text:
    WILLIAM BOARDMAN, Respondent, v. JOSEPH GAILLARD, Jr., and others, Appellants.

      Insurance—dividends — custom—receipt.

    Plaintiff and defendants were joint owners of a steamer, plaintiff owning four-fifths, and defendants one-fifth. The steamer was managed by defendants, and, by them, insured for the benefit of all the owners in several mutual insurance companies, the plaintiff being charged with four-fifths of all the premiums; held, that the plaintiff was entitled to receive four-fifths of all scrip or dividends received by the defendants on account of such premiums.
    The vessel was subsequently sold, and, after the defendants had received the proceeds of the scrip, the plaintiff received seventy-six dollars and thirty-five cents, as the balance then due him out of the earnings of the vessel, and gave a receipt therefor, which purported to be in full of all demands against the defendants. The plaintiff testified that he did not know, at this time, that anything had been realized from the scrip; held, that he was not estopped by the receipt from showing his mistake as to the facts, and that he only intended to give a receipt for the sum of money he actually received.
    To render a custom obligatory, it must ordinarily be proved that it was known to the party to be bound thereby.
    Appeal from a judgment, in favor of the plaintiff, entered upon the report of a referee. The action was for an account, in respect to the proceeds of scrip received by defendants on premiums paid on insurance on a steamer, the joint property of plaintiff and defendants, in the Atlantic and other mutual insurance companies.
    The plaintiff, at the time he- received the seventy-six dollars and thirty-five cents, gave the following receipt:
    Received, New York, 12th November, 1867, from Messrs. Aymar & Co., seventy-six dollars and thirty-five cents, to close account, my interest in steamer “Mary A. Boardman,” and in full of all demands of mine against Messrs. Aymar & Co.

    The other facts in the case appear in the opinion.

      George H. Foster, for the appellants,
    insisted that receipt was in nature of contract, and could not be varied by parol. (Pierce v. Pierce, 25 Barb., 243-252; Palmerton v. Huxford, 4 Den., 166;
      Howlett v. Howlett, 56 Barb., 478; Grocers' Bank v. Fitch, 1 N. Y. Supreme, 653; Howard v. Norton, 65 Barb., 167 ; Kock v. Bonitz, 4 Daly, 117-120; Joslyn v. Capron, 64 Barb., 606.) That the account became stated. (Hutchinson v. Market Bank of Troy, 48 Barb., 302; Lockwood v. Thorne, 11 N. Y., 170.)

      F. H. Benn, for the respondent.
   Daniels, J.:

The plaintiff and the defendants, who constituted the firm of Aymar & Co., were the owners of the steamer called Mary A. Boardman from the time when she was built, in 1862, until August, 1864, when she was sold. The title was in the defendant, Joseph Gaillard, Jr., as security for advances made by his firm in building her. It was so held for the benefit of the plaintiff and defendants, he owning four-fifths and they the remaining one-fifth; she was managed by the firm of Aymar & Co., in which the plaintiff was not interested; whilq she was so owned and managed, she was insured by the firm in the Atlantic and Sun Mutual Insurance Companies. These companies transacted their business on what is known as the mutual plan, which was so arranged and carried on as to allow the persons, insured by them, to participate in the profits of the business of the companies. Under that arrangement, the firm received from these companies, for the years 1862, 1863 and 1864, certificates called scrip, entitling them to certain amounts, as their portions of the earnings or the profits of the business done in those years. The insurances, on account of which these certificates were issued and received, were all effected for the benefit of the plaintiff as well as the defendants, and four-fifths of the premiums, paid for them, were charged over by the defendants to him, and allowed by him in the settlement of their accounts; in effect, therefore, four-fifths of their amount resulted from the insurance of his interest in the steamer, and the premiums paid by the firm and reimbursed to it by him. And that proportion of the certificates or scrip, was, for that reason, as much his property as it would have been, if the insurance to that extent, had been effected in his name; if a loss had happened during the continuance of either insurance, no person would deny the plaintiff’s right to four-fifths of the entire amount paid in satisfaction of the claim under it, and yet that would be no more directly the result of the premium paid by him for the insurance, than the certificates or scrip issued on account of its proportionate part of the profits or surplus earnings of the company; in reality, the amount returned, by force of the scrip or certificates, is so much more premium paid than the sum for which, under the circumstances afterward occurring, it appears the insurance should have been made; in substance, it is a rebate of the premium paid for the insurance, and it as completely and equitably belongs to the person whose interest, at his expense, is insured, as the money did, which he paid for the purpose of having the insurance made; if he had paid a certain sum to an agent for the purpose of procuring a policy for him upon his interest in the ship, and it had been effected for less than the amount, the difference would, beyond controversy, be the property of the principal, and his rights, in this respect, cannot be changed by the circumstance that the money actually went into the hands of the insurance company, under an implied understanding that the portion, not required to pay the premium earned, should be returned to the person effecting the insurance; so far as the firm of Aymar & Co. acted for the plaintiff in insuring his interest in the steamer, they did so as his agents, and under the well-settled principles applicable to that relation, he was entitled to the benefits, advantages and profits of the act they performed in his behalf.

There is nothing in the action of the chamber of commerce, as it is shown in the case, in conflict with the existence of this right. The conclusion of the committee, to which the subject was referred, and which was afterward adopted, was, that “the parties here who effect the insurance, are entitled to the stock certificates.” In the present case, the plaintiff was the real person who effected the insurance made on his four-fifths of the steamer; it was done for his sole and exclusive protection and benefit, through the action of his agents, and at his expense, and they paid so much more for it than the companies proved entitled to receive, as they agreed to refund by means of the certificates or scrip, issued on account of subsequent surplus profits or earnings.

But as the action of the chamber of commerce, cannot be allowed the effect of law, regarding the rights of parties in legal controversies, it would not change the case, even if the construction already mentioned could not appropriately be given to the conclusion mentioned in the report of the committee; the legal rights of parties to property, cannot be divested or changed by any such action. These rights, in this case, result by operation of law from the relations existing between the parties, and the means through which the insurance upon the plaintiff’s interest in the property was effected, and no custom can be allowed, as valid, which would deprive the party, entitled to it, of the protection secured by well-settled legal principles; if it could, the law would be chargeable with the palpable absurdity of providing the means for its own subversion. Beyond that, there was no evidence in the case, which, in any view, could render such a custom, even if it existed, obligatory upon the plaintiff, for he was not shown to have any knowledge of its existence; and proof of such knowledge, or of facts from which it may be fairly inferred, is ordinarily essential to the establishment of a valid custom.

The proof showed that Aymar & Co., from time to time, rendered accounts to the plaintiff, showing their receipts and disbursements in the management of the steamer, and the premiums paid on the plaintiff’s account for insuring his interest; but, as they contained nothing whatever in reference to the certificates or scrip received, they present no obstacle in the way of maintaining the present action for his proportion of their proceeds, even though he failed to object to the accounts and afterward settled them. There was nothing on the face of the accounts rendered, from which he could infer that the firm intended to claim his proportion of such proceeds, and he could not' therefore be reasonably expected to object to their omission to credit him with it; besides that, his own evidence as a witness, which was acted on as credible by the referee, was, that he did not know that anything had been realized from the certificates or scrip when the accounts rendered were settled, and if he had, that would not have precluded him from proving a mistake or misapprehension as to the facts, on his part, as to that subject. The proof in this case was sufficient to bring the plaintiff’s claim within the rule supported by these authorities.

And after these accounts had been rendered and settled, and after the proceeds of the certificates or scrip had been received by the firm of Aymar & Co., the plaintiff received seventy-six dollars and thirty-five cents, as the balance then due him out of the earnings and management of the steamer; the receipt then given by him, declared the amount paid to close the account of his interest in the steamer Mary A. Boardman, and to be in full of all demands against Aymar & Co.

