been exhausted by counter-charges of debts made at about the same time and afterwards.

ISTo inquiry was or could have properly been made as to the handwriting of the entries in the plaintiffs’ books put in evidence by the defendant. The inquiry would have been quite immaterial, as they did not derive their character as evidence from that circumstance, but from the fact that they were found in the books of the plaintiffs in the regular course of their business, and were, therefore, to be deemed and' regarded as the acts and admissions of the plaintiffs themselves. It was of no importance, therefore, that the entries offered in evidence by the plaintiffs were in the handwriting of one of the plaintiffs. They were admissible, on the ground that the defendant had put in evidence a portion of the admissions made by the plaintiffs which were favorable to him, and it followed from thence that the plaintiffs were entitled to put in the residue which favored their views. It was wholly unimportant, whether the whole or any portion of the entries were in the handwriting of the plaintiffs, or either of them. The judgment appealed from should be affirmed.

Hogeboom, J.

The plaintiffs’ account books, it is conceded, were properly in evidence. In connection with the oral testimony of the clerks, they established the larger part of the plaintiffs’ claim. Being in evidence, the defendant availed himself of them to prove thereby credits in his own favor. These were equally well established, whether' they were in the plaintiffs’ handwriting or not. The plaintiffs’ had brought them forward as their books, claiming for them authenticity and credit, and could not deny their admissibility and force, even when they operated against themselves.

In using them for his purpose, the defendant apparently travelled over their entire' contents, selecting his items wherever he pleased, without reference to dates or subject matter, or their connection or relation to the charges read by the plaintiffs. Thus he selected from the day books three different items, each of considerable amount, of the respective dates of May 2d, 1848, March 22d, 1849, and October 27th, 1849. He selected from the cash book eight different items, ranging between the dates of July 21st, 1848, and November 19th, 1851. He had therefore used the whole of the books indifferently for his purpose. He had taken the entire account between the plaintiffs and the defendant, adopted it for his own benefit, and was not, I think, at liberty to renounce it where it made against him. The books constituted one entire series of accounts between these parties, and, for the purposes of this case, may be regarded as if they contained nothing else whatever— indeed, as if they had all been presented in court by the plaintiffs on a single paper or account current. In such case could the defendant be permitted to cull particular entries from the account and exclude the residue? I think" not.

The rule that a party whose oral declarations, in a conversation are improved in evidence by his adversary, is-not thereby permitted to introduce in his own favor disconnected portions of the same conversation having reference to distinct and independent matters,. has no close application to such a case.

1st. Because the account must be regarded as the single, entire and continuous statement of the party offering it—■ presenting his version of the true state of the business transactions between the parties—not necessarily entitled to credit in every part, if discredited by other evidence, but admissible for the consideration of the jury.

2d. Because the defendant, .having, adopted the whole statement by ranging through its entire scope and contents, has given currency to the whole, and has made.it necessary to examine and take in the whole, in order to determine how far the portions rejected by him bear upon, affect or qualify the portions selected. There is no evidence that the portions of the account introduced by the plaintiff, after those introduced by the defendant, do not materially qualify the effect of the latter items, and do not in fact relate to the same precise subject matter. And we may presume it to be so, as we can make no intendment against the propriety of the ruling in the court below.

This court has, in substance, affirmed the propriety of this evidence. In Low v. Payne (4 Comst. 248), the plaintiffs’ books (properly established by preliminary proof), constituted the only evidence. They contained credits which the defendant insisted upon the benefit of, and the court held him thereby compelled to submit to two charges of cash paid contained in the books, though not properly items of book account. In Pendleton v. Weed (17 N. Y. 76), where the books of two different firms had been put in evidence (in part consisting of different members), the court say: “ The plaintiff having given in evidence entries in some of the books of each firm on the question of payment, it was proper to allow the defendant to refer to other entries on the same subject.” If a party uses books of account against his adversary, he makes them evidence for him on the same subject. They are like airy declaration or admission by writing or orally; if part is used, the whole relating to the same matter is admissible.” (Cow. & Hill’s Notes, 229.)

