text:
    MARCUS WITMARK, Plaintiff and Respondent, v. LEOPOLD HERMAN and SOLOMON HERMAN, Defendants and Appellants.
    ARREST AND BAIL.
    False statements made by a party in regard to the solvency and pecuniary resources of his firm, for the purpose of obtaining credit on the purchase of goods for said firm, and with the intent to cheat and defraud the party from whom the goods are purchased, when sufficiently averred in a pleading or affidavit, are sufficient to sustain an action on the case for fraud and deceit against the party making such false statements (Stitt v. Little, 63 S. T. 427), and uncontroverted they show the debt to have been fraudulently contracted, and for the fraud thus perpetrated the partner by whom the false representations are made, if not others who profited by the transaction, can be lawfully arrested and held to bail (Sherman v. Smith, and cases therein cited, 42 Sow. Pr. 198).
    Before Speir and Sanford, JJ.

      Decided June 241878.
    Appeal from an order denying defendant’s motion to discharge the defendant Solomon Herman from arrest, and refusing him leave to renew such, motion.
    The action is brought to recover $459.30, the price and value of merchandise sold and delivered by plaintiff to defendants between February 7 and April 5, 1877, on a credit of sixty days. Such sale was made and credit given, as the plaintiff alleges, in reliance upon false and fraudulent representations made by the defendant Solomon Herman as to the solvency and pecuniary resources of the defendants’ firm. Upon the verified complaint and the affidavit of the plaintiff, showing the existence of a cause of action on contract, ' and that the liability of the defendants was fraudulently incurred, an order of arrest was made, on March 2, 1878, under which both of the defendants were arrested and held to bail. On March 21, 1878, the defendants obtained an order requiring the plaintiff, upon affidavits made by each of said defendants and by one "Ralph Gfeist, to show cause why such order of arrest should not be vacated, and why the plaintiff should not be compelled to state separately his cause of action for each of the six sales alleged in his papers, í nd why the plaintiff should not be compelled to elect between his cause of action for breach of contract and tort.
    On the argument, the defendants in open court duly and voluntarily waived the affidavits on their behalf upon which such order to show cause was obtained, and, in support of their motion, relied solely upon the papers upon which such order of arrest was granted.
    The court refused to vacate the order of arrest as to Solomon Herman, but granted the motion as to Leopold Herman upon his stipulating not to institute any suit founded on his arrest.
    Solomon Herman then moved for leave to renew the application, as to himself, upon the affidavits served with the order to show cause, or upon other and additional affidavits, and the court denied his motion. An order was thereupon entered, in which the facts as above stated are recited, and which conforms in all respects to the decision of the court.

      From that order both defendants appeal.

      Charles 8. Cage, for appellants.

      Benno Loewy, for respondent.
   By the Court.—Sanford, J.

The facts stated in the complaint and in the affidavit of the plaintiff, upon which the order of arrest was granted, are, for the purposes of the present appeal, to be taken as true. If the affidavits upon which the defendants obtained their order to show cause controverted such facts, which does not appear from the record, the waiver and withdrawal of those 'affidavits is tantamount to an express admission of the allegations of the complaint and of the statements contained in the plaintiff’s affidavit (Hathorn v. Hall, 4 Abb. Pr. 227 ; Lowell v. Martin, 21 How. Pr. 238). It clearly appears from the plaintiff’s affidavit, as well as from the complaint, that the goods for the value whereof a recovery is sought were sold, and that credit was given therefor to the defendants, in reliance upon false statements made by the defendant Solomon Herman in regard to the solvency and pecuniary resources of the defendants’ firm, and that such statements were made for the purpose of obtaining such credit. Such statements are alleged to have been made with the intent to cheat and defraud the plaintiff, and their falsity is declared to have been known to the defendant, Solomon Herman, when he made them. These averments would be sufficient to sustain an action on the case for fraud and deceit (Still v. Little, 63 N. Y. 427), and uncontroverted, they show that the debt for which the present action is brought was fraudulently contracted. If the defendants’ guilty purpose were i-n issue, the fact of their failure within a month after their last purchase from the plaintiff was made, with but a small stock of goods on hand, and with assets scarcely exceeding one-third of their liabilities, would tend strongly to induce the inference that they must have known, or at least must have had ample reason to believe, that they were hopelessly insolvent when the representations were made, on the faith of which a credit was given them. For the fraud thus perpetrated, the individual partner by whom the false representations were made, if not both, who profited by it (Sherman v. Smith, and cases cited, 42 How. Pr. 198), could lawfully be arrested and held to bail.

The refusal of the judge to permit the motion to be renewed was discretionary, and his discretion was wisely and properly exercised. There was nothing before him to excuse or explain the action of the defendants’ attorney, in deliberately and unqualifiedly waiving the affidavits on which he had obtained his order, and in relying solely upon the papers upon which the order of arrest was granted. The affidavits were in his possession, and his election not to use them cannot be ascribed to inadvertence or mistake. The application to renew should have been founded upon some meritorious basis.

The order appealed from must be affirmed with costs ; but, inasmuch as some satisfactory explanation or excuse may be offered for the withdrawal of the affidavits upon which the order to show cause was granted, the defendants, upon payment of the costs of the motion, and of this appeal, may apply at special term, upon proper papers, for leave to renew their application in such manner and upon such terms as shall be just.

The order appealed from contains no provision with respect to the separate statement of the several sales, alleged in the complaint. The question as to the propriety of such separate statement is not raised by this appeal.

Speir, J., concurred.


source: Caselaw Access Project

author: By the Court.—Sedgwick, J.

license: Public Domain

text:
    ANDERSON FOWLER, Plaintiff and Appellant, v. HENRIETTA BUTTERLY (Substituted in Place of North America Life Insurance Co.), Defendant and Respondent.
    Life insurance policy.—Husband and wife.—Married woman, EIGHTS AND POWERS OF.—GrlFT, COMPLETION OF.
    Nicholas Butterly, the husband of the defendant, procured a policy of life insurance to be issued to him in September, 1869, by the North America Life Insurance Co., which assured his life in the sum of $5,000, until September 6, 1882, or until his decease, in case he died "before the last named date, and then said company agreed to pay the said $5,000 to him, in case he was living at the expiration of the time, and in case of his decease before that time, it agreed to pay the said sum to his wife, the defendant. In October, 1872, both husband and wife executed an assignment of the policy to one McCormack, who subsequently assigned the same to plaintiff. In 1875, Nicholas Butterly died. The plaintiff sued the company, -who paid the money into court, and procured the substitution of the defendant in its place. This appeal is from the decision of the judge below, on the following points :
    1. That the policy of insurance was protected by the statute in respect of life insurance for the benefit of married women, and that, in 1872, when the defendant signed the instrument, which was in the foim of an assignment, she had no right to assign the same.
    2. That whatever was the nature of her rights under the policy, her execution of the purported assignment was not her act, but was the result of undue influence used upon her by her husband, which amounted to compulsion.
    The following question was also raised and argued by counsel on the appeal. That the defendant had no rights or interest whatsoever in the policy at the time of the assignment, but the husband was possessed of the whole legal and beneficial property and interest in the policy and the same passed by^iis assignment.
    On these several points the court—Held, the wife had the power to transfer any right or interest in the policy, that had vested in her at the time she executed the purported assignment.
    If the means used by the husband deprived the defendant of mental or moral power to guide her actions for herself, the signature was not voluntary, but extorted from her.
    If she was induced or persuaded to act, her signature was voluntary. If she was compelled to act, it was involuntary.
    The kind and amount of force used in such a case has the same relations that it would have in a charge of robbery, as distinguished from larceny or false pretenses.
    What will compel a wife to sign may depend upon her temperament, and the past relations between her and her husband. There may be little in the way of threats or action, and yet the absolute fact may be, that resistance to his will or non-compliance with it may be impossible.
    If the wife testifies to her own state of mind, and swears that she was afraid of her husband, the court must rest upon that fact, if she is a credible witness.
    In this case the husband was not possessed of the whole legal and beneficial property and interest in the policy. The wife had a right and interest therein created by her husband in the nature of a gift, and it thereby became her sole and separate estate, and he had not the power in law or equity to dispose of it.
    Before the statute relating to and protecting the estates of married women, the husband had power to give, directly and without the intervention of trustees, personal property to his wife, so that the same became free in equity from his power of disposition of the same. By our present statute law a gift of property by a husband to his wife vests the same absolutely in the wife, and it becomes her separate property ansi estate to all intents and purposes.
    The form of the gift is not important if it appears that there was an executed intention to give (Stewart «. Kissam, 2 Barh. 493).
    In the present case the right or interest of the wife proceeds from the husband voluntarily, and his acts and intentions in respect to it, and the limitations and modes of control of the same prescribed by him at the time of its creation must be entirely respected and preserved by the court.
    In all cases it is safest to consider that there must be a delivery of the gift, or an execution of the intention on the part of the donor, to benefit the donee without delivery. In this case the omission to deliver the policy to the wife is not conclusive against the gift, because the form of the gift was such that the husband would naturally retain the policy in his possession, to use for himself (in case he lived until the year 1881).
    In cases of choses in action actual delivery is not always necessary (see the cases cited and reviewed in the opinion of the court, as applicable to the questions in this case). The original delivery of this policy was to the husband in behalf of his wife as well as in his own behalf, and upon that delivery the wife became vested with an interest in the policy which the husband could not take nor divest from her without her consent.
    Before Ctrims, Ch. J., Sedgwick and Freedman, JJ.

