Case ID: ny-super-ct_36/html/0413-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Monell, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CHARLES A. HINCKLEY, Plaintiff and Respondent, v. WILLIAM KREITZ and EMIL UNGER, Defendants and Appellants.
    I. Undertaking on Appeal to the General Term—Costs of Appeal to Court of Appeal.
    1. Liability of the sureties on.
    
    
      a. Such undertaking includes and covers the costs of an appeal to the Court of Appeals, and the sureties thereon are liable for such costs.
    
      2. Release of sureties on.
    
    
      a. Whether a stipulation, in an agreement between an assignee of the judgment (Gunther) and an attorney (Elmore) who had a lien, etc., by which the attorney, in consideration of $500, agreed to accept that sum in full of all costs and counsel fees and disbursements then or thereafter to be incurred, and to take all necessary and proper means to enforce the judgment as against the judgment-debtor without further charge or expense, that no proceedings should be taken on the judgment against the sureties on the appeal to the Court of Appeals; and a clause in an assignment of said judgment by said assignee to said attorney, whereby the attorney, in consideration of the assignment releases the sureties on appeal to the Court of Appeals from any and all liability by reason of their having been bail in the action, and agrees to protect and indemnify them against any liability incurred by them, or either of them by reason of being such bail, and from any and every and all liability whatever; and whereby the assignee covenants on the part of said sureties, that they will not or either of them bring any claim or make any demand against the attorney on account of any money paid to the plaintiff in the action, or said attorney in the action, or in the proceedings therein by said sureties on the appeal to the Court of Appeals; coupled with the oral testimony of one of such sureties that he paid $350'to his co-surety (since dead) “ who attended to the whole matter; ” and the oral testimony of the attorney to the effect that he received the $500 mentioned in his agreement with Gunther, from Gunther; that he knew the sureties on appeal were uneasy; that Gunther told him " he bought the judgment from Dennstaedt (the judgment plaintiff), and made that agreement with Schuchman and Muller ” (the sureties on the appeal to the Court of Appeals) operate to release the sureties on the appeal to the General Term—was not passed on by the court, such defence not being set up in the answer.
    Before Monell, Curtis, and Sedgwick, JJ.
    
      Decided December 31, 1873.
    3, Payment, what is not.
    