If it be said this last authority shows that the entries in the different books related to the same subject matter, to wit: the question of payment of a particular judgment, I reply that in this case, the subject matter is the state of the entire account between the parties. The parties had made it so by their mode of using the books. The plaintiffs had made the books evidence for themselves of all matters of accounts between the parties. The defendants had selected indifferently and indiscriminately from the mass of materials thus presented to them, all which they supposed tended to their advantage, without reference to their continuity or connection with .those proved by the plaintiff. •The entire books, with all their entries, had thus come legitimately ..before .the court by the mutual assent 'of the parties, and they were permitted to cull from them at their pleasure. If we were disposed to take a stricter view of the rights of the parties, there is no evidence that the plaintiffs introduced a single item subsequent to those introduced by the defendant.

If these views are correct, the judgment should be affirmed. If they are not so, the judgment should not be reversed, but corrected by deducting therefrom the items illegally admitted, amounting to $137.49.

Judgment affirmed.


author: Mullin, J.

text:
    William W. Nellis v. The New York Central Railroad Company.
    Under chapter 228 of the laws of 1857, which provides that the New York Central Railroad Copipany, at every station on its road where a ticket office shall he established, shall keep the same open for the sale of tickets at least one hour prior to the departure of ¡each passenger train from such station, but that they shall not be required to keep such offices open between nine P. M. and five A. M., except at Utica and six other stations on its road; and that if any person shall, at any station where a ticket ■ office is established and open, enter .the cars as a passenger without first having purchased a ticket, it shall be lawful for the company to demand and receive from him a sum not exceeding five cents, in addition to the usual rate of fare; the extra fare can only be demanded when the passenger fails to purchase his ticket at an established ticket office that is open.
    If the ticket office is not open, no ticket can be procured, and no right exists to demand the extra fare.
    So held where the plaintiff entered the cars of the company, at Utica, as a passenger, at one o’clock A. M., without having first procured a ticket, the ticket office not being then, nor for an hour previous to the departure of the train at one o’clock, open.
    And held, that the company, having assumed to demand and receive from the plaintiff five cents, in addition to the legal fare, under these circumstances it ‘ ‘ asked and received a greater rate of fare than that allowed by law,” and was thus brought within the provisions of the first section of chapter 185 of the laws of 1857, and was liable to the penalty of $50 mentioned in that section.