      Decided August 1, 1878.
    Appeal from judgment entered on decision of judge at special term.
    The original defendant deposited in court $5,041. The case showed these facts. On September 6, 1867, Nicholas Butterly, husband of defendant Henrietta Butterly, applied in writing to the North America Life Insurance Company for insurance on his life ; and to the direction to “ Specify name of person or persons for whose benefit assurance is desired. If wife of person to be assured, say so,”—stated: “ Nicholas Butterly. A. In case of death to Henrietta Butterly, wife, if living. B. Otherwise to Alice V. Butterly, daughter.” A policy was thereupon issued. This policy was, about September 28, 1869, surrendered by Nicholas Butterly and a new policy was issued to him. The only alteration related to the manner of paying the premium. The policies contained the provision that the company “do assure the life of Nicholas Butterly, of Brooklyn, in the amount of $5,000, until the sixth day of September, in the year 1882, or until his decease in case of his death before that time. And the said company do hereby promise and agree to and with the said assured well and truly to pay or cause to be paid, the said sum insured to the said assured, within 90 days after the' termination of this assurance as aforesaid, or in case he shall die before that time, then to Henrietta Butterly, wife, if living, otherwise to Alice Y. Butterly, daughter of the saidassured.” There was a further provision that the “company do further .promise and agree, that if after due payment of the said premiums for the first two years of the assurance, default shall be made in the payment of any subsequent premiums . . . they will pay ... as many fifteenth parts of the original amount hereby assured, as there shall have been complete annual premiums paid'at the time when such default shall first be made.” This clause was not to be operative unless the policy should be returned to the company within thirty days from the day of default. He paid the premiums to October 13, 1872, and. on that day, executed and delivered the following assignment:
    “In consideration of the sum of $1,500 to me in hand paid by Joseph E. McCormack, the receipt whereof is hereby acknowledged, I, Nicholas Butterly, do hereby sell, assign, transfer and set over unto the said Joseph E. McCormack, the policy of insurance on my life, issued by The North America Life Insurance Company, and numbered 11,994.
    “Dated, New York, October 13, 1872.”
    On the same date, the following paper was delivered by Nicholas Butterly to McCormack :
    “In consideration of the sum of one dollar, to us in hand paid by Joseph E. McCormack, the receipt whereof is hereby acknowledged, we Henrietta (wife), and Alice Y. Butterly (daughter), do hereby sell, assign, transfer and set over unto the said Joseph E. McCormack, all our right, title and interest, in the policy of insurance on the life of Nicholas Butterly, issued by The North America Life Insurance Company, and numbered 11,994.
    “Dated, New York, October 13, 1872.
    “HENRIETTA BUTTERLY.
    “ALICE Y. BUTTERLY.”
    Thereafter the premiums were paid by McCormack, until he assigned the policy to the plaintiff, and then the premium was paid by plaintiff, or on his account by McCormack.
    As to the instrument signed by the defendant, Mrs. Butterly, the judge found as matter of fact, that “it was signed by her without any knowledge of its purpose or purport, without any consideration passed to her for so doing, and without any intention on her part to divest herself of any property or right, or of any interest in said assurance, and that her signature thereto was procured from her by the exercise, on the part of her husband, of undue influence and control, amounting to compulsion ;” and as a conclusion of law on these facts, that the instrument was inoperative and void as an assignment of the wife’s interest in the policy.
    The general conclusion was, that the assignment by the husband transferred only his contingent interest to receive the amount of insurance, in case he was living in 1881, and he having died in 1875, the wife was entitled to the amount insured.

      O. Van Santvoord, attorney, and of counsel for appellant, among other things, urged :
    I. The policy issued to Nicholas Butterly, as the covenantee, on his application for a consideration moving from him, with the provision in the covenant with him to pay 'the sum insured on his life to his wife, if she survived him, at the most vested in or conferred upon her a right of action, if she survived, for the recovery of such sum, which, as a chose in action of the wife by the gift of the husband, the latter could defeat by a release or an assignment for a valuable consideration. In Draper v. Jackson (16 Mass. 476), it was held that the law required that a note and mortgage made to husband and wife should go to the wife if she survived her husband, for which the reason given is that when the husband takes a security for a debt in the joint names of himself and wife he is understood to assent and intend that she shall have some peculiar benefit from it (pp. 482, 486). It is added, it is true, that the husband may afterwards change his mind and may release the demand or take a new security for it, or bring the action in his own name, and if he recovers the money he will retain it to his own use. In 2 Pierre Williams, 497, the lord chancellor held that a bond given to husband and wife during coverture, on the husband’s dying first, survived to the wife, though it be true that the husband may disagree to the wife’s right to it, and bring the action on the bond in his own name only ; but till such disagreement the right to the bond is in both the husband and wife, and shall survive. In Sanford v. Sanford (45 N. Y. 723), it is held that if one loaning money takes a promissory note therefor, payable to the order of himself and wife, this imports a gift to the wife if she survive him, and delivery of the note to her by the husband is not necessary to perfect the gift. During the husband’s life such note remains subject to the husband’s control, and the wife has no legal interest therein, until his decease—that is, until his decease without having exercised his right to control the disposition of the note. See, further, as to right of husband to dispose of the dioses in action of the wife, by a sale for valuable consideration, the leading case in this State: Schuyler v. Hoyle, 5 Johns. Ch. 196. In 2 Kent's Com. 137, it is said the rule is, that if the husband appoints an attorney to receive the money, and he receives it, or if he mortgages the wife’s dioses in action, or assigns them without reservation for a valuable consideration, or if he recover the debt by a suit in his own name, or if he release the debt or novates the debt by taking a new security in his own name, in all these cases, upon his death the right of survivorship in the wife to the property ceases. The right of the husband to dispose of the interest of the wife acquired by the gift of the husband is not affected by the acts for the more effectual protection of the property of married women, act of April 7, 1848, ch. 200; April 11, 1849, ch. 375 (See section 3 of act of 1848, as amended by act of 1849. See Towl v. Towl, 114 Mass. 167).
    II. The policy being the instrument by which the payment of the amount insured was secured to be paid, whether the payment should become due before or after the death of Butterly, the assignment thereof by Butterly to McCormack for a valuable consideration, without any reservation, was an effectual transfer of the interest in the sum assured, whether the same should become payable before or after the death of Butterly, discharged of any claim of the wife as survivor, which was terminated by such assignment (See Jones v. Gibbon, 9 Vesey, 411; 2 Kent, 137).
    III. But, further, the convenant in the policy being with N. Butterly, as the assured, the legal title and interest was in him, and no suit could be brought at common law upon it except in his name or that of his executors or administrators (1 Chitty Pl. 3). His so taking it is evidence of an intention to retain the control of it, and without a delivery to the wife with intent to pass the title, o'r retaining it until his death without disposing of it, the wife could acquire no interest in it (Hicks v. Davis, 3 Md. Ch. 266 ; Carpenter v. Dodge, 20 Vt. 595 ; Scott v. Simes, 10 Bosw.
      314; Reed v. Reed, 52 N. Y. 651. See also Fortesque v. Barratt, Myl. & Keene, 36; Stone v. Haskett, 12 Gray, 227).
    IV. The assignment of the wife was effective to pass any interest which she may be supposed to have had, if any, there being nothing in any statute at that time enacted, which required any acknowledgment before any commissioner or notary ; and the presumption of law being, that a party to a writing did read it, or was otherwise informed of its contents, or was willing to assent to its terms without reading it, where there is no evidence of fraud or imposition (See cases collected in Grace v. Adams, 100 Mass. 507).
    Y. Any interest which the defendant can be supposed to have acquired by the terms of the policy was contingent upon its continuance, by the payment of premiums for account or benefit of the original parties on days specified. And when, after the sale to McCormack, to be rid of the payment of further premiums which Butterly was under no contract or obligation to make, no provision was ever made for such payment by or on behalf of Mr. Butterly ; this should be deemed an abandonment of any such interest (See Baker v. Union Mutual Life Ins. Co., 43 N. Y. 283).