At the time when that payment was made, the plaintiff testified that no settlement was made, and that all which was designed to be receipted for, was the amount of money he received; that he did not read the receipt, and .could not do so without his glasses; when, on the other hand, the clerk of the firm, who made the payment and took the receipt, testified that it was paid as the last amount the plaintiff was entitled to, on account of his interest in the steamer. Under this state of the evidence, the question, whether the amount paid was received in full by the plaintiff, was one of fact, and as the referee has found upon it against the defendants, his conclusion must be adopted as final, for no such preponderance existed upon the subject, either way, as would justify this court in holding that conclusion to be erroneous.

It must be assumed, in conformity with this finding, that the amount paid was simply received as so much then appearing to be due to the plaintiff from the defendants, having no effect whatever upon any other legal demand which might be shown to eKist against them in his favor; accordingly, there was nothing in what then transpired, which should prevent the plaintiff from maintaining his present demand, and the statement in the receipt, subscribed by him, that he received the amount paid, in full, did not exclude proof showing that such was not the fact; what the receipt contained on this subject, was, in no just sense, a contract; it was a simple declaration, at the most, that the amount paid was received in full of all demands, and that has always been liable to explanation and contradiction, where it may be shown to be inconsistent with the truth and the settled rights of either party to the controversy involving it. The referee found that certificates or scrip were received by Ay mar & Co., on account of the insurance of the steamer in the Sun Mutual Ins. Co., to the amount of $2,520 ; but the evidence of the secretary, who was sworn and examined as a witness on the plaintiff’s behalf, showed that it was all canceled without anything being paid upon it by the company; the only profit, which the firm derived from it, was secured by means of its sale, made in April, 1866, at a discount ranging from twenty, to thirty-seven per cent. This large discount was not made good by the interest of six per cent, and the dividend of one and one-half percent which the company paid upon it; neither did those payments, and the excess in the gross amount of the certificates or scrip received over the amount allowed by the referee, so far increase the proceeds, as to equal the amount allowed for them by the learned referee. What that precise amount should be, under the evidence, it is not necessary to determine; for the defendants, by their answer, have admitted that they received scrip from both the insurance companies insuring the steamer, on which they realized the sum of $8,788.é9, and that, certainly, is as much as the evidence warranted the referee in concluding that they had received ; four-fifths of that, amounting to the sum of $7,030.92, the plaintiff was certainly entitled to recover, which is $42.66 less than the amount allowed him. As the defendants, upon their own admission, are liable under the evidence relating to the other subjects, considered to this extent, there can be no necessity for examining the objections taken during the trial, as to the exclusion or admission of evidence; neither can it be proper to consider the vast multitude of exceptions taken by the defendants to the referee’s refusal to find on the specific matters submitted to him, for no question can be presented by exceptions of that description. The only error in the case, at all prejudicial to the defendants, is that relating to the amount allowed, and to correct that, the judgment should be reversed, and a new trial ordered, with costs to abide the event, unless the plaintiff, within twenty days after notice of the decision, stipulate to deduct forty-two dollars sixty-six cents, with interest from the 16th of April, 1866, from the amount of the judgment. In the event of making such stipulation, the judgment, as so reduced, should be affirmed, without cost of this appeal to either party.

Davis, P. J., and Lawrence, J., concurred.

Ordered accordingly.

       Minnesota R. R. Co. v. Morgan, 52 Barb., 217.

       Ripley v. Ætna Insurance Co., 30 N. Y., 136, 160 ; Duguid v. Edwards, 50 Barb., 288; Wadley v. Davis, 63 id., 500 ; Read v. Delaware & H. Canal Co., 3 Lansing, 213 ; Higgins v. Moore, 34 N. Y., 417.

       Hutchinson v. Market Bank of Troy, 48 Barb., 302, 324; McIntyre v. Warren, 3 Keyes, 185.

      Ryan v. Ward, 48 N. Y., 204.

       Rogers v. Wheeler, 52 N. Y., 262.


source: Caselaw Access Project

author: Beady, J.: Davis, P. J.:

license: Public Domain

text:
    GEORGE E. HOLYOKE and another, Respondents, v. SAMUEL ADAMS and ALFRED RICHARDS, Appellants.

      Discharge in bankruptcy—when not allowed to be set up in supplemental answer — attachment.

    In an action commenced against the defendants, who were non-residents, an attachment was issued, to procure the dissolution of which, an undertaking, with sureties, was given. Some two years after the commencement of the action, and while it was pending before a referee, the defendants commenced proceedings in bankruptcy, and, having procured their discharges, applied to the court for leave to file a supplemental answer, setting up the discharges, so procured, as a defense to the suit. The court, at Special Term, refused to allow them to do so. Held, that this was proper.
    Appeal from an order made at the Special Term, denying a motion made by the defendants for leave to file a supplemental answer, setting up their discharges in bankruptcy, obtained subsequent to the commencement of the action.
    This action was commenced in 1869, and,, the defendants being non-residents, an attachment was issued against their property, to procure the dissolution of which, an undertaking, with sureties, was given. The case, being at issue, was referred to Hon. W. H. Leonard, to hear and determine. During the pendency of the action, and in the month of October, 1872, the defendatits were severally adjudged bankrupts by the District Court of the Hnited States, for the District of Massachusetts. In January, 1873, a motion was made, in behalf of the defendants, at Special Term at "chambers, founded upon said proceedings in bankruptcy, for a stay of all proceedings in this action, pending the application by defendants for their discharge, which motion was denied so far as to allow plaintiffs to proceed to judgment in the action. From this order, the defendants appealed to the General Term of this court, where the order was affirmed, the following opinion being delivered by Beady, J.:
   Beady, J.:

In this case, the proceedings in bankruptcy were not commenced within four months after attachment was granted, and the attachment, if it had been continued, would not, therefore, have been dissolved by operation of the bankrupt law. The fourteenth section declares only that attachments, made within four months next preceding the commencement of such proceedings, shall be dissolved. The result of the attachment is a vested right, which is to have the property seized, applied to the extinguishment of the debt; subject, however, to the right of the debtor to substitute an undertaking prescribed by law. The plaintiff, by attaching property, acquires a specific lien upon the debtor’s interest, and is entitled, like a judgment creditor, to impeach the colorable title of a fraudulent mortgage.

The execution and delivery of such an undertaking to release the property, should be held, in legal contemplation, to be a part, and in continuation of the attachment proceedings. The propriety of this is apparent from the obligation assumed by the sureties, which is, to pay any judgment that may be recovered in the action, the sureties thus agreeing to do exactly what the property seized would do when applied, namely, pay the judgment obtained; and also from the presumption that the property levied upon, would have remained in statu quo until the judgment was recovered, if the undertaking had not been given. The application of this principle, in this case, would protect the plaintiff from the intervention of a power, by which he might otherwise be deprived of a substantial right, acquired by superior diligence, under the laws of the State.

The character of the undertaking, its subject, office and purpose, however, leave no doubt that it is a substitute for the levy under the attachment, which is in effect continued, although the process is discharged. There is another view of this question which may be stated thus: The undertaking having been given, the sureties assumed the payment of the debt alleged when established by pro. cess of law, and they became the debtors of the plaintiff, on condition that the demand was proven and judgment for it obtained. This obligation rests upon, and the consideration is, the delivery of the property seized, a delivery predicated entirely of their promise to pay the claim, for the discharge of which the property released, was seized. Their liability, therefore, depends upon whether the debtor, at the time of the giving of the undertaking, was lawfully indebted to the plaintiffs, and, to ascertain that, the judgment must be recovered; for such, as already suggested, is the condition of the obligation assumed by them. If this view be correct, it is immaterial whether the debtor has been discharged from his indebtedness or not, by subsequent proceedings. Such a result would not affect the liability of the sureties whose undertaking related to an existing liability, which, as soon as determined, made their promise absolute. For these reasons, in addition to those already given, the order of the Special Term should be affirmed.