      Held,, also, that in an action against the railroad company, to recover the forfeiture of $50, it was not necessary that the complaint should set out the various enactments consolidating the several companies iVhich make up the New York Central Railroad Company, so as to show that the latter company is restricted to a fare of two cents per mile for each passenger ; but that it was' enough to allege that the defendant had been duly organized; that it was entitled to demand and receive of passengers a certain rate of fare, and'that it had demanded and received a higher rate.
    By .chapter 185 of the laws of " 1857, it was enacted that any railroad company which shall ask and receive a greater rate of fare than that allowed by law shall forfeit fifty dollars, which sum may be recovered, together, with the excess so received, by the party paying the same, but it-shall be lawful and not construed as extortion for any railroad .company to take the legal rate of fare for one mile for any fractional distance less than a mile.
    By chapter 228 of the same year, it was enacted that the New York Central Railroad Company at every station on its road, where a ticket office then was or might be thereafter established, should keep the same .open for the sale ¡of tickets,' at least one hour prior to the departure of each passenger train from such station; but they were not re.quired to keep such offices open between nine p. m. and five a. m., except at Utica and six other stations on' its road. At these stations the offices were to be kept open between five a. m. and 11 p. m. By thé second section of the same chapter, it was provided that if any person shall at any station where a ticket office is established and open, enter, the cars of said company as a passenger thereo'n, without first having purchased a ticket for that purpose, it shall be lawful for the company to demand and receive from such person a sum not exceeding five cents, in addition to the usual rate of fare for the distance such person may desire to be transported.
    The plaintiff in his complaint alleges in substance, that the defendant is a corporation duly organized, and that on the 18th May, 1857, at about 1 a. m., the plaintiff being desirous of being carried on defendant’s cars from Utica to' Albany, a distance of ninety-five miles, and no more, the plaintiff went to the ticket office of the defendant, established at Utica, about ten minutes before one o’clock a. m., the time fixed for the departure of the train from Utica to Albany, to purchase a ticket, by means whereof’he could be transported over said defendant’s road from Utica to Albany, and was ready and desirous to purchase and pay %r the same, the lawful price, but such ticket office was not open,, and no ticket could be procured therefrom, and was not open at any time within the hour preceding the' departure of said train. That he took his seat in said train at the city of Utica; that soon thereafter the conductor .of said train, who was the duly authorized agent of the defendants, demanded and received of plaintiff the sum of $1:95 for his fare, although informed that the office was not open, and a ticket could not for that reason be procured, which the conductor conceded, but nevertheless demanded and received $1.95 for the plaintiff’s fare from Utica to Albany, while the plaintiff insisted it was but $1.90, and the.plaintiff was compelled to pay and did pay $1.95 for his fare. And that by reason thereof, the said defendant did ask and receive from the plaintiff a greater rate of fare than that "allowed by law, to wit:_ the sum of five cents, and it thereby became liable to pay said plaintiff the sum of $50.05, and for that sum this action was brought.
    The defendant demurred to the complaint, alleging as grounds of demurrer:
    1. That it did not state facts sufficient to constitute a cause of action; and
    2. That it did not appear by the complaint that the defendant did not keep its ticket office at Utica open at least one hour prior to the departure of each passenger train between five A. M. and eleven P. M., prior to and including the 18th May, 1857; and that it does not appear that the defendant did not keep said office open for the sale of tickets on the 17th May, 1857, from five A. M. till eleven P. M.; nor does it appear that the plaintiff paid any greater rate of fare than that allowed by law.
    The demurrer was overruled at a special term in the fifth district,- with leave to the defendant to answer on payment of costs in twenty days. If the defendant did not answer and pay costs in twenty days, then judgment was ordered for the plaintiff on the demurrer, with costs.
    •Prom this order the defendant appealed to the general term of the fifth district, by which it was affirmed, with costs, and with leave to the defendants to answer on payment of costs. The defendant -did not answer, and thereupon judgment was entered'for the sums demanded in the complaint, with costs.

      From the judgment, and from the order of the general term, the defendant appealed to this court.