      LuJce A. LocJcwood, attorney, and Henry W. Johnson, of counsel, for respondent, among other things, urged:—I.
    Upon the facts proven and found, there clearly is no error in the conclusion of law found thereon : “ that the paper purporting to be an assignment of her right and interest, is inoperative and void.” If it was not her free act and deed, if it was not executed or delivered by her Icnowingly, understandingly and intentionally, it could not operate to deprive her of a single right, unless such facts or circumstances were shown as would create an estoppel against her. It was not claimed or pretended on the trial, nor is it suggested by any of the exceptions, that any such facts or circumstances existed ; and it is clear from the evidence that all of the essential elements of an estoppel are wanting in the case. The assignee dealt with the husband as the sole owner of the policy ; bargained with him for it; paid him for it; never saw the wife respecting it, and never paid her anything. For aught that appears from the evidence he did not require anything from her ; never examined the instrument signed by her, or made any inquiry respecting it, or did any act upon the faith of it.
    Upon this state of facts it clearly cannot be claimed or pretended that the instrument can be upheld as an estoppel within any well-considered authority (2 Bishop on Married Women, §§ 484-495; Tyler on Infancy and Coverture, 726).
    II. But the instrument signed by the defendant wTas inoperative and void for another reason. 1. The policy is a “wife’s policy” within the spirit and object, if not the letter, of the legislation of this State enabling the husband to make provision by insurance for the benefit, of his wife as a widow, as such legislation has been interpreted by the courts and by the enabling act of June 23, 1873. She did not, and could not, therefore, transfer any interest in the policy by the instrument in question (Eadie v. Slimmon, 26 N. Y. 9 ; Barry v. Equitable, 59 Id. 587 ; Barry v. Brune, 8 Hun, 400 ; Moehring v. Mitchell, 1 Barb. Ch. 264 ; Laws of 1840, ch. 80 ; Laws of 1858, ch. 187 ; Laws of 1862, ch. 656; Laws of 1870, ch. 277; Laws of 1873, ch. 281). 2. If the policy is not a “wife’s policy” within the authorities and acts above referred to, it constituted a valid insurance in favor of the wife at common law, and she was thereby constituted the appointee or beneficiary of the fund upon her husband’s death (Baker v. Union Mutual Life Ins. Co., 43 N. Y. 287 ; Lord v. Dall, 12 Mass. 115; Thompson v. Amer. Tontine Life and Savings Ins. Co., 46 N. Y. 674). 3. Being a mere appointee of the fund, no interest vested in her which could be the subject of assignment during the lifetime of her husband.
    III. The plaintiff’s case is to be considered only in the light of the instrument executed and delivered by Butterly to McCormack. That instrument was nothing more than what it purported to be on its face, and that was, an assignment of the policy as it then existed. It had undergone no change since it was issued. By its terms the insurance money was not payable to Butterly unless he should be alive on September 6, 1882, and the policy was then in full force. If he died before that day, leaving the defendant him surviving, and the policy in full force, then the insurers expressly stipulated and agreed to pay the money to her. The precise event has happened which, by the terms of the policy, makes the money ’ payable to her. Butterly has died, leaving the policy in full force and the defendant surviving.
    The sole effect of his assignment, therefore, was to vest in the assignee the same right to receive the money that he, Butterly, would have had if it had not been executed ; that is, a right to receive the money on September 6, 1882, if then living, and the policy should be then in force. As he is now dead, it follows as a necessary result, that the plaintiff can take nothing by the assignment.
   By the Court.—Sedgwick, J.

The learned judge held that the policy of insurance was protected by the statutes in respect of life insurance for the benefit of married women, and that, in 1872, when the wife signed the paper, which was in form her assignment, she had no right to assign it (Eadie v. Slimmon, 26 N. Y. 9 ; Barry v. Equitable Ins. Co., 59 Id. 587). A married woman possessed such a right, for the first time in 1873 (Laws of 1873, ch. 821). He thus impliedly held that her interest under the policy was not her separate estate, and she had no power of disposition over it as her separate estate. He further considered, that whatever the nature of her right was, her execution of the assignment was not her act, but it was the result of undue influence used upon her by her husband, which amounted to compulsion.

Undoubtedly (Barry v. Equitable Ins. Co., supra) if the means used by her husband" deprived her of mental or moral power to guide her actions, for herself, her signature was not voluntary. It was extorted from her. She had all the faculties for free action. She could not be deprived of those, but means might be used to stop their function.

The point to be scrutinized is the condition of the facility of volitión as determined by external circumstances, beyond her control. These circumstances are to be examined to ascertain their effect upon the will. Their character in other regards is immaterial. If the result was, that she was induced or persuaded to act, her signature was voluntary. If she was compelled to act, it was involuntary. The kind and amount of force used in such a case has the same relations that it would have in a charge' of robbery, as distinguished from larceny or false pretenses.

What will compel the wife to sign may depend upon her temperament and the past relations between her and her husband. There may not be much to testify to, so far as words or threats go, but the absolute- fact may be, that resistance to his will or noncompliance with it, was not possible. A judge must be very cautious, but in a case like the present, the wife herself is the witness to testify to her own state of mind. She swore she signed because she was afraid of her husband. The judge was bound to rest upon the fact, if she were credible. There was testimony to support the finding of fact on this point, and it must be sustained.

The learned counsel for the appellant takes the position that the policy was not within the statutes that regulate life insurance for the benefit of married women. He argued that the statute meant to protect against creditors, the use of premiums paid from the husband’s moneys in case the benefit was to go to the wife, but in the present case the policy was in fact for the benefit of the husband, as he would have the insurance money if he lived to the year 1881. The whole premium was paid in solido for the husband’s benefit, and therefore the husband’s creditors would have a right to take it.

I think this is correct, and it meets the position that the insurance could not be assigned by the wife, by reason of the policy of the statute; but it does not meet the position that her assignment was obtained by compulsion.

Therefore the judgment must be sustained, unless the husband, at the time of his assignment, was possessed of the whole legal and beneficial property and interest in the policy, and the wife had no interest or property in it. .If the wife, however, had a right of action, in the nature of a gift by her husband, it became her sole and separate estate. If it was her separate estate, he had no power, in law or equity, to dispose of it. Before the statute to protect the estates of married women the husband had power in equity to give directly and without trustees personal property to his wife, so that it was free in equity from his power of disposition. By our statute, a gift by husband to wife, becomes her separate property for all purposes. The form of the gift is not important, if it appear that there was an executed intention to give (Stewart v. Kissam, 3 Barb. 493).

In cases like the present, the right or interest proceeds from the husband voluntarily. His acts and intentions in respect of it are to be entirely respected, and the limitations and modes of control which he presented are to be entirely preserved.

It is said that he never parted or intended to part with his control, because the promise is wholly made to him, and the policy was kept in his own possession. The only clause which seems to give the wife an interest (viz., that which makes it payable to her, if he die before 1881), was dictated by him, and did not affect any right or interest of the company. It was not a stipulation for their beneiit.

If that clause were not in the policy, the husband could by law, without leave of the company, shape an assignment that wuuld have the same effect as the clause, and could keep any degree of control over the assignment he pleased. Therefore it is argued, that so long as the policy is not delivered to the wife, the maxim applies, viz., Expréssio eorum qucB tacite insunt nihil operatur.

This argument was used in Connecticut Mutual Life Insurance Co. v. Burroughs, 34 Conn. 305.

A married woman procured an insurance on her husband’s life, payable to her, her administrators and assigns, for her sole use. The policy provided that in case of the death of the wife before the death of the husband the amount of said insurance shall be payable after her death to her children for their use, or to their guardian if under age.”

Before the husband’s death she had assigned the policy to the defendant. After her husband’s death, the insurance money was claimed by her child. The court held that the child’s interest was protected by a statute of Connecticut, and could not be assigned by the mother. The court also looked at the case irrespective of the statute, and as if the premiums had been paid by her from her separate property. The suggestion liad been made that the provision in favor of the children was an expressed but unexecuted intention to give the sum insured to her children, which she could abandon at pleasure. The court was of the opinion that “ the intention was not to give a sum of money to the children but to make a life policy in a certain event payable to them. The intention was not only expressed but executed. The contract was complete, and the money when due was payable to the children, without any further act on her part.”

It cannot with certainty be said that the law will deem a voluntary provision for wife or children final and irrevocable, under different and less significant circumstances than would uphold a voluntary disposition in favor of a person with no tie of blood or marriage. A meritorious consideration is hardly more than an expression used by judges to intimate a justifiable inclination to uphold a settlement. It is safest to consider that in all cases there must be a delivery, or an execution of the intention to benefit without delivery. In the present case, so far as intention goes, the omission to deliver the policy is not conclusive, for the form was such that the husband would retain it, to use for himself, in the contingency of his living until the year 1881.