This appeal is thus disposed of, without considering whether the .fourteenth section of the bankrupt act is constitutional; whether, when the jurisdiction of a State court has been invoked and rights have been secured under it, they can be taken away by proceedings in another court, under the provisions of the Constitution of the United States. It might not be difficult to solve this problem, although it has been held, in proceedings in bankruptcy, that congress has the power, by operation of a general bankrupt law, to divest the conditional lien, acquired by levy of an attachment. We have examined, but do not feel bound to follow, the cases cited on the argument which were decided in the courts of Massachusetts.

In the month of September, 1873, the defendant, Adams, and in January, 1874, the defendant, Richards, were severally discharged, in said bankruptcy proceedings, from all their debts and claims, provable against their estates in October, 1872.

On the 9th of January, 1874, a motion was made in behalf of the defendants, for leave to file a supplemental answer, setting up their discharge in bankruptcy, and, the motion having been denied, this appeal was taken.

E. Cooke, for the appellants.

Edward D. McCarthy, for the respondents.

Davis, P. J.:

The motion in the court below, was for leave to file a supplemental answer, setting up the defendant’s discharge in bankruptcy.

The suit was commenced in 1869. The property of the defend-' ants in this State, was attached in due form at that time, they being non-residents. An undertaking was given, with sureties, on the dissolution of the attachment. Some two years afterward, while the action was pending upon a reference, the defendants commenced proceedings in bankruptcy, which have resulted in the. discharges now sought to be pleaded. When this case was before this court, on appeal from an order refusing a perpetual stay of proceedings in the action, this court held, as appears by the MS. opinion of Brady, J., that by the attachment, the plaintiffs acquired ‘ a lien upon the property attached, for the payment of the recovery that might be had in the action. That the proceedings in bankruptcy, not having been commenced within four months after the levying of the- attachment, did not operate to dissolve the attachment. That the plaintiffs, therefore, had “a vested right,” by force of the attachment, “ to have the property seized, applied to the extinguishment of the debt; subject, however, to the right of the debtor to substitute an undertaking prescribed by law.” And that the execution and delivery of such an undertaking to release the property, should be held, in legal contemplation, to be a part of, and in continuation of, the attachment proceedings; and that the same is a substitute for the levy made under the attachment, which is in effect continued, although the process is discharged.

We think these rulings necessarily dispose of all the questions involved'in this motion; and if we had doubts of their correctness, we should still feel bound to follow them as a direct adjudication of the court upon the question presented. We are, however, satisfied of their soundness, notwithstanding the contrary ruling in Carpenter v. Turrell, which was not overlooked by the court on its former decision.

Without entering into any general discussion of the questions, we think the order appealed from should be affirmed, with costs.

Daniels, J., concurred.

Order affirmed, with costs.

       Rinchey v. Stryker, 26 How., 75.

      Bump on Bankruptcy (5th ed.), 329, and cases cited.

      100 Mass., 450.


author: Davis, P. J.:

text:
    ALFRED GREENWOOD and HARRY ALDRIDGE, Respondents, v. MARY A. BRINK, Appellant.

      Partnership—profits—participation in — d Go. — chapter 281 of 1833.
    Participation in the profits of a firm, unless enjoyed under an express agreement that it is given in lieu of compensation for services, and that it gives no interest in the business, makes a man a partner.
    Under chapter 281 of Laws of 1833, which makes it a penal offense to assume a copartnership name where no partnership exists, it is a sufficient answer to show that the firm name actually represents persons, who are liable as partners to third persons and creditors.
    Appeal from a judgment of the Supreme Court, in favor of plaintiff, for ninety-three dollars and seventy-five cents and costs. The action was brought to recover the value of goods sold to defendant. The answer alleges that the plaintiff, Greenwood, was doing business under the firm name of Alfred Greenwood & Co., and that in fact he had no partner, and that the designation “ & Co.,” did not represent any partner; that, in so doing, Greenwood violated chapter 281, of the Laws of 1833. The defendant, Harry Aldridge, claimed a one-half interest in the claim, by assignment from Greenwood. The plaintiff demurred. The demurrer was overruled, with leave to reply. The plaintiff served a reply, but did not formally withdraw the demurrer. On the trial, the judge charged, “ that participation in the profits makes a man a partner, and it is not necessary that they should say anything about the losses.” “ It is possible, however, for a firm to employ clerks and give them, as a compensation for their services, a certain amount of the profits; but it must be distinctly understood between the parties that that is as compensation, and that they have no interest in the business whatever.”

      E. H. Berm, for the appellant.
    The answer that the goods were sold contrary to law, was a good defense. (43 How., 176; 29 id., 489.) The demurrer, not having been withdrawn, admitted the allegations of the answer. (Cutler v. Wright, 22 N. Y., 472, 482.) No partnership existed in this case. (Baldwin v. Burrows, 47 N. Y., 199; Pattison v. Blanchard, 5 id., 186; Burckle v. Eckhart, 3 id., 132; Vanderburgh v. Hull, 20 Wend., 71; Clark v. Gilbert, 32 Barb., 581; Conklin v. Barton, 43 id., 435 ; Man. Brass Manufacturing Co. v. Sears, 45 N. Y., 797.)

      C. J. G. Hall, for the respondent.
    The receipt of the reply was an election to accept that plea from the plaintiff. (Munn v. Barnum, 12 How., 563; Spelman v. Weider, 5 id., 5.) To constitute partnership, an agreement to share in losses is not necessary. (Manhattan Brass Manuf. Co. v. Sears, 45 N. Y., 797; Leggett v. Henneberger, 1 N. Y. Supreme Ct. Rep., 418.)
   Davis, P. J.:

The demurrer to the answer having been overruled by the court, and leave given to reply on payment of costs of the demurrer, and the plaintiffs having served a reply and paid the costs, the demurrer must be regarded as abandoned, although not formally withdrawn. A reply, having been expressly permitted by the order of the court, was proper, and formed part of the record. The order, on the overruling of the demurrer, was obtained on defendant’s motion, and the provision requiring a reply and payment of costs, must be deemed to be granted on his motion. The record, therefore, properly before the court on the trial, was the complaint, answer and reply, and the issue to be tried arose upon the answer and reply. The answer admitted all the material allegations of the complaint, and entitled plaintiffs to judgment for the goods sold, unless the defendant should affirmatively establish that the goods were sold to her by Greenwood, in a firm name, in violation of the statute, when, in fact, there was no firm at the time of the sale. On that issue, evidence was given to the jury on both sides, and the jury found adversely to the defendant.

The only question in the case, is whether the court was correct in charging the jury that “ participation in the profits ” (of a firm) “ makes a man a partner, and it is not necessary that they should say anything about losses.” The court accompanied this charge with the explanation that it is competent for a party or firm to employ clerks, and give them, as a compensation for services, a certain amount of profit, but it must be distinctly understood between the parties that it is as compensation, and that they have no interest in the business whatever, and he left it to the jury to say whether the arrangement between Greenwood and Aldridge, gave the latter an interest in the business, or a share in the profits as a partner, or whether Aldridge was to receive a share in the profits as compensation merely. I do not think there was any error in this ruling. Both of the plaintiffs testified, substantially, that Aldridge was a partner, with the understanding that he should put in his services and be interested in the business, and have one-fifth of the profits, over and above losses, for his share. They assumed a firm name, and carried on business in such name, Aldridge representing the “ & Co.” Upon their testimony, they would not be permitted to say they were not partners as to third persons and creditors, whatever the law might hold as between themselves. And I think it is a sufficient answer, under the statute making a penal offense to assume a copartnership name where no partnership exists, to show that the firm name actually represented persons, who were liable as partners to third persons and creditors.

It is well settled, by the law merchant, that a participation in the uncertain profits of trade, as a return of capital advanced, constitutes such participator a partner in the concern in which the capital is invested, and makes him liable to third persons, although he is to receive back his whole capital and interest, without deduction for losses or liabilities, as between himself and partners. One who takes a share of the profits, as such, of a trading firm, becomes a partner as to third persons, on the ground that those profits form a portion of the fund, upon which creditors have a right to rely for payment. The modifications of the rule, in this State, require that the servant, compensated by a share of profits, shall have no community of interest in the capital stock of the concern, and shall not, by any arrangement, be deemed a partner as between himself and the members of the firm, and shall not suffer his name to be used as a partner, nor be the person represented by the & Co.; in short, he must not 'hold himself out, in form or in fact, as a partner ; otherwise he falls within another rule.

