text:
    CATHERINE E. KOHLER, Executrix, &c., Plaintiff and Respondent, v. AUGUST MATTLAGE and ALBERT WEDEMEYER, Impleaded, &c., Defendants and Appellants.
    BOND TO PAY CERTAIN DEBTS WHICH OBLIGEE WAS LIABLE TO PAf, AND INDEMNITY AGAINST THE SAME.
    In case of a simple indemnity bond there is no breach until actual damage is sustained by the obligee, who must prove the same against the obligor or his indemnitor to sustain his action. There is a distinction between such a bond and those like the bond in the present case, where the obligation is to perform a certain act, or to pay specific debts, and to hold harmless the obligee therefrom. In the latter case the breach is made and the contract broken, when the obligor fails to perform the act, or to pay the debts he covenanted to pay; and upon such failure and default, the obligee may recover the entire debt, although he had not been compelled to pay anything at the time the action was brought by him against the obligor (See cases cited in the opinion of the court).
    Before Curtis, Ch. J., and Sanford, J.

      Decided May 8, 1877.
    This is an appeal by the defendants, Mattlage and Wedemeyer, from a judgment for $3,602.49, rendered against the defendants at a trial before the court at special term.

      The action is upon a bond made by the defendant Chapman, in the penal sum of $6,000, conditioned for the payment by Chapman, within nine months, of the debts of the firm, composed of the plaintiff’s testator, John F. Kohler, and himself, and in which the defendants, Mattlage and Wedemeyer, the appellants, joined as sureties. Various defenses were interposed' by the appellants.
    The court found at the trial as matter of fact: First. That John F. Kohler departed this life at the city of New York, on September 25, 1873, leaving his last will and testament, bearing date May 15, 1867, which was duly admitted to probate on October 16, 1873, and letters testamentary thereon were duly issued to the plaintiff on the said October 16, 1873, and the said plaintiff duly qualified as executrix of said last will and testament.

      Second. That at the time of his decease, the said John F. Kohler, and the defendant, William H. Chapman, were engaged in business in the city of New York, as copartners in the manufacture of a variety of bread known as “ Kohler’s Cream Bread.”

      Third. That on November 14, 1873, the said plaintiff, as executrix of said last will and testament of John F. Kohler, deceased, entered into an agreement in writing and under seal with the defendant, William H. Chapman, whereby he bought and said plaintiff granted and conveyed unto said defendant all the property and interest which said John F. Kohler, or his estate, had in said business of manufacturing “Kohler’s Cream Bread.” That in and by said agreement, and as consideration therefor, the said defendant' Chapman covenanted and agreed to and with the plaintiff simultaneously with the execution and delivery of said agreement, to execute and deliver to the plaintiff, his three promissory notes for $1,000 each, due in six, twelve and eighteen months respectively from the date of said agreement, and to assume and pay all the debts of said concern, existing at the date of said agreement, and to pay certain rents and taxes, and to execute and deliver to the plaintiff simultaneously with said agreement, notes and bond, a purchase money chattel mortgage containing the usual covenants and conditions of such mortgages, and covering all the personal property conveyed to him by said agreement, to secure the payment of the aforesaid three notes, and of the said debts, rents, and taxes, and as further security for the payment of the aforesaid debts, rents, and taxes, within nine months after the date of said agreement, said Chapman agreed to execute, acknowledge, and deliver to the plaintiff a bond in the penal sum of $6,000, conditioned for the payment by the said Chapman of the aforesaid debts, rents, and taxes, within the aforesaid nine months, with two sureties to be approved by said, plaintiff.

      Fourth. That the defendant Chapman proposed the • defendants Mattlage and Wedemever as his sureties on said bond, and they were accepted by the plaintiff, and without either fraud or false representation on plaintiff's part they thereupon duly executed and acknowl- • edged the bond which is set forth in the. complaint.. That the said bond, agreement, notes and chattel mortgage were simultaneously executed and delivered, and were each and all parts of one and the same transaction ; that said notes, bond and chattel mortgage were executed and delivered in conformity with the said-agreement, and for the purpose of consummating the single bargain of selling and securing the consideration of the sale of the property mentioned in the third finding of fact. That there was no laches of the plaintiff or her agents in regard of her duties as to the collection of the amount due her under said agreement, or the-enforcement of the liens acquired under said chattel, mortgage.

      Fifth. That said defendant Chapman neglected and failed to pay certain of the debts secured by the said bond within the nine months provided for their payment, and immediately after the expiration of said nine months the plaintiff duly notified the said sureties of Chapman’s default and of their liability to pay, and made due demand of payment of them. That said sureties thereupon granted, and reduced to writing and signed, an extension of the time for the payment by said Chapman of said unpaid debts for six months. That at the expiration of said extended time said Chapman has still neglected and failed to pay the said debts of said concern, amounting to the sum of three thousand two hundred and fifteen dollars and twenty cents, and said sureties were duly notified by plaintiff of said Chapman’s default and of their liability to pay, and a second demand of payment was made of them and they refused to pay ; that the interest on said sum of three thousand two hundred and fifteen dollars and twenty cents, to the date of this decision, amounts to the sum of two hundred and thirty-one dollars and forty-one cents, making the total of three thousand four hundred and forty-six dollars and sixty-one cents.
    The court further found as conclusions of law :
    I. That the bond set forth in the complaint is an absolute undertaking on the part of the defendants, Mattlage and Wedemeyer, to pay the debts assumed by Chapman, in case of his default, and that the condition of said bond was broken immediately upon the default of said Chapman, and the said defendants, Mattlage and Wedemeyer, thereupon became liable to pay plaintiff the amount of said Chapman’s legal liability to her.
    II. That the said plaintiff is entitled to judgment '-against the defendants for the said sum of three thousand four hundred and forty-six dollars and sixty-one cents with costs.

      Steele & Clark, attorneys for appellants ; Jefferson Clark, of counsel.

      Strong & Spear, attorneys for respondent; George H. Foster, of counsel.
   By the Court.—Curtis, Ch. J.

The appellants contend that the court erred in denying their preliminary motion at the trial, to dismiss the complaint. They urge that the complaint does not show that the plaintiff has been damnified or incurred any legal liability in consequence of any matter therein alleged, and that, to entitle the plaintiff to recover, it was necessary to show, either actual damages sustained, or a fixed legal liability incurred.

There is a difficulty with this claim of the appellants. Their bond is a departure from a simple contract to indemnify against damage. It is conditioned for the payment of the debts of the firm in a specified time, as well as to hold harmless the obligee from the payment of them. The condition was broken on the failure of ° Chapman to pay the debts of the firm within the specified time. The, plaintiff, the obligee, had the right to recover the amount of the debts, when Chapman made default.

The complaint is upon this bond, executed by the defendants, which fixes and limits the measure of damages for this breach to the amount of the debts not paid by Chapman. The payment of these debts was a specific act, provided for by the terms of the instrument, to which the appellants were parties.

Where the obligation is that the party indemnified shall not sustain damage by reason of the acts or omissions of another, or by reason of any liability thereby incurred, there is no breach until actual damage is sustained, which the party indemnified must prove against the indemnitors to sustain his action.

The distinction is recognized between this last described class of cases and those like the present, where the obligation is to perform a specific thing and to hold harmless the obligee from a liability, when the contract is broken upon a failure to do the act, or when liability is incurred (Gilbert v. Winan, 1 Conn. 550 ; Sedgwick on Damages, 2 Ed. 313; Wright v. Whiting, 40 Barb. 235 ; Belloni v. Freeborn, 63 N. Y. 390). In the latter case it was said by Allen, J., that when the bond was conditioned, as in this case, to pay the debt and save harmless the obligee against his liability to pay the same, the obligee might recover the entire debt upon default in its payment, without having paid anything.

The defendant Chapman failing to pay the debts at the expiration of the nine months, there was an extension of six months’ further time granted him in which to do it, to which the other defendants, the appellants, became parties, by a consent indorsed upon the bond' At the expiration of this extension, Chapman still failing to pay the debts of the firm, and the appellants, upon whom demand was made refusing to pay, and the creditors having presented their debts as claims against the plaintiff’s testator’s estate, and eighteen months having elapsed, and they threatening suits, they were paid by the plaintiff out of the testator’s estate. The legal remedies of the plaintiff against Chapman’s estate were exhausted by judgments and executions returned unsatisfied, before this action was commenced.

Chapman failed to pay the notes in full, given to the plaintiff and secured by the chattel mortgage. This mortgage was foreclosed, and a judgment for a deficiency was recovered against Chapman for between $1500 and $1600, upon which an execution was also issued and returned unsatisfied. These judgments and unsatisfied executions show the insolvency of Chapman. There is no claim made of any collusion between the plaintiff and Chapman, and the recovery of the judgments against him by confessions, does not impair their legal effect. It was her duty as executrix to recover them in the mode that caused the least expense and delay (Underhill v. Hunt, 3 Denio, 321; Bridgeport Ins. Co. v. Wilson, 34 N. Y. 275).

