Case ID: ny-super-ct_41/html/0235-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Sanford, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOHN D. DUCKER, et al., Trustees, &c., Plaintiffs v. JOHN H. RAPP, Administrator, &c., Defendant.
    principal and surety.
    In the case of a surety for lessees, the landlord is under no obligation to demand of the lessees the rent, nor to institute proceedings to recover the same against the lessees, nor to notify the surety of the non-payment of the rent, before resorting to his remedy against the surety.
    In the case at bar, the undertaking of the defendant’s testator was to pay any arrears of rent that might remain due to the lessor or his legal representatives, and the duty of seeing to it, that the rent was paid, devolved upon, and was assumed by him. His promise to pay in case of default, was express and unqualified, and upon such default, his liability to pay became fixed (McKensic). Farrell, 4 Bos., 192; Turnure v. Hohenthal, 36 N. Y. Superior Ct. 79; McKecknie v. Ward, 58 N. Y. 541).
    
      Before Curtis and Sanford, JJ.
    
      Decided May 1, 1876.
    A parol promise of the landlord or his representatives lo inform the executor of the surety, if the rent was not paid, will not vary the obligations of the surety’s executor. It did not operate to exonerate him, if unfulfilled.
    The guaranty was under seal, and until breach could not be discharged or modified by parol (Clough v. Murray, 3 Rob’t 7; Kuhn v. Stevens, 7 Robt. 544).
    The promise was a mere nudum pactum, void for want of consideration.
    Nor was ibe defendant discharged by the omission of the plaintiff to enforce, by execution, judgments recovered against the lessees for the rent, nor by the countermand of said executions.
    By none of the several acts claimed by the defendant to have been done by the plaintiffs, or omissions by them, was the defendant’s rights impaired, nor the obligations of his testator to pay the rent, released or discharged.
    This case comes np on exceptions taken by defendants, at the trial before Hon. John Sedgwick, Judge, and a jury, October 25, 1875. The court directed a verdicfcfor the plaintiffs and ordered defendant’s exceptions to be beard, in the first instance, at general term, judgment in the mean time being suspended.
    A verdict was thereupon rendered in favor of the plaintitfs, for six thousand one hundred and seventy dollars, and fifty-eight cents.
    The action was brought by Margaret Ducker as the widow of Melchior Ducker, deceased, and by the said Margaret Ducker, and others, as executors and trustees under the last will and testament of said deceased, against John H. Rapp, as administrator with the will annexed of John H. Rapp, deceased. The complaint alleges that the plaintiffs respectively are such widow’s executors and trustees, and as such, are entitled to the rents of the real property of which the said Melchior Ducker died seized. It further alleges the execution and delivery of a lease, by their testator to .Doane, Wing, Cushing and Smith, under the date of March 2, 1870, whereby the premises, No. 19 West Houston Street in the city of New York were demised for the term of five years from May 1, 1870, at a rental of six thousand dollars per annum, payable quarterly, on the first days of August, November, February and May, in each year. That the lessees entered but failed to pay the rent as agreed, and that there remained unpaid at the commencement of this suit, four instalments of fifteen hundred dollars each, for the quarters ending respectively, on the first days of May, August, and November, 1874, and February 1, 1875, with interest. It further alleges the execution, on March 2, 1870, by John H. Rapp, defendant’s testator, of an agreement, ££ wherein and whereby, he did covenant and agree to and with said Melchior Ducker and his legal representatives, that if default should at any time be made by said Richard Doane, Human B. Wing, •James W. Cushing, and Robert W. Smith, in payment of said rent and performance of the covenants contained within said lease on their • part, to be paid and performed, that said John H. Rapp would well and truly pay said rent or any arrears thereof that might remain due unto said Melchior Ducker or his legal representatives, and also all damages that may arise in consequence of the non-performance of said covenants, or either of them, without requiring notice of any such default from said Melchior Ducker.” It also alleges the death of John H. Rapp, and the issuance to defendant of letters of administration with the will annexed.
    The defendant, by his answer, admits a sufficiency of assets in his hands and the execution of the lease as alleged in the complaint. But he denies any knowledge, information or belief as to the guaranty, and; avers that he has been discharged from all liability for the payment of the rent reserved in the lease, by the acts and omissions of the plaintiffs, viz.:—
    