The issue tendered by the answer, having been disposed of favorably to plaintiffs, they were entitled to a verdict, because no issue had been taken on the allegations of the complaint. The plaintiff might have failed in the action if the defendant had denied the allegation of the complaint, for some of those allegations were disproved (to wit, the sale by Greenwood alone) by the proof of partnership, and, unless the court had permitted an amendment, the defendant would have succeeded on such an issue.

There was no issue to which to apply the variance between the proofs given to defeat the allegations of the answer and the averments of the complaint, and the only issue in the case being disposed of against the defendant, it follows that the judgment must be affirmed.

Lawrence and Daniels, JJ., concurred.

Judgment affirmed.

The recent English decisions upon this question, hold that a participation in the profits of a trade or business, even when it is not shown to be simply as compensation to an employee, is not conclusive evidence of a partnership, and, that whether that relation does or does not exist, must be determined by the contract between the parties. (Cox v. Hickman, 8 H. L. Cas.,p. 267; Mollevo v. The Court of Wards, L. R., 4. Privy C., p. 419 ; Bullen v. Sharp, L. R., 1 C. P., p. 86.)— [Rep.]

       Brown v. The Saratoga R. R. Co., 18 N. Y., 495; Cutler v. Wright, 22 N. Y., 472, per Selden, J., p. 483.

       Code of Procedure, § 153.

       Oakley v. Aspinwall, 2 Sand., 7; Waugh v. Carver, 2 H. Blk., 235 ; 1 Smith Lead. Cas., 491; Dob v. Halsey, 16 John., 34.

      Pott v. Eytor, 8 Man., Grang. and Scott, 31; Id., 641.

       Burckle v. Eckhardt, 3 N.Y., 132; 45 id., 797.

         Burns v. Rowland, 40 Barb., 368; Parker v. Barker, 1 Brod. & Bing., 9.


author: Daniels, J.:

text:
    CARLOS CHAMBERLAIN and others, Appellants, v. DAVID A. LINDSAY and WILLIAM G. CHITTICK, Respondents.

      Hew trial—when granted on grounds of surprise and newly-discovered evidence.

    This action was brought to recover for debts contracted and payable in England. The defense was that a composition deed had been executed by the debtors, and assented to and approved by the requisite number and amount of their creditors, which, by the terms of the English bankrupt laws, discharged them from their debts, upon compliance with the terms and provisions of the law, under which it was entered into; one of which was that the deed should be left to be registered, within twenty-eight days from the date of its execution. The deed was executed by the defendant, Chittick, personally, and by Lindsey, by Kerr, his attorney. It was dated December 8, and registered December 30. The defendant, Chittick, was examined before trial and testified that he left England November 27, thus showing that he could not have executed the deed on December 3. At the trial, the plain tiff claimed the deed to be invalid, as it appeared that it was not registered within twenty-eight days of its execution. Held, that upon these facts, alone, a new trial should not be granted on the ground of surprise, as defendants’ attorney might, by a reasonable degree of diligence, have discovered the discrepancy between the date of the deed and the time of the defendant Chittick’s departure from England, and have introduced evidence to explain it.
    Before the trial, to a question, put by one of the defendants’ counsel, as to what they relied on in opposition to the deed, or what their point in the case was, one of the plaintiff’s counsel replied by asking, “What effect do you suppose the English bankruptcy law has on American debtors ?” And, again, when an application was made by defendants, to dismiss the case from the short-cause calendar, one of the plaintiff’s counsel stated, “ that he believed the case would turn only on questions of law, and that the facts were not in dispute.” Held, that the effect of this conduct was to mislead the defendants’ counsel and induce him to believe that the legal effect, alone, of the proceedings was to be the subject of contest, and that no formal omissions existed in the documents relied upon, and that a new trial was properly granted upon the ground of surprise.
    Appeal from an order made at the Special Term, granting a new trial on the grounds of surprise and newly-discovered evidence.
    This action was brought by the plaintiffs, merchants at Manchester, England, to recover from the defendants, the sum of $1,283 in gold, on two acceptances given by the defendants to plaintiffs at Manchester, and payable in London, and a balance due for goods sold the defendants by the plaintiffs, in England.

      The answer admitted the acceptance and the sale of the goods, and set up that the defendants were discharged by virtue of a certain composition deed made with their creditors, pursuant to the English bankruptcy law. Pursuant to a stipulation signed by the plaintiffs’ attorney, the English statutes relative to bankruptcy proceedings and the composition deed were read in evidence. The deed was executed by Lindsay, by John Kerr, his attorney, and by the defendant, Chittick, personally. It was dated December 3, 1869, and registered on the 30th day of December.
    The deposition of the defendant, Chittick, taken before the trial, was read in evidence, from which it appeared that he was not in England from the 27th day of November, 1869, until September, 1870. The plaintiffs moved the court to direct a verdict in their favor, on the grounds: 1st. That the bankrupt act of Great Britain had no extra-territorial force. 2d. That the deed was not properly attested as to the defendant, Lindsay, the power of attorney having been executed in New York, and not before an attorney or solicitor, as prescribed by the act; and 3d. That the deed was not registered within twenty-eight days from the date of its execution. The motion was granted, and a verdict directed in favor of the plaintiffs for $14,217.78. Defendants’ counsel then moved for a new trial on the grounds of surprise and newly-discovered evidence, claiming that they were induced to believe, by the stipulations of the plaintiffs’ counsel, and from statements made by him, that there was no disputed question of fact, and that the only contest on the trial, would be as to the legal effect of the proceedings; that, on a new trial, they would prove that when the deed was executed by the defendant, Chittick, it was delivered m escrow, to be held until it was executed by Kerr, the attorney of Lindsay, and that it was not executed by him until the 11th of December. The motion was granted, and, from the order directing a new trial, the plaintiffs appealed. All the facts appear in the opinion.

      Wm. F. Shepard, of counsel for the appellants,
    claimed that the defendants’ counsel had been negligent, and a new trial should not be granted. (The People v. Marks, 10 How., 261; Best v. Starks, 24 id., 58; Fellows v. Emperor, 13 Barb., 92-105; Lawrence v. Ely, 38 N. Y., 42; Jacobs v. Morange, 47 id., 59.) That the deed was void, because it was not registered within the time required by the statute. (Re Skinner, 11 Law Times, N. S., 354; 13 Weekly Rep., 114; 10 Juris., N. S., 1137; 34 Law Jour., 9; Re Power, 11 Jur., N. S., 985; 13 Law Times, 451.) That even if the deed were delivered in escrow, it was executed when it was signed and sealed by Chittick, and the twenty-eight days commenced to run from that time. (Perryman’s Case, 5 Coke, 846 ; Coare v. Giblett, 4 East, 85-94; Graham v. Graham, 1 Vesey, Jr., 272; Hunter v. Hunter, 17 Barb., 28 ; Austin v. Hall, 13 John., 286 ; Wheelwright v. Wheelright, 2 Mass., 447; Hatch v. Hatch, 9 Mass., 307; Hathaway v. Paine, 34 N. Y., 92; Tooley v. Dibble, 2 Hill, 641.)

      John E. Bwrril, for the respondents,
    claimed that the twenty-eight days, provided for the registration of the deed, did not run until the deed had been executed by all the parties ; that the motion for a new trial was addressed to the discretion of the court below. (Seeley v. Chittenden, 10 Barb., 303; Lawrence v. Ely, 38 N. Y., 42 ; Platt v. Munroe, 34 Barb., 291; Tyler v. Hoornbeck, 48 Barb., 197; Hoppock v. Stone, 49 id., 524.)
   Daniels, J.:

According to the notice of the motion, on which the order appealed from was made, the application for a new trial was restricted to the grounds of surprise and newly discovered evidence; for, although it was added that the motion would also be made on other grounds stated, no mention of them was made in the notice.