In cases of choses in action actual delivery is not always necessary In Scott v. Sims (10 Bosw. 314; Borst v. Spelman, 4 N. Y. 288), and in Sanford v. Sanford (45 N. Y. 726), the law is applied that if a husband take a note to himself and his wife or to her alone, then in case she survive him, the action on it survives to her the wife, and the form of the security implies a design by the husband to benefit the wife. It was said that the wife had no legal interest in it during the husband’s life. Judge Beckham said specifically, in Sanford v. Sanford, that a delivery to the wife was unnecessary to perfect the gift. These cases are like the present, excepting that in them the husband retained but did not exercise a power and right of disposition, during his Jife, and in this the husband in his life did all in his power to convey his whole right and interest in the policy, and also that in them the promise was made to the wife solely or jointly, directly, and in this, the promise is made solely to the husband. .

“ It is not every promise made by one to another, from the performance of which a benefit may ensue to a third, which gives a right of action to such third person he being neither privy to the contract nor to the consideration (Simson v. Brown, 68 N. Y. 362; Garnsey v. Rogers, 47 N. Y. 233); yet the form and nature of the contract of insurance and the point at which the wife could only reap the benefit of the provision in her favor,—that is, after his death,—show clearly that it was the husband’s intent that she should have a right of action.”

The mere form of this promise might not divest the husband of all power over the wife’s interest which he intended to bestow on her, but the contemporaneous acts, voluntarily and designedly adopted by him, were such as to make all else that was necessary to an executed transfer to her a matter of form. If the owner of personal property make an explicit declaration that he holds it in trust for another, it is an executed trust, although there is no doubt that no transfer and re-transfer was made. The reason of this must be, that, as owner, he has the power to furnish conclusive evidence that the result or effect of a transferring by him and taking a re-transfer to him in trust has occurred.

The rest is but a form which he, as owner in his own right, has the power to dispense with. Even in delivery of chattels as a gift, the form of relinquishing possession by the donor and the taking of it by the donee immediately, may be dispensed with, in the instance of the chattels being within the power of the two parties,- and both act as if delivery and acceptance had taken place.

In this case, outside of the effect of the form of the policy, the husband declared in writing to the company that it was for the benefit of his wife, &c., and of himself, and upon that the company made the special promise, so far as it was for the benefit of the wife, to the husband acting in her behalf,—whether as her agent or trustee is immaterial. All that might have been done by him, in the shape of an assignment to her, and notice of that by him on her behalf to the company, would not have necessarily involved any action by her personally. The legal result would have been what he effected without the unnecessary form.

I am, therefore, of the opinion that under the circumstances the original delivery of the policy was to the husband, in her behalf and as well as his, and that upon that delivery she became vested with an interest which the husband could ■ not divest without her consent.

The judgment should be affirmed with costs.

Curtis, Ch. J., and Freedman, J., concurred.


text:
    GUSTAV E. SPARMANN, By Guardian, Plaintiff, v. JOHN KEIM, Defendant.
    I. Fraud.
    1. False representations.

    (it) What does not constitute in the law.

      1. Business. A representation that a certain business would yield large profits, does not.

      II. Complaint.— Construction of, on appeal.

    1, Two CAUSES OF ACTION, WHEN NOT BEG-AKDBD. AS CONTAINED IN.

      (a) Where there are averments, which, taken by themselves, would constitute a cause of action based on contract, but not stated as constituting a separate cause of action, but on the contrary so intimately interwoven with other averments as to show that the whole theory of the action was based on tort, to wit, fraudu- ' lent representations ; and upon a motion being made on the trial after all the evidence was in, for a dismissal of the complaint, on the ground that an action could not be sustained on the false representation stated in the complaint, the plaintiff made no claim that the evidence sustained any part of the complaint as showing an action on contract; and the court granted the motion, tp which plaintiff excepted ; and ordered the exceptions to be heard in the first instance at the general term.
    Held,
    on hearing the exceptions, that the complaint must be regarded as containing but a single cause of action, viz.: one in tort, and that plaintiff could not sustain his exceptions on the ground that the evidence sustained those averments in the complaint, which, if taken separately, might be deemed to state a cause of action in contract.
    Before Sedgwick and Sakeord, JJ,

      Decided November 4, 1878.
    . Exceptions of plaintiff, heard at general term in first instance, upon dismissal of complaint.
    The complaint, alleged as follows:
    “ I. That the plaintiff is an infant under the age of twenty-one years.
    “II. That on the fifth day of October, A, D. 1874, at said city of New York, upon application duly made on his behalf!, the said Chas. J. Nehrbas was, by an order of this court, duly appointed the guardian of the plaintiff for the purposes of this action.
    “ III. That on or about, the, first day of July, A- D. 1874, the. said defendant, by paeans of false.: representations, obtained from said plaintiff the sum of ope thousand dollars, to be invested in a certain artistic decorating business which said defendant falsely represented would yield large profits, but on the contrary said business is and has been ever since said first day of July, A. D. 1874, constantly losing money, and furthermore said defendant is appropriating whatever profits may be and are realized, to his own use and benefit, to the great danger and injury of the plaintiff.
    “IV. That relying upon such representations on the part of the defendant, the plaintiff did, on or about said first day of July, 1874, pay over to said defendant, at his instance and request, said sum of one thousand dollars for the purposes of said business.
    “V. Plaintiff also shows that between about June 11, 1874, and about Julyl, 1874, said plaintiff at the request of the defendant lent and advanced unto such defendant, and also to and for his use by payments to other parties at his instance, divers sums of money, viz., altogether about four hundred and one dollars and ninety-five cents, upon condition that the same should be repaid upon demand, but the defendant has wholly failed to repay the same though payment thereof has been duly demanded ; and.that said amount of money, so lent and advanced and paid out, as aforesaid, was thereafter, upon the formation of such partnership, allowed by the defendant as part of such one thousand dollars contributed as herein above mentioned, and constitutes a portion of the same.
    “ VI. That the plaintiff upon ascertaining the falsity of the representations made by defendant as aforesaid, and before the commencement of this action!, has demanded a return to him, plaintiff, of the aforesaid one thousand dollars by the defendant, who however utterly refused so to do, and still so refuses.”
    Evidence was taken, which tended to show that plaintiff had been induced to place money in a certain business by representations of the defendant that the business was a good paying business, and that they would make lots of money in it, and also that before the plaintiff definitely agreed to become partner with the defendant in the business, he had lent to the defendant various sums of money, or had paid it to third parties; and that when the agreement to go into the business was made it was agreed that the former loans and advances should be deemed as part of the $1,000, which the plaintiff was to place in the business. There was a third person interested in the business.
    The court dismissed the complaint on the ground that the representations complained of, even admitting them to be false, were not false representations known to the law, but the expression of opinion. Plaintiff excepted, and the exceptions were ordered to be heard in the first instance at general term.

      1Vehrbas & Pitshlce, attorneys, and of counsel for plaintiff, urged :—I.
    Where the infant party is manifestly entitled to something, the court should not suffer him to be deprived of existing rights, by the guardian’s mode of pleading, or other neglect, if any (Stephens v. Van Buren, 1 Paige, 479, 480; Howell v. Mills, 53 N. Y. 322). The justice should, therefore, have considered the “ case made out by the evidence,”—which was sufficient, in law. So, a judgment was vacated to protect infant’s rights—notwithstanding the pleading of his guardion ad lit. (Curtis v. Ballagh, 4 Edw. Ch. 635).
    II. But the complaint is correct,—i. e., it is on contract, and not at all ex delicto. The first count (subd. V. of complaint) is, of course, ex contractu.; and as to the other count (i. e., the rest of complaint), the same simply avers that defendant stated to the plaintiff that by his coming in as partner with capital, &c., that certain business spoken of would yield large profits, &c., and thereby plaintiff was induced so to enter defendant’s then business with money &c.,—which statements uttered by defendant were, as the thing turned out, false (Á e., untrue). Having been thus led to fructify the defendant’s then business, plaintiff sets forth the whole case, and claims his “infant’s privilege” to get back his money. 1. The justice could not dismiss this case as one ex delicto—when the complaint was all ex contractu. 2. But our complaint, apart from theory, is ex contractu by express authority of Byxbie v. Wood, 24 N. Y. 607, 612. There, the complaint averred that plaintiff’s assignor and defendant being about to go in a joint enterprise, by defendant's “ false and fraudulent representations ” as to the value, &o., of the defendant’s then ship to be used for the enterprise, the plaintiff’s assignor was induced to pay certain moneys towards a half interest in said ship, which moneys plaintiff reclaims from defendant. On the trial, however, fraud was not proved. Held, plaintiff could recover as for money had and received. “The action, though no fraud is proven, is sustainable as merely for money,—which the law implies a promise to repay. The action sounds in contract, and the words charging a wrong should be disregarded ” (Veeder v. Cooley, 2 Hun, 74).
    III. The first count (?’. e., subd. Y. of complaint), is a pure money demand—i. e., direct loans to and advances for defendant. The plaintiff and defendant were in law strangers to one another, up to July 1, 1874, the date they established their copartnership. And all transactions prior to that date are simple loans and advances to defendant and for his use,—to which the law adds a promise to repay. Hence, as regards this first count ($401.95), plaintiff was also entitled to the jury’s verdict, for that (Fey v. Smith, 3 Daly, 389). Defendant cannot urge the “ agreement” as changing the status of this $401.95 from “loans and advances ” to “ partnership fundsplaintiff being an infant who herein repudiates that agreement.
    IV. Second count ($400.31) is, to recover back (because of plaintiff’s infancy) money passed under the agreement signed by plaintiff and defendant,—for he (defendant) being the other party to the contract, is responsible to the infant for what passed from infant under it. An adult cannot draw in the infant to experiment on such infant’s money in changing and enlarging the adult’s business without liability.

