author: By the Court.—Speir, J.

text:
    ANNA H. BUTLER, Plaintiff, v. THE AMERICAN POPULAR LIFE INSURANCE COMPANY, Defendant.
    I. INSURANCE.

    1. PREMIUMS, PAYMENT OF.
    1. Charging to the account op the assured operates as
    PAYMENT, WHEN.

      (a.) When mutual accounts are kept between the insurance company and the insured (the business being transacted between the acting officers of the company and the insured), the charging the premium to the account of the insured is equivalent to payment.
    1. Mutual accounts Tcept; what evidence sufficient to establish.

    3. Waiver op non-payment.

      (a.) • Effect of receipt of subsequent pi'emiums.

    1. Where the assured makes a payment specifically appropriating it to the payment of the premium falling due on a certain day, and the company accepts the same; such payment and acceptance continue the policy in force, notwithstanding default in the’ payment of premiums which had previously fallen due.
    3. CANCELLATION OF POLICY.
    1. Cancellation and practice of company as to actual entry thereof.

      (a.) Proof of, when inadmissible.
    It not appearing that the assured had any knowledge or intimation of the cancellation; and the facts proved showing that there could be no valid cancellation; evidence as to the fact of cancellation and the practice of the company in relation thereto is inadmissible.
    H. FRAUD.

    1. Questions as to, when properly withheld prom the JURY.

      {a.) When the alleged fraud was merely a mistake from which no injury resulted, and the party who it is claimed committed the fraud, immediately on discovering the mistake called the other party’s attention to it, and the defendant, who is the one desiring the question to go to the jury, makes no allegation in his answer that there was any fraud in the bill (in respect whereof fraud is alleged at the trial), at the time of the settlement thereof, though the facts must then have been well known, the question as to fraud is properly withheld from the jury.
    Before Curtis, Ch. J., and Speir, J.

      Decided May 8, 1877.
    Exceptions ordered to be heard at general term.
    The action was brought to recover $2,000 and interest upon a policy of insurance issued upon the life of Dr. Samuel H. Butler, the husband of the plaintiff, for her benefit, on July 18, 1870.
    At the date of the policy Dr. Butler had been a physician residing and practicing in Philadelphia, and the editor, proprietor, and publisher of a .periodical known as the Medical and Surgical Reporter, and had inserted advertisements and made medical examinations for the defendant prior to the date of the policy, and published editorials in its favor.
    It was agreed between the parties that the defendant should issue two policies of insurance upon Dr. Butler’s life for $2,000 and $3,000 ; that the premiums upon the $2,000 policy—the one in suit—should be paid in cash at the end of the year, with intimations that the defendant would need Dr. Butler’s services as medical examiner, and that he might pay the premiums on the $3,000 policy in that way. Both policies were sent to Dr. Butler, countersigned and in force, and his promissory note for $57.14, due July 18, 1871, was taken'for the premiums upon the $2,000 for the first year, and his due-bill for $80.37, payable in advertising, was taken for the premiums for the same period upon the $3,000 policy.,
    Dr. Butler inserted advertisements for defendant for the first year on both policies', and sent in a bill for $135, being $2.51 less than the aggregate of the premiums, and on September 28, 1871, defendant returned the note and due-bill to Dr. Butler, and charged the balance of $2.51 in its favor against him in the second year. At the same time defendant sent to him renewal receipts for the second year of both policies, and wrote to him that the premiums, amounting to $130, were charged to him. Dr. Butler inserted advertisements for the defendant during the second insurance year; and in July, 1872, he sent to defendant Ms check for $66.15, payable to defendant or order, being the semiannual premiums on the two policies for the first half of the third year. This check was received with the notices prior to July 18, 1872, and collected by the defendant, who applied it upon a balance they claimed to be.due on Ms account for the second insurance year. The premiums were duly tendered to defendant for the second half of the third insurance year, and for the first half of the fourth year, during which last named period Dr. Butler died.
    A verdict was rendered for the plaintiff by direction of the court for $2,124.16, with directions that the exceptions should be heard in the first instance at general term.

      P. H. Vernon, attorney, and of counsel, for plaintiff, among other things, urged:
    I. The right and power of insurers to make agreements changing the terms and conditions of their policies, or waiving compliance therewith, have been fully established by a long line of decisions, and “is not a disputable proposition” (Trustees of First Bap. Church v. Brooklyn Fire Ins. Co., 19 N. Y. 305 ; Boehen v. Williamsburgh City Fire Ins. Co., 35 Id. 131; Bodine v. Exchange F. Ins. Co., 51 Id. 117-122 ; Kolgers v. Guardian Life Ins. Co., 10 Abb. Pr. [N. S.] 176 ; O’Reilly v. Guardian M. Life Ins. Co., 1 Hun, 460 ; Heaton v. Manhattan F. Ins. Co., 7 R. I. 502; Sheldon v. Conn. Mut. Life Ins. Co., 25 Conn. 207-218).
    II. “Fraud is not to be inferred, but must be proved, and will not be allowed to be made out from mere conjecture, or loose inference from ambiguous and inconclusive circumstances, which are as consistent with honesty as with falsehood” (Sullivan v. Warren, 23 How. Pr. 188-192; Henry v. Henry, 8 Barb. 588).
    III. There is no allegation of fraud or unfair dealings contained in defendant’s answer, and no issue involving fraud exists in the case. Fraud must be pleaded (Faure v. Martin, 7 N. Y. 210).
    IV. The defendant having charged the second year’s premiums to Dr. Butler, and notified him thereof, and sent him a renewal receipt, and he having acquiesced in the charge, and retained the renewal receipt, Dr. Butler became liable to pay such premium, and the policy was continued in force, and even if the premiums were never actually paid by advertising, or otherwise, the defendant could not forfeit the policy, but has only a claim for the amount unpaid against Dr. Butler’s estate (Sheldon v. Atlantic F. & M. Ins. Co., 26 N. Y. 461-466 ; Miller v. Brooklyn Life Ins. Co., 12 Wall. 285; Mutual Benefit Life Ins. Co. v. French, 2 Cin. Superior Ct. 321).

      V. Where mutual accounts are kept, charging a premium to the account of the insured is equivalent to payment (Marsh v. Northwestern N. Ins. Co., 3 Biss. 351; Prince of Wales L. & E. A. Co. v. Harding, El. & B. 183, 211, 223).
    VI. The check for $66.15, sent by Dr. Butler on July 12,1872, and accepted and collected by defendant, paid the first semi-annual premium for the third year of the policy; and such acceptance and-collection waived any previous default, and continued the policy in force to January 18, 1873 (Carroll v. Charter Oak Ins. Co., 38 Barb. 402 ; 2 Am. Leading Cases, 625 ; Frost v. Saratoga M. Ins. Co., 5 Den. 154; Viall v. Genesee M. Ins. Co., 19 Barb. 440; Bovier v. Connecticut Life Ins. Co., 23 Conn. 244).
    VII. The defendant had no right to apply Dr. Butler’s check to any purpose except that for which it was sent; but if unwilling to accept it for such purpose should have returned it at once.
    “The rule is that the party paying has power to make the application at the time of payment, which he may do, either by express words, or a conduct indicative of his intention” (Smith’s Mer. Law, 8 Eng. Ed. 538 ; Simson v. Ingham, 2 B. & C. 65 ; Stone v. Seymour, 15 Wend. 19, 23; Patty v. Milne, 16 Id. 557; affirmed, 22 Id. 558 ; Hall v. Montrose, 2 Hall, 185.
    VIII. But even if defendant had a right to divert the check sent to pay the premium for the first half of the third insurance year, the check was effective as a tender of that premium, and its application upon the account for the second year, admitted that the policy was in force during that year (for if not in force, there was nothing due for premiums), and was a continuing waiver of any existing default (Washoe Tool Manufacturing Co. v. Hibernia Fire Ins. Co. of Ohio, 14 Supreme Ct. 75; affirmed by court of appeals, N. Y. Weekly Dig. vol. 3, p. 3).

