Court Opinion

ID: 3614959
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:58:21.973357+00
Date Added: 2024-06-11T07:41:05.558524
License: Public Domain

The defense in this case would have been sound, if the facts proven had brought it within the rule of law applied upon the trial. It is settled that one of several original debtors can so contract with the others for their assumption and payment of the common debt as to acquire the rights of a surety, upon knowledge of the new arrangement being communicated to the creditor. (Millerd v. Thorn, 56 N.Y. 402; Colgrove v. Tallman, 67 id, 95; Calvo v. Davies, 73 id. 216.) This is not a rule which in any manner assumes to alter or modify the original contract or the common liability. That remains as an unchanged fact, and may be enforced as freely and perfectly as ever against all the debtors. The change effected is that as between themselves, one becomes a surety for the rest because of a valid agreement by which they become primarily liable for the debt and bound to pay it in exoneration of their associate, and this fact being fairly and fully brought to the knowledge of the creditor, he is bound to respect the rights of the debtor who had become a surety and acquired the right to protection as such. When, therefore, by the agreement of the debtors among themselves, it is sought to invest one or more of them with new equitable rights outside of the original contract by notice to the creditor of the later arrangement, it is not too much to require that such notice shall be definite and distinct, and so given as to fully and fairly apprise the creditor of the new agreement in fact made, and the changed attitude of the debtor claiming the rights of a surety.
That was not done in this case. Of the four tenants, all liable for the rent, two, Gill and Purdy, left the firm and the premises, and two, Cassidy and Flanigan, remained, having by a valid agreement with the outgoing partners assumed and agreed to pay the rent thereafter to accrue. If the fact of that agreement had been fairly communicated to the creditor the right of Gill and Purdy to be treated as sureties would have been established. But no such communication is shown. The only fact proven is that Cassidy informed the plaintiff's agent that Gill and Purdy were going out and Cassidy and Flanigan were to remain and pay the rent. No *Page 148 
agreement by which they were bound to do so made between themselves and Purdy and Gill, was in any manner communicated to plaintiff or his agent. The sole witness relied on is Cassidy. He testified: "I told Mr. Hand at the time that we were going to remain there, and we would pay the rent along. Ques. That is that you and Cassidy would pay the rent? Ans. Flanigan and I would stay there. Ques. And would assume and pay the rent? Ans. Yes, sir. Ques. And that Gill and Purdy were going away? Ans. They were going — yes, sir." And when, on cross-examination, he was asked to repeat exactly all that he remembered of this conversation, his answer was, "I don't know as I — I didn't — could not remember the exact conversation, what it was. The whole import of it was that Gill and Purdy were going out, and that we were going to remain." In all this there is an utter failure to prove the essential fact that the existence of an agreement between the partners by which Cassidy and Flanigan had become primarily bound to pay the rent was communicated to Hand. No such agreement is stated at all. Nothing is told inconsistent with the idea that the legal relation of Gill and Purdy to the common liability remained unchanged. That they were going out, that Cassidy and Flanigan would remain, that the latter would pay the rent, were the sole facts communicated, but there was nothing in them to indicate the existence of an agreement upon the dissolution by which the remaining partners were bound to pay the rent in exoneration of the retiring members of the firm, or to warn the creditor that such retiring partners had been placed in the position and acquired the rights of sureties.
The unsoundness of the defense, however, did not end here. Certain notes were given by Cassidy and Flanigan for rent in arrears, which it is claimed extended the time of payment so as to discharge Gill and Purdy, if indeed they had acquired the rights of sureties. While the defendants do prove that the notes were made to the order of Hand for the purpose of paying the rent, they do not prove their delivery to Hand at all. The latter, however, admits their delivery to him by Prentice, *Page 149 
the bookkeeper of Cassidy and Flanigan, but swears that when they were delivered he accepted them upon the express stipulation that the liability of Gill and Purdy should not thereby be released, and expressly reserving the rights and remedies of the plaintiff against them. There is no contradiction of this evidence, and the undisputed fact is that the notes were delivered and accepted upon the express condition referred to. Such arrangement did not discharge Gill and Purdy, even if we accord to them the rights of sureties. (Morgan v. Smith, 70 N.Y. 545; Calvo v. Davies,
73 id. 211.) The agreement, as was said by ANDREWS, J., in the case last cited, "does not operate as an absolute but only as a qualified and conditional suspension of the right of action:" * * "it is treated in effect as if it was made in express terms subject to the consent of the surety, and the surety is not thereby discharged."
It is apparent, therefore, that no defense to plaintiff's conceded claim for the rent was established, and no question of fact was raised to be submitted to the jury. And when, at the close of the evidence, the plaintiff's counsel asked the court to direct a verdict for the plaintiff for the amount claimed, which request was refused under exception, an error was committed, vital to the case, and for which the judgment should be reversed.
The judgment should be reversed; new trial granted, costs to abide event.
All concur except RAPALLO, J., absent.
Judgment reversed.