Case Name: Elizabeth A. Culliford, Respondent, v. Theodore C. Walser and Peter McHugh, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 3 A.D. 266
Docket Number: 
Parties: Elizabeth A. Culliford, Respondent, v. Theodore C. Walser and Peter McHugh, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 3
Pages: 266–273

Head Matter:
Elizabeth A. Culliford, Respondent, v. Theodore C. Walser and Peter McHugh, Appellants.
Sureties— relative liability of sureties on a bail bond and on an undertaking on appeal—subrogation of the latter to the plaintiff!s claim against the former — action by the plaintiff on behalf of the latter—what is not a payment of a ' judgment.
In an action in which an order of arrest was procured, against the defendant Montgomery Gadd, Theodore O. Walser and Peter McHugh became bail in the sum of $1,000; judgment was obtained against Gadd, from which he appealed tó the General Term and to the Court of Appeals, in both of which courts the . judgment was affirmed; executions against property were issued upon the judgments in each court, and were returned unsatisfied; executions.against, the person of Gadd were issued upon the several judgments, each of which was returned as not found.
Upon the appeal to the General Term Gadd gave an undertaking ¡to stay proceedings in which Cornelius 0. Ellis.and Franklin Wand were sureties, and before the appeal to the Court of Appeals was perfected the plaintiff began an action against Ellis and Wand upon their undertaking, in which Ellis only was served, against whom judgment was entered by default for the amount of the recovery against Gadd; together with the amount of the judgment at General Term and the costs. This judgment, which has never been paid, was obtained while the appeal to the Court of Appeals was pending, and during that period the plaintiff issued an, execution upon the judgment recovered against Ellis, and made a levy upon his real property. Ellis moved to open his default and the court made an order (which was disregarded by both parties) that, upon the payment by him of this judgment, the plaintiff should assign his judgment against Gadd entered upon the recovery, and the judgment of affirmance at the General Term, together with any cause of action which he might have upon the bail bond. Thereafter the attorney for Ellis, paid to the attorney for the plain"tiff a sum of money about equalling the judgment entered against Ellis, and it was agreed that the action then pending upon appeal against Gadd should be prosecuted to a final determination for the benefit of Ellis, and that thereafter an action should be brought by and in the name of the plaintiff, upon the bail bond for her benefit and that of Ellis, and that the plaintiff should account to Ellis for any moneys received by her; thereupon the sheriff released his levy upon the real property of Ellis.
Upon an appeal from a judgment in favor of the plaintiff and against the sureties upon the bail bond brought in pursuance of such agreement,
Held, that the action could be maintained;
That the primary liability to pay rested upon Gadd;' that the defendants had contracted that if he were defeated they would render his body amenable to process or would pay the judgment, and that as they had done neither and Gadd had paid nothing the defendants were liable to the plaintiff upon the undertaking;
That the payment by Ellis, who was not in privity with the defendants, did not affect their liability nor pay the debt of Gadd unless it was so intended; that an intention to work such a result must be clear or the liability would remain where it primarily belonged;
That when Ellis paid he became subrogated to all the rights which the plaintiff had or could enforce against the defendants, the primary debtors;
That upon the facts it was clear that the plaintiff had not been paid twice; that, in substance, the plaintiff had accepted some money from Ellis, and had agreed with him that she would prosecute the present action for their joint benefit and account to him for anything she might receive;
That as the plaintiff had never been paid her judgment for costs in the Court of Appeals she had a direct interest in the present action, in the prosecution of which she was also to be regarded as the trustee of an express trust.
Appeal by the defendants, Theodore C. Walser ana another, from a judgment of the Supreme Court in favor of the plaintiff:, entered in the office of the clerk of the county of Richmond on the 27th day of July, 1895, upon the decision of the court rendered after a trial at the Richmond Circuit before-the court without a jury.
John A. Grow, for the appellants.
F. Spiegelberg, for the respondent.

Opinion:
Hatch, J.:
Plaintiff instituted an action against one Montgomery Gadd and procured to be issued therein an order of arrest upon which the per son of GadcL was taken in custody by the sheriff. For the purpose of procuring his release from custody, defendants executed an undertaking of bail in the sum of $1,000, whereby they jointly and severally Undertook, pursuant to the statute, that the said Gadd should at all times render himself amenable to the process of the court during' the pendency of .the action, and would at all times render himself amenable to any mandate which might be issued to enforce final judgment against him in the action. Final judgment was obtained against Gadd and duly entered. From this judgment he appealed to the General Term, where the same was affirmed, and judgment of affirmance, with costs, entered. From this determination he appealed to the Court of Appeals. This appeal was dismissed for fraud in the undertaking given to stay proceedings, and a judgment for costs was entered upon the dismissal. Subsequently lie filed a.new notice of appeal to the Court of Appeals, and procured the execution of a new undertaking staying proceedings. This appeal was heard upon the merits, and resulted in a judgment of affirmance, with costs, and judgment was dul-y entered thereon. Intermediate the dismissal of the first appeal and the perfecting of the new one, property executions were issued upon the three judgments first referred to, and all were returned unsatisfied. Upon the affirmance of the judgment in the Court of Appeals a property execution was issued upon the judgment entered therein, which was returned unsatisfied. Thereupon the plaintiff issued executions upon all of the judgments against the person of Gadd, and they were each returned by the sheriff as not found.