The court, at the Special Term, appears to have taken that view of the application; for, by the terms of the order, it was the motion for a new trial on the grounds of surprise and newly-discovered evidence, which was granted. The merits of the case are, therefore, not strictly before the court on the present appeal, farther than their consideration may prove incidental in the examination of the reasons existing for the support of the order. Both parties to the action were admitted to be British-born subjects. The plaintiffs were engaged in business as merchants in Manchester, England, and, during November and December, 1869, the defendants were engaged as merchants, carrying on business in New York and in England. Th,e debts in controversy were contracted and payable in England. Upon this state of facts, the parties, as to the transactions involved in this action, were subject to the laws of that country, so far as proceedings affecting the demands were taken there.

During the latter part of the year 1869, a composition deed was executed by the debtors, and assented to and approved by the requisite number and amount of their creditors, which, by the terms of the English bankrupt laws then in force, effected their discharge from their debts, upon compliance with the terms and provisions of the law under which it- was entered into.

These terms and provisions appeared to have been all complied with, excepting the one requiring the deed to be produced and left at the office of the chief registrar, for the purpose of being registered, within twenty-eight days from the date of its execution by the debtor. Whether that was done within the time prescribed, was apparently the point on which the cause was finally disposed of at the trial. For as the deed could be, and was, executed by one of the debtors by means of a power of attorney, that cannot be regarded as a defect in the defendants’ defense, on which they could have been properly or probably defeated.

The deed itself was dated on the 3d of December, 1869, and it was registered, as the law required it to be, on the thirtieth of that month. So that, on the face of the paper, the law seemed to have been literally compli ed with in that respect. But before the trial took place, the debtor, who in person executed the deed, was examined as a witness in the case at the instance of the plaintiffs, and, without his attention being in any manner directed to the precise time when the deed was executed, testified that he left England for New York on the 27th day of November, 1869. This circumstance rendered it at once apparent that he could not have executed the deed on the third day of. December, the day of its date, but must have done it on or before the twenty-seventh of November. No inquiry was made for an explanation of this circumstance, nor was the attention of the witness, in any manner, directed to its existence, and the fact itself seems to have escaped the observation of the defendants’ attorney and counsel. It plainly might have been discovered by a reasonable degree of attention to the evidence given by the witness, in view of the date appearing- upon the face of the deed. And for that reason, if the application had proceeded solely upon that ground, the omission to devote that degree of attention to the case, before the trial was brought on, would have formed a' complete answer to it.

Parties to legal proceedings, are required to use attention and diligence in the proper preparation of their causes for trial; and if either fails to do that, and, consequently, is defeated when he might otherwise have succeeded, the fault is his own, for which the courts can ordinarily supply no remedy. But it is claimed, by the defendants’ attorneys and counsel, that they were prevented from discovering this discrepancy between the statements of the witness and the date of the deed, by assurances, received from the plaintiffs’ counsel, which induced them to anticipate an entirely .different objection to the defense made under the composition deed. And sufficient reason is disclosed by the affidavits used upon the application, to warrant the conclusion that such was the case. It is not supposed that the plaintiffs’ counsel really designed to deceive the attorney for the defendants with whom their interviews were held. But it is quite apparent that they designed to respond to his inquiries, as to the position they intended to take by way of answer to the defense, in such a manner as would not be likely to disclose the real defect they had then discovered to exist. They had the undoubted right not to respond at all, for it was no part of their duty to disclose the precise course which they designed to take in the trial of the cause, or the reason on which they would endeavor to recover a verdict for the indebtedness sued upon. But when they waived that, and undertook to respond to the inquiries made, it*should have been done in such a manner, ns not to leave a palpably erroneous impression on the mind of the person making them.

When the stipulation was made, agreeing upon certain evidence to be given on the trial, one of the attorneys for the defendants, inquired of one of the plaintiffs’ counsel what they relied on in opposition to the deed, or what their point was in the case. And the reply was made by asking the question, “ What effect do you suppose the English bankruptcy law has on American debtors ?”

• The ordinary effect of'such an interview, would be to produce the conclusion, that the legal effect, alone, of the proceedings under the bankrupt law, was to be rendered the subject of contest at the trial.

It was calculated to lure the attorney, particularly if he was apt to be confiding as to his adversary’s statements, into the belief that no formal omissions existed in the documents relied upon by the defendants as their defense. And it was not unreasonable that the trial should be undertaken with that expectation existing on the part of the defendants. The natural course to be taken, would be to prepare and fortify the defense, so far as that objection required it to be done, and devote no particular attention to it in other respects.

Upon another occasion, preceding the trial, when an' application was made by the defendants’ counsel, to dismiss the case from the calendar of - short causes, one of the plaintiffs’ counsel stated-, by way of answer to it, “ that he believed the case would turn only on questions of law, and that the facts were not in dispute.” And yet the fact required for the proper presentation of the questions of law, which was found to be controlling in the case, was one which did require to be proved, and it was proved by the deposition of one of the defendants.

The trial was opened, and proceeded in such a manner as to indicate the existence of care in avoiding all disturbance of the conviction abiding in the minds of the defendants’ attorneys. And it was not until the case was in a condition to be finally disposed of, that their minds were enlightened upon the real point in controversy in the action. Then they asked leave to have a juror withdrawn, for the trial to stand over until further preparation could be made to meet the plaintiffs’ objection, but that was refused on account of a supposed want of authority to conform to that request. The case was adroitly managed by the counsel for the pi Jffs, and their conduct might deserve the admiration of observers, were it not for the possibly disastrous effects resulting from it to the defendants.

It is the duty of courts of justice, to secure the trial and disposition of legal controversies appearing before them, in conformity to the legal rights of the parties, so far as that may be practically done; and the sanction of the ingenious devices made use of ■ the present case, which probably misled the defendants’ attorneys and counsel to their prejudice, would plainly violate that obvious duty. While parties and their counsel are not obliged to inform those opposed to them, what their precise course of action may be upon the trial, they certainly are obliged to avoid saying and doing what may have a direct tendency to mislead them. And if they do not, and gain an advantage by means of an erroneous impression, voluntarily produced for the purpose of affording an opportunity to secure it, the court is bound to deprive them of it, where that appears to be required to promote and attain the ends of justice.

The defendants showed, in support of their application, that they could prove that the deed was delivered in escrow at the time when it was executed by the first debtor, and so remained until after the 3d of December, 1869, which they insist will answer the statutory requirement that it should be left for registry within twenty-eight days after its execution. The solicitor, whose affidavit was produced in support of the defendants’ motion, stated that the deed would only take effect, as an executed instrument, from the time when the event happened on which it was held in escrow, while three other eminent English barristers, among whom is the present lord chancellor, have concurred in a different opinion.

Under ordinary circumstances, this preponderance against the defendants would properly lead to a denial of their motion. For there would be plausible ground, at least, for concluding that another trial could not change the result. But there is, after all, a probability that the defendants’ solicitor may prove to be right in his views, notwithstanding the authority opposed to him. And as long as it is the duty of the court to withhold encouragement from the course of practice which prevented the defendants from presenting the point at the trial, that probability is sufficient to justif, ¡affirmance of the order; particularly, as the point in dispute can be more effectually examined and decided upon evidence taken on notice, than ex parte affidavits. And there is room for doubt as to whether the requirement of the statute was not too literally construed against the defendants. Whether it was or not, it is not necessary or proper to decide at this time. It is sufficient that a fair administration of justice appears to require that the defendants should he afforded an opportunity for securing a decision of the point on which they now rely for the success of their defense, and which they were deprived of by the statements and conduct of the plaintiffs’ counsel.

The order appealed from, should be affirmed, with costs to abide the final result of the action.

Davis, P. J., and Westbrook, J., concurred.

Order affirmed, with costs to abide the event.

       2 Kent’s Com., 459, marg. paging; Story’s Conflict of Laws, §§ 335, 338, 340.

       Re Fulcher, 1 Chancery Appeal Cases, 519.