      Cox & Avery, for the appellants.
    I. In this state the rate of fare on railroads is established by statute at three cents per mile. (Act of April 2, 1850, sec. 28, subdiv. 9; Act of March 27, 1857.)
    II. If any facts exist, which in the case of this particular road take it out of the general railroad act (of April -2, 1850), they should have been averred in the complaint. Particularly as the consolidation act is permissive and prospective, taking effect only upon the contingency of consolidation. (Vide sec. 7 of Act of April 2, 1853.) ■
    III. The contingency contemplated by section seven not being averred in the complaint to have occurred, the reduction of fare (to two cents per mile), which was only to take effect upon that contingency cannot be assumed. Consequently the rate of fare quoad hoc remains three cents per mile. These, then, are the facts, and this the law before the court. The distance here traveled was 95 miles, which, at three cents per mile, is $2.85. We exacted $1.95-—less than we were entitled to by 90 cents.
    IV. Every issuable fact material to the right of action must'be averred in the complaint. (Code, § 142; 13 How. Pr. 220; 2 Duer, 674; 5 Sandf. 566; 3 Seld. 478.) Averments of law (e. g. lawful fare, unlawful, &c.), are insignificant. (13 How. Pr. 35; 14 How. 163, 286; 23 Barb. 575, and cases; 4 Seld. 366.) Upon the merits of.this case, when we come to examine them, it will be found, we think that the plaintiff hadmo action for this penalty. 1Í this court will take judicial notice of the private statute (of April 2d, 1853), authorizing prospectively the consolidation of the several companies named; and also of the fact- of such consolidation subsequently occurring, and that this defendant is the result; then we say.
    V. We had the right to exact this five cents “ iñ addition to the usual rates of fare.” Because the party had no ticket. The statute defines defendant’s obligations and privileges. (Chap. 218 of Acts of 1857.)
    “ Section 1. The New York Central Railroad Company at every station on its road where a ticket office is now, or may hereafter be established, shall keep the same open for' the sale of tickets, at least one hour prior to the departure of each passenger train from such station; but nothing herein contained shall require said company to keep such office' open between nine o’clock p. m. and five o’clock a. ii., except at Albany, Schenectady, Utica, Syracuse, Rochester, Buffalo and Suspension Bridge, which shall be kept open as hereinbefore required, between five o’clock a. m., and eleven o’clock p. m.
    Section 2. If any person shall at any station where a ticket office is established and open, enter the cars of said company as a passenger thereon, without having first purchased a ticket for that purpose, it shall be lawful for the said company to demand and receive from such person a sum not exceeding five cents in addition to the usual rate of fare,” &c.
    We are to keep our office open at Utica from five-a. m. to eleven p. m. The meaning and extent of the word Used in the statute, “ established and open,” is thus clearly defined in section one of that act. By keeping the office open during those hours, we have our office “established and open,” for the purposes of that act. The averment in the complaint, that our office was not open at one o’clock in the morning, does -not affect our rights under that statute. According to the view which prevailed in the supreme court in this cause, a passenger taking the train at Utica at half-past eleven p. m., might refuse to pay this five cents (although he had the whole day to buy a ticket), and furthermore the company are liable to the penalty given by chapter 185 (Acts of 1857), for receiving it.
    . VI. This .“Act to prevent extortion,” (of March 27, 1857,) was never contemplated by the legislature to be applicable to such cases as this. It was passed four days before this act of April 1 (giving us the right to receive five cents). The presumption that upon this occasion we took the five cents because the party had no ticket, is not repelled by anything stated in the complaint; and as against a party seeking to impose a penalty, must be the lawful presumption, for whenever an act can be attributed to a lawful motive, it always is thus attributed. Can it be true that, for an error of judgment in the construction of this act of April 1, 1857, which was intended by the legislature for the benefit and relief of the defendant, the penalty given for a willful offence is incurred?
    VII. Because the general railroad law of this state gives to railroad companies, as such, the ■ right to demand three cents a mile for passenger travel, and there is no averment in the complaint to take the case out of that act; and because an error in construing a statute intended for our benefit cannot amount to a willful demanding of “a greater rate of fare,” we ask that this judgment be reversed.

      Ward Hunt, for the respondent.
    I. The defendant had no authority to demand and receive this additional sum of five cents, beyond the legal fare. (Laws of 1857, p. 432-488; Porter v. N. Y. Central R. R. 34 Barb. 353.)
    1. A ticket office was established for the sale of tickets at the Utica station.
    2. It'was not open for the sale of tickets at the time of the departure of the train, and had not been at any time during one hour prior to such departure.
    3. This sum can only be charged where the ticket office is open at the departure of the train, and the passenger enters the cars without first purchasing his ticket.

      {a.) The act does not even say when the office is “so open,” or “ open as above provided,” but simply when “it is open,” i. e., “when the office is. actually open when the train starts.”