    
      a. The $500 mentioned in the agreement between Gunther and Elmore, paid to and received by Elmore, does not enure to the benefit of the sureties on the appeal to the General Term as to payment on the judgment.
    Appeal from judgment and from order denying motion for a new trial made on minutes.
    Upon an appeal taken by one Anschutz from a judgment in the Court of Common Pleas against him, in favor of the plaintiff’s assignor, he gave an undertaking with these defendants as sureties. The appeal was from the Special to the General Term.
    The undertaking, after reciting the judgment and the appeal therefrom, was as follows :
    “Wow therefore, we, William Kreitz, of Wo. 156 East Houston Street, in the city of Wew York, and Emil Unger, of Wo. 46 East Houston Street, in said city, do hereby, pursuant to the statute in such case made and provided, undertake that the said appellant will pay all costs and damages which may he awarded against him on said appeal not exceeding five hundred dollars; and do also undertake, that if the said judgment so appealed from, or any part thereof, he affirmed, or the appeal he dismissed, the said appellant will pay the amount directed to he paid by the said judgment, or the part of such amount as to which the said judgment shall be affirmed, if it be affirmed only in part, and all damages and costs which shall be awarded against said appellant on the said appeal.”
    The judgment was affirmed by the General Term, and the defendant took a further appeal from such judgment of affirmance to the Court of Appeals, giving a new undertalcing with other sureties. The Court of Appeals affirmed the judgment of the General Term, and remitted the record to the court below, where judgment upon the remittitur was duly entered.
    The plaintiff in this action claimed, and was allowed to recover against these defendants, all the damages and costs in the action, including the costs of the appeal to the Court of Appeals. It appeared in the evidence as follows:
    On the 14th of April, 1869, Gottlieb Gunther executed an agreement purporting to be between him and J. B. Blwood, whereby, after reciting the judgment recovered in the Common Pleas by Dennstaedt against Anschutz and the affirming thereof by the General Term and an appeal pending in the Court of Appeals, and that such judgment had been by an instrument bearing even date therewith assigned by Dennstaedt to him (said Gunther) subject to the lien of said Elwood for costs, counsel fees, etc. It was in substance agreed that Elwood in consideration of $500, the receipt whereof he acknowledged, should accept said $500 in full payment of all costs, counsel fees, and disbursements in said action whichhad been or might thereafter be incurred, and should take all necessary and proper measures to enforce said judgment against said Anschutz without further charge or expense, and that no proceedings should be taken on said judgment against Philip Schuchmann and Nicholas Muller, the sureties who joined in the undertaking on the appeal to the Court of Appeals.
    On the 30th of December, 1871, by an agreement made between said Elwood and Gunther under seal, Gunther assigned the judgment and judgments in the above agreement mentioned to Elwood, and released Elwood from all the terms, conditions, and requirements thereof. Said agreement then proceeded as follows :
    “And the said Elwood on his part, in consideration of the foregoing, agrees to protect and save harmless the said Gunther from any and all liability by reason of his having been the owner of said judgment and judgments, and also releases and absolves the said Muller and Schuchmann, in said foregoing agreement named, from any and all liability by reason of their having been bail in said action, and agrees to protect, save harmless, and indemnify them forever from and' against any liability incurred by them, or either of them, by reason of being such bail, and from any and every and all liability whatever, except as qualified, as follows, to wit: The said Gunther covenants and agrees on the part of the said Muller and Schuchmann, that they will not, or either of them, bring any claim or make any demand of or against the said Elwood by or on account of any money paid to the plaintiff or to said Elwood in this action, or in the proceedings herein by the said Muller and Schuchmann, or either of them, and that he will protect and save harmless the said Elwood from and against any and all claims and demand they or either of them may make against him therefor.”
    On the 23d of November, 1872, Dennstaedt executed to the plaintiff the following assignment:
    “For a valuable consideration to me in hand paid, I hereby releáse, assign, transfer, and set over unto Charles A. Hinckléy, of the city of Hew York, all my right, title, and interest in and to the above described judgment and judgments and to the undertaking and undertakings given on the appeal and appeals in said action, and to any and all remedies and causes of action that I may have or might have had upon said undertaking and undertakings, or against the sureties thereto, had this transfer by me not been made ; and I do authorize the said Hinckley to do any and all acts in the premises for the collection of said judgments, and the enforcement of said remedies upon said undertakings and against the sureties thereto, in the same way and manner and as fully as I could have done, had I remained the owner and holder thereof.
    “Dated Hew York, Hov. 23, 1872.
    “Fr. Dennstaedt.”
    On the 29th of Hovember, 1872, Blwood executed to plaintiff an assignment in the same form as the one last above.
    The instruments were read in evidence. On the trial, John Philip Schuohmann, one of the sureties on the undertaking to the Court of Appeals, was called as a witness, and in answer to the question, “Did you ever pay any money to Mr. Dennstaedt, or to Mr. Blwood for Mr. Dennstaedt on account of this judgment % ” testified in substance that he could not say he paid money on account of the judgment; that it was Mr. Muller (his co-surety) that settled; that he did not do it himself; that he paid Muller $250, and left him “to attend to the whole matter.”
    Mr. Blwood testified that he received the $500 mentioned in the agreement between Gunther and him, from Gunther ; that he knew the sureties on appeal were very uneasy on account of the insolvency of their principal; that Gunther told him “he bought the judgment from Dennstaedt, and made that agreement with Schuchmann and Muller.”
    Dennstaedt testified that he had sold all his interest in the judgment to Gottlieb Gunther before Nov. 23, 1872, and that the assignment to Gunther was in writing. This assignment was not read in evidence.
    One of the defences in the present action was that the plaintiff was not the real party in interest, but that said J. B. Elwood was such real party. Some evidence was given which it was claimed tended to establish that defence.
    It was also claimed that the payment of the five hundred dollars mentioned in above agreement between Gunther and Elmore should be allowed against the plaintiff’s claim. At the close of the evidence on both sides defendant’s counsel moved to dismiss the complaint on the ground that there was no proof that the defendant, Anschutz, had not discharged his liability; second, that there vyas no proof that a demand was made upon the sureties for payment before suit; and third, on the further ground that the plaintiff is not the real party in interest, and that the defendants have been released.
    Motion was denied, and defendant excepted.
    Defendant’s counsel then asked leave to go to the jury on the question whether Mr. Elwood was not the real party in interest; also, whether part of the judgment had not been paid; also, as to whether the plaintiff was the real party in interest.
    Denied, and defendant excepted.
    Defendant’s counsel then asked the court to instruct the jury that they cannot find for the costs to the Court of Appeals. That they must credit on the judgment $500 and interest paid on the 14th of April, 1869.
    Denied, and defendant excepted.
    The court directed a. verdict for the plaintiff for $1,836.20.
    