       Tyler v. Hoornbeck, 48 Barb., 197.


text:
    WILLIAM C. DE HART, Appellant, v. RUFUS HATCH (T. T. Johnson, a Witness, Respondent).

      Referee—when appointed to take affidavit to he used on motion —expande motions.

    A referee will not be appointed to take the affidavit or deposition of any person, to be used upon an ex parte motion.
    Appeal from an order vacating an order appointing a referee to take the testimony of T. T. Johnson, to be used on a motion, to be made by the plaintiff, for the arrest of the defendant.

      O. P. Buel, for the appellant.

      Henry 8. Bennett, for the respondent.
   Daniels, J.:

The application, which was denied by the order appealed from, was for an order requiring the respondent to appear and make an affidavit to he used by the plaintiff in procuring an order to hold the defendant to hail in an action of slander. When an order of arrest is obtained, it must be procured from a judge of the court in which the action is brought, or from a county judge: And the application to be made for it, is entirely ex parte in its character. No hearing of the parties is required or provided for, upon such an application. But the judge is required to make the order, when the case is shown to be one of those mentioned in section 179, and it appears by the affidavit produced, that a sufficient cause of action exists and a proper undertaking is presented. The application for such an order is, however, a motion, as that term is generally defined by chapter 8 of the Code of Procedure. But while it is called a motion, it is still one of a very informal character. This chapter contains provisions relating to motions made for ex parte orders, including orders of arrest. It also contains provisions relating to motions on notice, more properly known as such, as the term was used before the Code, and to a very great extent has been used since that time. Motions of this description, are often important in the interests they affect, and the points on which they are decided. And it is to furnish evidence for their proper disposition that the provision was enacted, by which persons may be compelled to supply their affidavits to the party making or opposing them, after they have refused to make them voluntarily. This provision has no application to a motion made before a judge for a mere ex parte order. It is confined in terms to motions made in a court of record, as distinguished from applications to a judge. The order requiring the affidavit to be made, can only be obtained when the party applying for it, intends to make or oppose a motion in a “ court of record.” These are the terms used to define the cases in which the order is allowed to be made. And they do not include an application made for an exporte order to a judge, for that is not a motion made in a court of record. The affidavit presented for the order to examine the witness in the present instance, did not show a case within the import of these terms. For that reason, the order appealed from was properly made, and it should be affirmed, with costs.

Davis, P. J., and Beady, J., concurred.

Order affirmed, with costs.

       Code, §§ 180,181, 182.

       Code, § 401, sub. 7.


text:
    JEANNETTE G. SHEPHERD, Respondent, v. THOMAS C. SHEPHERD, Appellant.

      Alimony—not affected by subsequent remarriage of wife—divorce.

    Where, upon a divorce obtained by the wife, on the ground of the husband’s adultery, the decree requires him to pay her a certain sum of money, annually, for her support, this allowance is not affected by her subsequent remarriage, nor should it be reduced on that account.
    Appeal from an order refusing to modify the decree in this case, as to alimony.
    Judgment of divorce was entered in favor of the plaintiff against the defendant, on the ground of his adultery, September 5th, 1871, and, by the decree, he was directed to pay the sum of $3,000 a year to the plaintiff for her support.
    Since the judgment, the plaintiff has remarried, her husband having an income of $2,500. Before marrying the defendant, the plaintiff had obtained a divorce from a prior husband, and she derives an income, by reason of that marriage, of $672.50.
    After the marriage of the plaintiff, the defendant moved to modify the decree by striking out the provisions as to alimony, or by reducing the amount. The referee, to whom the case was referred to report the facts and his opinion, reported that the marriage of the plaintiff did not entitle the defendant to be relieved from the payment of the alimony, and that no sufficient reason was shown for the reduction of the amount. *
    Exceptions were filed by the defendant, and a motion made to overrule the report and grant the original motion, and from the order denying this motion, defendant appealed.

      Wm. F. Shepard, for the appellant.

      G. W. Scmdford, for the respondent.
   Daniels, J.:

The statute empowers the court, upon making a decree in favor of the wife, dissolving the marriage for the misconduct of the hüsband, to require him to provide such suitable allowance for her support as it shall deem just, having regard to the circumstances of the respective parties. And the continuance of that allowance is in no way rendered dependent on the fact that she shall not afterwards marry again. It is liable to no such contingency. Beyond that, the statute expressly secures to the wife the right to marry again where she is the innocent party to the decree. And it neither expressly, nor by any reasonable implication, deprives her of her allowance by way of alimony for so doing. Complete control is given the court over the subject of the amount, but that is in no sense rendered dependent upon the circumstances of her subsequent marriage. And as long as that is the nature of the provision made upon this subject, the court is not authorized to add a further qualification, for which no warrant has been supplied by the law. The remedy is entirely statutory in its nature, and must be governed by the import and spirit of the legislation enacted upon the subject. And, as it has not been provided that the wife shall forfeit her alimony by afterwards marrying, the court has no right to attach that as a penalty to the act.

In Forrest v. Forrest, the husband was not allowed to prove the subsequent misconduct of the wife, for the purpose of depriving her of her alimony on that account. The reason of the rule, applied in the disposition of that case, would seem to maintain the conclusion that an act, approved of by both law and morals, should not be attended with a loss which was there denied to be a proper or lawful consequence of her subsequent misbehavior. The proofs show that she is dependent upon the provision made for her support by the decree, and it is not claimed that any change has occurred in the circumstances of the husband, rendering him unable to supply it. For that reason, no cause exists for any reduction or modification in the allowance. And, as the wife’s marriage forms no good ground for depriving her of the provision made by the decree for her support, the husband should not be relieved from its performance. In one sense, it was a punishment justly imposed upon him for the violation of his marital obligations; and that reason exists with as much force at this time, for its continuance, as it did when the decree itself was pronounced against him. For these reasons, as well as those mentioned by Justice Donohue, in his opinion, the order made should be affirmed, with costs.

Davis, P. J., and Brady, J., concurred.

Order affirmed, with costs.

       3 R. S., 5th ed., 236, § 58.

       Id., 237, § 62.

       25 N. Y., 501, 514-516.


text:
    HENRY JACOBY, Respondent, v. DAVID JOHNSTON and another, Appellants.

      Submission to arbitration—when it operates as a discontinuance of an action,— stay of proceedings.

    After the commencement of this action, an agreement, under seal, was entered into by all the parties thereto, to “submit all matters involved in said action, and presented by the pleadings therein, to the hearing, determination and decision of three arbitrators,” and “ that the action in the Supreme Court aforesaid, and all proceedings therein, or in relation thereto, shall be stayed pending the award of said arbitrators;” held, that the submission would have effected a discontinuance of the action but for the clause providing for a stay of proceedings; that this operated as a perpetual stay until the making of the award, which would at once effect a final discontinuance of the action.
    Appeal.from an order made at Special Term, denying a motion made by the defendants for an order discontinuing the action and striking the case from the circuit calendar. This action was commenced to recover of the defendants damages for an alleged wrongful entry upon certain lands of the plaintiff, and removing therefrom trees, timber, etc. After issue was joined, an agreement, under seal, was entered into by all the parties, submitting all matters involved in said action, and presented by the pleadings therein, to the hearing, determination and decision of three arbitrators.
    The agreement afterwards provided, “ that the action in the Supreme Court aforesaid, and all proceedings therein, or in relation thereto, shall be stayed pending the award of said arbitrators.” Subsequent to entering into the agreement, the plaintiff noticed the action for trial, and put it upon the circuit calendar.
    The defendants moved the Special Term for an order discontinuing the action, and striking it from the circuit calendar. This motion was denied, and from the order thereon, the defendants appealed.

      J. A. Thompson, for the appellants.
    -, for the respondent.
   Davis, P. J.:

The submission to arbitration of the subject-matter of this action, was full and absolute. Its effect would have been a discontinuance of the action, but for the clause making special provision in relation to the action. That clause provides, “ That the action in the Supreme Court aforesaid, and all proceedings therein or in relation thereto, shall Toe stayed pending the award of said arbitrators.”