      Geo. S. SedgwicTe, attorney, and with Leonard C. Curtis, of counsel, for defendant, urged:—I.
    This is a case of failure of proof. The gravamen of the cause of action averred in the complaint is false representations, and no false representations have been proved. In such a case, even if the evidence should disclose a good cause of action, the complaint must be dismissed because its essential allegations have not been proven. A judgment can be rendered only secundum allegata et probata (Gasper v. Adams, 28 Barb. 441; Kelsey v. Western, 2 N. Y. 506).
    II. The statement made by the defendant that the business would pay largely, was a mere expression of opinion, and was not a false representation.
   By the Court.—Sedgwick, J.

It seems to me clear that, so far as the complaint shows, the plaintiff placed his right to a recovery from the defendant solely on the ground that there had been false representations made by defendant to induce him to invest money in the business. Admitting his right to proceed for money had and received upon the avoidance of any contract connected with the transaction that the plaintiff made while an infant, yet he did not elect to bring his action on that state of facts, but upon the fraud. The plaintiff pleads that on or about July 1, lie was, by the alleged false representations, induced to pay over to the defendant “ said sum of1 $1,000 for the purposes of said business.” The plaintiff then proceeds to state that about June 11 and about July 1, the plaintiff advanced certain moneys, upon condition that the sum should be repaid upon demand, but the defendant has wholly failed to repay the same, though payment thereof has been duly demanded, and that said amount of money “was thereafter, upon the formation of such partnership, allowed by the defendant as part of such $1,000, contributed as hereinabove mentioned, and constitutes a portion of the same.”

This part of the complaint is not made to constitute a second cause of action, as showing the right of the plaintiff to avoid, on the ground of infancy, the express contract, and to proceed for money had and received ; for in addition to the terms of this part, the complaint proceeds “ that the plaintiff upon ascertaining the falsity of the representations made by defendant as aforesaid, and upon the commencement of this action, has demanded a return to him, plaintiff, of the aforesaid $1,000 by the defendant,” who refuses, &c. If the complaint had disclosed an intention to make this a second cause of action, it would have been demurrable as joining a cause of action on contract with one for tort, although the objection would be waived if not taken before trial.

After the whole evidence was in, the motion was made to dismiss on the ground that an action for obtaining money by false representations, as stated in the complaint (the words of the objection were “ complained of”) would not lie, as they were only the expression of an opinion, and not the statement of a fact. There was no claim that the evidence sustained any part of the complaint as showing an action on contract for money had and received. If there had been such a claim, there would have been a statement of it, and the court would have acted on it in an appropriate manner. 1*1 o doubt the matter was tacitly considered as the complaint left it, that the plaintiff was willing to have that part of his claim, as affected by his subsequent agreement that the money first advanced should be deemed part of the $1,000 which he only claimed in consequence of the alleged false representations. It would seem that until after the plaintiff had made all the advances, lie was ignorant that his infancy affected the rights of the parties, and there is no evidence that the defendant knew of the infancy until action was brought. There was no error in the ruling made by the court as to the false representations, and from the complaint and the whole case I am of opinion that no other claim was made.

Exceptions overruled, and judgment ordered for defendant, on the dismissal of the complaint with costs.

Sanford, J., concurred.


text:
    WILLIAM A. HAVEMEYER, and another, Administrators, &c., Plaintiffs and Respondents, v. JOHN C. HAVEMEYER, and another, Defendants and Appellants.
    I. Costs.
    1. Order allowing amendment of pleading.

      (a) Phrase in “on payment op costs op the action to the pkesent time, ” construction of.
    1. It means such costs as would go to the party against whom the amendment is allowed, in case there had been a termination, favorable to him, at the date of the order granting leave to amend. Such costs must he taxed, and, if improper items are allowed the remedy is hy appeal from the taxation.

    H. Appeal.
    1. Conditions on which leave to amend pleading is granted. Appealability of.

    (a) An appeal will not lie therefrom. The whole order should be appealed from.
    Before Sedgwick and Sanford, JJ.

      Decided November 4, 1878.
    Appeal from order.

      Nelson J. Waterbury, for appellants.

      John E. Parsons, for respondents.
   By the Court.—Sedgwick, J.

The court below granted an order that the defendants have leave to serve an amended answer “ upon payment by the defendants to the plaintiffs of the costs of the action to the present time.” The appeal is from so much of the order as imposes the condition of the payment of the costs of a trial already had, and of an appeal to the general term, which reversed the verdict in favor of plaintiff and directed that the defendants should have costs of the appeal to abide the event. This assumes that the matters objected to were implied in the phrase of the order “costs of the action to the present time.” The better construction is, however, such costs of the trial as would go to the plaintiff in case there had been a termination favorable to him at the time of the order giving leave to amend. In such case, the only question that could arise, would be upon an appeal from taxation which gave more costs to the plaintiff than he would be entitled to if he had recovered. For there can be no question that upon an application to substantially change a defense, the court has the power to impose all the costs that a plaintiff would be entitled to have in the action.

But be this so or not, an appeal will not lie from a condition merely of allowing service of an amended answer. In such case, the opposite party would be bound by the part of the order nob appealed from, and is not in a position to urge that if it be without the powers of the court to impose the conditions, then leave should not be given to serve an amended answer. Yet the whole importance of the condition is, its relation to the power to be granted. There would be no error prejudicial to the defendant, if on all the facts, such a condition was imposed in a case where leave to serve the amended answer should have been absolutely denied. And any court that imposes the condition or changes one already imposed, should have the power to refuse leave (Tribune Association v. Smith, 40 N. Y. Superior Ct. 81). Therefore the question raised should have been upon an appeal from the whole order, so that there might be, here or below, a proper order made.

Order appealed from affirmed with $10 costs to respondent.

Sanford, J., concurred.


author: By the Court.—Van Vorst, J.

text:
    THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Plaintiff and Respondent, v. THOMAS A. DAVIES, Impleaded with others, Defendant and Appellant.
    I. Principal.
    1. Changing the relation to that of surety.

      (a) Mortgage assumed by grantee op mortgagor.
    1. Effect of.

      1st. As to the mortgagor.—The land becomes the primary fund for the payment of the mortgage debt, and the mortgagor stands thereafter in the attitude of surety only.
    2nd. As to tiie mortgagee.—After notice of assumption by the grantee, he is bound in his dealings with the grantee and others, in regard to the mortgage debt, to do nothing to the injury of the mortgagor as surety.
    3rd. Rights resulting.
    (1) Pursuit of land and grantee.—The mortgagor had a right to demand that the mortgagee proceed without delay, after his right of action has accrued, to collect the mortgage debt out of the land and grantee, and if he neglects so to do after full and explicit request, and collection therefrom becomes thereby either wholly impossible or only partially impaired, then the mortgagor is either wholly, or pro tanto, as the case may be, discharged.
    (2) Extension of time.—If the mortgagee extends the time of payment to the grantee, the mortgagor will be discharged.
    (3) Conveyance "by such grantee of the mortgage to a subsequent grantee who also assumes the mortgage, effect of.

      (d) Docs not impair the above stated rights of the mortgagor. It gives him the additional advantage of the subsequent assumption.
    II. Surety.
    1. Bequest to creditor to pursue principal, requisites of . a. Where it is a corporation creditor the request must be made to some officer or agent who is authorized to act in the premises.
    1. An assistant to the solicitor of its law department, which department examined vouchers, the surrender of death claims, and had the supervision of all litigated business and general direction of it, but had no right to order the foreclosure of a mortgage, which right was vested in its president and finance committee, is not such officer or agent.