      To which defendant excepted.
    Defendant’s counsel moved for a new trial on the minutes,, which was denied, and defendant excepted.
    Defendant appeals from the judgment entered upon the verdict, and from the order denying the motion for a new trial.
    S. Kauffman, attorney, and Lewis S. Sanders of counsel for appellants, urged :
    I. There was direct positive evidence of payment of $500 by Schuchmann & Muller on account of the judgment.
    II. Manifestly, the condition of the undertaking was fulfilled when judgment was rendered at the General Term, and appellants’ liability was. absolutely fixed and terminated then. We have,, also, in the case another undertaking covering the costs of the Court of Appeals.
    III. Dennstaedt or Gunther received from Schuchmann & Muller, sureties on the undertaking to the Court of Appeals, five hundred dollars, for which sum Messrs. Schuchmann & Muller were released from their undertaking. In fact, by a secret agreement the stay of proceedings of Dennstaedt against Anschutz on the judgment was cancelled, and Anschutz’s time to pay voluntarily extended for five hundred dollars until action of Court of Appeals.
    1. A voluntary extension to principal of time of payment for a valuable consideration, without the consent of the sureties, discharges the sureties, “the law presuming injury to the surety” (The Bank of Albion v. Burns, 46 N. Y. 175).
    
      2. Part payment, with an extension of time of payment of balance, discharges surety (Smith v. Townsend, 25 N. Y 482.
    “ Suspending right of action by the creditor has alike “effect, although but for a single day” (Place v. McIlvain, 38 N. Y. 99 ; Fellows v. Prentiss, 3 Denio, 518 Myers v. Welles, 5 Hill, 464-5).
    3. The acceptance of five hundred dollars by Dennstaedt or Gunther, and a cancellation of Schuchmann & Muller’s undertaking and stay of proceedings, worked a suspension over of the remedy of appellants Unger and Kreitz against Anschutz, and operates as a discharge of their liability as sureties (Myers v. Wells, supra).
    
    4. “ When a surety intervenes for the purpose of obtaining time for the principal, a prior surety will have the same rights against him as against the principal, such prior surety stands in the place of the creditor, and such latter surety stands in the place of the debtor, and can be relieved only by payment of the debt” (Schirtzel’s Appeal, 49 Penn. P. 25; Armstrong’s Appeal, 5 Watts & S. 356; Cunio v. The Huntingdon Bank, 1 Penr. & W. 398 ; Potts v. Nathan, 1 Watts & S. 157 ; McCormick’s Adm. v. Irwin, 11 Casey, 116).
    The release of Muller & Schuchmann was a release of the sureties ultimately liable to pay, and by operation of law was a release of the prior sureties, the appellants here.
    
      T. B. Elwood, attorney, and of counsel for respondent.
    The defence as to the claim for costs in the Court of Appeals was unsustained (Traver v. Nichols, 7 Wendell, 434; Ball v. Gardner, 21 Wendell, 270; Bennett v. Brown, 20 N. Y. 99; Robinson v. Plympton, 25 N. Y. 484; Gardner v. Barney, 24 Howard, 467 [affirmed in Court of Appeals—see How. Pr. Reps. 599, note of Cases affirmed] ; Smith v. Crouse, 24 Barb. 433 ; Tibble et al. v. O’Connor, 28 Barb. 538, 61 Barb. 125).
    There is no pretence made by defendants of any payment by them, or either of them, or by the sureties, but only of a payment by Gunther, to his attorney when he was the owner of the judgment and actual plaintiff in the action. Any defendant in any action could ¡equally well insist upon a reduction from the amount to "be recovered from him of any sum that the plaintiff had paid his own attorney in the prosecution of the . action.
   By the Court.—Monell, J.