Upon the first appeal to the General Term Gadd procured to be executed an undertaking staying proceedings with Cornelius C. Ellis and Franklin Wand as sureties therein. On the. day before the last appeal was perfected in the Court of Appeals by the filing of the undertaking, plaintiff commenced an action against Ellis and Wand as sureties upon this undertaking. Service of the summons therein was made only upon Ellis; he made default, and judgment was entered against him for the amount of the recovery against Gadd, together with the sum entered in the judgment of affirmance at the General Term, and the costs of the action. This judgment was obtained and entered during the pendency of - the last appeal in the Court of Appeals, and now remains wholly unsatisfied of record, Rone of the judgments obtained against Gadd have ever been paid, and the same now remain undischarged of record. Prior to the affirmance of the judgment in the Court, of Appeals, and while the apj>eal was pending therein, plaintiff issued an execution upon the judgment recovered against Ellis, under which a levy was made upon his real property and the same was advertised for sale. Thereupon Ellis made' a motion to open his default and for leave to file an answer. The motion was denied, but an order was entered providing that upon payment by him of this judgment, with interest, disbursements and sheriff's fees upon the execution, .the plaintiff assign the judgment against Gadd entered on the recovery and upon affirmance at the General Term, together with any cause of action the plaintiff may have against the present defendants upon the undertaking now the subject of consideration. Both parties disregarded this order, and thereafter the attorney for Ellis paid to plaintiff's attorney a siim of money about equalling the judgment entered against Ellis, and the parties agreed that the action then pending upon appeal against Gadd should be prosecuted to a final determination for the benefit of Ellis, and that thereafter this action should be brought by and in the name of plaintiff for her and Ellis' benefit, and that plaintiff should account to Ellis for all moneys received by her. Thereupon the sheriff was directed by plaintiff's attorney to withdraw the executions, and upon the payment by Ellis of the expenses and fees the same was withdrawn and the levy released.
However involved and complex the various steps and proceedings which have been had, make this case, it appears with absolute clearness that the primary liability to pay rested upon Gadd, and when judgment was rendered against him it was. the contract of. defendants that they would render his body amenable to process, or in default thereof pay the judgment, not exceeding the sum stated in the undertaking. This was the primary liability as between the parties hereto. (Code Civ. Proc. § 575 ; Metcalf v. Stryker, 31 H: T. 255-257.) And the fact remains that up to the present time neither Gadd nor the defendants have paid anything, although the judgments against the former remain in full force and vigor, and defendants have at no time produced his body amenable to process. When plaintiff proceeded against the sureties in the undertaking on-appeal it did not affect the liability of Gadd to pay the judgment, and defendants, by virtue of their contract as bail, were under the same obligations to pay after their liability became fixed, to the extent of their undertaking. When Ellis paid it did not work-a discharge of their liability or affect their undertaking, or discharge the debt of Gadd, unless it was so intended. There was no' privity between Ellis and the defendants; he paid to relieve himself from liability on the judgment, not to discharge the judgment against Gadd or relieve defendants. This position finds support in Madison Square Bank v. Pierce (137 N. Y. 444); Mechanics' Bank v. Hazard (13 Johns. 352).
It is said, that these cases do not.apply to the present case, for the reason that the question arose between principal and surety and not between surety and bail, and a distinction is sought to be made between sureties and bail. But it has been said that " bail are sureties, with the rights and remedies of sureties in other cases." (Toles v. Adee, 84 N. Y. 222.)
The facts found and the evidence disclosed that there Was no intention upon the part of plaintiff or Ellis that his payment should operate as a discharge of deféndants from liability. The intention to work such a result must be clear, otherwise the liability remains where it primarily belongs. (Ontario Bank v. Hallett, 8 Cow. 192 ; Dunford v. Weaver, 84 N. Y. 445 ; Muller v. Eno, 14 id. 597-605.)
When Ellis paid he undoubtedly became subrogated to all the rights which plaintiff had or could enforce against the primary debtors. The judgment and undertaking were not affected by the act of Ellis in releasing himself.' They survived and remained available -to him as to the plaintiff in the action. (Townsend v. Whitney, 75 N. Y. 425.)