The defendants introduced no evidence to show that the condition of their obligation for the payment of the firm debts, had been complied with. Their nonpayment after the expiration of the time limited for their payment, and their amount sufficiently appears from the proofs in the case. The defendant Chapman testifies to the effect that their firm had the goods of these creditors, and that he examined the bills with the plaintiff’s agent, Mr. Spear, and found they were all correct td the best of his knowledge.

The claim of the appellants that they were discharged from liability on the bond in suit, by a variation in the agreement between the executrix and Chapman is not sustained by the evidence. It is true, that Chapman testified that by an agreement between him and the plaintiff made subsequent to the written agreement, he had permission to sell other horses than those for which permission was given him in the written agreement. But on his cross-examination he gives a different version of it, and admits that he falsely stated to plaintiff’s agent when the extension of the bond was made, that he had these three other mortgaged horses out at pasture, when in truth he had previously sold them, and that he only let it be known that he had done this when the plaintiff sought for them, to sell under the foreclosure of the mortgage. The testimony in the case justifies the refusal of the court to find that there was this permission given to the defendant Chapman to sell these three other mortgaged horses. The plaintiff made every reasonable effort to recover the ° mortgaged property, and the appellants cannot take advantage of the' fraudulent acts of their principal, Chapman, in respect to the mortgaged property, to exonerate themselves from responsibility.

The sureties claim that they were discharged, by the neglect of the plaintiff to file a copy of the chattel mortgage within thirty days before November 14, 1875, to preserve the security. Copies had been filed for each of the preceding years, but it had been foreclosed July 24, 1875, and no copy was thereafter filed. The plaintiff had proceeded under the mortgage and duly foreclosed it, and if the principal for whom these appellants were sureties saw fit previously to secretly abstract, and convert some of the mortgaged chattels to his own use, which the plaintiff could not find to foreclose, it is not for them to take advantage of it and be benefited by his bad faith towards the plaintiff.' There was no request on their part that a copy should be filed, or that any steps should be taken to enforce the mortgage, and no ground exists in such contingency to relieve the sureties (Schroeppel v. Shaw, 3 N. Y. 446).

The mortgage itself was a purchase money mortgage, and made to secure primarily the notes given for the purchase, and at no time was it as a security ample enough to pro video for and secure the old partnership debts, or any portion of them. The omission to refile it, even if the plaintiff had been under any obligation towards the sureties to do so, and they had requested it and it had been unforeclosed, would not have damnified the appellants (Black River Bank v. Preston, 41 N. Y. 453). The evidence fails to establish the neglect of any obligation on the part of the plaintiff, towards the sureties in reference to filing a copy of the chattel mortgage.

The sureties insist that they, were discharged from any liability over $2000 on the bond, in consequence of the plaintiff’s filing in the register’s office on November 10,1874, a certificate that her interest in the mortgaged premises was then only $2,000, being the amount of the unpaid notes given for the purchase.

The omission to refile a copy of a chattel mortgage and a statement of the interest of the mortgage by virtue thereof in the property, under chapter 501, Laws of 1873, only invalidates it against the creditors of the. mortgagor and subsequent purchasers or mortgagees in good faith. The position of Chapman and these sureties was unaffected by the amount named in the statement. The mortgaged property was not worth more than enough to pay the two notes. There was no bad faith about it on the plaintiff’s part. It is shown to have been an error of her agent committed inadvertently, by which reference to these partnership debts was omitted in the statement.

If the appellants are to be put in the attitude of sureties who have paid the debt, and are thereby entitled to be substituted in the place of the creditor as to all the security held by the creditor to enforce payment of the principal debtor, then, in the language of Chancellor Kent (Hayes v. Ward, 4 Johns. 130), the creditor “must do no willful act, either to poison it in the first instance, or to destroy or cancel it, afterwards.”

There is no evidence that the sureties are thus prejudiced. There is no obligation resting on the holder of a chattel mortgage, under such circumstances, at his own expense and trouble, to file copies of the mortgage and also statements, when the sureties make no request to him to do so, and make no offer to pay the expenses of it, and especially when their principal is, without the knowledge of their creditor, appropriating and selling the mortgaged chattels. It was their business, to see that their principal committed no torts of this character, and if they wished protection from his bad faith or from his other creditors, if he had any, to notify the mortgagee and to request the refiling of the mortgage and statement, and to offer to pay for the expense of it (Schroeppel v. Shaw, 3 Com. 446; Hoffman v. Hulburt, 13 Wend. 377; Herrick v. Borst, 4 Hill, 650; Supervisors Monroe Co. v. Otis, 62 N. Y. 88).

The appellant’s exceptions do not call for a reversal of the judgment and a new trial.

The judgment appealed from, should be affirmed with costs.

Saneoed, J., concurred.


source: Caselaw Access Project

author: By the Court.—Curtis, Ch. J.

license: Public Domain

text:
    JOHN HADEN, et al., Plaintiffs and Appellants, v. MICHAEL COLEMAN, Defendant and Respondent.
    CONTRACT FOR THE ERECTION OF BUILDINGS.
    Architect's certificate of the progress and completion of THE WORK.
    A party who enters into a contract to perform certain work, payment for which is to be made according to the provisions of the contract, one of which is the production by him of the architect’s certificate of the completion of the work, must produce that certificate as a condition precedent to payment, and is as much bound by that provision and condition in the contract as by any other (Smith y. Brady, 17 A". T. 176; Glattfiisy. Black, 50 Id. 148).
    Payments made by the defendant on the contract without any demand or requirement of the production of such a certificate, does not operate as a waiver of the certificate as to the other payments, or of the final certificate upon the completion of the work (Barton y. Hermann, 11 Abb. Pr. N. S. 378).
    The statements of the defendant, that he was pleased with the work, or that he was dissatisfied with the architect, or a negotiation for the release of the payment of a loan to the defendant by the builder, as a condition for the payment of the balance claimed by the builder, on the contract in question, do not create a waiver of this condition precedent on the part of the builder.
    Before Curtis, Ch. J., and Speir, J.

      Decided May 8, 1877.
    Appeal from a judgment entered upon an order dismissing the plaintiff’s complaint at the trial.
    The action is brought to recover a balance of $3,000, for building three five-story houses for the sum of $16,500 on defendant’s land, under a contract made by the defendant with the plaintiffs. After the action was commenced the defendant paid on account of the buildings and for the plaintiff’s use in a proceeding for the enforcement of a mechanic’s lien, $1,000.
    The defendant answered, that the payment for the work was, by the terms of the contract, to be made when the architect’s certificate of completion was signed and obtained, and that no such certificate had been signed or obtained. The court dismissed the complaint, on the ground that the plaintiffs had not shown sufficient to release him from the obligation to furnish the certificate, to which ruling the plaintiff excepted. Plaintiffs claimed that such certificate had been waived by the defendant.

      Geo. W. Van Siclen, for appellant.

      Joseph H. Choate, for respondent.
   By the Court.—Curtis, Ch. J.

The agreement and specifications between plaintiffs and defendant, for building the houses, called for the architect’s certificate. The agreement provides that the plaintiffs will "well and sufficiently erect and finish the new buildings . . . agreeably to the drawings and specifications ... in a good workmanlike and substantial manner, to the satisfaction and under the direction of the architect, to be testified by a writing or certificate under the hand of the architect.” And again, it requires that the payments for said buildings should be made in certain instalments, each to be paid when certain parts of the work was finished, provided, that in each of the said cases a certificate shall be obtained and signed by the architect, certified by him to that effect.

The specifications provide that all the work is to be done in the neatest and best workmanlike manner, subject to the approval and superintendence of the architect, whom the owner appoints for that purpose.

No certificate from Mr. Waring, the architect, was obtained by plaintiffs, who claimed that such certificates were waived by defendant.

The plaintiffs having thought proper to enter into a contract with the defendant, making the production of the architect’s certificate a condition precedent to the payment, are as much bound by that obligation as by any other (Smith Brady, 17 N. Y. 176 ; Glamais v. Black, 50 Id. 148). No such certificate was ever obtained, nor does it appear that any application was ever made to the architect for it.

The plaintiff relies upon a waiver by the defendant of the certificate. Certain conversations with the defendant are testified to by the plaintiff, Haden. But nothing was said by the defendant in these conversations, directly or indirectly, tending to show that he waived his right to the production of the architect’s certificate, if he chose to insist upon it. His expressions that he was pleased with the work, or dissatisfied with the architect, or that he wanted to have plaintiff release him from the payment of a loan the plaintiff had at a previous time made him of $1,000, as a condition of paying the balance on the contract in question, fail to create a waiver of this condition precedent, contained in the contract.

It was justly considered by the court at the trial, that the payments made by the defendant without demanding the architect’s certificate established no more' than that, as respects these payments, the defendant did not choose to rely upon any legal defense he might have to the contract. Such payments of some of the installments without the production of the certificate, cannot operate as. a waiver of the final certificate upon the completion of the work (Barton v. Hermann, 11 Abb. Pr. N. S. 378).

The judgment appealed from should be affirmed, with costs.