      This case decides that a waiver for an indefinite time cannot be terminated, even by unheeded demands for payment, but only by notice that unless payment is made at a given time the policy will be void or canceled ; and no such notice was given in the case of the Butler policy.
    IX. Forfeitures are not favored, but are odious in law.
    “Forfeitures are only enforced where it is clearly shown that they were meant by the actual agreement of the parties” (Worden v. Guardian Mut. Life Ins. Co., 39 Superior Ct. 317-328, opinion by Curtis, J.).
    “Forfeitures are not favored, especially where delay can be compensated for in money” (Mut. Benefit Life Ins. Co. v. French, 2 Cin. Superior Ct. 327).
    “Forfeitures are enforced only where there is the clearest evidence that that was meant by the stipulation of the parties” (Helme v. Philadelphia Life Ins. Co., 61 Pa. St. 107).
    X. A clause in a policy of insurance, forfeiting the same for the non-payment of premiums, refers only to premiums becoming due at the times stated in the policy, and; if different times of payment are agreed upon outside of the policy, the clause of forfeiture contained therein does not apply (N. E. Mut. Life Ins. Co. v. Hasbrook, 32 Ind. 447; McAllister v. N. E. Mut. Life Ins., 101 Mass. 558).
    XI. If the defendant by its course of dealing with Dr. Butler led him to believe that payment of premiums would not be required at the times stated in the policy, it is estopped from claiming a violation of the conditions of the policy in that regard (Helme v. Philadelphia Life Ins. Co., 61 Pa. St. 107; Thompson St. Louis Mut. Life Ins. Co., 2 Ins. Law J. 422; Heaton v. Manhattan Fire Ins. Co., 7 R. I. 502 ; Meyer v. Knickerbocker Life Ins. Co., 51 How. Pr. 263).
    XII. The defendant’s second exception, relating to the exclusion of testimony concerning its cancellation of the policy, in December, 1872, and concerning its practice, with reference to the actual entry of the cancellation, is untenable.

      George Bliss, attorney, and of counsel for defendant, among other things urged:
    I. The premiums were never in fact paid, either in money or advertising.
    II. There was no credit given or waiver which operated to excuse the defaults and leave the policy in force at the time of the death, because by Dr. Butler’s own avowal to Lambert, he procured the receipt to be sent him by an agreement to send the money as soon as he got them, i.e., on delivery, and because a waiver of condition of prompt payment was beyond the power of the persons who are alleged to have made the waiver, and that want of power was known to Dr. Butler, though this was not necessary (Van Allen v. Farmers’ Joint Stock Insurance Co., Court of Appeals, 5 Ins. Law J. October, 1876, 729, 732; Mersereau v. Phœnix Mut. Life Ins. Co., Ct of Appeals, May 30,1870, 5 Ins. Law J. October, 1876, 765 ; Blossom v. Lycoming Fire Ins. Co., Ct. of Appeals, 5 Ins. Law J. April, 1876, 302 ; Bush v. Westchester Fire Ins. Co., 63 N. Y. 531).
    The same objection of a want of power applies to all subsequent acts which may be alleged to constitute a waiver of the condition as to payment,—such as the sending of the notices in January, 1872,—though that was obviously an inadvertence.
    III. The letter, May 8, 1872, from Butler, bases a claim upon the possession' of the receipts. If up to that time it could be held that there was a binding recognition of the policies as in force, and a giving of credit for the premiums, this was surely terminated by Mr. Keyes’ letter of May 10, 1872, and the statement of account inclosed in it, that showed a balance due the company of $132.52, and called for payment, which was not made.
    That being the condition of matters, in July, 1872, Dr. Butler sent his check for $66.15. Even if we concede that he intended it to apply in payment of the premiums to become due on July 18, he did not say so, and the company were not bound to so apply it. They had notified him that he owed them money before that—an assertion which is now shown to be true beyond question. They could refuse to receive his money entirely, or receive it and apply it on the overdue balance; certainly if, in the latter case, they notified him of their action. This they did by letter of July 15, 1872, three days before the maturity of the first of the premiums, to which it is now alleged it should be- applied, and from that application he never dissented until November following.
    It seemed at the trial to be claimed that the action in so receiving and crediting the money received was to be regarded as a waiver and a conclusive recognition that the policy was then in force. But the company’s act—if it was the act of the company—must be taken as a whole. You cannot say the receiving the money was a recognition of a valid policy, but the application of the money was unauthorized. That would be like taking half of an admission (Insurance Co. v. Newton, 22 Wall. 32). You must take it all together. So regarded, it was at most an expression of the willingness of the company to treat the policy as in force provided the overdue premiums were paid.
    IV. When the fraud practiced upon the company in the matter of the advertising bill was discovered by them they had a right to revoke all their action based thereon and to be put back in the same position they were before they were misled by such fraud. This included a right to declare the policy forfeited for non-payment of premiums. Even if it is conceded that under ordinary circumstances the company could not, after it had once given credit for a premium, thereafter declare the policy forfeited for non-payment of that premium, still this has no application to a case where the credit is obtained by a false and fraudulent representation, as we claim was made to us by the presentation of the bill for advertising which had not been done. If it is denied that the act was fraudulent, then we say the denial of our request to go to the jury on that ground was error. Here we exercised our right to declare the policy forfeited, when in January, 1873, we refused to receive the premium tendered for the next six months, notifying his agent who made the tender that we had been deceived by Dr. Butler. Mr. Rollins expressly tendered only for the premium then about becoming due. But we do not admit that if a temporary credit is given for the payment of a premium, thereby-all right of forfeiture for that premium is forever gone. We say that the company must still have the right to insist upon the forfeiture after reasonable notice to pay up is given, and that in this case such notice was given.
   By the Court.—Speir, J.

As to the question of the payment of the premiums for the second insurance year the evidence is conclusive that a receipt for the annual premium of $52, on the policy for $2000, was sent to Dr. Butler by defendant with a statement that they were charged to him. The -first semi-annual premium of the third years’ insurance was paid to defendant together with the premium on a $3000 policy, by Dr. Butler’s check for $66.15. These are the facts relating to the payment of the premiums involved in the issue by the pleadings. The second semi-annual premium of the third insurance year, and the first semiannual premium of the fourth insurance year, during which Dr. Butler died, were duly tendered to the defendant.

The first question of law in the case is—Did Dr. Butler become liable to pay such premium, and was the policy continued in force by the delivery of the renewal receipts for the second year, accompanied with the statement by the defendant that they were charged to him ?