    2. If such assistant, however, could be regarded as a proper officer or agent to receive an unqualified request to foreclose a mortgage, yet he is not a proper officer or agent to receive a conditional request which imposes on the corporation the duty of keeping itself advised as to when the conditions occur upon which the request is to become operative.

      (a) Such a request is not the full and explicit one required.

    2. Extending time of payment so as to discharge surety.

    (a) What is not.—A mere forbearance to collect, or a naked promise to forebear, is not.
    1. The mere abandonment of foreclosure proceedings upon payment, by a subsequent incumbrancer, of the costs and interest then due, and the receipt from such incumbrancer of interest subsequently falling due, there being no agreement to extend the day of payment of the mortgage, will not discharge one who stands in the position of surety for the mortgage debt, although he be the mortgagor.
    HI. Corporation creditor.
    1. Surety's demand on, to proceed against principal debtor.

      (a) Requisites of.
    1. See Surety, supra.

    Before Sedgwick, Van Voest and Speir, JJ.

      Decided November 4, 1878.
    The defendant Davies made a mortgage to the plaintiff, in 1869, to secure the payment of $44,000 on the first of June, 1870, with semi-annual interest.
    The mortgage covered lots in the City of New York, owned by Davies.
    The mortgagor, subsequently to the execution of the mortgage, and during the same month in which it was made, conveyed the mortgaged premises to the defendant Cudlip. By the terms of the conveyance to him, Cudlip assumed the payment of the mortgage.
    The plaintiff was advised by Davies of his conveyance ro Cudlip, and of his assumption of the mortgage. Cudlip, on July 15, 1871, conveyed the premises to John Adriance, subject to the mortgage, which he agreed to pay. Adriance died in November, 1874, but previous to his death, he conveyed the premises to Nathaniel Jarvis, Jr., and others, in trust for certain purposes. The mortgage being unpaid, this action was commenced in April, 1876, for its foreclosure. The complaint demands judgment against the defendant Davies personally for any deficiency which might arise on the sale of the mortgaged premises. The defendant Davies, by his answer, avers that the plaintiff, without his knowledge or consent, several times extended the payment of the bond accompanying the mortgage, and bound itself not to foreclose the same for a specified time, and that, by reason of such extensions, he is released from all-liability on account of the mortgage. He claims also to be released by the neglect of the plaintiff to foreclose the mortgage, he having, as he claims, called upon the plaintiff in December, 1874, to ascertain whether there were any taxes and assessments unpaid upon the premises, with the object of having the mortgage foreclosed if such taxes and assessments were in arrear, and was there, as he claims, informed by the agent of the plaintiff, that there were no unpaid taxes and assessments. He alleges that the company well knew, at the time cf his application for information as to taxes and assessments, that his object was to procure the immediate foreclosure of the mortgage, in case any taxes and assessments were remaining unpaid, and protect himself from any depreciation in the value of the lands.
    He claims that at the! time he was so advised that there were no taxes or assessments unpaid, there was in fact a large amount of taxes and assessments outstanding unpaid, and that the plaintiff well knew at the time that such taxes and assessments were liens upon the premises. Defendant further in his answer urges, that up to and within a reasonable time after July, 1875, the mortgaged premises were worth, and coiild have been -sold for, more than enough to have paid the mortgage, and all other claims against, and liens upon, the premises.

      The action was tried at special term, and a judgment of foreclosure was rendered, the defendant Davies being adjudged to pay any deficiency remaining after the application of the proceeds of the sale, according to the directions of the decree.
    The deficiency amounts to $22,896.63. The defendan t Davies appeals from so much of the judgment as holds him for the deficiency, and also from the decree itself.

      Edmund Coffin, Jr., attorney, and of counsel for appellant, urged:—I.
    After the conveyances set forth in the complaint, the relation of the several parties became settled in equity ; the land became the primary fund for payment of the debt, and Adriance the principal debtor ; Cudlip surety to Adriance; and the land and Davies surety to all; while the plaintiff stood, so far as the collateral was concerned, as trustee holding the mortgaged lands for the benefit of Cudlip and Davies (Calvo v. Davies, 8 Hun, 222 ; Vrooman v. Turner, Id. 78 ; Ely v. McNight, 30 How. Pr. 97 ; Russell v. Pistor, 7 N. Y. 171; Bently v. Vanderheyden, 35 Id. 677; Garnsey v. Rogers, 47 Id. 242; Remsen v. Beekman, 25 Id. 552 ; Morss v. Gleason, 64 Id. 204; Barnes v. Mott, Id. 397; Colgrove v. Tallman, 67 Id. 95). As soon as knowledge of these transfers was brought to the plaintiffs, the same liabilities and responsibilities were thrown upon them as though the relationship to the 'transaction arose from the original contract made by and with their consent.
    II. The interview and conversation between the defendant and William G. Davies in 1874 constituted a sufficient request to collect this mortgage. The request was conditional, but made so only because of the false information given to the defendant. William G. Davies was the proper agent of the corporation plaintiff in the matter, and the company is bound by his act, whether right or wrong (Booth v. Farmers’ & Mechanics’ Nat. Bk., 50 N. Y. 396 ; Leslie v. Knickerbocker Life Ins. Co., 63 Id. 27, 34). A corporation can act in no other way than through its agents and employees. The former position and active duty of Mr. William Gr. Davies made him the most proper agent in the employ of the company for this particular business. He had been in charge of the bond and mortgage department, and therefore, knew best what information could be procured from the books of the department. He was their assistant solicitor in the law department, charged with the duty of keeping the clerical run of non-payment of taxes, so that action in directing foreclosure on account of such non-payment could be taken. But when the assistant solicitor of the company assumed, by referring to the books, to be able to find the information there, when the fact inquired for was made a basis of dealing with the company, a complete estoppel in pais arises against the company, so far as that transaction is concerned (Wickersham v. Lee, Alb. L. J., March 24, 1877, p. 234; Leslie v. Knickerbocker Life Ins. Co., supra). But leaving aside all this, the defendant contends that a conditional request by a surety that the creditor collect, is as ample for his protection, so soon as the condition is fulfilled, as an unconditional one. Admitting that the company was under no equitable obligation to protect the defendant by an immediate foreclosure when he made his request, because of this condition, the' obligation surely did arise in March, 1875, when the fact of the existence of taxes and assessments was brought to their attention. It was Mr. Harding’s specific instruction to insist on prepayment of taxes and assessments, as a condition precedent to discontinuance of foreclosure proceedings. “It is to be inferred that this would not have been departed from by him as a subordinate, unless by affirmative and particular direction from superiors, and for some particular reason and with a definite purpose ” (Leslie v. Knickerbocker Life Ins. Co., supra). Mr. Harding testifies himself, that he did not forget his instructions, but made inquiry under them, and received special instructions to waive the general rule. For this instruction he must have gone to the law department, and either to Mr. William G. Davies himself or to his immediate superior, Judge Palmer. This brings the knowledge that the contingency mentioned by the defendant had arisen, not only to the company, but with moral certainty to the very officer of the company to whom defendant had applied. Then, with this knowledge, and after this expression of his desire on the part of the defendant, this company not only neglects to sue for defendant’s protection, but overrides its own general instructions, for the indulgence of a stranger, at the defendant’s expense. The proof is clear that the premises were at this time abundant in value to have paid the bond and all the tax and assessment liens. It is contrary to all justice and equity that the plaintiffs now, after this depreciation in value has occurred, may still hold the defendant for a deficiency arising solely from this late depreciation (Johnson v. Corbett, 11 Paige, 265 ; 1 Story Eq. §§ 325, 326).
    III. The transaction between the company and Mr. Sage constituted an ag'reement not ■ to foreclose the mortgage in suit for an appreciable period of time, and was founded on a valid and binding consideration. There was a total of $3,217.50 paid by Mr. Sage to the plaintiffs or for their use, for which they had against him no possible claim in law or morals, unless it was in consideration for an agreement to delay foreclosure proceedings. That there was an agreement on the part of the company is abundantly proved. The plaintiffs sent the mortgage to their attorneys to be foreclosed. Mr. Sage wanted a delay in these proceedings. He went to the company-about it and to the company’s attorneys, having some conversation, as the result of which he paid his money, and the mortgage was returned to the company not foreclosed, and, with their consent, proceedings stayed for a year. In Mr. Sage’s language he “ paid the money'for the purpose of getting time.” If the company, on March 13, 1875, had gone right on with their foreclosure, to which Sage as second mortgagee was a necessary party, would not this payment under these circumstances have been a good defense and have justified an answer on his part ? A parol agreement to extend time of payment of a sealed instrument is valid (Burt v. Saxton, 1 Hun, 551, and cases cited). This is applied directly to a case of mortgage foreclosure, and a parol agreement for time for a money consideration paid by a person other than the bondsman, but who was a necessary party defendant, is upheld as a good defense to an action of foreclosure (Dodge v. Crandall, 30 N. Y. 294; Hubbard v. Gurney, 64 Id. 457). The agreement may be implied and not express, and will discharge the surety (Beard v. Root, 4 Hun, 356 ; 41 Super. Ct. 235 ; Ducker v. Rapp, 67 N. Y. 464 ; Place v. McIlvain, 38 Id. 96). It is not necessary that a definite day be set to which time is extended (Brooks v. Wright, 13 Allen [Mass.] 72). But even if a definite time were necessary, we have it here, for Mr. Sage wanted time until his counsel could perfect certain proceedings then instituted. “ Id certwrn est, quod cerium, reddere potest.”
    IY. The action of the company in regard to this mortgage, from the time of its maturity in June, 1870, has been so utterly in disregard of the bond of Bavies that it is evident that they had given up all claim against him long before commencement of this action ; and the company has been so entirely indifferent to his rights and interests that they must, in equity, be decreed to have waived all claim of a personal nature. Adding this to the fact of the great delay in this action, the defendant claims that the case comes under the equities suggested in Black River Bank v. Page, 44 N. Y. 453; Barhydt v. Ellis, 45 Id. 107, and cases cited ; North Am. Fire Ins. Co. v. Mowatt, 2 Sandf. Ch. 108 (marginal).