There was no disputed -question of fact in the case which required submission to the jury. The proof of the transfer of the judgment to the plaintiff was clear and abundant. Not only the written assignment which was not impeached, but the parol evidence furnished by the defendants, established very conclusively that the title to the judgment was in the plaintiff. The intermediate assignments from Bennstaedt (the plaintiff in the judgment) to Gunther, and from Gunther to Elwood, formed the links in the chain of title, after proof of the assignment from Elwood to the plaintiff. Had there been any equity or interest of the defendants affected by such several transfers, or by any of them, then a question of a different character might arise. But it does not appear that there was any defence which the defendants could have made available against Gunther or Elwood which was not equally available against the plaintiff. It was therefore immaterial so far as the defence was concerned, that the plaintiff’s title came through Elwood and Gunther. The written assignments conveyed the legal title, and that was enough as against the defendants, who had no •special equities as against any of the other parties.

The five hundred dollars paid to Elwood was not a ■payment on the judgment. It expressly appears that it was paid under the agreement between Gunther and Elwood that it should be received “in full satisfaction •of all costs, counsel fees, and disbursements in the action which had been or might be incurred. ’ ’ Such costs, etc., were such as the plaintiff in that action, or his assignee, Gunther, might incur or be liable for, and did not in-. elude or apply to the costs recoverable in the action, and which were included in the judgment against Anschutz, the defendant.

There was, therefore, no question of fact for the jury upon either of these branches, of the case, and the refusal to make the submission was not erroneous.

The right to recover in this action against the sureties on the appeal from the Special to the General Term, the-costs of the appeal to the Court of Appeals, presents a question which has not, I believe, been directly adjudicated upon by any court. There are many cases, fosóme of which I will presently refer, which are dicta, at least in favor of the right.

As an original question, I should incline strongly against it.

The defendants were sureties upon an appeal from a Special to a General Term of the court. Their engagement was that their principal, the appellant, would pay all costs and damages which might be awarded against him “on said appeal,” and if the judgment should be-affirmed, the amount of such judgment.

Here, it seems to me, is an express and clear limitation of the sureties’ agreement that if the appellant is-unsuccessful, he shall pay all costs and damages which may be awarded against him on such appeal. There is-nothing in the instrument that would indicate an intention on the part of the sureties to enlarge their liability, and extend it to other or further proceedings in. the action. An appeal from a Special to a General Term is a distinct and definite proceeding. Although, in one sense a continuation, it is, nevertheless, a separate and disconnected action, regulated by special provisions of law, and is as capable of involving a separate-liability and limitation, as in the case of any othersuretyship. x

This view is strengthened, I think, by the provision <of law, that to render an appeal to the Court of Appeals £ £ effectual for any purpose, ’ ’ a written undertaking must "be executed on the part of the appellant to the effect that he will pay all costs, etc., which may be awarded against him in that court (Code, § 334). Such undertaking requires at least two sureties. Here is a further appeal, but it is wholly separated from any prior appeal, and absolutely requires a new undertaking with a fresh and original liability of sureties.

If the intention of the legislature can be ascertained from the several provisions of law regulating these successive appeals, it is manifest, I think, that it was de" signed not only that security should be given upon each appeal, but that such security should be applicable and appropriate to each appeal. Had it been supposed that the sureties upon an intermediate or previous appeal could be held for the costs of all subsequent appeals, then the provision requiring a new undertaking in the Court of Appeals would have been onerous and unnecessary.

It seems to me, therefore, that the defendant’s liability did not extend beyond the costs, etc., in the General Term, and cannot be construed to include the costs of a further appeal to which they were not privy.

But I And a number of decisions, some of which are authority for us, in which language is used of such an unmistakable import as to render the question stare decisis.

In Travers v. Nichols (7 Wend. 434), the security was for the payment of any sum which might be adjudged against the party giving it, and it was held that the liability of the sureties extended to all the costs in the action, and included the costs of an appeal from a justice of the peace to the Court of Common Pleas.