      (5.) This is the reasonable meaning of the statute. If the defendant is at the trouble and expense of keeping its office open, and if it gives the plaintiff the means of buying his ticket when he comes to the station to start, the plaintiff should give the defendant this advantage, if it is deemed such, of selling tickets at the office. While, if there is no opportunity so to purchase, the defendant is not entitled to the' advantage, and there is no reason why the plaintiff should pay any. additional sum.
    (c.) The suggest!,on that if the office is kept open from five A. M. until eleven P. M., the right is then given to exact the five cents on all occasions, is not tenable. It is opposed to the plain language of the provision. It is opposed to its reasonable construction. It is opposed' to the universal habit and practice of the country. No man ever expects to purchase his ticket until a reasonable time before the departure of the train in which he is to start. This suggestion requires him to adopt a different system. The subjects of the first and second sections are distinct, and the two provisions are distinct. Section one requires positively that the office shall be open for a specified period on each day. Section two provides that when it is actually open, but without referring to the precise time directly or indirectly, then, if a ticket is not purchased, an additional fare may be charged.
    H. The act of the, conductor was the act of the agent. He was their agent to demand and receive fares from passengers, and if in so doing he demanded- and received too much fare, the act was in the course ef his agency, and was the act of the company. (34 Barbour, 353; 14 Howard, 468.) •
    I. It is so averred and admitted.
    2. It must be so in the nature of things. The directors in a body demanding and receiving fare would occupy but the same position as that of the conductor, namely, an agent.
    IH. The five cents was received “ as fare,” and not by way of penalty or forfeiture.

      1. It is expressly averred and admitted in the complaint and demurrer, that it was paid and received “ as fare.”
    2. It was so,in fact, and under the law of 1857, p. 488, chap. 228: <‘It shall be lawful to demand and receive five cents in addition to the usual rate of fare. The fare is fixed at two cents per mile, or any other sum, and in the case spoken of, the fare maybe added to “in .addition to the usual rate of fare.” The fare is added to—is increased— by the sum of five cents. The legal or usual rate from Albany to Utica was $1.90. If he did not purchase a ticket, the usual rate or $1.90 became added to or increased, and thereupon “the fare” became $1.95.
    3. There is nothing in the transaction of the nature of a penalty or forfeiture. This law does not require the purchase of a ticket in advance, nor does any other. The plaintiff had as perfect a right, so far as this law is concerned, to enter the cars and claim to be transported without a ticket as with a ticket. The only difference is, that in the one case his fare is $1.90, and in the other his fare is greater than the usual rate, and is $1.95. If the plaintiff had borne with him an infectious disease, he would' have had no right to be in the cars, and might have been expelled. His expulsion would be in the nature of a penalty. If he had committed acts of violence or indecency, his right to a passage would have been forfeited, and he might have been turned out, or he might have been compelled to pay damages for any injury inflicted. But in the present case, there is no disease, no violence, no indecency — nothing that impairs his legal right. He is merely subject to an additional fare-of five cents.
    IV. It is averred and admitted th'aSt the defendant did “ ask and receive from the plaintiff a greater rate of fare than that allowed by law, to wit: the sum of five cents.” The defendant intended to do exactly what it did do, to wit: to demand $1.95 as the fare or price of transportation from Utica to Albany.-