The stay of proceedings thus provided for, indicates an intention not to have the submission operate as an absolute discontinuance, as otherwise it would have done. It does, however, operate as a perpetual stay “ pending the award,” which must be construed to mean until the award is made. The making of the award, in the absence of any stipulation for the entering of judgment upon the same in the action, would at once operate as a final discontinuance of the suit; so that, practically, while the submission remains in force, the suit in court is completely suspended. Neither party has revoked the submission. A revocation, to put an end to the submission, must be made with the same formality as the submission itself.

The submission being in writing and under seal, it must be revoked with like solemnity. The effect of the submission, while remaining in force, is to stay, absolutely, all proceedings in the suit. The plaintiff was not, therefore, at liberty to take any steps in the action, after the submission. The motion to discontinue, under the circumstances, was properly denied, but the cause should have been stricken from the calendar, under the stay of proceedings. The order appealed from, should be modified so as to deny the motion for discontinuance, and grant that part asking that the case be struck from the calendar, and, as so modified, affirmed, without costs.

Daniels and Beady, JJ., concurred.

Order as modified affirmed, with costs.

       Van Antwerp v. Stewart, 8 John., 125; Howard v. Cooper, 1 Hill, 44; Robertson v. M’Neil, 12 Wend., 578, 582.

         Larkin v. Robbins, 2 Wend., 505; Camp v. Root, 18 John., 22; Jordan v. Hyatt, 3 Barb., 275; Wells v. Lain, 15 Wend., 99 ; Van Slyke v. Lettice, 6 Hill, 610 ; 11 How., 355.


text:
    GEORGE KUHN, Appellant, v. WARREN G. BROWN, CHARLES W. ALCOTT, CHARLES C. WEHRUM and ALFRED LOCKWOOD, Respondents.

      Statute of frauds.

    The plaintiff sold to defendant, Lockwood, a $20,000 bond and mortgage, and assigned to him, at the same time, a $2,000 bond and mortgage, as collateral security thereto. At the same time, the plaintiff and the defendant, Alcott, executed an agreement, under seal, by which, after reciting that the plaintiff was indebted to the defendant, Wehrum, in the sum of $2,000, and that the defendant, Alcott, had become security for the payment of said money, it was agreed that Lockwood should hold the $2,000 mortgage, after payment of the $20,000 mortgage, to secure Alcott for his liability as security. Held, that this was a sufficient memorandum within the statute of frauds; that the defendant, Alcott, thereby became security to Wehrum for plaintiff’s debt to him; and that he was entitled to the proceeds of the $2,000 mortgage.
    Appeal from a judgment in favor of the defendants. The plaintiff, on the 6th of August, 1869, sold to the defendant, Lockwood, a bond and mortgage for $20,000, and at the same time assigned to him, as collateral security for the payment of the said mortgage, a bond and mortgage for $2,000, known in this case as the Kreitz mortgage. In May, 1869, the plaintiff being indebted to the defendant, Wehrum, in the sum of $7,066.35, it was agreed between them that Wehrum should take $2,000 therefor, provided the defendant, Alcott, would become collateral security for the payment of said sum, and Alcott thereupon said that he would become such security. This was all by parol, and was not reduced to writing and subscribed by Aleott, but an entry was made in his books, which, it was intended, should relate thereto. At the time of the assignment of the Kreitz mortgage to the defendant, Lockwood, the following agreement was executed by the plaintiff and the defendant, Aleott:
    Whereas, George Kuhn, of Mott Haven, Westchester county, Hew York, is indebted to Charles C. Wehrum, of the city of Hew York, in the sum of $2,000, payable on the 1st of May, 1870, without interest; and whereas, Charles W. Aleott has become and is security to the said Wehrum for the payment of the said $2,000 on the said 1st day of May, 1870; and whereas, the said Kuhn has assigned to Alfred Lockwood, of the city of Paris, France, a certain bond and mortgage made by William Kreitz to said Kuhn, to secure $2,000, said mortgage being recorded in the register’s office of the city of Hew York, in liber 931 of mortgages, page 19, said assignment to said Lockwood being security to said Lockwood upon the assignment of a $20,000 bond and mortgage made by said Aleott to said Kuhn, and by said Kuhn to said Lockwood. How, therefore, in consideration of one dollar, it is agreed that said Lockwood may hold said $2,000 mortgage, to secure said Aleott for his liability as security as aforesaid, and for that purpose he may, after the payment of said $20,000 bond and mortgage, assign said $2,000 bond and mortgage to said Aleott, to secure him for being such security as aforesaid, or to indemnify or repay to him the amount which he may pay, as such security, on or after May 1,1870, and said Aleott agrees to use his exertions to induce said Lockwood to surrender said $2,000 bond and mortgage, and accept other securities in the place of it whensoever said $2,000 bond and mortgage shall be paid, if paid before maturity, so that the said $2,000 may be paid to said Kuhn.
    Hew York, Aug. 6, 1869.
    GEORGE KTJHH. [l. s.]
    O. W. ALCOTT. [l. s.]
    Witness:
    Warren G. Brown.

      The Kreitz mortgage was paid to Lockwood, in November, 1869. At the time of the commencement of this action, there was about $10,000 due on the mortgage sold to Lockwood, and at the time of the trial, about $400. The plaintiff brought this action to recover from Lockwood the proceeds of the Kreitz mortgage, and, at the trial, he tendered to him the whole amount due on the $20,000 mortgage. The case was tried before Hr. Justice Beady without a jury, and a judgment was entered, by which it was adjudged that the defendant, Alcott, was legally liable as guarantor of the debt of the plaintiff to Wehrum, and the defendant, Lockwood, ordered, after the $20,000 bond and mortgage should have been fully paid, to pay over the proceeds of the $2,000 mortgage to the defendant, Wehrum. From this judgment the plaintiff appealed. The following opinion was delivered by Hr. Justice Beady at the Special Term:
   Beady, J.:

The question presented in this case, although not free from difficulty, is, nevertheless, to be determined on general principles.

The statute of frauds requires that every special promise to answer for the debt, default or miscarriage of another person, shall be void, unless some note or memorandum of the agreement, be in writing and subscribed by the party to be charged, and the decisions which have been made, declare that the agreement or memorandum, when made, shall be sufficiently explicit to show the obligation assumed, either by its own terms or other memoranda connected with it, and of which it is a part.

Prior to the substitution in our statute, of the word subscribed ” for the word “ signed,” the name of the promisor at any place upon the memorandum, was held to be a compliance with its terms, but now the subscription must be at the foot of the agreement, which contains the engagement made.

It has also been held, and the law has not been changed, that it is sufficient to meet the requirements of the statute, if the memorandum be signed by the party to be charged.

These principles are so familiar, that it is not considered necessary to refer to the authorities. In this case, after the parties had met, and the defendant, Alcott, had verbally assumed to pay the plaintiff’s debt to Wehrum, a memorandum was made in Alcott’s books of the transaction, which, as subsequent entries clearly show, was intended to express Alcott’s liability to Wehrum. The original entry was made by Wehrum, under the direction and in the presence of Alcott, but in itself does not show that the latter undertook to pay the plaintiff’s debt. It has no such import. If it had, the signature of Alcott, whether made by him or under his direction, appearing in connection with the memorandum, and in such relation to it as it does, might justly be held to be in conformity to the spirit of the statute, and therefore binding upon him.

The intention of the parties—the design of Alcott and Wehrum, in making the entry which was supposed to be in conformity to the understanding of the plaintiff and them—is apparent, and leaves no room for doubt.

