#### The London and Southwestern Bank, Limited, Appellant, *v.*William Nicholas White, Respondent.

First Department,

May 29, 1914.

Contract — agreement that confession of judgment shall be held in escrow — agreement by plaintiff to accept certain sum in full settlement of all claims—when entry of judgment on defendant’s confession premature.

The defendant, being indebted to the plaintiff, a foreign bank, deposited with it securities as collateral and left with it other securities for safekeeping. Thereafter the plaintiff recovered judgments against the defendant in the foreign country and upon the defendant coming into this State he confessed judgment in an action brought upon the foreign judgments. It was stipulated, however, by the parties that the confession of judgment should be held in escrow, if the defendant paid, in installments, a certain sum of money “in full settlement of plaintiff’s claim.” It was further provided that the defendant should execute transfers of the securities held by the plaintiff if necessary to enable the plaintiff to realize thereon. The confession of judgment and the foreign judgments upon which it was founded were to be assigned to the defendant, or his nominee, when the last installment was paid to the plaintiff.

*Held,*that by the stipulation the plaintiff agreed to accept the sum stated in full settlement of all claims, and although full payment had not been made, the plaintiff, having satisfied all claims due at the present time by selling the defendant’s securities, was not entitled to enter judgment upon the defendant’s confession, and a judgment so entered should be vacated.

Ingraham, P. J., dissented, with opinion.

Appeal by the plaintiff, The London and Southwestern Bank, Limited, from an order of the Supreme Court, made at the *740New York Special Term and entered in the office of the clerk of the county of New York on the 24th day of March, 1913, vacating a judgment against defendant, entered upon confession, with notice of an intention to bring up for review an order of reference made herein and entered in the office of the clerk of the county of New York on the 14th day of July, 1911.

*Edgar M.*Doughty, for the appellant.

*Charles Caldwell,*for the respondent.

Scott, J.:

The defendant prior to the year 1900 was engaged in business in London, Eng., and had become indebted to plaintiff. He had deposited certain securities with plaintiff as collateral for his indebtedness, and left certain other securities with it for safekeeping.

Early in the year 1900 plaintiff recovered judgments against defendant in England for upwards of £7,000. Defendant then came to the city of New York, where he engaged in business, and in February, 1905, plaintiff commenced an auction in this court upon the English judgments. Defendant answered alleging payment and setting up a counterclaim. Depositions were taken in London concerning the state of the account between plaintiff and defendant, from which it appeared that after the recovery of the English judgments plaintiff had realized upon certain of the securities deposited with it as collateral, and had thereby reduced defendant’s indebtedness to about £6,000. After some negotiations a settlement was arrived at, pursuant to which defendant executed and delivered to plaintiff’s attorney a confession of judgment for $29,040, with interest from June 1, 1906, together with $1,775 costs. It is one of the conceded facts that this sum represented the total claim "of plaintiff against defendant at the time the confession was executed. Contemporaneously with the execution and delivery of this confession a stipulation was entered into between the parties upon the construction of which depends the accuracy of the order appealed from.

In the 1st clause of the stipulation it was provided that the confession of judgment above referred to should be held in *741escrow by plaintiff’s attorney, and should not be entered or filed of record in any court by the plaintiff or its attorneys so long as the defendant performed the conditions of the stipulation as thereinafter specified. The 2d clause provided as follows: “ The defendant agrees to pay or to procure to be paid and the plaintiff agrees to accept, the sum of Seven thousand five hundred dollars ($7,500) *in full settlement of plaintiff’s claim,*which said sum of Seven thousand five hundred dollars ($7,500) is to be paid in equal installments of Seven hundred fifty dollars ($750) each.” Then follow provisions for the payment of said installments on the 1st day of Hay, 1907, and on each year thereafter, and for the running of interest on installments, the payment of which should be deferred.

The 3d clause provided for the payment of the costs, of which $650 was to be paid at once, and the balance in specified installments.

The 4th clause reads as follows: “The defendant shall execute any and all forms of transfer of the various shares now held by the plaintiff and any other documents that the plaintiff, or its attorneys may consider necessary to enable the plaintiff to realize upon the securities now in its hands held by it against the defendant, the forms of such documents, transfers and receipts to be prepared by the plaintiff or its agents, and defendant shall only be required to execute any such forms before a Notary Public for the County of New York or English Consul resident in the State of New York.”

