15 Wend. 502 | N.Y. Sup. Ct. | 1836
One of the grounds on which the defendants moved for a nonsuit was, that the plaintiff was bound to prove a demand upon Gibb'ons for the payment of the money secured by the bond and mortgage, and that notice of the non-payment had been given to Eckford, or his executors.. In actions upon the contract of guaranty it is sometimes necessary to aver and prove a demand of payment from the principal debtor, and notice of the non-payment tó the guarantor. Mechanic Ins. Co. v. Ogden, 1 Wendell, 137. Douglass v. Reynolds, 7 Peters, 126. 3 Wheaton, 154, note. But I think no demand was necessary in this case. The bond and mortgage of Gibbons were dated on the 2d of December, 1825, and the money was payable on the 2d of December, 1826. On the previous 17th of July, Eckford’s bond was executed, and was conditioned that Gibbons should punctually satisfy and pay themoney. The undertaking was absolute th&tGibbdns should pay at the specified time; and there was nothing either in the terms of the contract or the nature of the transaction which impose^ on the .creditor the duty of seeking the principal debtor. Allen v. Rightmere, 20 Johns. R. 365. Although a surety is in some things favorably regarded in the law, his contract, like that of every other person, must be interpreted . according to its natural and most obvious import. If he make an unconditional engagement for the act of a third person, the contract will be broken if that person fails to do the act. A qualification of the agreement, though not expressed in terms? may sometimes be inferred from the special circumstances of the case; but here there is no ground for such an inference?, The obligor agreed that his bond should be forfeited if Gibbons did not pay at the day. He might have limited his undertaking in such a manner that he would only be answerable for any deficiency after a foreclosure of the mortgage, and a resort to Gibbons on his personal obligation; but he has. made a different contract, and must abide the legal consequences. It was his duty to pay the debt immediately on the default of the mortgagor; and then he wduld have been substituted in the place of the creditor, with the right to resort to Gibbons on the bond and mortgage for his indemnity. Classon v. Morris, 10 Johns. R. 539. Hayes v. Ward, 4 id. 129.
There is still another answer to the objection that no demand upon Gibbons was proved. If a demand had been averred in the declaration, the plaintiff would not have been bound to prove it. The plea of non estfactum puts in issue nothing but the execution of the deed on which the action is brought; and, as a general rule, neither party can be either required or permitted to go beyond the issue joined. 10 Johns. R. 47. 12 id. 337. 14 id. 89. 9 Cow. 307. 10 Wendell 202.
The next ground for asking a nonsuit was, that the plaintiff had not produced the bond and mortgage of Gibbons, nor accounted for their non-production. I can perceive no foundation for this objection. The plaintiff had not counted upon
The only remaining ground on which the motion for a non-suit was made is, that the plaintiff had not shewn any title in the- Western Insurance Company to the bond and mortgage of Gibbons. What was meant by this general objection, when it was taken on the trial, or how the circuit judge un
Although the question growing out of the place where the business was transacted had not arisen at the time of the motion for a nonsuit, evidence on that subject was given near the close of the trial, and the judge may have intended to decide it in his charge to the jury that the plaintiff was entitled to a verdict. It may therefore be proper to examine it; and although the right of the defendants to raise the other question discussed on the argument may be doubted, I will consider that also. Had the Western Insurance Company power to take the bond and mortgage ? The company was incorporated in 1817. 4 Laws of N. Y. 192, (b). The capital was not to exceed $400,000. The corporation was made “ capable of purchasing, holding and conveying any estate, real or personal, for the use of the said corporation, subject to the restrictions herein after mentioned.” §1. The restrictions were
Did the fact that these securities were taken at an office kept by the company, in New-York render the transaction illegal ? This is not like the case of The People v. Geneva College, 5 Wendell, 211. The college was founded for the education of youth in the village of Geneva, and they claimed as a franchise the right to establish a medical faculty in the city of New-York. The court held that they had no such right. In the case under consideration the name of the corporation is, “-The Western Insurance Company of the Village of Buffalo; subscriptions to the capital stock were to be opened in that place; notice of the first election was to be given, and the elections for directors were to be held in that village. Beyond this there was nothing to fix the location of the corporation. Whatever limitation in relation to other matters may be implied, I think the company might loan its capital on bond and mortgage in any part of the state; and the fact that the business was transacted at an office kept by the company in Neio-York, will not invalidate the securities. It does not appear that the office in New-York was established for the purpose of banking, or doing any other act beyond the powers of the corporation ; and should it be granted that the'company had no right to keep an office in New-York for any purpose, still, if the act of taking the bond and. mortgage at that place was in itself legal, I doubt whether it could be avoided merely because the business was transacted in an unauthorized office. The defendants should, at the least, have proved that some business was done at the
Another question was mentioned on the argument, to wit, that the company had no power to take from Mr. Eckford this collateral undertaking for more effectually-/ securing the payment of the money mentioned in the bond and mortgage. But as this point does not appear to have been made or even hinted ai on the trial, I do not think it should be considered in this place. There can never be an end of legal controversies, if the parties are permitted to discuss questions in a court of review, which they omitted to make at the proper time.