Speie, J., concurred.


text:
    ANN L. NEILL, Plaintiff and Respondent, v. THE AMERICAN POPULAR LIFE INSURANCE COMPANY, Defendant and Appellant.
    LIFE INSURANCE.
    Relation of Policy to Application.—Age of Applicant Must BE COBKECTLY STATED.—PROOFS OF DEATH.—EFFECT OF STATEMENT THEREIN IN REGARD TO AGE OF APPLICANT THAT DIFFER, from the Application.—Errors in same may be Corrected by Parol Proof on the Trial.
    In an application for life insurance the company have a right to insist and to stipulate that true answers be given to its inquiries in regard to the age of the applicant, and false answers in that respect will relieve the company from the conditions of the policy.
    If, by the proofs of death, it appears that the applicant was a year older than appeared from his original application, parol proof may be given - to show that the statement in such proofs was made by mistake. The insured is not estopped from showing the mistake.

      As the proofs of death in the case did not mislead or injure the company, nor cause it to do or to omit to do anything to its prejudice, estoppel in pais does not exist.
    The case of Irving v. Excelsior Eire Insurance Co., 1 Bos. 507, considered as overruled to some extent by McMaster v. Insurance Co. of N. America, 55 A. Y. 222, and Parmlee d. Hoffman Insurance Co., 54 A. Y. 193.
    Before Curtis, Ch. J., and Sedgwick and Speir, JJ.

      Decided May 8, 1877.
    Appeal from a judgment entered upon a verdict in favor of the plaintiff for $5,195.
    The action is brought upon a policy of insurance, made by the defendant on the life of James Neill, the husband of the plaintiff. The policy was for $5,000, and was issued in 1868. The premiums were all duly paid.
    The answer of the defendant sets up that it was stated in the application for insurance, that the age of the insured was fifty years, whereas the defendant avers upon information and belief, that his age was fifty-five years.

      George Bliss, for appellant.

      John H. Parsons, for respondent.
   By the Court.—Curtis, Ch. J.

The proofs of death showed a discrepancy of one year, making the insured one year older than he was stated to be in the original application. This discrepancy was proved at the trial to have been caused by an error of one year in the computation by the person who prepared the proofs of loss, and not to have resulted from any error in the original application. There was no conflicting evidence on this point.

The court charged that the company had a right to insist and stipulate, that true answers should be made in the original application, and that if the answer in respect to the age of the applicant is untrue, the plaintiff was not entitled to recover anything. That they were to determine if there was this error in the original application, and if so, to find for the defendants; but if they .found that it occurred in making up the proofs of death, and believed the testimony and explanation testified to by the person making up such proofs, they should find for the plaintiff. There were no exceptions to the charge.

The only point submitted by the defendants on the appeal is, that the court erred in admitting evidence, that the statement of age in the proofs of death was an error. The case of Irving v. Excelsior Fire Ins. Co., 1 Bosw. 507, is cited to show that an estoppel in pais is applicable to the facts of this case ; but it is conceded that this decision is perhaps to some extent overruled in McMaster v. Prest., &c. of Ins. Co. of N. America, 55 N. Y. 222. In the latter case it was held, that the proofs of loss did not create the liability to pay the loss, and that the insured was not estopped from showing that a statement in the proofs of loss was made by mistake. This view was sustained in Parmlee v. Hoffman Ins. Co., 54 N. Y. 193. It is apparent that as the declaration of age in the proofs of death in the case in question, did not mislead or injure the defendant, or was calculated so to do, or to lead the defendant to do or omit to do anything by which it would be prejudiced by a denial of the declaration, that the basis for an estoppel in pais does not exist.

Judgment appealed from should be affirmed with costs.

Sedgwick and Speir, JJ., concurred,


author: By the Court.—Curtis, Ch., J.

text:
    HORACE B. CLAFLIN, et al., Plaintiffs and Appellants v. S. B. MOORE, et al., Defendants and Respondents.
    FRAUD.
    False representations and a suppression or omission to state all the liabilities of a firm, when professing to so do, for the purpose of obtaining credit, are equally inconsistent with honesty and good faith.
    A party is not obliged to answer questions nor to volunteer statements in regard to his capital and business affairs, when seeking credit; but when he undertakes to give a statement of his affairs in order to obtain such credit, common honesty requires him to give a truthful and full statement, and under such circumstances, there is as much fraud in a suppression or omission to disclose an integral part of his liabilities in order to deceive the party from whom he seeks credit, as there would have been in making a false representation as to the amount of his assets.
    It is impossible to reconcile alleged failures of memory in regard to large liabilities (which in this case exceeded the capital claimed in the statements and representations) with what is commonly known and recognized as honesty and fair dealing among business men. Such allegations cannot be received in justification of such suppressions and omissions. The approval of the acts of a party under such circumstances would be at variance with the settled principles on which mercantile transactions and commercial credit , rest and are governed.
    Before Curtis, Ch. J., and Sedgwick and Speir, JJ.

      Decided May 8, 1877.
    Appeal from an order of the special term, vacating an order of arrest.

      Almon Goodwin, for appellants.

      Charles Matthews, for respondents.
   By the Court.—Curtis, Ch., J.

The defendant, S. B. Moore, a country merchant at Wilkesbarre, Penn., when applied to by the plaintiffs in January, 1874, for a statement of the pecuniary condition of his firm, which consisted of his brother Oscar C. Moore and himself, and who bought goods on credit of the plaintiffs, stated in substance that their assets were §36,028.73, and that they owed $20,066.78. This showed a capital of $15,961.95.

The plaintiffs continued to sell on credit to the defendants until the latter owed them, in September, 1876, $4,069.70, part of which was for goods sold the defendants that month. In the course of that month the defendants made an insolvent assignment and claimed to be unable to pay anything.

It appears that when the defendant S. B. Moore made the statement of the financial condition of his firm to the plaintiffs, he omitted to mention that they owed their father $5,500 for capital to commence business with, for which then or subsequently a judgment note was given, and also that he omitted to mention that their firm were then indorsers of the notes of the defendant Oscar C. Moore for about $19,000.

As these omitted liabilities exceeded their capital, and would, if mentioned to the plaintiffs, probably have terminated the defendants’ credit with them, it is desirable to consider if these omissions can be reconciled with honesty and fair dealing on the part of the defendant, $. B. Moore.

It is but just to him, to say that he does not deny the fact of making the omissions, but it is difficult to be satisfied with his reasons for doing so. He states that not being asked about the indebtedness to his father, and not thinking about it, he did not speak oí it, and the same reason is in substance assigned for not speaking of the firm’s indorsements for Oscar C. Moore.

It is the most natural thing in the world, when a man is seeking credit, and is asked by the person from whom he seeks it, about his pecuniary condition, that he should remember such liabilities as the defendant refers to. It is difficult to suppose that this defendant would forget at such a time about the note the defendants gave their father for capital in their business, especially as they remembered "to have it put in the form of a judgment note, not certainly with a view of prejudicing him in securing himself in a race with their other creditors then or at some future day. Even conceding that the failure to embrace this debt in their statement of liabilities to plaintiffs was a mental inadvertence consequent upon the plaintiffs not asking the defendant about it, which, in view of their having no notice of it, it was not easy for them to do, still it is asking too much to require the court to believe that for these same reasons the defendant did not disclose that they were liable as indorsers for one of their firm, in a sum far exceeding the amount of the capital they claimed in their statement to plaintiffs to have, unless there is stronger evidence to support such a theory than the papers on this appeal disclose.

The defendant was not obliged to answer a question, or to volunteer any statement, but having undertaken tp give a statement of the affairs of his firm, in order to get a credit from the plaintiffs, common 'honesty required him to give a truthful statement, and under such circumstances, there is as much fraud in a suppression to disclose a part of their liabilities in order to deceive the plaintiffs, as there would have been in a false representation of the amount of their assets.

It is impossible to reconcile these coincidences of alleged failures of memory on the defendant’s part in respect to the liabilities of his firm, and the other circumstances appearing in the case, with „what is commonly known as honesty and fair dealing among business men.

The defendant must have known all along that the plaintiffs were relying upon his untrue statement, and if that untruthfulness arose from a temporary failure of memory at the time he made the statement, it was his duty to have corrected it, and not to have gone on for several months, until the purchases from plaintiffs were largely increased. It is absurd to suppose he did not think of these liabilities until the firm was forced to make an assignment. At that time, the note to their father, with interest, was $7,672.50, and the indebtedness for Oscar C. Moore was $19,943.51, and their remaining debts about as much more, while their stock, their chief assets, was sold by the assignee for $8,000.

The acts of the defendant are not consistent with good faith, and to sustain them as such, would be at variance with the settled principles on which mercantile transactions and commercial credit rest, and must in the nature of things be governed.

The order of tfie special term vacating the order of arrest, should be reversed, and the order of arrest re-instated.

Speir, J., concurred, Sedgwick, J. not voting.


author: By the Court.—Sedgwick, J.

text:
    BENJAMIN P. FAIRCHILD, Plaintiff and Appellant, v. THERESA LYNCH, Defendant and Respondent.
    I. AGENCY FOR THE RECEPTION OF A NEED.