The 5th and 6th clauses provided for the assignment by plaintiff to Alice L. White of the confession of judgment, and to defendant or his appointee of the English judgments upon the payment of the last installment of $750. It was further stipulated that defendant might anticipate the payment of the agreed sum and might have thirty days’ grace in the payment of any installment.

The defendant paid the first installment of $750, and made the first payment of $650 on account of the costs. He has not directly made any further payments, but the referee, to whom the matter was referred to take the evidence, has found that plaintiff has paid itself, or is properly chargeable with the proceeds of securities deposited with it by defendant, which *742should have been credited against plaintiff’s claim to an amount in excess of all the installments payable under the stipulation up to the present time, and leaving only' a little over seven hundred dollars due upon the whole amount which plaintiff agreed to accept. This result is arrived at by charging plaintiff with the value of certain securities transferred by plaintiff before the confession of judgment but for which defendant was not given credit at the time the confession was executed, and by further charging plaintiff with the proceeds of securities sold by it since the execution of the confession. The referee’s calculations appear to have been carefully made and have been approved by the Special Term and we, therefore, accept them. The decisive question is as to the meaning of the stipulation above recited. If it means, as defendant contends, and as appears to be the plain purport of its language, that plaintiff agreed to accept $7,500, if paid as provided in the stipulation, in full settlement of its whole claim against defendant, the order appealed from is right and must be affirmed. In our opinion this is the unmistakable meaning of the stipulation. Not only did plaintiff agree in plain terms to accept this sum “in full settlement ” of its claim, hut it also agreed that when that sum should be paid both the confession of judgment and the two English judgments which constituted the very foundation of the claim should be assigned to defendant or his nominee. The plaintiff relies upon the 4th clause of the stipulation as indicating that the real agreement was that defendant should not only pay $7,500, but should also make over absolutely to plaintiff all of his securities of every kind then in its hands. This intent is certainly not clearly expressed and we do not think it is to be read into the stipulation. It appeared in evidence that as to certain of the securities held by plaintiff they were valueless as collateral because they could not be realized upon owing to the lack of formal transfer, such as it is customary to append to negotiable securities deposited as collateral for a debt. As we read the 4th clause it did nothing more than to provide that defendant should execute the necessary transfers so that the securities might become available in plaintiff’s hands as security for defendant’s undertaking to pay the amount it had been agreed *743that he should pay. To read the clause as plaintiff would have us read it would lead to the result that in case of default in payment of a single installment plaintiff would be entitled to judgment for the full amount of its claim and in addition to the proceeds of all of defendant’s securities.

If we are right in our construction of the stipulation and the referee’s computations are accurate as they appear to be, the order appealed from must be affirmed, with ten dollars costs and disbursements.

Laughlin, Clarke and Dowling, JJ., concurred; Ingraham, P. J., dissented.

Ingraham, P. J.

(dissenting):

I dissent. The plaintiff has recovered in England two judgments against the defendant on which there was due about $29,000. The action in this State was brought on those judgments for that amount. The parties then settled the action by a stipulation, by which the plaintiff agreed to accept in full settlement of the claim the sum of $7,500, payable in installments, and as part of that settlement the defendant agreed to “execute any and all forms of transfer of the various shares now held by the plaintiff and any other documents that the plaintiff, or its attorneys may consider necessary to enable the plaintiff to realize upon the securities now in its hands held by it against the defendant.”

As I understand it, it is not claimed by the defendant that this sum of $7,500 paid the amount of the judgments which was actually due to the plaintiff at the time the settlement was made. It seems to me clear that this sum of $7,500 was to be paid in excess of the securities which the plaintiff held and to which by the settlement it became entitled, and the balance of $7,500 was to be paid in addition to what the plaintiff received from the sale of the securities.

I think, therefore, the defendant was in default and plaintiff was entitled to enter the judgment, and the judgment should not be vacated until the amount actually due the plaintiff has been paid.

Orders affirmed, with ten dollars costs and disbursements.