Alcott still adheres to the agreement, and evidently considers himself bound to perform it. The plaintiff, however, availing himself of the statute, insists that Alcott is not bound by any promise or agreement which he gave; that no memorandum in writing subscribed by him was made containing it, and that it is therefore utterly void. If this premise is well founded, the result is as claimed. It appears, however, that after the agreement was made, and the attempted record of it put in Alcott’s books, the plaintiff and he met, and the paper of the 6th of August, 1869, was executed by them. This clearly recognizes the obligation assumed by Alcott for the plaintiff’s benefit, and is signed by both. It recites that the plaintiff was indebted to Wehrum in the sum of $2,000, payable on the 1st of Hay, 1870, without interest, and that Alcott had become, and was security to Wehrum for the payment of the sum named, on the day named, ahd then provides that the defendant, Lockwood, may hold a mortgage in his hands, to secure Alcott for his liability as security to Wehrum, and may assign the mortgage to Alcott, after it should be released from Lockwood’s lien, arising from its deposit with him by the plaintiff. That paper refers undoubtedly to the verbal agreement made between the parties (plaintiff Alcott and Wehrum), that the latter would accept $2,000 in full of his claim against the plaintiff, if secured by Alcott’s engagement to pay it in case the plaintiff did not. It does not refer to the agreement, as such, but to its effect, assuming it to be valid and binding.

In disposing of the question presented, therefore, I propose to predicate Alcott’s liability, entirely, of the paper of the sixth of August.

It is therein stated, as already suggested, that Alcott had become, and was security for the payment of the sum of $2,000, on the 1st May, 1870, and it is provided that Lockwood may hold the mortgage referred to, to secure Alcott against his liability, as stated. Does this paper, signed by Alcott, sufficiently express his agreement with Wehrum ?

If it does, then, being signed by the former, the party to be charged in favor of Wehrum; it is not within the statute, and the promise is not void.

In my judgment, the agreement sufficiently appears. The plaintiff acknowledges that he was to pay Wehrum the sum of $2,000 on the 1st May, 1870, and that Alcott was security for its payment on that day.

The duty imposed upon Alcott, indicated by the legal and ordinary acceptation of the word security,” was to pay the debt named, in case the plaintiff failed to pay it at the time designated, and thus, whether between themselves, as principal and surety, or between them and Wehrum, the indebtedness and its time of payment were clearly defined.

It is the written acknowledgment of the debt due, and the reiteration of Alcott’s agreement to pay it, in case the plaintiff omitted to do so. The language of the paper is, “ has become and is security,” and thus relates back to an agreement, the result of which is not only in effect stated by the use of the word “ security,” but its terms sufficiently given in detail. Assuming the original agreement to be insufficient, this recognition and repetition of it, recreates and give it vitality.

The statute requires some note or memorandum, and it is not material whether the identical agreement be signed or not.

If the note or memorandum appears in any form or paper containing the agreement, it is sufficient. The language of the statute is general. The note or memorandum is not limited in terms to one mode between the creditor and promisor, nor does it demand that the note or memorandum shall be subscribed by both parties. It exacts only a note or memorandum of the agreement, subscribed by the party to be charged therewith.

The object of the statute, which was to prevent frauds perfected by false swearing, or, as stated by Senator Verplanck, in Davis v. Shields, “ The prevention of frauds and perjuries, by substituting for the loose recollections of memory and the mutual danger of misconception of parties, a precise written agreement, or at least, a distinct written memorandum of the contract,” is accomplished, if, in any paper signed by the promisor, it shall appear that he made the agreement which is charged against him. His subscription makes it apparent that the claim has not been manufactured to be sustained by perjury. Hence, we find the rule stated by Justice Sutherland, in Gale v. Nixon, to be, “It is not necessary that the identical agreement should be signed, but if it is acknowledged by any other instrument, duly signed, it is sufficient,” and it rests, as already shown, on a good reason. The paper containing the note or memorandum in this case, is an agreement between the debtor and promisor, relating to the debt, in which the creditor’s name not only appears, but also the engagement made with him by the promisor, against which the latter sought, by that paper, to protect himself. These elements are controlling, and make it clear that the promise of Alcott was valid, and not within the statute of frauds.

The consideration of the promise is sufficient. The defendant, Wehrum, having a claim of $7,000 against the plaintiff, agreed to take $2,000, if the defendant, Alcott, would become security. An agreement by a creditor to take less than the face of the demand, upon receiving security for the amount paid, is valid. Where, by the agreement to settle, there is a benefit, or even a legal possibility of benefit, to the creditor, the additional weight will turn the scale, and render the consideration sufficient.

Having arrived at these conclusions, it follows that the plaintiff cannot recover. The gravamen of his complaint is, that the promise of Alcott was not binding, and the agreement of the sixth August, therefore, void.

26 Wend., 354.

I have not considered it at all necessary to examine any other question than the one discussed, deeming it conclusive.

It is proper, however, to say that there is no evidence justifying the charge that the paper of the sixth August was obtained by fraud or deceit.

Inasmuch as the question presented is not free from difficulty, as already suggested, I think but one bill of costs should be awarded the defendants unitedly, all having appeared by the same attorney. I think, however, that a reasonable allowance in addition should be made, and its amount determined on the settlement of the decree to be entered herein.

Ordered accordingly.

On the appeal to the General Term:—

Edward P. Cowles, for the appellant, insisted that there was no valid promise by Alcott, within the statute of frauds. (Mallory v. Gillett, 21 N. Y., 413.)

Wcvrren G. Brown, for the respondents, insisted that the premise of Alcott was legal and valid, and could be enforced. (Gale v. Nixon, 6 Cow., 445; Roberts on Frauds, 121; Welford v. Beazely, 3 Atk., 503; 3 Bro. Ch., 318; 1 Ves., 6; 9 Id., 355; Webster v. Zeilley, 52 Barb., 482.)

Davis, P. J.:

All allegations of fraud or imposition on the appellant, in procuring the instrument of 6th of August, 1869, having been distinctly withdrawn during the trial (as appears at fol. 202 of the case), that paper stood, as the court then remarked, unimpugned and upon its legal effect. It was upon this instrument that the learned judge, at Special Term, predicated the defendant, Alcott’s liability, as surety for plaintiff, to the defendant Wehrum. The instrument recited that Alcott had become, and was, security foi the payment of the sum of $2,000 to the defendant Wehrum, on the 1st of May, 1870, and provided that Lockwood should hold the mortgage of Kreitz, as an indemnity to Alcott upon his liability as such. It was signed and sealed by both the principal and surety. This was, in our opinion, sufficient to take the promise of Alcott out of the operation of the statute of frauds. The reasons given by Beady, J., in his opinion at Special Term, are quite satisfactory to us on this point, and we adopt them as expressing what we deem to be the law.

The effect of the tender of the money, due on the $2,000 mortgage, is not material to be discussed in this case, so far as relates to the $20,000 mortgage, held as collateral. When the suit was commenced, the Kreitz mortgage was properly held by Lockwood as collateral to the balance claimed to be unpaid on the $20,000 mortgage, but, as between the appellant and Alcott, the Kreitz mortgage was also held to secure Alcott on his obligations as surety for appellant’s debt to Wehrnm. The right and duty of Lockwood to still hold the Kreitz mortgage as assignee, for Alcott’s benefit, under the instrument of sixth of August, would still remain after the extinguishment of the debt, to which he held it as collateral for his own benefit. Lockwood is not denying, but affirming, this liability, and thereby ratifying the act of his agent, Brown, in receiving the agreement, clothing him with that power.

Alcott, who is also a defendant in the suit, makes no question whatever of the validity of his agreement to be security. How far, under such circumstances, the principal debtor, who has placed in his hands, or in the hands of a third person, collateral to indemnify him against such liability, can be permitted to .raise the question, it is not necessary to determine. Upon the facts found by the judge, we are of opinion that his conclusion of law was sound, and that the judgment rendered thereupon, should be affirmed.

Daniels and Westbbook, JJ., concurred.

Judgment affirmed.

      Gale v. Nixon et al., 6 Cow., 445; Roberts on Frauds, 121; Webster v. Zeilly, 52 Barb., 482.

       Phillips v. Berger, 2 Barb., 608.

       6 Cow., 448.