      1. Prima vacie evidence ov.
    (<r„) Conveyance of the property by the alleged principal and admissions by him in an answer in another action, is.

    1. F and 0 entered into a contract whereby F agreed to convey to C certain premises. 0 directed F to make the deed to L. In pursuance of such direction F executed a. deed conveying the premises to L and delivered it to G' for L. This deed conveyed the premises “subject to a certain mortgage made by F.......which said mortgage the jiarty hereto of the first part assumes and agrees to pay as part of the consideration hereinbefore expressed.’’ L subsequently conveyed the premises to B by a deed in which her grantee agreed to pay said mortgage as part of the purchase money. In an action subsequently brought against F, L, B, and others, to foreclose this mortgage, the complaint alleged that F sold and conveyed the premises to L by a deed in which “ the said L assumed said mortgage as part of the consideration on such purchase and agreed to pay the same.” L, by her verified answer to this complaint., admitted that F sold and conveyed to her, and further alleged “ and this defendant received the said deed and this defendant admits that this defendant received said land subject to said mortgage,” but she therein denied that she had ever agreed to pay the mortgage, and denied that under the deed to her she was bound to pay it. In that action judgment of foreclosure and sale was rendered on consent of her attorney which did not charge her with personal liability for any deficiency.
    Held,

      prima facie evidence that 0 was L’s agent for the purpose of accepting the deed from F to her, and that by his acceptance L became bound to perform any agreement on her part contained in it.
    1. Assumption of mortgage.—Also held that if, on a proper construction of the deed it contained a clause whereby the property was conveyed “subject to a mortgage which the party of the second part assumed and agreed to pay,” L was bound to perform such agreement, and to save F harmless from any liability on the mortgage.

    II. EEEE—OONSTEUOTION OF.—ORANGE OF WOEES.

      . 1. Mortgage assumption clause.

      (a.) The word “first” turned in “ second.”

      1. A deed contained the following clause “subject nevertheless to a certain mortgage .... which the party hereto of the first part assumes and agrees to pay as part of the consideration hereinbefore expressed.” The word “first ” was construed to read and mean “second," and as thus construed constituted an agreement by the grantee to pay the mortgage.
    III. MAXIM.

      Verba intentioni etnone contra debent inservire, ut res mag is mleat qnam pereat—applied.
    IV. EQUITY AG TIGN.

    1. Cause op action at law mat b$ becovebed in it.
    (a.) If a plaintiff brings an action for equitable relief, and on the trial establishes a cause of action at law, he may, although he fails to establish any right to equitable relief, recover judgment on such cause of action at law, the defendant not having demanded "a trial by jury or raised any objection.

    Before Sedgwick and Sandford, JJ.

      Decided May 8, 1877.
    Appeal from a judgment in favor of defendants, for costs, entered on dismissal of complaint after a trial at special term by the court without a jury.
    The complaint averred the making- of a contract between the plaintiff and one Leonard, for the sale and conveyance to the latter of a house and lot of land on the northerly side of Twenty-seventh street, in the city of Hew York, for the price or sum of $21,500, to be paid partly in cash, parity by a conveyance of other premises to the plaintiff, and partly by the purchaser's assuming the payment of a mortgage for $15,000, then on the premises, and subject to which the plaintiff’s conveyance thereof was to be made ; that Leonard assigned the said agreement to the defendant who afterward completed the purchase, accepting from the plaintiff a warranty deed of said premises, in which it was stated that said premises were conveyed subject to the mortgage, the same forming part of the consideration money of such conveyance ; that it was thereupon intended, both by the said plaintiff and said defendant, that the said deed should further state that the defendant thereby assumed and agreed to pay said mortgage as part of such consideration money, but by a mere clerical error and mistake, unknown to and unobserved by both plaintiff and defendant, it xvas stated in said deed that “the party of the first part thereto, that is to say, the plaintiff herein, thereby assumed and agreed to pay the said mortgage, as part of the consideration money thereinbefore expressed. The complaint further averred that the defendant accepted said deed, intending thereby to assume and in equity and good conscience did assume and agree to pay said mortgage, as part of the consideration of her purchase; that by xdrtue of such conveyance defendant became seized, in fee of said premises subject to said mortgage, and became thereby bound to indemnify and save harmless the said plaintiff from the said mortgage and all the conditions therein. The foreclosm-e of the said mortgage by the assignees thereof xvas also averred, the result of such foreclosure being a judgment against the plaintiff for a deficiency of $5,585.71. Then folloxved an averment of the payment of said sum by the plaintiff to the assignees of the mortgage, as required b}^ such judgment-, whereby “an action has accrued to the said plaintiff to demand and have of and from the defendant herein the sum of $5,585.71, xvith interest from March 3, 1875,” and a demand of judgment against the said defendant, (1), for a reformation of the deed, by correcting the mistake above mentioned, and (2), for the recovery from the-defendant of the said sum of $5,585.71, xxfith interest.
    The defendant answered denying any knowledge or information as to the alleged agreement betxveen the plaintiff and Leonard, and anjr intent on her part to assume or pay the said mortgage. She averred that she paid Leonard, xyho, as she was informed and beliex-ed, oxvned the premises, the sum of $11,000, as the full purchase price thereof, and xvas to take the same subject to a mortgage of $15,000, represented to her as being upon the said premises ; but, that she did not, in any way, manner or form, agree to assume or become liable personally for the payment of said mortgage. She further denied that by reason of anything in said deed contained she became or ever was or is now bound to indemnify the said plaintiff or to save Mm harmless from the said mortgagee.
    The answer put in issue all the allegations of the complaint not specifically admitted, and set up affirmative defenses, which it is unnecessary to state.
    Upon the trial the plaintiff proved, among other tilings, that on February 14, 1873, he was seized in fee and possessed of the house and lot described in the complaint; that on February 15, 1873, he mortgaged the same to one Luyster, to secure the payment of $15,000, with interest thereon ; that on February 5, 1873, he made an agreement with William Leonard to sell and convey to him the said premises for the price of $21,500, subject to the said mortgage, and to the payment thereof by Leonard as part of such contract price; that in and by said agreement Leonard agreed to purchase said premises on the terms and conditions therein mentioned, and to pay said purchase money by assuming the payment of said mortgage as part thereof, and to pay the residue partly in cash and partly by a conveyance of other property to the plaintiff; that subsequently to said February 5, 1873, Leonard directed the plaintiff to execute a deed to the defendant herein, instead of executing the same to the said Leonard, and that on or about February 18, 1873, the plaintiff, for value received, and by direction of Leonard, executed and delivered to the defendant a deed of said premises, bearing date February 18, 1873, whereby the said plaintiff, therein described as the party of the first part thereto, for an expressed consideration of $26,000,— recited to have been paid to Mm by the defendant, who was therein described as the party of the second part, conveyed to said defendant the said premises, “ subject, nevertheless, to a certain indenture of mortgage given by the party hereto of the first part to secure the principal sum of $15,000, and interest, . . . which said mortgage the party hereto of the first part hereby assumes and agrees to pay as part of the consideration hereinbefore expressed.”
    The plaintiff further proved that on April 1, 1873, by deed bearing date on that day and duly executed under her hand and seal, the defendant for the consideration therein expressed of $28,000, conveyed the said premises to one Edward D. Bell, describing them in and by said deed as “the same premises conveyed to the said party of the first part, (the defendant) by Benjamin P. Fairchild, (the plaintiff) by deed, dated February 18, 1873, and recorded, February 20, 1873;” such conveyance was made, subject to the mortgage mentioned and referred to in the deed from plaintiff to defendant, and Bell, the defendant’s grantee, therein and thereby assumed and agreed to pay the said mortgage as part of the consideration of the said conveyance from defendant to him.
    The plaintiff .further proved that the deed executed by him to defendant was drawn by an attorney, one George F. Demurest, at his request; that he handed to Demurest Ms contract with Leonard and instructed Mm to prepare a deed in accordance therewith, substituting the name of the defendant for that of Leonard, as grantee ; and that he intended to execute a deed subject to the mortgage, the grantee assuming and agreeing to pay it. He testified that he never knew of the phraseology of the deed whereby it was stated that the party of the “first” part assumed payment of the mortgage, until the answer of the defendant was served in the present suit. Demurest testified that he received instructions from the plaintiff to prepare the deed in accordance with the contract- between the plaintiff and Leonard, and delivered the deed to Leonard for the defendant. It was not delivered to the defendant personally. He supposed the deed conformed to the contract, until after the commencement of this suit; and he testified, without objection, that the clause of the deed, whereby the party of the first part thereto assumed and agreed to pay the mortgage as part of the consideration therein expressed, was strictly and clearly a clerical error, as the intention was that the grantee should assume the mortgage.
    The plaintiff further proved that by sundry mesne assignments thereof the said mortgage with the bond therein mentioned was transferred to the trustees of Elizabeth 0. Chauncy, deceased, and that, the same having become due, by reason of default in the pay ment of interest, agreeably to certain conditions therein contained, an action was commenced by the said trustees in the supreme court, on September 23, 1874, for the foreclosure of said mortgage. Plaintiff, defendant and said Bell were, with others, made parties defendant, and such proceedings were thereupon had, that a judgment was finally rendered in said suit, for the recovery by said trustees of the said sum of $5,585.71, against the said plaintiff, the said sum being a deficiency of the proceeds of the sale of said mortgaged premises, to satisfy the amount adjudged to be due to said trustees upon the said mortgage.
    The plaintiff also proved that he had paid the said sum with interest to said trustees as required by said judgment.
    By the record of the said judgment which was put in evidence on the part of the plaintiff, it appeared that the defendant answered the complaint in foreclosure, and, by her answer thereto, expressly admitted that the plaintiff herein sold and conveyed to her the mortgaged premises, and that she received the deed therefor. She also admitted that she received the said land, subject to the said mortgage, and afterward sold and conveyed said land to said Bell subject thereto; but she therein denied that she had ever agreed to pay the mortgage, and denied that under the deed to her she was bound to pay it. The judgment of foreclosure and sale was rendered upon the consent of her attorney, and did not charge her with personal liability for any deficiency.
    At the close of the evidence on the part of the plaintiff, counsel for defendant moved to dismiss the complaint on the ground that there had been no proof that the defendant adopted or agreed to the contract between plaintiff and Leonard, or in any way agreed to assume the mortgage.
    The court dismissed the complaint, counsel for plaintiff duly excepting, and judgment was thereupon entered in favor of the defendant.