      1. By their refusing an offer, made by the lessees, on or about May 1,1874, to allow them to collect rents from under tenants of the premises, and to apply the same upon the rent thereafter to become due, without discharging the lessees. The answer avers that plaintiffs then knowing the lessees to be pecuniarily embarrassed, refused such offer, without notifying the defendant thereof, and permitted the lessees, while in default, to collect all rents due from such under tenants, and that the amount thus collected was about two thousand three hundred dollars.
    2. By negligently omitting to issue an execution, on two judgments alleged to have been recovered by plaintiffs against the lessees, one for one thousand seven hundred and five dollars and fifty-seven cents for the rent which became due May 1,1874, the other for one thousand six hundred and seventy-eight dollars and five cents for the rent which became due August 1, 1874. The answer avers that by reason of such omission the amount of such judgments, which by a proper execution to the sheriff of the city and county of Mew York, might easily have been collected, was lost.
    3. By staying proceedings on such judgments, and extending the time of said lessees, to pay the same, and the rent for which they were respectively recovered ; and by an agreement, alleged to have been made between the plaintiffs and said lessees, to the effect that if legal proceedings were commenced to collect the rent to accrue on Movember 1, 1874, time to answer should be extended until February 5, 1875. Such agreement is alleged to have been made without defendant’s knowledge or consent.
    4. By agreeing with the lessees under date of October 21, 1874, to accept a surrender of a portion of the premises, from that date until February 1, 1875, and to collect the rental thereof, accruing from under tenants during that period, which agreement is also alleged to have been made by the plaintiffs without defendant’s knowledge or consent.
    It appeared in evidence that since the commencement of this suit the plaintiffs had collected from the lessees, and credited upon the quarter’s rent due May 1, 1874, two hundred and fifty-six dollars and fifty-five cents, and that the rent in arrear with interest, allowing such credit, amounted to six thousand one hundred and seventy dollars and fifty-eight cents.
    The contract of guaranty was proved as alleged.
    It further appeared that in 1872, one of the plaintiffs, John D. Ducker, was requested by the defendant, whose intestate was then living, to let him know, if the rent was not paid, and said he would do so.
    It further appeared that the plaintiffs, in this action, as executors of the will of Melchior Ducker, but not in their capacity respectively of his widow and the trustees appointed by his will, brought suit against the said lessees, in the supreme court, on the 26th day of June, 1874, for the rent due May 1, 1874, and on the 4th of August, 1874, for the rent due on the 1st of Aug-gust in that year. The complaint in each of such suits was defective and demurrable for insufficiency. Wing, one of the defendants, appeared, however, in each suit and put in an answer. Subsequently, and on the 6th October, 1874, no affidavit of merits having been filed in either suit, the attorney for the plaintiffs therein took inquests in both, and thereupon on the same day, entered up judgment and issued execution. The executions were received by the sheriff at 3.50 p.m. of that day, but at about half past three o’clock on the same day, October 6, the attorney for the j udgment debtors obtained an order to show cause why such inquests should not be set aside, and staying proceedings, meanwhile, under such judgments. This order was served on the sheriff at his office a little before four o’clock and just after he had received the executions. The inquests were subsequently opened by an order of court, made October 9, 1874, but the judgments were allowed to stand as security, and the stay of proceedings thereon was continued.
    On October 21, 1874, a stipulation was entered into by and between the parties to said suits, to the effect that the executions therein should be countermanded ; that all proceedings upon the first judgment should be stayed until November 25, 1874. and upon the second judgment, until January 10, 1875; that in case legal proceedings were commenced to collect the rent claimed to be due November 1, 1874, the time for defendants to answer therein, should be extended until February 5, 1875. Such stipulations on the part of the plaintiffs in said suits were conditional upon the observance, by defendants therein, of certain stipulations on their part, among which were the payment of the said judgments respectively, less certain sums paid as costs in opening the inquests, the first on November 25, 1874, the other on January 10, 1875. The said stipulation also accorded to the plaintiffs in said suits the right and privilege of collecting from under tenants of the premises the rents thereafter accruing up to February 1, 1875, applying the same, if collected, toward the payment of such judgments.
    By the will of Melchior Ducker,' his widow, and the trustees thereby appointed, became entitled to the rents of the real estate whereof he died seized. No interest in, or right to collect such rents passed to his executors, as such.
    At the close of the evidence, defendants’ counsel requested the court to charge the jury, (1) that the stipulation, above mentioned, operated wholly to discharge the liability of the defendants on the contract of guaranty, made by their testator; (2) that such stipulation, at the least, operated to discharge the defendant as surety as to the quarters’ rents, accruing respectively May 1, 1874, August 1, 1874, and November 1, 1874; (3) that the omission and refusal of plaintiffs to accept the proposition of the lessees, to yield to plaintiffs all the rents from under tenants (without informing defendant) operated to discharge defendant; (4) that the omission and negligence of plaintiffs in not collecting the judgments recovered by them for the two quarters’ rent and their countermand and release of the executions therein issued, then liens on the property of the lessee Wing, all without any notification or information thereof to defendant, operated to discharge defendant; (5) that by the act of plaintiffs in resuming possession and control of a portion of the premises under the stipulation and the terms of the stipulation in that respect, the terms of the lease were varied, and defendant thereby discharged; (6) that by the promise of the plaintiff, John D. Ducker, to notify defendant or his agent, John C. Rapp, of any failure of the lessees to pay rent, and by his failure to do so during the accruing of the four quarters’ rent sued for, the defendant was discharged ; (7) that by such promise the terms of said guaranty were altered and plaintiffs are estopped from claiming rent so accruing.
    The court refused, to charge each and every such proposition, and defendant duly and separately excepted to each and every such refusal.
    The defendant then asked to go to the jury upon the evidence offered, as tending to prove the facts, upon which each and every such proposition was asked to be charged. The court refused so to permit the defendant to go to the jury, and defendant duly excepted to such refusal.
    The defendant then moved that the court direct a verdict for the defendant. The court denied the motion, and defendant duly excepted,
    