There can be no question where mutual accounts are kept between the parties, that charging a premium to the account of the insured, is equivalent to payment. It is to be remembered in this case, the business was transacted between the insured and the acting officers of the company, and not by its agents. The defendant’s president, Dr. Lambert, testified that Dr. Butler told him he had asked the company’s secretary to send him the receipts, telling him that he would send the money, and thereupon Lambert told Dr. Butler that by the provisions of the policy the receipts would not be good for anything until he had paid, and that they were good for nothing. It is evident that the defendant did not cancel the insurance, but considered the policy still in force and the credit still continuing for three months after the alleged conversation. In January, 1873, it sent prematurely to Dr. Butler a notice of premium to become due on the 18th of that month. The defendant’s secretary wrote to him May 10, 1873, that the sending the notice in January was “of course an inadvertence,” and he enclosed a statement of account, and proposed that thereafter when Dr. Butler took defendant’s receipts for premiums,- he should give “at the same time a due-bill, and then each side has evidence of the settlement up to a given date.” The defendant’s secretary wrote to him on July 15, 1873, that his check for §66.15 had been credited to Ms account. The defendant also wrote to Butler on September 35, 1871, that he was charged on the second year with $2.51, the balance against Mm on the settlement for the first year. The facts conclusively show that the defendant did keep an account with Dr. Butler during the second insurance year, and did continue to give him credit. The premium was paid when the receipts were given (Prince of Wales, &c. Co. v. Harding, Ellis & Bl. Q. B. 181).

The second question is—Did the acceptance of Dr. Butler’s check for $66.15, sent July 12,1872, enclosed with a notice of premium falling due on July 18, 1872, and its collection by defendant, waive any previous default, and continue the policy in force to January 18, 18731

The company wrote to Mm that his check had been received and credited to his account, and that it was not sufficient to balance his indebtedness on the last year’s premiums, and requested a remittance. Dr. Butler had paid the second year’s premiums by the insertion of advertisements, and he held the defendant’s receipts therefor; and in May, 1872, he wrote its secretary that notices had been erroneously sent in January, for payments to fall due that montli. The defendant’s secretary replied that the sending of notice in January was of course an inadvertence. Moreover, Dr. Butler had specified the purpose for which the check was sent. The rule is, that the party paying has the right to make the application at the time of payment, which he may do either by words or by conduct indicating his intention (Stone v. Seymour, 15 Wend. 19 ; Simpson v. Jughan, 2 Barn. & Cress. 65).

The defendant’s fifth exception was to the denial of its request to go to the jury upon the ground of fraud alleged to have been practiced by Dr. Butler in rendering bills for advertisements which were not inserted.

From an examination of all the evidence it is apparent that the alleged fraud was merely a mistake, to which Dr. Butler called defendant’s attention as soon as discovered and from which no injury resulted. There is no allegation in the answer that there was any fraud in the bills presented for payment for the insertion of advertisements in the “ Reporter,” at the time of settlement and the delivery of the renewal receipts, though, the facts - at the time must have been well known.

The defendant’s second exception relates to the exclusion of testimony concerning its cancellation of the policy in December, 1872, and what its practice was with reference to the actual entry of the cancellation. There was no evidence or offer of evidence to show that Dr. Butler or the plaintiff had any knowledge or intimation of the cancellation or of defendant’s practice. Ho valid cancellation of, a policy can be made during a period covered by a paid or tendered premium, or during the term of a credit which has not been terminated by a legal demand of payment and notice that default will be followed by forfeiture.

The plaintiff must have judgment upon the verdict in accordance with plaintiff’s motion.

Curtis, Ch. J., concurred.


source: Caselaw Access Project

author: Speir, J. Curtis, C. J., concurring.

license: Public Domain

text:
    PHILIP A. MADAN, Plaintiff and Respondent, v. ROBERT SHERRARD, Jr., President of the New York Transfer Co., Defendant and Appellant.
    I. CARRIERS OF GOODS. BACCACE EXPRESS.

    1. Limiting their liability by clauses of agreement inserted in instruments delivered by them on the receipt of goods for carriage.
    1. Effect of instrument as limiting liability.

      1. Test of.
    1. The' chabacteb in which it was beceived is.

      (a.) If received and taken by the party delivering the goods for carriage as a contract between him and the carrier, the clauses of limitation will be binding ; otherwise not.
    2. Presumption as to the character in which the instrument is received arising erom its nature.
    1. Bills of lading and other commercial instruments. Persons receiving them are conclusively presumed, to know that they contain the terms on which the property is "to be carried, and to have assented thereto (62 N. T. 179).
    BUT, '

    _ 2. Where the business of the carrier is the carriage of the luggage of travellers from railroads, steamboats, ác., to their residences, or to other railroads, steamboats, ác., and he employs agents to go on trains of cars, and steamboats, &c., and solicit from the passengers such carriage, and such agent, on receiving the luggage, or the railroad or steamboat check therefor, gives to the passenger a printed slip, after having written thereon a description of the luggage by the number of the check received, or otherwise, there is no such conclusive presumption; and the question as to the character in which the paper was received is to be determined by the surrounding circumstances.
    (a.) Domestic bill oe lading.
    The placing of these words on the paper does not alter the rule.
    II. APPLICATION OF PRINCIPLES.

    The plaintiff (Madan) was in a car coming to the city of New York. Defendant’s agent came into the car asking for baggage. Plaintiff beckoned to him; he came to plaintiff, took his railroad check for his trunk, asked his address, wrote the number of the check and the address on the paper, which it is now claimed constituted a contract of limitation, handed it to plaintiff, and passed on. This is all that occured. There was evidence that the light in the car was so poor and dim as to render it impossible to read. The agent wrote the number and address by the aid of a lantern which he carried on his arm. Plaintiff did not read or know the contents of the paper, except the number of the check and the address. He did not try to read it, but immediately folded it up and put it in his pocket. There was evidence that plaintiff had before received from baggage carriers receipts for baggage intrusted by him to them, but no evidence that he had ever read . them or knew their contents. It was also in proof that he had sent merchandise and freight by carriers, in which cases he read the receipts. Plaintiff testified that he knew the'paper related to the carriage of his baggage, and that it was the only hold he had on the company.
    Held
    1. A charge, that if under all the circumstances the jury believed plaintiff knew that the agent proffered the paper as a contract, and accepted it as such, he is bound by it, no matter whether he knew the contents or not, and his recovery must be limited to $100, but if they thought that plaintiff did not know that the paper was meant to be a contract and had no reason to believe so and could not have read it, then he was entitled to recover the value of the goods lost;— Contained no error calling for a reversal.
    3. That a refusal to charge, that if plaintiff did not attempt to read or examine or think of reading or examining the paper, the absence of light in the car was immaterial,
    Was no error.
    3. That refusal to charge in terms, "that if there were sufficient facts about the delivery of the paper under the circumstances of the case to challenge plaintiff’s attention as a man of. ordinary discretion in yiew of the mode of doing business with which he was familiar, that it related to a portion Of defendant’s duty with respect to his baggage, then he is bound;”
    Did not under the evidence in the case constitute error.
    4. That the judgment entered upon a verdict for the value of the property should be affirmed.
    Before Curtis, Ch. J., and Speir, J.