      V. The complaint avers all the facts necessary to constitute a cause of action.
    1. It is said that the general act allows three cents per mile to be demanded, and no facts are averred which place this company in any different position. (Laws of 1850, § 28, sub. 9.) Certain companies are allowed by law to charge three cents per mile. Certain other companies may be organized, that are permitted to charge only two cents per mile. (Laws of 1853, page 110.) The former might by law have charged $2.35 from Utica to Albany, the latter could charge but $1.90 by law. The complaint avers that the conductor charged and received $1.95 as the fare, and that that was five cents more than the law allowed. In other words, one dollar and ninety cents was what the law permitted to be charged for the fare, and the conductor demanded one dollar and ninety-five cents, and was therein guilty of the extortion condemned by the statute. This is a plain averment that the company >vas one of those organizations, whose fare is limited to two cents per mile.
    2. “ It is never necessary to aver matters which the court are supposed to know, and are bound to understand,” (3 Corns." 188; 12 Wend. 70; 17 Wend. 88,) as a public statute or the common law, or the geography or public history of the country, or the contents of the almanac. The court takes judicial notice of many things, e. g., of the ordinary modes of transacting commercial business within this state, as of statutes regulating banks and their business, and the ordinary rate of exchange between commercial cities. (10 Barb. 406; 4 Sold. 182.) Also of the ordinary duration of human life. (6 Duer, 633; 20 N. Y. 65.) Also of notorious facts, such' as the usual time required for steamers to cross the Atlantic. (3 Sand. Cb. 571; 4 N. Y. Leg. Obs. 2.59.) The courts take judicial notice of the civil divisions of the state. (6 Hill, 475; 7 Cow. 429.) The court will take judicial notice of the - occurrence of Sundays, as that the third day of grace fell on Sunday. (7 Wend. 460.) Also that circulating notes of banks are signed by the president and cashier; that deposits are received and paid out by the clerks, tellers and cashiers; that certificates' of deposit and certificates upon the face of checks are signed by the same class of officers, or one of them. (26 How. Pr. R. 1; Farmers’ & Mechanics’ Bank v. Butchers’ & Drovers’ Bank, 16 N. Y. 125; 4 Kern. 623.) The court know, therefore, that the act of 1853 was passed, authorizing the ten railroad companies therein named to consolidate into a single company. The court know, also, that that act was accepted and carried into effect, and that the New York Central Railroad Company, extending from Albany to Buffalo, was the result of such consolidation. They know it from general history, from the records of the secretary of state’s office, and from legislative recognitions of its existence. Thus the act of 1857,-chap. 228, page 488, recognizes the New York Central Railroad Company as extending from Albany to Buffalo, and as having offices at each of these places. It establishes, also, that the New York Central was organized from and by the companies named in the act of 1853. So the act of 1857, chap. 431, page 856, recognizes this New York Central as existing in Cayuga county, and we aver it' to be running its cars from Utica to Albany. Also the act of 1862, chap. 120, page 271, directing the .highway tax of said road, in the town of Mentz, in the same county, to be expended in a particular manner.
    3. It is said that the complaint does not aver that the plaintiff is a way passenger, and that it is only as to way passengers that the charge is limited to two. cents per mile. The suggestions already made, answer the objection. The court cannot refuse to know that Albany is the capital of the state, situated on the right bank of the Hudson river, and that Buffalo is a port upon Lake Erie, at the distance of three hundred and fifty miles from Albany, and that Utica is an intermediate point. Way passengers are here distinguished from through passengers, and it is not necessary, under the most precise system of pleading, to aver that when a passenger traveled from Utica to Albany, he did not, in so doing, travel from Buffalo to Albany.
    4. All these objections are to the form of the allegations rather than to the substance. They form the proper subject of a special demurrer, and not a general demurrer.
   Mullin, J.

A railroad company is under no obligation to establish offices for the sale of tickets. If ticket offices are not established, passengers must pay their fares to the conductor on the cars. Such a system would throw great responsibility and labor on conductors, cause loss to the company, and be the source of annoyance to the passengers. All these consequences are avoided in a great degree, by the" establishment of ticket offices, but the benefit is derived mainly by the company.

When, therefore, the legislature authorized the defendant to demand five cents, in addition to the usual fare, of every passenger not purchasing a ticket at a ticket office before getting on to the cars, the object was to compel, as far as such a provision could compel, travelers to purchase tickets, and thereby benefit the company.

If the law had stopped by giving the power to impose five cents on each passenger not procuring a ticket, it is quite clear that the effect of it would be merely to add five cents to the established fare, because it would be for the interest of the company to embarrass, and as far as possible to prevent the purchase of tickets at its offices.

To prevent such an abuse of a power given for the accommodation of the company, it was provided that the five cents should be exacted only of those who failed to purchase tickets at places where a ticket office is established and open.

This provision might be evaded. . In order, therefore, to secure the public against liability to imposition, it ivas further provided that the defendant should keep its offices open one hour, for the sale of tickets, prior to the departure of each passenger train from such station, between certain hours specified in the act.