We quite agree with the claim that plaintiff " cannot have- two satisfactions." But because plaintiff cannot have this advantage it does not relieve the defendants from paying once the amount they have contracted to pay. Upon the facts it is quite clear that plaintiff is not to be paid twice. She has not assigned any judgment nor her right of action against the defendants, nor has either she or Ellis assumed to discharge defendants' from liability. What has been done is this: She has accepted some money from Ellis,, and has agreed with him that she will prosecute this action for the joint benefit of both, accounting to him for what she receives in the end. Both have an interest. ; It appears that she has never been paid her judgments for costs on the dismissal and costs on the affirmance of the judgment in the Court of Appeals, and they were not mentioned in the order requiring her to assign. These judgments remain undischarged and so far as appears, unimpaired by any agreement with Ellis. Therliability of defendants is continuous fcr any judgment that may be obtained against Gadd to the extent of the undertaking. (Appleby v. Robinson, 44 Barb. 316.)
She has, therefore, a direct interest in the prosecution of this action. It may be as stated that she has received all the money that she is likely to receive, but that is not equivalent to saying that she is without interest. Because a part of the money is to go in payment of legal expenses does not deprive her of interest as the presumption is that she is personally liable for the expenses of her lawsuit. In any event, whether she prosecutes for herself or as trustee for Ellis, or as she does in fact in both capacities, she is brought within the provisions of the law authorizing her to maintain the action. (Code Civ. Proc. § 449 ; Madison Square Bank v. Pierce, 62 Hun, 493.)
Defendants are not prejudiced by this result. By the terms of them undertaking they are required to pay $1,000 and no more. They are required to pay but once. When they have done that they erect a complete barrier to any further demands upon them on account of this undertaking. Whether plaintiff gets the whole, a part or nothing is of no consequence to them and is a matter in which they have no interest. As between plaintiff and Ellis questions may arise, but that is no concern of defendants, as they cannot be injured thereby.
We have examined the other questions raised by the appellants, but find no error therein. The judgment appealed from should be affirmed, with costs.
All concurred.
Cullen, J
I thin it clearly settled in this State that a payment by the surety to a creditor does not satisfy the debt, but the debt itself remains outstanding, to be enforced by the sureties against all persons from whom he may obtain satisfaction, except those whose equities are paramount to his own, This action can, therefore, be maintained by this plaintiff not only for the amount still due her on her judgment, but also for the benefit of the surety on appeal, who has paid her a part of' that judgment, provided that the equities of the surety are greater than those of the bail.
Bail, in one sense, are sureties. This is settled by authority. (Rathbone v. Warren, 10 Johns. 587.) The general rule is that, as between' earlier sureties and later sureties whose suretyship has caused a stay of proceedings, the later sureties are primarily liable. So in Hinckley v. Kreitz (58 N. Y. 583) it was held that the sureties on an undertaking to the Court of Appeals were liable to pay the judgment appealed from, as against the sureties on the undertaking to the General Term. In Burns v. Huntingdon Bank (1 Pen. & Watts [Pa.], 395) it was held that a surety who gave bail to obtain a stay of execution on a judgment against the principal wat liable as between him and the sureties on the original obligation of the principal. So also in the case of a joint judgment entered' against principal and surety, where another person became surety to stay execution against the principal; it was held the original surety was entitled to subrogation to the judgment and might recover against the surety on the stay. (Schnitzel's Appeal, 49 Penn. St. 23.) The ground of this rule is stated by the Court of Appeals in Hinckley v. Kreitz (supra): " That the later surety suffers no injustice in being obliged to do what he has agreed; and that his equities are subordinate to those of the original surety, because his interposition may have been the means of involving the first surety in' the ultimate liability to pay." Under this rule, I am not prepared to say. that in certain cases bail or other sureties on obligations pending the action may not have superior equities, to those of the subsequent sureties on appeal from final judgment. The undertaking of bail, under subdivision 2, section 575 of the Code, is that the defendant will deliver the chattel and pay any sum recovered against him. From that obligation the bail can only be discharged by the satisfaction of the final judgment either by themselves or their principal. Any stay obtained by their principal would, therefore, necessarily extend the duration of their liability. But other bail,, under section 591, can at any time exonerate themselves by a surrender of their principal. The stay on appeal, obtained by the undertaking, no wise limits or prevents the exercise of this right. The only case that I can see in which hail might be injured by the stay, would be one where the principal would be inaccessible, yet might have property from which the bail could realize the amount of their lia^ bility on the judgment.
In Rathbone v. Warren (supra), it was held that an agreement by the creditor that he would not issue execution against the body of the debtor before a specified time, discharged the bail from liability; but that decision, as I understand it, was based on the particular facts of the case; that by the' extension the defendant had been enabled to escape to a foreign country.- It is not authority for" the proposition that an agreement to forbear the issue of process for -a specified time will discharge the bail.
I am, therefore, of opinion that to relieve the bail from liability to a surety op. appeal, who has paid the judgment, it is necessary for the bail to show affirmatively, by proof, that they have been damaged by the delay caused by the stay. As no proof to that effect was given on the trial,, the defendants were justly held liable.
The judgment appealed from-should be affirmed, with costs.- -
Judgment affirmed, with costs. .