      Decided May 8, 1877.
    The plaintiff sues the defendant as a common carrier for the value of a trunk and contents, upon the ground that the same was lost by defendant’s negligence. The answer admits that the defendant is a carrier for hire, but alleges an agreement limiting the liability of the defendant in case of loss to $100, unless specially agreed for. That no such extra risk was agreed or paid for.
    The appellant’s agent gave to the respondent, while he. was traveling on the Mew York and Mew Haven Railroad, a receipt or check for the trunk, to deliver the same at Mo. 47 West Forty-seventh street, M. Y., and took his brass check therefor. It was about 10 o’clock in the evening of September 1. The agent was passing through the car in which, the respondent ' was seated, asking for baggage; the respondent beckoned to him, he came to the respondent and asked his address, took the railroad check for the trunk, and wrote the number of such check and respondent’s address on the receipt, by the light of the lantern he had on his arm, and passed on. Mothing was said about the contents of the receipt, and no remarks made except, to ask where the trunk was to be delivered. The respondent did not- read or know the contents of the receipt, except the number of the brass check and the place where the trunk was to be delivered. It was never delivered. When the plaintiff received the receipt he immediately folded it up and put it in his pocket, and did not try to read it.
    There was evidence that the light in the car was so poor and dim as to render it impossible to read. There was also evidence that plaintiff had before received from baggage carriers receipts for baggage entrusted by him to them, but no evidence that he had ever read them or knew their contents. It was also in proof that he had. sent merchandise or freight by carriers, in which cases he read the receipts. Plaintiff testified that he knew the paper related to the carriage of his baggage, and that it was the only hold he had on the company.
    The paper given to the plaintiff was as follows :

      After the close of the evidence on both sides defendant’s counsel moved that the court direct a verdict for the plaintiff for $100; which motion was refused and exception taken.
    He also requested the court to instruct the jury as matter of law that the delivery of this receipt to the shipper at the time of the receipt of the property, constituted a contract under the circumstances of this case, and the plaintiff is limited In his recovery to $100 as the value of the property ; which was refused and exception taken.
    The court thereupon charged the jury in substance:
    “If Mr. Madan received the paper as a contract, then he can only recover $100; and it. is within your province, if you think it necessary to compensate him further, to add seven per cent, interest on-that $100, from the first day of September, 1873.
    ‘‘ On the other hand, if you think that Mr. Madan did not know that that was meant to be a contract, and had no reason to believe so, and could not have read it, then he is entitled to recover the value of the goods he lost.”
    Defendant’s counsel asked the court to .charge the jury “That if there were sufficient facts about the delivery of this paper under the circumstances of the case, to challenge his attention as. a man of -ordinary discretion, in view of the mode of doing business with which he was familiar, that it related to or pertained to defendant’s duty, with respect to the baggage, that then he is bound.”
    Thereupon the the.court thus, instructed the jury : "I cannot charge you in that way. I can charge no further than, this; that if from all the circumstances of the case the jury believe Mr. Madan knew that Bishop proffered that as a contract, and he accepted it as such, he is bound by it, no matter whether he knew the contents or not.”

      Defendants’ counsel then asked the court to charge the jury “That if the plaintiff did not attempt to read or examine, or think of reading or examining the paper Exhibit A, the absence of light in the car was immaterial.”
    The court refused so to charge. The defendant’s counsel duly excepted to each of the refusals of said justice to charge as above requested.
    The jury rendered a verdict for plaintiff for $414.25.
    From the judgment entered on the verdict, defendant appealed to the general term.

      Luke A. Lockwood, attorney, and of counsel, for appellant, among other things, urged :
    I. The law is well settled that, in the absence of fraud or imposition, the receipt delivered by the agent of defendant to the person shipping the package, must be held to be the contract between the parties (Collendar v. Dinsmore, 55 N. Y. 200 ; Magnin v. Same, 56 Id. 168; Kirkland v. Same, 62 Id. 171). It is not pretended that there was any fraud or imposition in this case.
    II. 1st. The learned judge erred in refusing to charge, as first requested after the close of his charge. 2nd. The learned judge erred in refusing to charge, as secondly requested after the close of his charge, because the evidence showed that the plaintiff neither tried to read the contract, nor did it occur to Mm to read it. What possible effect could the state of the light in the car have had ? Undoubtedly the evidence, as to light, was suggested by the case of Blossom v. Dodd (43 N. Y. 264): Particular attention is requested to the form and appearance of the paper relied upon by the defendant, in that case, which was thought of so great importance as to require its exact reproduction at page 265. That case turns upon the character and appearance of the paper itself. The court says, however, “The delivery and acceptance of a paper containing the contract, may be binding though not read, provided the business is of such a nature, and the delivery is under such circumstances, as to raise the presumption that the person receiving it knows that it is a contract containing the terms and conditions upon which the property is received to be carried,” and cites with approval the opinion of the court in Grace v. Adams (100 Mass. 560). “It is not claimed that he did not know, when he took it, that it was a shipping contract or bill of lading.” So in Van Toll v. The S. E. R. Co. (104 Eng. Com. Law R. 75), the same principle was decided. Miller, J., said, “Assuming that the plaintiff did not read the terms of the condition, it is evident she knew they were there.” The bill of lading in this case, Exhibit A, is inserted that the court may see that it is not a “card or check” for baggage calculated “ to repel the idea of a contract, but to invite attention to it as a contract.”
    III. The facts of this case bring it directly within the principle decided in Kirkland v. Dinsmore (62 N. Y. 176).
    j T. C. Campbell, attorney, and of counsel, for respondent, among other things, urged:
    I. The fact is, the car being dimly lighted, so that the plaintiff could not read the paper presented, he had a right to infer it was nothing more than a token given in exchange for his check, and he cannot be presumed to know it contained a contract, and did not in fact contain any. The most that could be said was it contained matter by which the defendant wished to entrap the plaintiff with a contract. If the defendant meant to deal honestly, it should have informed plaintiff of the contents of the paper, and given him an opportunity to have assented to its terms or dissented. We claim as in the case of Blossom v. Dodd. First. The transaction was not such as necessarily charged the plaintiff with knowledge the paper contained a contract. Second. The circumstances repel the idea that plaintiff had knowledge that the receipt contained a contract or that the plaintiff assented to its terms. The case is in all essential particulars like the case of Blossom v. Dodd, and the court should have directed a verdict for plaintiff without submitting the case to the jury, as there was no evidence, in fact, on which they could find for the defendant. The defense could not be maintained without violating the established rules as to contracts, and without completely overthrowing the laws which are absolutely necessary to ensure fair dealings on the part of common carriers (Butler v. Heand, 2 Campbell, 515; Blossom v. Dodd, 43 N. Y. 264; Prentice v. Decker, 49 Barb. 21; Lemuegierger v. Wescott, 49 Id. 283; Parker v. The South Eastern R. Co., Law and Equity Reporter, vol. 2, 599-600). He also commented on the cases of Kirkland v. Dinsmore, 62 N. Y. 175 ; Hollister v. Nowlen, 19 Wend. 234; Dorr v. New Jersey Nav. Co., 11 N. Y. 485; Butler v. Herne, 3 Campb. 414; Prentice v. Decker, 49 Barb. 21; Limburger v. Prescott, 49 Id. 283 ; Grace v. Adams, 100 Mass. 560 ; Gall v. S. E. R. Co. ; Parker v. South Eastern R. Co., 12 Law and Equity Reporter, 12.
    II. The only real exception to the charge arose cm the request of defendant to charge the jury if the plaintiff did not attempt to read or examine, or think of reading or examining, the paper, the absence of light in the car was immaterial. The fact there was no light sufficient to read was a fact proper to be proved in the case. It might have been the very reason why the plaintiff did not make the attempt to read the paper. The court properly commented on the subject in the charge, and to charge as requested would be doing the plaintiff injustice. On the whole case, it is manifest justice has been done, and the judgment should be affirmed.
   Speir, J.

The question in the case is, was the receipt, received by the plaintiff, taken by him as a contract between the parties ? The jury were charged that if he did not accept it as a contract, and was not bound so to accept it, he was entitled to recover the full value of the property, and if he received it as a contract between them, then he can recover only the limited sum and interest. There is no positive evidence that the parties directly assented that the paper was to be • taken as a contract, and the point is, do the facts and ' circumstances show that the plaintiff knew or should have known that it was more than a mere receipt, but an implied contract, the terms of which he should have informed himself.