      
      Joseph W. Dixon, for plaintiff.
    
      Edward M. Shepard, for defendants.
   By the Court.—Sanford, J.

The plaintiffs were under no obligation to demand of the lessees the rent reserved by the lease; or to institute proceedings against them for its recovery; or to notify defendant of its non-payment, before resorting to the remedy against the defendant, as the personal representative of their surety. The undertaking of the defendants’ testator to pay any arrears of rent that might remain due to the lessor or his legal representatives, without requiring notice of default, was express and unqualified. The duty of seeing to it that the rent was paid, was, by the contract, devolved upon and assumed by him. His promise was to pay, in case of default, not after demand or notice, or failure to collect. The right of action against him, and bis legal representatives, accrued immediately upon the lessee’s default, and his or their liability then and thereby became fixed (McKensie v. Farrell, 4 Bos. 192 ; Turnure v. Hohenthal, 36 N. Y. Superior Ct. R. 79 ; McKeeknie v. Ward, 58 N. Y. 541). The promise of the plaintiff, John D. Ducker, to let the defendant’s son know if the rent was not paid, did not vary the rights and obligations of the parties, in this respect. It was made, if at all, in 1872, long after the contract, and was purely gratuitous. It did not operate to modify the contract of suretyship, or to exonerate the defendant from the obligations thereof. The guaranty was under seal, and until breach, a contract under seal cannot be discharged or even modified by parol (Clough v. Murray, 3 Rob't. 7; Kuhn v. Stevens, 7 Robt. 544). It was, moreover, a mere nudum, pactum, void for want of consideration.

Nor was the defendant discharged by the omission of the plaintiffs to enforce by execution the judgments recovered by them on October 6, 1874, nor by the countermand of such executions. Proceedings under the judgments were stayed by order of the court in which they were rendered, before such executions were issued to the sheriff. No levy was made, and no lien was acquired under them. The plaintiffs impaired no right of the defendant, in countermanding executions which they were prohibited from issuing by an order of the court, even though such executions were issued in ignorance of that order. The judgments were allowed to stand merely as security, and it is apparent that they could never have been sustained or enforced, had the suits proceeded to trial, after the inquests were set aside. The complaints showed no cause of action, and were demurrable for insufficiency. They would have beau dismissed on motion, had the cases been brought on to be tried. If, therefore, a technical lien was acquired by issuing the executions, the defendants sustained no injury by reason by its abandonment. The ground on which a surety’s liability^ is discharged by the surrender of securities held by the creditor of his principal, is that his right of subrogation is thus impaired or adversely affected. His contract is strietissimi juris, and the creditor can not be permitted to interfere with security to the benefit of which he is entitled. But the surrender of a security operates as a discharge only pro tanto. Hence, if an apparent lien be, in reality, invalid, or not susceptible of enforcement, either by the creditor, or byr the surety on succeeding by subrogation to the creditors’ rights, the liability of the surety is not affected by its extinguishment. Thus in Blydenburgh v. Bingham (38 N. Y. 371), if was held that the surety of a judgment debtor was not discharged by the release from the operation of the judgment, of lands in which it was supposed that the judgment debtor might have some contingent interest, when it appeared that, in fact, he had no such interest, and that the judgment did not constitute such lien. . So here the judgments upon which the executions were issued, standing merely as collateral security for such recovery as might thereafter be had in the suits wherein they were obtained by default, and it being apparent that no recovery could have been had in such suits, for the reason that the complaints therein did not state facts sufficient to constitute a cause of action, it is manifest that if the defendant had paid the debt of his principal, and had thus been subrogated to all the rights and remedies of the plaintiffs, he could have derived no benefit or advantage from such executions, and he wa,s, therefore, in no wise prejudiced by their countermand. Again, the property, or partnership interest of Wing (one of the lessees and judgment debtors), upon which the executions in question are claimed to have constituted liens, is shown to have been of no value, by reason of the insolvency of his firm.