      Turner Lee & McClure, attorneys, and Herbert B. Turner, of counsel, for respondent, urged:—I.
    When Davies conveyed the mortgaged premises to Cudlip, and Cudlip accepted the deed, in which it was recited that he, Cudlip, assumed and agreed to pay off the mortgage in question as part of the consideration of the conveyance, the relation of principal and surety was created between them. Davies became the surety and Cudlip the primary debtor, as far as their relations to each other were concerned ; and, if Davies had been called upon to pay the amount due on his bond, he might have looked to Cudlip to idemnify him (Blyer v. Munholland, 2 Sandf. Ch. 478).
    II. But the above proposition simply states the relations of Davies and Cudlip to each other. As far as their relations to the plaintiff are concerned,. they remained and are equally bound. Davies is bound, being the original debtor. The plaintiff might have relinquished its lien on the real estate and sued him on • his bond. It preferred to pursue the ordinary course— foreclose the mortgage, sell the land, and enter a judgment for the deficiency against him. It was not bound to enter such judgment against him or any other party. Cudlip, by accepting the deed, containing an agreement on his part to pay the mortgage, became liable to the plaintiff to do so. The mortgagee is entitled to claim the benefit of this promise made to its original debtor, by virtue of the doctrine of subrogation in equity, by which a creditor is entitled to all collateral . securities which a debtor has obtained, to enforce the primary obligation. (Trotter v. Hughes, 12 N. Y. 78 ; Rawson v. Copeland, 2 Sandf. Ch. 257). The agreement between Cudlip and Davies, by which the former assumed to pay Davies’ debt to the plaintiff, is a personal contract made between them for the benefit of the plaintiff; and the plaintiff might have maintained a personal action against Cudlip without foreclosing the mortgage, or joining Davies as defendant. This is on the principle that where a person makes a contract with another for the benefit of a third party, being himself bound, the third party may enforce its performance (Burr v. Beers, 24 N. Y. 178 ; Lawrence v. Fox, 20 Id. 268).
    III. A surety will not be discharged unless, 1. The creditor is guilty of an act of omission, notwithstanding the request of the surety, and the surety sustains damage in consequence; or, 2. The creditor makes some agreement without the consent of the surety, which changes the terms of the original contract. (1) The defendant Davies, in order to claim relief from his obligation in consequence of the neglect or delay of the plaintiff in foreclosing the mortgage, must show a full and explicit notice or request to the plaintiff to proceed, without delay; and improper neglect, on the plaintiff’s part to do so ; and that thereby the recovery of the debt has been rendered impossible (Valentine v. Farrington, 2 Edw. 53; Warner v. Beardsley, 8 Wend. 194; Hoffman v. Hurlburt, 13 Id. 377). Or he may show that the plaintiff’s means of recovery have been partially impaired only, in which case his obligation is impaired only to the extent of the loss (Barhydt v. Ellis, 45 N. Y. 107). The rule which places it in the power of a surety to compel the creditor to collect the debt, by demanding that it be done, is now too firmly settled in this State to be questioned. But the history of the law in this respect shows that the rule should be restricted within close bounds, for it was adopted against the opinion of some eminent judicial minds, and is not adopted to any extent in other States. The more general rule is that the surety must himself take measures, by bill in equity or otherwise, to free himself from his obligation. The history of the law in this State, on this subject, can be gleaned from the cases : Pain v. Packard (13 Johns. 174); King v. Baldwin (2 Johns. Ch. 554 ; S. C., 17 Johns. 384) ; Herrick v. Borst (4 Hill, 650). This doctrine of the Hew York courts has been expressly repudiated in other States. In Massachusetts, in the case of Fryer v. Jennings (4 Pick. 382). In Maine, in the cases of Leavitt v. Savage (16 Me. 72); Freeman’s Bank v. Rollins (13 Id. 202); Paige v. Webster (15 Id. 249); see also, Barker v. Marshall (16 Vt. 522) ; Ward v. Vass (7 Leigh, 135); Shaw v. McFarlane (1 Ired. 216); Johnson v. Planters’ Bank (4 S. & M. 165). We thus see, that even under the most lenient and indulgent view of the matter which the courts have ever taken, the surety must explicitly and formally request the creditor to sue before he can be discharged, and that this rule of law is confined to this State, and was introduced here with the admission that it was a “novel and alarming doctrine,” and in opposition to the expressed opinion of some of our greatest judges. As matter of fact, Davies made no such request. He was content to let the matter remain as it was, so long as he was not disturbed. He alleges a request in his answer, but has wholly failed to prove it. (3.) The defendant Davies alleges in his answer, that the plaintiff extended the time for the payment of the mortgage. Ho evidence of any such extension was even offered at the trial. To substantiate such a defense, the defendant must show that the plaintiff voluntarily and without his consent placed itself in such a position that it could not foreclose, (a.) To support any such extension there must exist some new consideration not contemplated in the original obligation. No mere payment made on account of the mortgage, can, under any circumstances, constitute any such consideration (Pabodie v. King, 12 Johns. 422 ; Hall v. Constant, 2 Hall, 205; Draper v. Romeyn, 18 Barb. 166; McLemore v. Powell, 13 Wheat. 554; Oxford Bank v. Lewis, 18 Pick. 458 ; Blackstone Bank v. Hill, 10 Id. 128 ; Freeman’s Bank v. Rollins, 13 Shepley, 203 ; Central Bank v. Willard, 17 Pick. 150). It clearly follows from these cases, and from the settled law on the subject, that the vital element of any continuance of a debt which will discharge a surety must be its postponement for some specified time within which no payment can be made or received, and in the absence of this element, an agreement to defer, which is not binding, and a postponement in accordance therewith, or partial agreement, or the payment of interest in advance, or even the concurrence of these, will not discharge the surety. A fortiori there is no extension in the present case, in which not even a single one of these circumstances relied on as a valid defense in the cases above cited, occurs, (b.) Mere indulgence granted by a creditor to the principal debtor, however long continued, and whatever the consequences, will not operate to discharge the surety (Schroeppell v. Shaw, 34 N. Y. 446; Thompson v. Hall, 45 Barb. 212; Pollock v. Hoag, 4 E. D. Smith, 473; Dorlin v. Christie, 39 Barb. 610 ; Albany Dutch Church v. Vedder, 14 Wend. 166; Hunt v. Bridgam, 2 Pick. 581 ; 2 Pars. on Contr. 24, and note, where the cases are collated ; People v. Jansen, 7 Johns. 336 ; Wright v. Simpson, 714, 734 ; Trent Navigation Co. v. Harley, 10 East, 34; Dawson v. Lawes, 23 E. L. & E. 374; Hunt v. U. S., 2 Gall. 32, 34; Oxford Bank v. Lewis, 8 Pick. 458 ; Remsen v. Beekman, 25 N. Y. 552, 557 ; Sprague v. Bank of Mt. Pleasant, 10 Pet. 257).
   By the Court.—Van Vorst, J.