It is apparent from the plaintiff’s testimony that he was acquainted with the nature of express receipts, that he had traveled upon railroads and boats, and received receipts for packages and freight, and that he had received receipts similar to the one given him. This would show that he had or ought to have knowledge that the receiving of packages or freight by express, or the common carrier, must be in writing. The terms for carrying vary as to distances to be carried, weight, quality, and character of the property to be carried. The business itself implies an express contract, the terms of which are to be ascertained. In such a case the party is bound to- treat the paper as a contract when he takes it, and must be assumed to do so. But in the case of carrying a trunk from a railway station to one’s residence, by express, and delivering into the hands of an agent a check containing the number, and receiving a receipt, does not necessarily imply terms of limitation to be set down in writing. It may be an implied contract, and it might or it might not contain terms of limitation. In such a case a person to whom the receipt is delivered, is not obliged, as matter of law, to make himself acquainted with its terms, and bound by them as if he had done so. This distinction is taken and clearly expressed in a recent-case, decided in May, 1876 (Parker v. The South Eastern R. Co., Law and Equity Reporter, vol. 12, p. 12). From the defendant’s using a lantern to write what he did, it is pretty evident that the light in the car was not sufficient to read by (Blossom v. Dodd, 43 N. Y. 264). Although this is not conclusive evidence that the plaintiff might not have read the paper had he tried to do so, there was nothing in the transaction which obliged him to make himself acquainted with its terms. There was not evidence enough to show that the plaintiff must have known, or ought to have known that the receipt contained some agreement which limited defendant’s liability. As the common law liability cannot be restricted by notice merely, the question of knowledge was properly left to the jury. The learned judge in terms charged if the plaintiff accepted the receipt as a contract, he was bound by it whether he knew it or not. The defendant relies upon the cases of Grace v. Adams (100 Mass. 560), and Van Toll v. The S. E. R. Co. (104 Eng. Com. Law R. 75), to show that parties are bound by such receipts. In the first case it was held from the nature of the transaction the party was presumed to have assented to the terms although he had not read the paper. In the other case there was evidence that the plaintiff assented to the terms.

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

Curtis, C. J., concurring.

The decision in the case of Blossom v. Dodd (43 N. Y. 264), governs the present case. The evidence sustains the finding of the jury that there was no contract. In this case, as in Blossom v. Dodd, no intimation was given that the memorandum handed back (apparently as a receipt for the plaintiff’s baggage), contained a contract to limit the carrier’s ’ liability.. The same circumstances also exist to repel the idea of a contract. There is the same impossibility .to read in the dimly-lighted car; and the printing in fine type of the so-called contract, though not quite so fine, is made still more illegible by night in the present case than in that, from being printed in pale green ink. The case of Kirkland v. Dinsmore (62 N. Y. 179), refers to the ruling in Blossom v. Dodd (supra), and maintains the distinction between a traveler receiving a card or ticket for his convenience, and protection in having his luggage carried by a porter from a railway station to his lodgings, and the transaction of commercial business through bills of lading and other instruments of that character.

No case holds that a traveler, receiving a receipt of .this nature, and under like circumstances, where it is impossible to read it, and no intimation is given him of its embracing a contract, is bound by such contract.

. Besides, there are intrinsic difficulties in extending any such immunity from liability, to parties engaged in the porterage of travelers’ baggage at night in large communities. The printing near the commencement of the receipt, the words “Domestic Bill of Lading,” does not obviate the. distinction drawn in the cases above referred to, though possibly so intended.

The court properly left the questions of fact, arising on the trial, to the jury.

I concur in the affirmance of the judgment and order appealed from.


author: Speir, J. Sedgwick, J. Curtis, Ch. J. (dissenting).

text:
    FRANCIS A. PALMER, Plaintiff and Appellant, v. JOHN FOLEY, Defendant and Respondent.
    I. INJUNG TION.

    1. ORDER OF REFERENCE, under the undertaking, to ascertain, damages.
    1. Liability on the undertaking, effect of question as
    TO, ON THE GRANTING OR REFUSING AN ORDER OF REFERENCE.

      (a) If it be perfectly dear that no action will lie, the order will not be granted.

      (b) If it be not perfectly clear that no action will lie, the order will be granted.

    1. Doubt, what sufficient to authorize order of reference.
    See infra.

    2. UNDERTAKING.
    1. Right of actioi? on, questionable when. .

      (a) Discontinuance of the action. The plaintiff obtained an order requiring defendant to show cause why an injunction should not be granted against him, and in the meantime enjoining defendant; on this temporary injunction the undertaking in question was given; on the return of the order to show0cause, the court, after hearing both parties, ordered that the order to show cause be made absolute, and that defendant be enjoined, etc. On appeal by defendant from this order, the general term modified it, and affirmed it as modified. After this, defendant’s attorney gave a consent for the discontinuance of the action without costs. Upon this consent plaintiff entered an order of discontinuance without costs. Defendant’s attorney gave the consent on receiving $100 for costs.
    Held,
    1. That it was not perfectly clear, that there was no right of action on the undertaking.
    2. That there was enough doubt on that point to authorize an order of reference as to damages.
    Before Curtis, Ch. J., Sedgwick and Speir, JJ.

      Decided May 8, 1877.

      An appeal from an order granting a reference to ascertain damages upon an injunction. The injunction was modified, but not vacated, and leave was granted to plaintiff within ten days after service of supplemental answer, to re-enter an order dismissing the complaint on payment of costs. The supplemental answer was served, and after the ten days had expired, and the case noticed for trial and on the calendar, the attorneys assented to the discontinuance of the action, and an order was entered accordingly.
    The plaintiff, as chamberlain of the city, alleged title to the office in his own deputy, and charged the-defendant as a mere intruder. The defendant denied this and set up title to the office. A temporary injunction was issued with order to show cause. On the return of the order, being opposed by the defendant, the injunction was continued. The defendant appealed to the general term, which continued the injunction but modified it.
    The question is, did the mere consent to the entry of the order of discontinuance deprive the defendant of his right to damages.

      William Meredith Field, for appellant.

      R. W. Townsend, attorney, and A. R. Dyett, of counsel, for respondent.
   Speir, J.

It appears that the order to discontinue the action was made upon the plaintiff’s motion, and the same was discontinued upon the payment- of defendant’s costs. It is difficult to see how such a motion could be successfully opposed by the defendant. The.plaintiff would have had the right to do so upon payment, or tender of the costs.. If the defendant had sustained damages by reason of the issuing of the injunction which the plaintiff became liable to pay, the mere discontinuance of the suit by order of the court on plaintiff’s application, could not discharge that liability. The liability had already occurred, and unless the order of the court, in terms, relieved the plaintiff, he has nothing to show for his release. The plaintiff, by his application to discontinue, -waived any right he may have had to the order, and the defendant had a right to the trial of the action, and to an appeal from the judgment therein to the general term, and to the court of appeals, if the judgment had been affirmed. As the case stands, the issuing of the injunction upon obtaining sureties to the undertaking, the motion to continue, and the modification on the appeal, together with the plaintiff’s voluntary discontinuance of the suit, raise at least the presumption of liability. The measure of liability must be determined by the order of reference. The order must be affirmed with costs.

Sedgwick, J.