      S. F. Cowdrey, attorney, and of counsel for appellant, urged:
    I. The cause of action, stated in the complaint, entitles plaintiff to both the equitable and legal relief prayed for, and those causes of action were properly joined (Code, § 167; Haire v. Baker, 5 N. Y. 362 ; Bradley v. Aldrich, 40 Id. 509, 511, 512; Sternberger v. McGovern, 56 Id. 20; Bruce v. Kelly, 5 Hun, 229 ; Anderson v. Hunn, 12 Sup. Ct. 79; Mann v. Fairchild, 2 Keyes, 112 ; Heywood v. City of Buffalo, 14 N. Y. 540 ; McKeon v. See, 4 Robt. 464; Margraf v. Muir, 57 N. Y. 159 ; Van Santvoord Eq. 15, 19, 23).
    II. The right to legal relief being shown by the complaint, the court does not lose its right to grant such legal relief, even if the plaintiff fails to obtain the equitable relief prayed for (Barlow v. Scott, 24 N. Y. 45; Sternberger v. McGovern, supra; Bradley v. Aldrich, supra; N. Y. Ice Co. v. N. W. Ins. Co. of Oswego, 23 N. Y. 357; Wells v. Yates, 44 Id. 525, and cases cited at p. 531).

      III. The circumstances of the case show that the words used in the habendum clause of the deed, by which “ the party of th & first part” assumes payment of the mortgage, were inserted by mistake, that they do not declare the intention of the parties, and that the intention of the parties was that “the party of the second part ’ ’ should assume such payment.
    IV. But the defendant did receive the deed, and she fully consummated the contract of sale, in precisely the same manner as Leonard would have done. She conveyed, or caused to be conveyed (it matters not which), to the plaintiff, the lots described in the contract ; and she paid, or caused to be paid in cash, the balance of the purchase-money according to the contract ; and, she sold the property to Bell in 1873, requiring Bell to assume payment of the mortgage (Vide Campbell v. Smith, 8 Hun, 6).
    V. If the defendant did not know when the deed was delivered what its contents were, she must have believed that the deed conformed to the contract. If she did know the contents of the deed as delivered to her, she was guilty of a fraud on the plaintiff, and this alone is sufficient to authorize reformation of the deed (Wells v. Yates, 44 N. Y. 525; Cited and approved, Bryce v. Lorillard Fire Ins. Co., 55 Id. 243. The fraud need not be set forth in complaint, Ib.).

    VI. There is no principle of equity more fully established than that courts of equity will reform and correct written instruments where, from accident or mistake, they fail to express the intention of the parties thereto. As to accident: Willard's Eq. Jur. 51, 52, 54, 55, 57 ; Story's Eq. Jur. § 78. As to mistake: Willard's Eq. Jur. 54, 59, 69, 72, 73, 74, 75, 78, 79 ; Fonblanque's Eq., book 1, ch. 3, § 1, and notes. (Gillespie v. Moon, 2 Johns. 585; Lyman v. United Ins. Co., 17 Id. 375; Wood v. Hubbold, 10 N. Y, 484; Rider v. Powell, 28 Id. 312). Citing and approving: Keisselbrack v. Livingston, 4 Johns. 144; Moale v. Buchanan, 11 Gill & Johnson, 325; De Peyster v. Hasbrouck, 11 N. Y. 582 ; Lyman v. United Ins. Co., 17 Johns. 375; Matthews v. Terwilliger, 3 Barb. 50; Quick v. Stuyvesant, 2 Paige, 84; Haire v. Baker, 5 N. Y. 357; Kerr on Frauds, 338, 345, 349, 354, 341; Gates v. Green, 4 Paige, 355; Wells v. Yates, 44 N. Y. 525; Kent v. Manchester, 39 Barb. 595; Mills v. Lewis, 55 Id. 179; Smith v. Mackin, 4 Lans. 41; Story's Eq. Jur. §§ 110, 153, 157, 159, 160, 163, 164 f, 168). Even although it be the mistake of one party only (Andrews v. Gillespie, 47 N. Y. 490 ; Nevins v. Dunlap, 33 Id. 680). A mistake of the scrivener who prepared the instrument, is sufficient ground for reforming the instrument (Nevins v. Dunlap, supra; Wood v. Hubbell, 10 N. Y. 484; Willard's Eq. 73 ; Story's Eq. § 164, f; Huss v. Morris, 63 Pa. 367, note A; Van Darge v. Van Darge, 23 Mich. 321; Hunt v. Rousmaniere’s Admrs., 1 Peters, 13; cited and approved in Pitcher v. Hennessy, 48 N. Y. 424; Kerr on Frauds, 349). Relief will be granted where the mistake is fairly implied from the nature of the transaction (Story's Eq. § 162 ; Kerr on Frauds, 354).
    VII. But aside from the question of the plaintiff’s right to equitable relief, the plaintiff is entitled to judgment on the covenant in the deed, as it stands, without any reformation. His remedy is completely established on legal grounds alone.

      Rules of Construction.—The construction shall be favorable to apparent intent of parties (Touchstone, 86, 87; Sanders v. Betts, 7 Wend. 287). Held, in this case, that the words “party of the second part,” in a covenant in a deed, mean “party of the first part.” The construction must be upon the entire deed, one part to help to expound another (2 Parsons on Con. 501; Ludlow v. McCrea, 1 Wend. 231; Tabb v. Archer, 3 Henn. & Mun. 435; Horry v. Horry, 3 Dessaus.
      115 ; Rawle on Cov. 697; 2 Kent's Com. 556; Sumner v. Williams, 8 Mass. 214; Fowle v. Bigelow, 10 Id. 379; Hopkins v. Young, 11 Id. 302; Van Hagin v. Van Rennselaer, 18 Johns. 420).
    VIII. The defendant, the grantee named in the deed, is bound by the covenants therein contained, although not signed by her (Atlantic Dock Co. v. Leavitt, 54 N. Y. 35, and cases cited; Trotter v. Hughes, 2 Kern. 74 ; Belmont v. Coman, 22 N. Y. 438; Spaulding v. Hallenbeck, 35 Id. 206 ; Ricard v. Sanderson, 41 Id. 179).
    IX. The defendant, although a married woman, having power to purchase the land, and having purchased it for herself—having, also, subsequently conveyed it as her separate estate, had power to make contracts relative thereto (Laws of 1860, 157, § 3, [amended] Laws of 1862, 343, § 1; Frecking v. Rolland, 53 N. Y. 422; Corn Ex. Fire Ins. Co. v. Babcock, 42 Id. 613 ; Sigel v. Johns, 58 Barb. 620 ; Ainslie v. Mead, 3 Lans. 116; Yale v. Dederer, 22 N. Y. 450; Rowe v. Smith, 55 Barb. 417 ; Rowe v. Smith, 45 N. Y. 230; Ballin v. Dillaye, 37 Id. 35 ; Vrooman v. Turner, 8 Hun, 82).