The conveyance of the land by the defendant Davies to Cudlip, and the agreement by the latter to assume and pay the mortgage, created the relation of principal and surety between them. The effect of this transaction was, in equity, to make the land the primary fund for the payment of the mortgage debt, and to place Davies in the attitude of surety only thereafter (Johnson v. Zink, 51 N. Y. 333 ; Jumel v. Jumel, 7 Paige, 594).

The subsequent conveyance from Cudlip to Adriance, although the latter also assumed the payment of the mortgage, did not affect Davies’ relation as surety. It gave him the additional advantage of the agreement of Adriance. This being the relation between Davies and the grantees of the premises, of which plaintiff had notice, although Davies still remained liable on the bond accompanying the mortgage, yet the plaintiff was bound in its dealings with the grantees and others, in regard to the mortgage debt, to do nothing to the injury of Davies as surety.

A surety has a right to request the creditor to proceed without delay in the collection of the debt, and if the creditor, notwithstanding such request, neglects to proceed, and the recovery of the debt thereafter has become by such delay impossible, the surety would be discharged, or should it appear that the creditor’s means of recovery have been, by delay after such request, only partially impaired, then his obligation against the surety is impaired to the extent of the los 3 only (Paine v. Packard, 13 Johns. 174 ; King v. Baldwin, 2 Johns. Ch. 554 ; S. C., 17 Johns. 384 ; Warren v. Beardsley, 8 Wend. 194; Herrick v. Borst, 4 Hill, 650 ; Colgrove v. Tallman, 67 N. Y. 95). The reason for this conclusion being that the creditor is under an “ equitable obligation” to obtain payment from the principal debtor, and the surety can by a “full and explicit request” compel the creditor to proceed to recover the debt, and his refusal to do so will exonerate the surety (King v. Baldwin, supra).

The learned judge before whom the trial was had was requested by the defendant’s counsel to find in substance as facts, that in November or December, 1874, the defendant Davies, at the plaintiff’s offices, informed William Gr. Davies (who was attached to the law department of the plaintiff’s business) that he was anxious about the value of the security, and desired to have the mortgage foreclosed, if any taxes or assessments upon the premises were unpaid; that thereupon William Gi. Davies made an examination of the books and papers of the company, and assured the defendant that there were no taxes or assessments unpaid, or interest in arrear ; that defendant informed William Gr. Davies that if any taxes or assessments should be unpaid and in arrear, he wished the mortgage forthwith foreclosed for his protection, which William Gr. Davies, thereupon, and at several times thereafter, assured him should be done.

The learned judge declined to find these facts, and the defendant excepted.

We have examined the case to ascertain whether the judge before whom the witnesses were examined was justified in refusing to find the facts he was requested.

From such examination, we cannot conclude that the judge was in error in declining to find any portion of what was requested of him which is material to the just disposition of the case. And the case in that respect may well rest upon his decision. William Gr. Davies, who is a nephew of the defendant, and who was frequently consulted by him, in the plaintiff’s offices, and elsewhere, in respect to Ms mortgages, has testified, that he could not have informed the defendant that there was nothing against the property, when interest was unpaid, the December interest being in arrear, and that the entries of payment of interest were promptly made in the books ; that the company’s books did not at that time show what taxes or assessments were against the property ; that he had not the information to give upon that subject; that he might have said that they knew of none; that he did not understand the defendant to direct or request that the, mortgage should be foreclosed ; that he very probably made a remark that he wanted it done if taxes and assessments accumulated.

Conceding that the plaintiff requested that the viortgage should be foreclosed, if taxes and assessments accumulated, and should be in arrear, does that amount to a “full and explicit” request to the plaintiff, to foreclose the mortgage ?

The request, it must be observed, was made of a person, who, under the evidence, had no duty in his relations to the plaintiff in that direction.

The president and finance committee of the plaintiff were the persons who had the control of such matters ; they directed the foreclosure of the company’s mortgages. The person of whom the request was made was neither president nor member of that committee. He had no authority to direct or order the foreclosure of a mortgage.

When a request of this nature is to be made of a corporation, to be effective, it should be formally made, and communicated to one charged with the subject.

This is the more important, as a disregard of the request is followed by a release of a security. In large corporations, there must needs be a systematic distribution of duties among numerous officers and agents. And persons seeking to charge a corporation with notice to, or with acts or omissions of its agents, must see to it that the notice is communicated to, or that the act or omission proceeds from a person charged with a duty in the premises. By way of illustration, a communication made to the discount clerk of a bank with respect to matters clearly not under his control, but within the specific duty of the notary, paying or receiving clerk, could not well be considered a good notice to the bank, by which it would be absolutely bound.

When a corporation is engaged in making investments of money, the duty of calling in loans is quite as important as that of making them. The decision in'each instance must rest in responsible hands. The plaintiffs intrusted this duty to its chief officer and principal committee, with whom the defendant, who was not a stranger to the plaintiff’s offices, should have formally communicated, and especially so, as his request to foreclose was conditional, accompanied with the added service, care and judgment, with respect to taxes and assessments.

But again: the defendant could not, through a notice to or request of William Gv Davies, cast upon the plaintiff the duty of watching taxes and assessments, so as to guard against their accumulation.

That was a matter about which the defendant might himself have inquired, as his interest prompted, at the proper municipal offices where reliable records are kept.

The evidence shows that the books of the company did not, at that time, disclose what taxes and assessments were returned against the property, and that the plaintiff had in fact no information to give upon that subject, and could only obtain it by an inquiry at offices equally open to the defendant.

The person in the plaintiff’s employment with whom the defendant communicated, according to his testimony, was not assigned to any duty of the nature of the one sought to be imposed by the defendant.

He was the assistant to the solicitor of the company in its law department. This department examined vouchers, the surrender of death claims, and had the supervision of all litigated business and general direction of it. He had no right, as assistant to the solicitor, to order the foreclosure of a mortgage for non-payment of taxes.

Had William G-. Davies, therefore, chosen to act in the direction requested, it must have been for the defendant, and in his interest, and for his omission, if any, the plaintiff is not liable.

But it is urged by the learned counsel for the defendant, that the plaintiff extended for a time the payment of the mortgage, at the request of Mr. Sage, the owner of a subsequent incumbrance. It appears that the plaintiff, in January, 1875, was about to foreclose the mortgage, and had placed the same in the hands of its attorneys for that purpose.

At this stage Mr. Sage came forward and paid the interest in arrear, and the expenses of the preliminary proceedings, and the mortgage was returned by the attorneys to the company. Mr. Sage, in August following, paid another installment of interest on the mortgage.

He testified that he was desirous of getting an opportunity to investigate the value of the property, and to that end made those payments. It is not shown that any agreement was made to extend the payment of the mortgage for a day.

The plaintiff simply forbore the collection of the debt which was due. However such forbearance of the creditor may prejudice the surety, it will not of itself have the effect to discharge him.

A naked promise to forbear, if one was made, would work no change in the antecedent relations of the parties.

The distinction between an agreement to give time, and time given irrespective of an agreement is important.

A creditor may refrain from taking proceedings, or abandon those he has commenced, provided he releases no lien, without discharging a surety (2 Am. Leading Cases [Hare & Wallace] notes to Pain v. Packard, and King v. Baldwin, pp. 390, 394).

There is nothing to show that the plaintiff was restrained by any agreement, for any length of time, from collecting the mortgage, and the defendant could, notwithstanding the payment of the interest in arrear by Sage, have at any moment paid the debt, and have been subrogated to the plaintiff’s rights and remedies under the mortgage (Calvo v. Davies, in the court of appeals, per Andrews, J.).

The manuscript opinion in that case has been handed up with the papers.

This opinion fully recognizes the position and rights of the defendant Davies as surety, upon the facts appearing as above stated.

The judgment for a deficiency in this case is doubtless owing, in a large degree, to the accumulated taxes and assessments upon the premises, which were, by the judgment of the special term, directed to be paid out of the moneys arising on the sale of the land.

Some of these assessments accrued as early as the year 1872, and a considerable portion of the whole was a matter of record in the proper city offices in December, 1874, when the defendant had the interview with the assistant solicitor in the office of the company.

However unfortunate the result may prove to the defendant, we cannot think that the case would justify this court in casting upon the plaintiff the burden of paying these liens.

If the plaintiff was at all at fault in allowing them to accumulate through its forbearance to foreclose when the assessments first appeared, the defendant is not wholly free from responsibility. If the existence of these liens depreciated the security of the mortgage, and furnished a reason for its foreclosure, the defendant, whose pecuniary interest in the matter was large, could have readily acquired a knowledge of them, and by a seasonable and explicit request to the plaintiff, could have secured himself against any loss whatever.

We fail to discover any error in the proceedings on the trial or in the judgment.

Judgment affirmed with costs.

Sedgwick and Speir, JJ., concurred.