— There is enough doubt as to the liability upon the undertaking under section 222 of the Code, to make the case of Carpenter v. Wright (4 Bosw. 655), applicable. By that case, unless it is perfectly clear that no action will lie, the liability should be determined in an action upon the undertaking.

I, therefore, concur in affirming the order with costs.

Curtis, Ch. J. (dissenting).

The defendant’s claim for damages, alleged to have been sustained in consequence of the temporary injunction granted to the plaintiff herein, is based upon that provision in section 222 of the Code, securing such damages to the defendant, “as he may sustain by reason of the injunction, if the court shall finally decide that the plaintiff was not entitled thereto.”

So far as the temporary injunction is concerned, and it is the only one granted in the action, the decision of the court at the special term held, that the plaintiff was entitled to it; and this decision was substantially affirmed on appeal at the general term. There is no other decision by the court in respect to it. Unless the parties, by their own action, have placed the right of the plaintiff upon a different footing, it is difficult to see how the court has finally decided that the plaintiff was not entitled to it.

The only action of the parties affecting the injunction, appears in a stipulation subscribed by their respective attorneys, April 24, 1874, in these words,‘‘ On payment of $100 costs to the defendant, we hereby consent to the discontinuance of the above entitled action without costs, and that an order may be entered to that effect.”

Upon the payment to the defendant of the $100 costs, and the reading and filing of this stipulation of the parties, the court ordered the action to be discontinued.

In November, 1876, this application for an order of reference to ascertain damages by reason of the injunction was made.

By this discontinuance, the injunction with the consent of both parties ceased to be operative. The discontinuance was not the sequence of any decision or act of the court, but the carrying out simply of an agreement or bargain between the parties, that such an order should be made on the payment to the defendant of a certain sum of money, which was then paid to him by the plaintiff.

N one of the cases referred to upon the argument, disclose this state of facts, in the discontinuance of an action, or indicate that such a contract of the parties inter sese, is to be construed into, or is tantamount to, a final decision by the court, adversely to the plaintiff’ s right to an injunction.

If the defendant had wished to protect any claim for damages by reason of the injunction, he should have been careful not to have waived the condition in section 222 of the Code. The defendant was not required to sign any agreement as to terms and discontinuance, but having voluntarily done so,- there is an embarrassment in discerning how his own act in discontinuing the suit, and rendering the injunction inoperative, can be viewed as the decision of the court, that the plaintiff was not entitled to the injunction.

It is true, that the demand is somewhat stale, and made against a public officer, long after his retirement from his official position ; but those are features which I have not considered.

The order appealed from should be reversed with costs.


text:
    FREDERICK W. GRIFFITH, et al., Plaintiffs and Appellants, v. DARIUS R. MANGAM, Defendant and Respondent.
    I. CORPORATIONS.
    (1.) Section 5 of the act of New Jersey entitled “an act concerning corporations,” approved February 14, 1846.
    1. Stockholders, liability of to creditors under this SECTION, HOW TO BE ENFORCED.

      (a.) By an equitable action only, brought by or on behalf of all the creditors against the corporation, making all the delinquent debtors also defendants, to assess upon and recover from each their pro rata shares of the debts.
    Before Curtis, Ch. J., Sedgwick and Speir, JJ.

      Decided May 8, 1877.
    This is an appeal from a judgment dismissing the complaint on referee’s report.

      The plaintiffs recovered a judgment for work, &c., against the Patent Lock Shank Button Company, a foreign corporation, incorporated under special act of the legislature of the State of New Jersey. Execution was returned unsatisfied. The defendant was sued as a stockholder, holding stock not fully paid for, in an amount exceeding plaintiffs’ claim.
    The following statute is relied on by the plaintiffs to maintain their action: “ When the whole capital of a corporation shall not be paid in, and the capital paid shall not be sufficient to satisfy the claims of the creditors, each stockholder shall be bound to pay, on each share held by him, the sum necessary to complete- the amount of such share as fixed by the charter of the company, or such proportion of that sum as shall be required to satisfy the creditors of the company.”

      Kelly & McCrea, attorneys, and of counsel, for appellants, upon the question discussed in the opinion, urged:
    I. The statute of New Jersey imports a several and individual liability.
    This would be undoubtedly so under the ordinary reading of the statute, each stockholder meaning not all, but each, separate, and independent. But we are not left to any original construction of the statute for its meaning. Analogous statutes have been- expounded, not only in our own courts, but in the courts of other States, and in other forums, which leave no doubt that the provision of the statute' now under examination should be construed to mean, as against stockholders, a separate and several liability, rather than a joint one (Bank of Poughkeepsie v. Ibbottson, 24 Wend. 473 ; Paine v. Stewart, 33 Conn. 516; Stanton v. Wilkinson, N. Y. Times, Feb. 20, 1876; Sanger v. Upton, 1 Otto [U. S. Sup. Ct.].56; Kennedy v. Gibson, 8 Wall. 498; In re Hollister Bank, 27 N. Y. 393).
    II. While the plaintiff might have availed himself of an action against all the stockholders, both on behalf of himself and any other creditor who might choose to come in, we insist that he was not bound to pursue this remedy alone. Upon principle, we think, this action is not to be distinguished from the suit of a creditor seeking to recover its debt from a person having assets belonging to an insolvent corporation (Bartlett v. Drew, 57 N. Y. 587 ; Garrison v. How, 17 Id. 458 ; Sanger v. Upton, 1 Otto, 56; Sawyer v. Hoag, 17 Wall. 610 ; Mann v. Pentz, 3 N. Y. 415 ; Story’s Eq. Jur. § 1252; Tinkham v. Borst, 31 Barb. 407; Ogilvie v. Knox Ins. Co., 22 How. U. S. 380 ; Weeks v. Love, 50 N. Y. 568).
    But it will be urged by the defendant here that the case of Bartlett v. Drew is not in point—that it has no application in its bearing upon the question of a stockholder’s liability. Let us see if this be so. Unpaid stock is as much a part of the property or assets of an Insolvent corporation as any other part of its property. There is no distinction. In the words of Swayne, J., in Sanger v. Upton, supra, “Unpaid stock is as much a part of this pledge (trust fund) and as much a part of the assets of the company, as the cash which has been paid in upon it. As regards creditors there is no distinction between such a demand and any other asset which may form a part of the property and effects of the corporation.”
    If this reasoning is sound, and speaking as it does the large and profound learning of the supreme court of the United States, we may well deem it to be correct, then the case of Bartlett v. Drew, we contend, has not only a very close but controlling application to the one at bar. And, in that view, we think, to use the language of the. opinion in that case, ‘‘ that the consideration of the questions in respect to parties and the form of the action quite unnecessary.”
    III. In opposition to the line of argument contended for in the foregoing points, it will doubtless be urged now, as it was before the learned referee, that there are authorities in this State opposed to the conclusions we. have arrived at, and which are fatal to them. And among these authorities is the case of Mann v. Pentz (3 N. Y. 415). Now, instead of considering this case an authority for the defendant, we think its entire scope and spirit in harmony with the views and position of the plaintiffs which we have already presented, and we are supported in this conclusion by the decision in Bartlett v. Drew, supra.

    IV. We consider that it follows from our assumption of the nature and effect of the defendant’s liability herein, that the remedy is not given to all the creditors jointly, but that it is available to each creditor as a several and distinct right. And we are firmly supported by authority in many of the cases already cited for this view of the statute (Bank of Poughkeepsie v. Ibbottson, supra; Briggs v. Penniman, 8 Cow. 387; Garrison v. Howe, 17 N. Y. 458; Weeks v. Love, 50 Id. 568).