The decision of the judge in relation to the amount of damages to be assessed was correct. As the condition of the bond was not simply for the payment of money by the obligor, it was necessary to assign a breach. It was a collateral undertaking for the act of a third person. 2 R. S. 378, § 5. The act to be performed by Gibbons was the payment of a specified sum of money at a particular time. The declaration alleged that he had not paid it. The defendants did not plead to or in any way deny the allegation ; and, according to well established principles in relation to pleadings, the fact of non-payment was admitted. There could be no question about the extent of the plaintiff’s damages. He was entitled to the specified sum, and would have recovered that amount, if he had not laid his damages at a smaller sum in his declaration, and if he had not voluntarily consented on the trial to limit still further the extent of his recovery. This bond was not like one conditioned to build a house, or do any act other than the payment of money. In cases of that description, the jury cannot see from the condition itself, nor ascertain by mere computation what damages the plaintiff has sustained ; and evidence on that subject must therefore be given, if the party wishes for any thing more than nominal damages. The cases already referred to sufficiently prove that the plea of non est factum, standing alone, admits every material allegation in the declaration, except the execution of the deed on which the action is founded. If the debt of Gibbons had been paid either in whole or in part, the defendants should have pleaded or given notice of that fact; and
The decision that the defendants could not inquire into the original consideration of the bond and mortgage of Gibbons, or prove them usurious, was clearly right. The plaintiff is not seeking to enforce those securities, but the contract of Mr. Eckford, by which he engaged that the money mentioned in the bond and mortgage should be paid. If the bond and mortgage were void for usury, Mr. Eckford, who was the president of The Life and Fire Company, may probably have known it; but there is no evidence that The Western Insurance Company knew it. That company took a contract which covered all contingencies by which they might fail of receiving the money from Gibbons. Such a contract the testator made; and he might as well set up the defence that the mortgage estate was inadequate to pay, or Gibbons insolvent, as
The judge decided that evidence'was inadmissible to show that the transfer of the bond and mortgage of Gibbons by The Life and Fire Company' was made in contémplation of insolvency. The act to prevent fraudulent bankruptcies by incorporated companies, Laws of 1825, p. 448, declares void all transfers and assignments of the property of, a corporation made in contemplation of insolvency. § 6. But the act was made for the protection of the creditors of the corporation. It avoids all preferences, and secures an equal distribution of the property among the creditors, in case of insolvency. § 17. The - act contains some few provisions for the safeguard of stockholders against the unwarrantable acts of the officers of a corporation ; but the leading object was the protection of credi-' tors. Upon what principle, then, can the defendants set up this objection ? Eckford was not a creditor; he was one of the actors in making this transfer. The transfer, if void, is void as against the creditors of The Life and Fire Company; but they do not complain. The defendants do not'represent them, and cannot, I think, be allowed to stand on this defence. It is not unlike the case of a deed made to defeat creditors, which is good as against the grantor and all others who are not creditors. If the assignment was made in contemplation of insolvency, there was no offer to prove that the- officers of The Western Insurance Company knew that fact; and I remark once more, that they took a contract which covered all the contingencies by which they- might fail to receive the money from Gibbons. It may be proper here to notice that the defendants, notwithstanding the decision of the judge, afterwards gave evidence on this question; but it was evidence directly contradicting the pretence that this assignment was made in contemplation of insolvency. They read the answer of The Western Insurance Company, which stated that the transfer was made before The Life and Fire Company stopped payment, “ and while the said company, its officers and agents, contemplated, and intended to continue its pay-
The mere want of such a consideration for a deed as would be necessary to support a simple contract is not a sufficient ground for setting aside the obligation in a court of equity. Indeed, voluntary contracts have been enforced by decrees for specific performace. Villers v. Beaumont, 1 Vern. 100. Beard v. Nuthall, id. 427. Bunn v. Winthrop, 1 Johns. Ch. 329. Osgood v. Franklin, 2 id. 23. Where an executory, contract is entered into for the sale of property, it is evident that the parties contemplated a consideration—a. quid pro quo; and the inadequacy of price may be so gross that it will amount to evidence of fraudbut if a man make a voluntary conveyance of his property without any circumstance of fraud or un
I ami strongly inclined to the opinion that the obligor was estopped by his deed from setting up the defence of a partial want of consideration. The evidence offered was to show that only 13,500 was paid by The Western Company to The Life and Fire, for the bond and mortgage of Gibbons. The bond of Edf odd recites that The Western Company ha.d paid the money for the bond and mortgage of Gibbons, Piad mentions the amount secured, viz. $s25,00Q'; and then the condition is, that Gibbons shall satisfy the amount paid by the Western Company, being the amount mentioned in the bond of Gibbons. Here was the admission under seal of a particular fact by the party, and I doubt whether he was afterwards at liberty to controvert it. Wittes, 9. 'But it is unnecessary to decide that point in this case.
-1 think there is no sufficient ground for disturbing the verdict.
New trial denied.