In Ball v. Gardner (21 Wend. 270), the bond was given by the plaintiff upon suing out an attachment from a justice’s court, and was conditioned to pay alt damages and costs if he failed to recover. This was held to extend to the final determination of the action, and was not restricted to a recovery before the justice.

In Smith v. Crouse (24 Barb. 433), there was an appeal to the county court from a judgment of a justice of the peace. The undertaking was to the effect that if judgment should be rendered against the appellant, the sureties would pay any unsatisfied part of the judgment. The county court reversed the judgment of the justice. «An appeal was taken to the Supreme Court, where the judgment of the county court was reversed, and that of the justice affirmed. It was held that the sureties were bound for the costs in the Supreme Court.

In Tribbles v. O’Connor (28 Barb. 538), the undertaking was on behalf of a plaintiff in an action of claim and delivery of personal property, and was conditioned for the payment to the defendant of such sum as might" for any cause” be recovered. This was held to cover all the costs in the action, including those of an appeal to the General Term.

Gardner v. Barney (24 How. Pr. R. 467), was in most respects like the case before us. There was an undertaking upon appeal from the Special to the General Term. The judgment of the Special Term was reversed, and the respondent appealed to the Court of Appeals, when the General Term was reversed, and the •Special Term affirmed. In sustaining the right to the costs in the Court of Appeals, it was held that “there was nothing in the Code nor in the language of the undertaking which restricts the liability of the sureties to the action of the General Term.” This case was affirmed by the Court of Appeals (see Seacord v. Morgan, 3 Keyes, 638).

Bennett v. Brown, (20 N. Y. R. 99) was, like Ball v. Gardner (ubi sup.), an action upon a bond given upon the issuing of an attachment, and a like decision was made; and Letson v. Dodge (61 Barb. 125) was like Tibbetts y. O’Connor, (ubi sup.), and a like decision was made.

In Robinson v. Plimpton (25 N. Y. R. 484), the undertaking was the same as in this case, but the General Term reversed the judgment below. On appeal to the Court of Appeals the General Term was reversed and the Special Term affirmed. Mr. Justice Allen says (p. 485): “In terms the undertaking does not restrict the liability of the defendants to the contingency of an affirmance of the judgment by the Supreme Court. The condition may as well refer to an affirmance by the judgment of any court to which the cause may go by appeal, or the final decision of the action in the court of last resort. There was no reason for making the undertaking effectual only upon the first appeal, and for the judgment of a court which was not necessarily final; and the statute and the undertaking given in pusuance of it have respect to the final determination in the court of last resort, or the last court to which the parties may take it by appeal. The cause is the same in every court, and the question in each is the same, to wit, whether the first judgment—that appealed from by the defendant’s principal—was erroneous and should be reversed, or was right and should be affirmed. The condition is in substance for the ultimate affirmance of the judgment appealed from.”

I have quoted thus largely from the opinion that the import of the decision may be clearly seen. There is no mistaking the language of the learned justice, and it puts it beyond all doubt, that the court intended to hold, and did hold, that the liability of the sureties continued until the final decision in the Court of Appeals.

A distinction might be drawn, if the language of the opinion admitted of it, between a reversal and an affirmance in the General Term. It might be said that as the sureties limited their liability to an affirmance by the General Term, which, so far as they were concerned, was a final determination, .they cannot be deemed to have stipulated for any further liability. According to-all the cases, upon an affirmance the sureties immediately became liable. Upon what principle, then, is that liability to be extended on proceedings which they did not institute, and in which they took no part 1 It may be different where the judgment is reversed. Then (as Mr. Justice Allen says), the contingency of an affirmance has not happened.

But, as I have said, .there is no mistaking the language in the case last referred to. It is sufficiently comprehensive to take in this' case, and we must follow it.

Seacord v. Morgan (3 Keyes 636) was an affirmance as to one only of several defendants, and the undertaking was held to be binding as to that one ; but it does not clearly appear that the plaintiff sought to recover the costs in the Court of Appeals. The undertaking, however, in that case was upon the appeal to the Court of Appeals, and I refer to it merely as approving Gardner v. Barney (ubi sup.).

Following these decisions, there was no error in allowing a recovery of the costs in the Court of Appeals.

We have examined the other exceptions taken at the trial, but do not find any error in the matter to which they relate.

The judgment should be affirmed.

Curtis, J., concurred.