      Arnold, Elliott & White, attorneys, and J. H. V. Arnold, of counsel, for respondent, on the question discussed by the court, urged:
    I. The defendant’s liability, if any, rests wholly on section 5 of the act of New Jersey entitled “An Act concerning Corporations,” approved February 14, 1846. This act is precisely the same as section 5, title 3, chapter 18, part 1, R. S. of New York. The courts of this State have held that under this New York statute the liability can only be enforced in an equitable action against the corporation and. all delinquent stockholders by or on behalf of all the stockholders (Mann v. Pentz, 3 N. Y. 416). This disposes of the case at bar in favor of defendant. There are other New York decisions to the same effect made upon above cited section of the R. S. and on analogous statutes (Talmadge v. Fiskkill Iron Co., 4 Barb.
      393 ; Morgan v. N. Y. and Albany R. R. Co., 10 Paige, 290 ; Matter of Hollister Bank, 27 N. Y. 305; Mills v. Stewart, 41 Id. 389; Osgood v. Layton, 3 Abb. Ct. of App.)

    II. Under other statutes such as the acts of 1811 and 1848, it has been held that an individual creditor had a right of action against an individual stockholder. These acts, however, were entirely dissimilar in their provisions from the one in question.
    III. The case of Bartlett v. Drew (57 N. Y. 589), is not in antagonism. That case was put on Che ground that the defendant was in possession of assets of the corporation, to which he had no right or title.
   By the Court.—Speir, J.

The only question for review is whether the facts as found, without exception, sustain the conclusions of law. The fact is proved, as found by the referee, that there were other delinquent stockholders besides the defendant, and that the plaintiffs could not recover in this form of action.

It will be seen by reference to this special act, that the only provision under which stockholders are liable for any debts of the company, is contained in the general clause, providing that the corporation shall have all the powers and be subject to the restrictions and liabilities applicable to corporations generally, in the State of Hew Jersey, under the “act concerning corporations,” approved February 14,1846, and the acts supplementary thereto. The fifth section of the act itself contains the provision under which the question arises.

Ho individual or several liability on the part of the stockholder is created by this section. The language is clear and explicit. There are two conditions of liability expressed, in terms. Where the whole capital of the corporation shall not have been paid in, and where the capital paid shall be insufficient to satisfy the claims of creditors, “Each stockholder shall be bound to pay on each share held by him the sum necessary to complete the amount of such share as fixed by the charter of the company, or pay such proportion of the sum as shall be required to satisfy the creditors of the company. ’ ’ The liability is incurred when the capital paid in is insufficient to satisfy the debts against the corporation, and then only to an amount sufficient for that purpose. The liability is to the creditors of the corporation—and not to the individual stockholders— to the extent of what remains unpaid upon their respective shares of the capital stock of the company, or of such proportions thereof as may be necessary to satisfy the debts of the corporation. An account must be first taken of the debts, of the assets, ando of the aihoimt of capital remaining unpaid upon the shares, and the amount unpaid by each stockholder, in order that they may be made equally liable, before each stockholder shall be bound to pay on each share held by him. In short, the stockholders under the statute are not liable to the company, but for the debts, and the debts are due to the creditors and not to the company (Morgan v. N. Y. & Albany R. R. Co., 10 Paige, 290 ; Mann v. Pentz, 3 N. Y. 416). In this last case it was decided that only an equitable action by the creditors against all the stockholders to assess and recover from each their pro rata share of the debts would lie; and that no action on the part of the company could be maintained for that purpose. Yo one creditor of the company can maintain an action against an individual stockholder, for the reason that the liability created by the statute is to the creditors generally, and not to individual creditors, thus creating a liability to the creditors jointly. In equity, this liability enures to the creditors in proportion to the amount of their debts, respectively. A court of law cannot do justice between the parties in a joint action by all the creditors, and work out this equity.

I have not been able to find any decision by the courts in New Jersey conferring directly or by implication any right of action to the corporation against stockholders, or any action at law to any creditor against an individual stockholder where stock is not fully paid up. The statutes under which the decisions in this State are uniform are in all respects the same as the one at bar. In all the cases these statutes have received but one interpretation—a joint liability on the part of delinquent stockholders to pay pro rata according to their stock, and a right on the part of the creditors to have such moneys applied pro rata and equitably in.payment of their debts.

The judgment must be affirmed with costs.

Curtis, Ch. J., and Sedgwick, J., concurred.


text:
    MATHEW T. BRENNAN, late Sheriff, &c., Plaintiff, v. JOACHIM ARNSTEIN and PHILIP GOLDMAN, Defendants.
    I. UNDERTAKINGS; SEVERAL IN AN ACTION.

    1. Release of sureties to a prior one; effect of on liability OF SURETIES TO A SUBSEQUENT ONE.

      (a) The release by the party to whom the first undertaking is given or his assignee, of. the sureties to that undertaking does not release the sureties on a subsequent undertaking given to him.
    3. Payment in whole or in part by the sureties to a prior undertaking.

      (a) Reduces (he UaMMti/ of the sureties on a subsequent one to the party to whom is is given, by the amount of such payment.
    H. CLAIM AND DELIVERY.

    1. Undertakings in actions of, application of above principles.

      (a) A release of the sureties to the undertaking givertlry the plaintiff on taking the property from the defendants upon a receipt from them of a portion of the amount for which they are bound under their undertaking, will not release the sureties to an undertaking given by the plaintiff on appeal to the general term from a judgment rendered against him in the action for the purpose of staying execution; but they are entitled to have credited on the amount for which they are bound the sum received from the sureties on the first- undertaking.
    III. UNBERTAKINQ-.

    I. INSUFFICIENT TO STAY EXECUTION.

      (a) Sureties liable thereon nevertheless, when.
    1. When it has been accepted as sufficient and all proceedings have in fact been stayed on the faith thereof.
    Before Sedgwick and Speir, JJ.

      Decided May 8, 1877.
    This is an appeal by the defendant Arnstein from an order denying a motion to vacate the judgment entered herein and the execution issued thereon and to allow him to defend the action.
    In 1871, Caroline Pollock brought a replevin suit against the plaintiff in this action (being the defendant in that one) and she as principal and Wahlig & Ma- . thias as sureties, executed an undertaking to procure the delivery of the property to her. The defendant in that action recovered judgment, and the plaintiff therein appealed to the general term and gave an undertaking on appeal to stay proceedings with the defendants in this action as sureties. The general term affirmed the judgment; the defendant in that action (being the plaintiff in this) thereupon brought this action on the undertaking given on appeal against both the sureties thereto (being the defendants in this action) and recovered judgment herein against them both by default. The plaintiff assigned this judgment and all the collateral undertakings to one Nathan Hutkoff, who brought an action under the replevin undertaking, and the sureties to the undertaking. Wahlig & Mathias answered, but thereafter they paid to Hutkoff one-half the amount, and assigned to him all claims and rights of action which they had against Arnstein & Goldman by reason of their suretyship, and Hutkoff & Goldman executed to Wahlig & Mathias a release, of and from all claims and demands which they or either of them had against said Wahlig & Mathias or either of them arising out of the said undertaking executed by them. Hutkoff credited on the judgment in this action the full amount recovered from Wahlig & Mathias, and issued execution against both defendants for the balance.