He failed in the latter part of October, 1874, almost immediately after, and notwithstanding the countermand of these executions, and in consequence of judgments against him which he could not pay. He testifies that at the time when the executions were issued, he believed himself able to pay his debts in full, but that his judgment and belief in that respect were based upon a valuation of his property which has since proved to be erroneous. There was no conflict of testimony upon this or any other question of fact, and the jury would not have been justified in finding from the evidence that the defendant sustained an appreciable loss by the countermand of the executions, even supposing them to have been regularly issued, and to have constituted valid liens.

The stipulation of October 21, 1874, which is claimed to have constituted a valid extension of the lessee’s time of payment, was entered into by and between the parties to the suits, in which the judgments above mentioned were recovered by default, and was signed on behalf of the plaintiffs in such suits, by their attorneys of record therein. It may well be doubted whether such attorneys had the right to represent or act for the plaintiffs in any other capacity, than that of executors, the suits having been brought by the plaintiffs in that capacity alone. As executors, the plaintiffs had no right to, or interest in the rents, and could make no valid agreement with respect to them. Representing them in that capacity only, their attorneys may well be supposed to have exceeded their authority, in attempting to contract for an extension of the time within which such rents might be paid.

Only the widow and trustees under the will had power over the rents, and an attorney, retained by and' appearing for them, to prosecute a suit in their capacity of executors of the will, can scarcely be presumed to have been duly authorized to represent them individually or in their capacity of trustees. There is no evidence of authority in the attorney to stipulate at all, except such as maybe inferred ex mrtute officio. And without express authority, an attorney has no right to bind his client by a promise of forbearance. Certainly no such authority extends to matters outside of the suits, in which the stipulation is entitled. The true test in such cases, is the inquiry, whether upon subrogation, the surety would have the right to proceed at once against the principal. I think the pendency of actions in favor of plaintiffs, as executors merely, would not operate in abatement of a suit brought by the surety after payment of the rent to the widow and trustees, as such; nor wpuld the surety be bound or affected by any stipulation, entitled in such suit and signed by the attorneys of record of the plaintiffs therein, even with respect to the subject matter of such suit; much less would his rights or remedies be impaired, by a stipulation entitled in such suit, and signed by the attorneys of record therein as respects matters wholly dehors the record.

But, assuming the sufficiency of the attorney’s authority to stipulate, the stipulation itself does not in terms purport to extend time of payment of the rent. It provides that “ all proceedings on the first judgment are to be stayed until November 25, 1874, and upon second judgment, until January 10, 1875. By the previous order of October 9, all proceedings under both judgments were stayed indefinitely, and the defendants were allowed to come in and defend. As we have already observed, there could have been no recovery in favor of the plaintiffs, had the suits been contested. The plaintiffs sued as executors, and as such, they neither had, nor averred any right or title to the rents. The effect of the stipulation, therefore, was rather to limit than extend the stay, and thus to hasten rather than retard collection. Besides, it affected only the particular remedy, and did not impair the right. The remedy was valueless; the stipulation rendered it effective. There was, however, in the stipulation nothing to preclude the discontinuance of the suits, or the commencement of other suits by the plaintiffs in their capacity of widow and trustees,—or by the defendant here, had he acquired the rights of the widow and trustees by subrogation. I do not think the stipulation can be construed as a valid extension of time of payment of the accrued rent, and with respect to the rent accruing in November following, it was clearly beyond the authority of the attorneys.

The refusal of the plaintiffs to undertake the collection of the rent payable by the lessees, from the under tenants of such lessees, is a matter of which the surety has no right or reason to complain, nor was he entitled to any notice, either of the offer or its refusal. Under the authority of the recent case of Clark Admr. v. Sickler Admr., N. Y. Weekly Digest, vol. 232, April 17, 1876 (decided by the court of appeals, February 23, 3876), no mere indulgence to the debtor, or omission to act on the part of the creditor, in the absence of an express request from the surety, operates to effect the surety’s discharge. In that case, the maker of a guaranteed, note went to the holder with the money due thereon, and offered to pay it, but the holder declined to receive the money, giving as a reason that he had no use for it, and requested the debtor to keep it. The guarantor was held liable, notwithstanding the subsequent insolvency of the debtor. The case seems to be the most rigid adjudication of a surety’s liability which has hitherto been made in the courts of this State, and as an authority, it j ustifies fully the actions and omissions of the plaintiffs herein.

Judgment ordered upon the verdict, with costs,

Curtis, J., concurred.