      William G. Bussy, attorney, and of counsel for respondent, urged:
    I. The action is brought in equity, to reform a deed (see complaint). To entitle a party to a decree reforming a written instrument, the plaintiff must bring himself 'within the following rules : (1.) The mistake must have been a mutual mistake, and must be plain, and clearly proved. (2.) The mistake must be of fact, not of law; and a mistake as to the meaning of language is a mistake of law. (3.) It must be clearly shown to the court what the real contract was. If any doubt be left on this point, the written contract cannot be disturbed (Kent v. Manchester, 29 Barb. 595 ; Mills v. Lewis, 37 How. Pr. 418; 55 Barb. 179; Fennel v. Wilson, 2 Abb. Pr. N. S. 466 ; Lyman v. United Ins. Co., 17 Johns. 372 ; Marvin v. Bennett, 26 Wend. 168 ; O’Donnell v. Harmon, 3 Daly, 424 ; Hetman v. Beardsley, 2 Johns. Ch. 585; Phoenix Fire Ins. Co. v. Gurney, 1 Paige, 278 ; Boardman v. Davidson, 7 Abb. Pr. N. S. 939 ; Nevins v. Dunlap, 33 N. Y. 676; 1 Story’s Eq. Jur. §§ 155, 66).
    II. In this case the plaintiff not only fails to prove the basis of his compláint, that the defendant intended to assume the mortgage, but it was clearly proved by plaintiff that defendant never entered into any contract or agreement, verbal or otherwise, with, or made any promises to the plaintiff; nor did she pay any part of the consideration. On the contrary, the contract was made by plaintiff with Mr. Leonard ; the consideration was paid by Mr. Leonard ; the deed was actually delivered to Mr. Leonard, and the deed was made to defendant simply because Mr. Leonard asked it, and because, as plaintiff understood, Mr. Leonard had made a trade with defendant. There is not only nothing to connect the defendant with the transaction but the evidence shows positively that she had nothing to do with the transaction in question.
    III. There is no delivery of the deed to the defendant (Perstetson v. Hughes, 65 Barb. 134).
    IV. A conveyance made “subject” to a mortgage does not bind the grantee to pay the mortgage (Minor v. Terry, 6 How. Pr. 208 ; Binsse v. Paige, 1 Keyes, 87).
    Y. The question of intent on the part of defendant to assume the mortgage was a question of fact simply ; and “ the rule that the report of the referee, like the verdict of a jury, is conclusive as to the questions of fact, is applicable to the findings of a judge. He takes the testimony, hears and sees the withesses, and is quite as well able as a jury or referee to arrive at a right conclusion as to the facts” (N. Y. Superior Court, Ritter v. Cushman, 35 How. Pr. 284 ; Lewis v. Greider, 49 Barb. 606).

       Note.—Of course, if the facts constituting the legal cause of action are not averred in the complaint and the defendant raises the point that although the facts proven constitute a legal cause of action, yet such cause of action is not complained upon, no recovery can be had thereon.

   By the Court.—Sedgwick, J.

The acceptance by defendant Lynch, of the conveyance of plaintiff to her, would have held her to the performance of any agreement on her part stated therein (Atlantic Dock Co. v. Leavitt, 54 N. Y. 35; Spaulding v. Hallenbeck, 35 Id. 206), although she did not sign. In her answer in this action she denied ever accepting the deed, averring in substance, that when she conveyed the property, she supposed that the plaintiff had conveyed to Leonard and Leonard to her. The plaintiff took the position, that Leonard acted as defendant’s agent when he accepted the conveyance made by plaintiff. The evidence on this issue was favorable to plaintiff, and there was no conflicting or explanatory testimony. The defendant had conveyed the land by a deed, in which her grantee agreed to pay the mortgage in question, “the same being a part of the purchase money of this conveyance.” In the foreclosure action of this mortgage, the complaint alleged that Fairchild (who is plaintiff here) sold and conveyed the premises to Lynch (the defendant here) by a deed in which “ the said Theresa Lynch assumed the said mortgage as part of the consideration on such purchase and agreed to pay the same.” She, by her verified answer, admitted that the present plaintiff sold and conveyed to her. Further, her answer alleged, “and this defendant received the said deed. And this defendant admits that this defendant received said land subject to said mortgage,” but she therein denied that she had ever agreed to pay the mortgage, and denied that under the deed to her, she was bound to pay the mortgage.

There was enough evidence, therefore, that Leonard acted as her agent in fact in accepting the conveyance, and that she thereupon became bound to perform any agreement on her part contained in it. The appellant claims that the following clause is an agreement by her to pay the mortgage, viz: “Subject nevertheless to a certain indenture of mortgage, given by the party hereto of the first part to secure the principal sum of $15,000 and interest, which said mortgage is recorded, &c., and which said mortgage the party hereto of the first part assumes and agrees to pay, as part of the consideration hereinbefore expressed.”

A correct interpretation of this is that the mortgage is to be paid by the party of the second part, without a resort to the contract which the conveyance consummated or to any other extrinsic facts. There was plainly a mistake of the pen. There is no ambiguity in the words, but there is a mistake. The manifest intent was that whoever was to pay the consideration agreed to pay the mortgage. Theresa Lynch was to pay it, and she was by an error that happens often in speech, in writing, and in printing, designated as the party of the first part. There is no doubt as to who was meant to be designated.

If it is necessary to give a rule, which justifies this conclusion, that rule is verba intentionietnone contra debent inservire, ut res magis valeat quam pereat. This requires that the whole of the instrument shall be examined, and any part which is inconsistent with or repugnant to the intent of the whole instrument, as is shown with certainty by the other parts, is to be rejected or modified according to the intent.

In Jackson v. Topping, 1 Wend. 890, there was a condition that if the grantee neglected to pay certain debts of the grantor, and suffered the grantor to be put to cost or trouble on account of the same, the grantor might re-enter, &c. The case was that some of the debts had not been paid, but the grantor had not been put to any cost or trouble on account of such debts.' Although the law is never more subtle and exacting than in construing a condition, so that there may be no forfeiture, the court held that in view of the whole instrument the conjunction “and” should be made to mean “ or,” and that a mere neglect to pay the debts without more, was a breach.

In Sanders v. Betts, 7 Wend. 287, the covenant of warranty against all persons claiming ‘ ‘ from and under him the said party of the second part” was construed so as to reject as repugnant to the rest of the covenant the words “the said party of the second part,” although the legal effect would be the same, as if the words were written party of the first part (Gardner v. Gardner, 10 Johns. 47).

In Buck v. Burk, 18 N. Y. 339, the contract was to deliver goods at not above 25 per cent, of the cost price, and the court held, counsel not arguing to the contrary, that it meant, 25 per cent, over and above the cost price, inasmuch as no other rational interpretation could be given to the terms, and the nature of the transaction and the circumstances forbidding any other construction.

In Morse v. Salisbury, 48 N. Y. 637, the action involved title to land, under a written contract made by B, which purported to convey all “ the land and timber excepting the hard wood ón 100 acres of land.” The contract was in duplicate and the other part delivered to B was the same excepting the word “bark” was in place of “land.” The court looked at both parts of the contract and the whole of them, and from them adjudged that “land” was not meant to be conveyed, thereby rejecting the word “land” as repugnant to the intent as learned from the whole taken together, and making it mean “ bark!”

In Bache v. Proctor, 2 Doug. 383, the condition of the bond was that if A should render a fair, just and perfect account of all sums received, “ the bond should be void.” A rendered a just account but did not pay over the sums received. Lord Mansfield said that the fair construction of the condition was that A should pay. Justice Bulles likened the case to one in the common pleas where the condition of a bond was that it should be void, if the obligor did not pay, and the court held that the palpable mistake of a word should not defeat the true intention of the parties. Here he said it never could be meant that so large a penalty should be taken merely to enforce the making out a paper of items and figures.

In Mills v. Wright, 1 Freeman, 247, the bond was conditioned “if he do not pay the money, the bond should be void.” The court said that the condition was absurd and void, but the bond was good.

In 1 Saunders, 66, note b, it is said that the principle has been extended to promissory notes and a note containing the words “ I promise not to pay ” was held to be a valid promissory note (Bayley on Bills, 4 Ed. p. 6). Simpson v. Vaughan, 2 Atk. 32, contains a reference to a case where the note was for ‘‘ £20 borrowed and received, which I promise never to pay.” The latter clause was modified by the promise implied from the first clause. In Vernon v. Alsop, (1 Leo. 77, T. Ray, 68, 1 Sid. 105, 1 Kel. 356, 415, 451), there was a bond, with the condition to pay £7 by two shillings a week, until the £7 were paid, and if he failed of the payment of the 2 shillings at any of the days, whereon it ought to be paid, the obligation to be void else to remain in full force. The condition was rejected and there was a recovery upon the bond, after a plea that the defendant had failed to pay, &c.

In Furgerson v. Harwood, 7 Cranch, 413, the declaration set out a contract that the said Walter delivered to the said Enos three hogsheads of tobacco, “he the said Enos to be allowed per cent, therefor, the highest six months credit price.” The contract produced in evidence did not have the words “he the said Enos,” and Judge Stoet considered whether the contract would have been materially changed if those words had been in. He said that it was very clear that the word “Enos” was by a mere slip inserted instead of “Walter.” It is repugnant to the sense and meaning of the contract that the creditor who received the tobacco at a stipulated price in part payment of his debt, should allow to himself that price. From the nature of the transaction the debtor must be entitled to the allowance. If the same words had been introduced into the written contract itself, they must have been rejected as nonsensical or repugnant, or have had imposed upon them a sense exactly the same as if the words had been “the said Walter.” Burr v. Broadway Ins. Co., 16 N. Y. 268, sustains the principles of these cases.