      Simon Sultan, attorney, and Algernon S. Sullivan, of counsel, for Arnstein, upon the points stated in the head note, urged:
    I. Even leaving out the question entirely as to whether, the defendant Goldman had paid' the judgment, or Nathan Hutkof had bought it, and assuming the latter to be the fact, the release of the replevin bond was a release of these defendants. 1. The sureties on the undertaking on appeal were, in fact, sureties for the parties to the replevin bond. The undertaking on appeal not having been in the form prescribed by section 336 of the Code, it did not stay proceedings on the execution (Elliot v. Buckland, 37 How. 71); being otherwise of no necessity in law, it was a mere gratuitous undertaking, creating no liability, not being supported by the statutory consideration (Post v. Doremus, 60 N. Y. 371). The sureties to the replevin bond, by the recovery of the judgment in replevin against their principal, had themselves become principal debtors bound by their obligation to effect a return of the property according to the judgment, and only if they failed to procure such return, the judgment was for a specific sum of money to stand in lieu of the property. The sureties on the undertaking on appeal never agreed to look to the return of the property, but to the payment only of the amount directed to be paid by the judgment. That amount, however, was not due and payable, unless the sureties on the replevin bond had made default in their undertaking to procure a return of the property. The effect of the undertaking on, appeal, therefore, was an obligation to become answerable for such default. Within every principle this created the relation of principal and surety (See Wood v. Fisk, 65 N. Y. 250, 251). The same reasoning applies to the relation here. The principals, the parties to the replevin bond, haying been discharged, the sureties were discharged likewise (Boyd v. McDonough, 39 How. 389). 2. The case of Hinckley v. Kreitz (58 N. Y. 583), contains no principle applicable to this case, and the learned judge erred in deciding the motion upon the doctrine there laid down. a. The undertaking on appeal in that case was indispensably necessary to effect an appeal at all, whereas in this case, there was no such necessity. The undertaking in that, case had the effect of staying proceedings on the execution, and to delay the collection of the judgment, the undertaking in this case did not stay anything (See Elliot v. Buckland, supra), b. It is argued in that case that the sureties on the first undertaking upon payment of the judgment when recovered had a right to stand in the place of a creditor as to all rights and remedies, but in order that the replevin sureties should have that resort here, they had necessarily to take an advantage of the breach of their own contract to have the property returned, for which default alone the money judgment, which the appeal bond secured, was payable. They could not take advantage of their own wrong. c. The principle in that case, and all the authorities cited in support of it, is that the interposition of the latter sureties was the means of involving the former into ultimate liability, and of securing a delay. There was no such legal result by means of the undertaking on appeal here, which was gratuitous and unsupported by any consideration.

      L. A. Gould, attorney, and of counsel, for Nathan Hutkoff, upon the points stated in the head note urged:
    I. Upon his own admission, Arnstein is liable to the holder of the judgment for the full amount thereof. And as surety upon the undertaking last given, he is primarily liable (Hinkley u. Kreitz, 58 N. Y. 583). So far he has paid nothing; if any sum is collected of him he may recover the whole amount from his principal, Pollock, and can demand contribution of his co-sureties if he pays more than the proportionate share (Holmes v. Weed, 19 Barb. 128; Bonney v. Seely, 2 Wend. 481; Bradley v. Burwell, 3 Den. 61 ; Norton v. Coons, 3 Id. 130 ; Easterly v. Barber, 3 C. S. 421; Armitage v. Pulver, 37 N. Y. 494).
    II. The principal, Caroline Pollock, has never been discharged by any of the sureties, but if the other sureties had released her this could work no injury to the appellant, Arnstein, for he has not done so. The judgment against her remains in full force. Hutkoff, the holder of the judgment, could recover the full amount from any one of the four sureties, and if he compels payment from any one of them of a sum greater than his proportionate share, that one may claim contribution from the others. Payment of course can be required but once, and if any one chooses to pay the whole he forthwith may assume the position and rights of the judgment creditor to recover their proportion from the others (Cuyler v. Ensworth, 6 Paige, 31).
    III. Appellant’s theory that the release of the sureties on the first undertaking on their paying one-half of the judgment operated to discharge him from all liability, has no foundation in reason, and is without authority in law. The primary liability resting upon the appellant and Goldman, their absolute release might be set up as a defense by Wahlig and Mathias, for the reason that the latter would have a remedy over against the former, of which the discharge of the former would deprive them (Hinkley v. Kreitz, supra, p. 592). But the release of Wahlig and Mathias could have no such effect even if it were absolute. Arnstein and Goldman could not compel Wahlig and Mathias to pay more than one-half of the judgment, and that amount Hutkoff compelled them to pay, credited the same to Arnstein and Goldman on the judgment, and issued execution against both for the balance only. If Arnstein alone is compelled to pay the whole sum remaining unpaid, he may have contribution against Goldman for one-half the amount so paid, and may recover the balance from his principal, Caroline Pollock. The obligation of the principal to a surety arises not from the signing of the undertaking by the principal, but from the implied agreement to indemnify the surety. There is no averment that Caroline Pollock is insolvent, nor that Goldman is not amply responsible. The appellant has suffered no injury, nor are his rights at all endangered. The order should be affirmed with costs.
   By the Court.—Speir, J.

The only facts in controversy relate to the assignment of the judgment to Hutkoff. The appellant Arnstein claims that the assignment to him was colorable only—that Goldman furnished the money to keep the judgment alive and to enforce it against Arnstein.

I am of the opinion that the court below justly decided that the weight of evidence sustained the validity of the assignment. The burden was upon the appellant to show affirmatively that the transaction was collusive. The strength of his application for relief greatly depends upon the allegation of bad faith on the part of his co-defendant and Hutktiff, as his moving papers disclose no defense to the action should he succeed in securing the favor of the court in permitting him to come in and defend. It is not claimed but that he became liable as surety, or that he has paid anything in satisfaction of his liability. Upon the decision of this controverted question of fact, the court on appeal has no ground to interfere.

The question is whether the sureties are liable upon the undertaking upon the appeal from the judgment against Caroline Pollock to the general term of this court. After reciting that she intended to appeal to the general term, the sureties ‘‘ undertook that the said appellant will pay all costs and damages which may be awarded against her on said appeal, not exceeding five hundred dollars, and also undertook, that if the said judgment so appealed from, or any part thereof, be affirmed, or the appeal be dismissed, the said appellant will pay the amount directed to be paid, &c.”

As surety upon this undertaking Arnstein became liable absolutely by the very terms of the undertaking when the judgment below was affirmed by the general term." His papers make the admission that he is liable to the holder of the judgment for the full amount. He may recover the whole amount of any sum, which may be collected of him from his principal Pollock.

The only equities which arise in the case relate to the equitable right of contribution. If he pay more than the proportionate share, he can demand contribution of his co-sureties. Therefore the appellant’s position that the release of the sureties on the first undertaking by paying one-half of the judgment operated to discharge the appellant from all liability has no foundation in law.

It was also objected that the undertaking on appeal, not having been in the form prescribed .by the code, did not stay the .proceedings on the execution, and created no liability, not being supported by the statutory consideration. > The omission, upon which the objection is founded, is that of a clause binding the sureties to obey the order of the appellate court. Otherwise the undertaking is regular. The appellant’s surety in his oath avers that he executed this undertaking “to stay all proceedings on the said judgment.” It was accepted and all proceedings were accordingly stayed. I am inclined to think that it is too late to raise this objection.

It would be grossly unjust to allow the appellant to escape from his obligation, voluntarily given, and which has been accepted and accomplished the purpose for which it was given, on the sole ground of .technical defects and informalities which he himself has committed.

The order must be affirmed with costs.

Sedgwick, J., concurred.