Had the 'departure of the train on which the plaintiff traveled from Utica to Albany, at the time of the demand for the fare for which this action is brought, occurred during the hours the defendant’s ticket offices are required to be kept open, and the one at Utica was not open, it could not be seriously claimed that a demand for the extra fare would have been justified, or that the penalty would have been incurred. But the ¡jlaintiff left at one o’clock in the morning, at which time the défendant was not required to open any of its ticket offices; and it is insisted that because the plaintiff did not do what it was impossible for him to do— to wit: buy a ticket before leaving Utica—he became liable to pay the extra fare. It seems to me, the proposition has but to be stated to be rejected as utterly unsound. To compel a passenger to pay a penalty because the company had deprived him of the power to travel for the regular fare, would be so oppressive and unjust that it Would require a positive provision of a legislative act to induce any tribunal to sanction it. The statute is'open to no such construction. The extra fare can only be demanded when the passenger fails to purchase his ticket at an éstablished ticket office that is open. If it is not open no ticket can be procured, and no right exists to demand the extra fare.

It is urged that the word “ open,” in the 2d section of chapter 228, means open at the hours ticket offices are required to be kept open by the first section of that chapter. But it is quite clear that the first section was intended to protect the public against any evasion of the duty to afford a reasonable opportunity to purchase tickets, and to relieve the company from keeping its offices open at all its stations during the whole night. The legislature in' effect say to the company, you shall keep your offices open one hour before the departure of each passenger train from each station, from five in the morning till nine in the evening, except in the larger towns they shall be kept open till 11 p. m. If you do this, and if passengers shall neglect to purchase tickets, you may charge each one five cents additional fare. But if your offices are not open you can get only the regular fare.

The Utica office was not open, as admitted by the demurrer, and hence there was no pretense for demanding extra fare.

The five cents which the defendant may charge is in addition to the usual rate of fare. By these words I understand the legislature to mean that the five cents is taken by the company as fare, and not as a penalty for omitting to buy a ticket. The legislature never permits parties to enforce the collection of penalties given by law to themselves. It was proper to permit the defendant to demand a higher rate of fare from one not complying with a regulation of the company than from those who conformed to it.

The complaint alleges and the demurrer admits that the distance from Utica to Albany is ninety-five miles, and that the fare is $1.90. I am unable to understand how, in view of these admissions, the defendant’s counsel can claim that the defendant is entitled to charge three cents per mile, or any other sum greater than two cents per mile. If the law did permit a charge of three cents, it would not help the defendant, after the admission that the fare was, in fact, two cents per mile. For the purposes of this case, we must act on the allegations and admissions in the pleadings, whatever the law may be on the subject. The pleadings make the law, by which the rights of the parties must be determined.

When, therefore, the defendant assumed to demand five cents in addition to the legal fare, it “ asked and received a greater'rate of fare than that allowed by law,” and is thus brought within the provisions of the first section of chapter 185 of the laws of 1857, and is liable to the consequences of such violation of the provisions of the statute.

The defendant’s counsel insists that the complaint should have set out the various enactments, consolidating the several companies which.make up the New York Central, so as to show that defendant is restricted to two cents per mile for carrying passengers over its road. I can perceive no more reason for setting out these statutes than there is for setting out the proceedings by which the several companies consolidated into the Central were incorporated and organized. It is enough to allege that the defendant has been duly organized, and that it is entitled to demand' and receive of passengers traveling over its road, a certain rate of fare; and that it has demanded and received a higher •rate. The acts of the legislature, and the proceedings of the separate companies, and of the defendant after consolidation, would be the evidence to establish the facts upon which the limitation of the fare which the defendant may • charge, depends.

The court by taking judicial notice of these acts and proceedings could not relieve the defendant from the effect of its admission, deliberately made, that the fare was but two cents per mile—though by the act it might be six cents.

The order and judgment appealed from must be affirmed, with costs.

Selden and Ingbaham, JJ., did not sit in the case. All the other judges being for affirmance.

Judgment affirmed.