It has been hardly necessary to cite these cases, except to show that there was no need of resorting to equity, to reform the defendant’s agreement for mistake, but that, where the mistake appears from the instrument itself, the law will enforce the obligation according to its true legal construction.

There can be no doubt, that the rest of the deed’ shows that the amount of the mortgage was part of' the consideration, and from that it follows, that the mortgage, as between the parties to the conveyance,' was - to be paid by the defendant, the grantee.

I am therefore of opinion that the complaint should not have been dismissed, inasmuch as the plaintiff had made a prima facie cause of action, at law, even if. there was no case for a reformation of the agreement,. in equity, but that the court should have proceeded to judgment in favor of plaintiff, for the sum he had been compelled to pay on the mortgage, with, interest, the defendant not having demanded a trial by jury, or raised any objection on that account.

The judgment appealed from should be reversed,, with costs to appellant to abide the event.

Sanford, J., concurred.


text:
    JOHN P. O’SULLIVAN, Plaintiff and Respondent, v. MARSHALL O. ROBERTS, Defendant and Appellant.
    I. WRITINGS, EVIDENCE.

    1. Indefinite Expressions.
    {a.) Extrinsic,proof is admissible to show what the parties intended to be covered by, and included in the expressions used.
    1. E. g., A contract called for the obtaining the “sanction” of a government to a certain organization, extrinsic proof is admissible to determine “what sanction” was agreed to be procured.
    II. GOVERNMENTS. '

    1. Consent or sanction of, or ratification by.

      (a.) Contract to procure, what is not performance of.
    1. Obtaining an order or decree from which by a constructive implication, the desired consent, sanction, or ratification may be inferred, is not sufficient.
    1. The consent, sanction, or ratification must be express, riot implied only.

    III. POWER OP ATTORNEY, EVIDENCE.

    1. EFFECT OF AS CONSTITUTING A CONTRACT.

      (a.) One containing recitals as to the objects for which it is made, and authorizing the performance of certain things, does not necessarily constitute a contract for compensation upon the performance ■ of the authorized things.
    1. That must depend on the agreement under which the power was given. If that makes compensation depend on the doing of things in addition to those contained in the power, the attorney must do the additional things to entitle him to compensation.
    :2. RECITALS IN, EFFECT OF. ■

      (a.) Operate as admissions as to facts.
    1. Explanation of. May be explained or contradicted by proof of a cotemporaneous contract, or of a contract for part execution whereof the power was given.
    1. Admissions by the attorney. A letter written by the attorney stating what in his view was the agreement, and referring to the power as setting forth the agreement so stated, is sufficient to entitle the defendant to go to the jury
      on the question, among others, whether the agreement was not as stated in such letter.
    IV. SATISFACTION, EXPRESSION OF; EVIDENCE; ESTOPPEL.

    1. The fact that a defendant has expressed himself entirely satisfied with the result of plaintiff's labors does not constitute such acceptance as to present the defendant from showing that plaintiff had not fulfilled his contract, and obtaining a verdict upon such showing.
    (it.) It is, however, proper esidence to go to the jury on the question as to what the contract was and whether the plaintiff had performed his part.
    Before Sedgwick and Sanford, JJ.

      Decided May 8, 1877.
    Appeal from judgment on verdict of jury, for plaintiff.
    The action was for the value of services, alleged to have been rendered by plaintiff at request of defendant and for his benefit.
    The answer, beside allegation of special matter, in substance denied generally the averments of complaint.
    Vanderpoel, Green & Cuming, attorneys, and A. J. Vanderpoel, C. N. Dickerson and Joseph S. Bosworth, of counsel, for appellant.

      James H. Fay, attorney, and Albert Stickney, of counsel, for respondent.
   By the Court.—Sedgwick, J.

The plaintiff on the trial and here, placed himself (as to the contract), upon the effect of written papers in evidence, and disclaimed the existence of any verbal contract.

The republic of Mexico had granted to certain parties-a right to build a railroad, &c., across the isthmus of Tehuantepec. Afterwards the republican government was attacked by military forces under Maximilian and dislodged by him from the capítol of the country. Maximilian formed what was called an imperial government and held a great part of Mexico.

The defendant wished to carry out the project of building the railroad, and made certain arrangements with the parties holding the grant, to the end that he might become the owner of it for the purpose of transferring it to an incorporation to be formed. A decision of this appeal does not call for an exact statement of these matters. The defendant at this point, wished that Maximilian should in some way confirm the franchises of the original grantees, in their transferees.

On the trial, the defendant claimed, that the purpose was to form an incorporated company to whom the grant should be assigned, and that it was agreed between himself and other persons, of whom Mr. Wikoff was one, that if the latter should procure what was desired from Maximilian, then the defendant would deliver to them $300,000 of the stock of the proposed company, and that the 50,000 of this stock which in a certain event was to be delivered to the plaintiff, was parcel of this 300,000 shares.

In the early part of April, 1866, Mr. Wikoff wrote a form of a letter to be signed by plaintiff. The plaintiff copied it, and signed the copy, and handed this copy to Mr. Wikoff, himself keeping the draft. There was no date to it. The contents were as follows :

“ My dear Mr. Wikoff:
“ Will you please say to Mr. Roberts, that I accept the offer made by you of an amount of New York and Tehuantepec stock that will produce fifty thousand dollars, for which consideration I agree to go to Mexico and co-operate with you in obtaining the imperial sanction to the proposed company.
“ Furthermore, I desire that Mr. Roberts will associate me with you as his representative in accomplishing the proposed object.
“ Finally, please arrange with Mr. Roberts, in accordance with all usages, that a liberal sum be appropriated for our joint expenses to and from Mexico.”

The plaintiff testified that on the morning of April 10,1866, as he was about to sail for Mexico, Mr. Wikoff or the defendant handed to him a letter as follows :

“Hew York, April 10, 1866.
“My Dear Sir:
“ I approve of the proposition made to you, by Mr. Wikoff, guaranteeing, to you fifty thousand dollars in stock of the projected Hew York and Tehuantepec Railroad and Steamship Company, in consideration of your assisting him to obtain the sanction of the imperial government of Mexico to said organization.
“I am very happy to associate you with Mr. Wikoff in the business he has undertaken, and hope that your joint efforts will be successful, both for my sake and that of his Mexican majesty.
“ I concur when the matter is complete.
“Marshall 0. Roberts.”

The original of this had been lost, but the plaintiff testified that all but the last sentence was in the writing of Mr. Wikoff, and that sentence was in the writing of the defendant. The defendant denied that he had signed this letter.

As to these two papers, the court charged that if there were no evidence of some modification at a later time, they formed, in themselves, a complete contract between the parties, that they were substantially the same in effect, and that even if the jury should find that the defendant had not signed the second, still he had (as a conclusion from evidence in the case), acknowledged Wikoff to be his agent, to make a contract of the kind set forth in the first, so that the first paper was evidence of a contract, all of whose terms were therein expressed.

The testimony did not show that the defendant had ever seen the first paper, and I am of opinion that the learned judge went too far in charging that, as matter of law, the admissions of defendant conclusively showed that Wikoff was defendant’s agent to make a contract for him of the kind set forth in that first paper. These admissions are in the answer and in letters written by defendant. Whatever detached sentences there may be, that by themselves might justify an inference that Wikoff was acting for Roberts in making the arrangement with plaintiff, still all I think should be considered with the position that, from the first to the last the defendant takes and persistently reiterates that it was Wikoff as a principal who made the arrangement, in order to successfully accomplish what Wikoff and others had undertaken with defendant.

It is' entirely consistent with this that the defendant had promised, by a separate obligation, to deliver the stock as stated in the answer. Be that so, it does not necessarily prove that Wikoff in the first acted as Roberts’ agent. It rather intimates the contrary.

And if the defendant did sign the second paper, I do not think that would conclusively show that Wikoff acted as defendant’s agent in making the arrangement referred to, in the first paper. On that point, proper consideration should be given to the peculiar phrases of the last sentence, as throwing light upon the intention of defendant to indicate that he did not mean to hold himself out as a principal actor in all that was referred to in the part written by Wikoff, although at the same, he would be bound to the special obligations that flowed from his concurrence. It would not be right to attempt to construe this letter, for counsel have not yet reached the point of examining what plaintiff’s rights are, if they rest upon that letter.

It might be important to see if the compensation intended by $50,000 in stock of the projected “ company” is the same as intended by “an amount of stock that will produce $50,000,” but a decision of this appeal does not involve this question, and counsel have not argued it, except incidentally. For a like reason, no attention will be given to the measure of damages, if the defendant were bound to deliver to plaintiff $50,000 in stock of the company.

It can hardly be doubted that the two letters describe the same object to be accomplished by the plaintiff and Wikoff. The one is “in obtaining the imperial sanction to the proposed company.” The other is “to obtain the sanction of the imperial government of Mexico to the said organization.” The plaintiff was bound to prove that he had secured that, before he could claim compensation. The court impliedly held the law to be, that by a proper construction the plaintiff performed this service, when he procured, as he proved, from Maximilian “permission to the Louisiana Tehuantepec Company .... that it may transfer the residence of its directorship from Hew Orleans to Hew York, and change its name to that of Hew York and Tehuantepec Railroad and Steamship Company. ” I use the words ‘ ‘ impliedly held this to be the law,” to avoid the statement of several parts of the charge to which specific exceptions were taken. The defendant claimed that the service described included, in addition to change of name, &c., the obtaining of the consent of the emperor to an assignment by the first grantees of its franchises to the proposed company. I am of opinion that the phrase “ obtaining the sanction of the imperial government,” may include all these things. Certainly if any one were obtained, there would thereby be a sanction of some kind. Proof, extrinsic of the letters, could probably be given to show to what the parties intended this sanction to apply, in order to determine what sanction was agreed to be procured. The learned counsel for plaintiff claims, that a consent to an assignment is implied in the consent given by the emperor, and that the emperor must be held to have assented to all the purposes which he knew were meant by the parties to accompany the change of name and of residence. The implication is not direct, but is inferred, and rests upon a construction that would be given by the political body who made the concession, not subject to the jurisdiction of courts. The parties must have intended that the sanction was to be express and not only implied.

The court further held that the testimony to support this claim of defendant was such as related to a power of attorney, as to which some facts should be stated, further holding at the same time, that but for this power, the plaintiff was only bound to procure the sanction as stated in the letter, viz., to a change of name and residence.

When the plaintiff started for Mexico first, he was accompanied by Mr. Wikoff, who took a power of attorney made by the defendant to him. The steamship was wrecked upon the coast, and both plaintiff and Mr. Wikoff came back to this city, and saw the defendant. The only thing done then, that refers to the question here, was that Mr. Wikoff, with the consent of the parties, withdrew from the proposed journey to Mexico, and the plaintiff was to proceed alone. The plaintiff began his second voyage to Mexico on April 25, 1866. On May 9, a power of attorney, the same in its words as that given to Mr. Wikoff, excepting that the plaintiff’s name was inserted in Mr. Wikoff’s stead, was executed by defendant. The plaintiff received this in Mexico in May, June, or July, and he thinks in June.

This power recited that whereas the defendant desires “the permission and sanction of the imperial government of Mexico to change the name of said company and to call it the New York, Tehuantepec and Pacific Railroad and Steamship Company, and to carry out the purpose above mentioned with the imperial government of Mexico, the said Marshall 0. Roberts has appointed and by these presents does appoint J. P. O’ Sullivan his attorney, in the name and stead of the said Roberts to negotiate with said imperial government of Mexico to change the name of the said company as above mentioned, and to transfer the rights and powers, property, franchises, charters of every name and nature of the said Louisiana and Tehuantepec Company with the New York, Tehuantepec and Pacific Railroad and Steamship Company.”

I think there can be no doubt that such a power of attorney is not conclusive evidence in its terms of what services the person named as attorney was to do, to entitle him to compensation. Its declarations are in the nature of admissions as to facts, but it is not a contract, and proof of a cotemporaneous contract may explain or contradict the admissions. The attorney may not be entitled to compensation if he does only what is recited as the motive of the principal to make the power, if he has elsewhere contracted to do something more. In the present case, the recital is not conclusive evidence that the meaning of the parties in the phrase “imperial sanction to the proposed company,” in the two letters (even if they contained the contract), wa? that there should be imperial permission to change the name of the company, and to do nothing more. Nor do I perceive that the purpose of the party is manifested more decisively by the statement of Ms wish in a recital, than it is by the statement of what the attorney is authorized to do. This shows a desire that the attorney should do the authorized things in a proper case.

Nor was it a necessary conclusion of fact in the case, that the plaintiff had never made Ms compensation depend among other things, upon procuring a sanction to the assignment to the proposed company before the power reached him in Mexico, if he did so at that time, because the plaintiff in his letter of May 18, 1867, to defendant writes: “I was called upon by Mr. Wikoff acting for you, and solicited to go to Mexico to undertake to procure by the imperial government the necessary ratification (and permission to change the name of the Louisiana and Tehuantepec Company) of the sale of said company’s rights, titles, interests, etc., to yourself, as is already distinctly set forth in your power of attorney to me.” This was such an admission as gave the defendant a right to go to the jury for their verdict, as to what was the original agreement, and also whether the plaintiff had not known the contents of the power to Wikoff at the first, and also had not known before he started the second time, what were to be the contents of the power to be sent to him in Mexico. I am therefore of opinion that it was for the jury to .say, whether the power, considered with the other facts of the case, was evidence of anything more than of what was the original agreement. If they had found that it was not, then there would have been no basis for the plaintiff being entitled to recover for the value of his services, on the ground that the original contract had been modified. In that event, the plaintiff or the defendant, would have had the benefit of a decision as to whether or not the procuring of the decree from Maximilian was or was not a satisfaction of the plaintiff’s obligation to procure his consent to an assignment of the franchises, &e.

Upon the question, as to whether defendant was not entitled to go to the jury, as to the nature of what was to be done by the plaintiff by the original agreement, reference should be had to the testimony of plaintiff that defendant expressed Ms entire satisfaction with the decree that the plaintiff had obtained. This interview required a construction by the jury. It did not con-statute such an acceptance by the defendant of what was done, that if the jury should find that the original agreement called for something else, they should also find that the plaintiff had performed the service. There was nothing to estop the defendant from showing what the fact really was. It was no waiver by defendant of any right. The contract had been fulfilled or it had not been fulfilled. It was not then executory. N othing that the defendant then said could have led the plaintiff to omit to do anything, which if done, might have given him a further right.

But it was evidence to go the jury as to the original contract, and as to whether the plaintiff had performed his part of it.

I am therefore of opinion that there should be a new-trial, the judgment being reversed with costs to appellant to abide the event.

Sanford, J., concurred.


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    FRANCIS J. TUOMEY, Plaintiff, v. JACOB DUNN, Defendant.
    I. LANDLORD AND TENANT.
    I. Tenant holding over after expiration of term.
    (a.) Effect of. The law implies an agreement to hold for another year on the terms of the prior lease.

    I. REPELLING IMPLICATION. — ACT OF GOD.— SICKNESS.
    1. Prior to May 1, 1875, defendant was in possession under a lease, the term whereof expired May 1, 1875, and the rent reserved thereby being payable quarterly on the usual quarter days. After May 1, 1875, defendant held over and continued in possession until May 11, 1875, when he moved out, This action was brought to recover a quarter’s rent, falling due August 1, 1875, at the rate reserved by the lease which expired May 1, 1875. The defense was that defendant was prevented from yielding up possession before May 11, by the act of God, in afflicting a cousin of defendant’s wife, who was a member of his family, with a malady which confined her to her bed, and which was so great that it would have endangered her life to have taken her from the house. On the trial, after the evidence on both sides had been closed, the court directed a verdict for plaintiff. At general term this direction was sustained, on the ground that the evidence failed to establish the facts constituting the defense pleaded, the court saying: ‘‘ this placing the decision on the evidence is not meant to imply that, if there were danger to her life or health in moving her, the defendant would not have been liable.”
    Before Sedgwick and Sanford, JJ.

      Decided May 8, 1877.
    Exceptions ordered to be heard in first instance at general term.
    The action was for rent of a dwelling-iionse, for the quarter beginning May 1, 1875. The defendant had been tenant for the previous year, and had held over and remained in possession until May 11, 1875, when he moved with his goods and family from the house.
    The defense was, that the defendant intended to leave at the end of the first year, but was prevented from doing so by illness of his wife’s cousin, a member of the family, which was so great that it would have endangered her life to have taken her from the house.
    The court held that this was no defense, and the jury gave a verdict for plaintiff, and judgment was stayed, with an order that the exceptions be heard in the first instance at general term.

      George A. Black, for defendant.

      William H. Newman, for plaintiff.

       Note.-—This proposition was conceded by the counsel; and necessarily results from the ground on which the decision is placed.

   By the Court.—Sedgwick, J.

The testimony given came short of proving that the holding over of defendant was involuntary on his part, even if that were finally to be determined by his consideration of the state of health of the lady who was sick. There was no proof that her life would have been imperiled or her illness aggravated by her leaving the house on or shortly before the first of May. The physician did not see her from April 22 until May 3. He gave some not very positive testimony that her state on May 3 was such as to make it hazardous to remove her. He did not remember whether she was confined to her bed on the 22nd day of April, and he testified that he couldn’t say, that on the first day of May she could not have been moved without hazard to her health. This, with the testimony of her relatives as to her health, would not have justified the jury in saying that this defendant had proved that she could not have been removed safely.

This placing the decision upon the evidence, is not meant to imply that if there was danger to her life or health in moving her, that the defendant would not have been liable.

The exceptions are overruled, and judgment for plaintiff is ordered to be entered on the verdict with costs.

Sanford, J., concurred.