Thomas v. Woods

4 Cow. 173 | N.Y. Sup. Ct. | 1825

Woodworth, J.

The defendant assigned to the plaintiff a bond and mortgage against Joshua Streeter";' and Covenanted, that in case the plaintiff should not be able to procure or enforce payment, at the- times and in the man ner therein specified, by due process of law, the defendant would be. accountable to him for such sum or sums of money as should- remain- due.

The Bond bears date the 8th-February, 1809; and is conditioned" for the payment of $1200, with interest, to commence the 1st April thereafter"; $500, payable March 1st, 1814 ;■ $400;.on the 1st March, 1-818-; and- $3Q0;-March- 1st, 1822; the interest payable annually tin the 1st March in each year.

This" action- is- commenced- to recover the balance of principal aiid interest due on the 1st March-, 1818. The declaration avers,.that tin the- 1st March, 1814,, $913 became due ; that a suit was commenced: against Streeter in tho Supreme-Court;, and judgment obtained in October term, 1814;: that a testatum fieri facias issued to the Sheriff of Washington,-Where Streeter resided, who returned that the defendant"hadmo goods or chattels, lands- or tenements.- It also avers, that the'plaintiff foreclosed the mortgage, and sold the mortgaged- premises, December 30; 1814, for- $905 ;. and after deducting: $50 84 for costa, there remained $829 49 to be applied to" the mortgage. The next averment states, that" óñ the 1st March,, 1818,. $420 30-became due, over and above the sum before received, and that the plaintiff issued an alias fieri facias to the same county, which was returnéd in like manner as the first. The declaration then alleges that Streeter was insolvent, and had been so since March 1st, 1814, and that the defendant had notice of the proceedings against him, and Of his insolvency.

The defendant pleaded non est factum, and that the plaintiff might have enforced payment, by due process of law, and took issue as to the insolvency of Streeter.

The verdict was taken, by consent, for $586 86, subject to the opinion of the Court, the amount to be reduced if ñecessary to such sum as the plaintiff is entitled to recover.

At the trial, the bond was given in evidence; and by the endorsements on the back, it appears that the interest for 1810, 1811 and 1813, except 36 cents, was received; but there is no evidence that the interest for 1812 had been paid by Streeter, or that any prosecution was commenced previous to 1814. For this omission, the defendant contends that the plaintiff lias not complied with the contract, and consequently, that he is exonerated. There is no doubt that the defendant is not liable for the interest of 1812, by reason of the neglect to prosecute for upwards of two years thereafter. When this interest fell due, the plaintiff, to whom it was payable* had a right to receive it from Streeter, or remit it to him, or, if he chose, to forbear a prosecution, and thereby incur the risk of loss, by exonerating the defendant to that extent. He was authorized so to do* within the fair construction of the assignment. It is immaterial to the defendant, provided no claim for its payment can be enforced against him. It would be a forced and unnatural construction, to suppose the parties intended, that nothing short of actual payment should suspend a suit against Streeter, although the same object was attained, so far" as the defendant is concerned, if the plaintiff' by any other act relinquished his hold upon him. I apprehend this objection cannot be supported upon any principle" of aw or justice.

In Ten Eyck V. Tibbets, (1 Caines, 427,) the oond assigned was payable by instalments; the .plaintiffs covenanted to use all due diligence, and to take all legal measures by prosecution at law. The first instalment was payable May 1, 1798, but no action was commenced until May 1,1799, when the second became due. In the action to recover against the assignors, no notice was taken of the first instalment; the plaintiffs did not claim to recover it of the defendants; but among other things it was urged by them, that it was the duty of the plaintiffs, to have proceeded, and that if the instalment had not been paid or sued for, the plaintiffs lost all right to look to the defendants for any future sums. The objection was not regarded. Thompson, Justice, says, “ it is a sufficient answer to say, that no demand is made of the defendants for that instalment ; any delay or laches of the plaintiffs in this respect can only be alleged when a demand is made upon the defendants.” On this point Radcliff, Justice, concurred, and Lewis, Chief Justice, seems not to have noticed the objection.

The action against Streeter was not commenced until May vacation, 1814. It is contended that it ought to have been commenced previous to that term. By the terms “ due process of law” I understand all ordinary legal measures, prosecuted with good faith. In considering the question of due diligence, I think it relevant to look at the testimony relative to Streeter’s responsibility in April, 1814. He had been Jailer and Deputy Sheriff a number of years. Sheriff Doty testified that as early as 1814, he was unable to pay his debts; he did not know that he orvned any real estate; since that time he has had but trifling personal property, and that generally covered by execution; and that he had no other means of supporting the prisoners, than with the money paid him by the county. One witness thought that in 1814 and 1815 a judgment of $ 100 might have been collected; but several other witnesses stated that he had been reputed to be insolvent from the time he AVent to Philadelphia with a drove of horses, Avhich appeared to be previous to the last war. Another witness thought if the judgment had been obtained in August term, instead of October, and a ca. sa. issued after a ft. fa. the debt could not have been collected.

These facts render it highly probable, that had the suit been commenced on the 1st April, 1814, the result would have been the same. Do they not show reasonable diligence in point of time ? Every question of due diligence must be decided by a view of all the facts and circumstances. What would be a Iach in one case, might be reasonable diligence in another. It will not be contended that due diligence requires a prosecution to be commenced, in every case on the day the money is payable. If a party intends that, he will guard his contract as in the case before cited, where the plaintiffs covenanted to prosecute “immediately after the several sums of money became due.” There is no such stipulation in this case. I entirely concur with the reasoning of Mr. Justice Thompson on this point, in the case cited. He observes, “ if there were any circumstances, whereby any loss might probably be sustained for want of due diligence in procuring payment of the first instalment, it might have been proper evidence for the defendants to have availed themselves of, on the issue with respect to due diligence.” I think the evidence satisfactory, that no loss has thereby been sustained. A reasonable discretion as to time was intended to be vested in the plaintiff by the language of the assignment; the strict construction contended for by the defendant would, I apprehend, be a departure from the obvious import. I conclude, then, that the plaintiff is not chargeable with neglect by omitting to commence the action until May vacation, 1814.

The case of Moakley v. Riggs, (19 John. 69,) is not applicable. There the defendant undertook that the note was good and collectable after due course of law. The plaintiff sued the endorsers, but not the maker, and averred that the maker was discharged under the insolvent act, 17 months after the note became due. The defendant demurred, and the Court held that this neglect discharged the defendant. Whether the maker was possessed of property during the 17 months did not appear. They could not presume that he was not, .nor could they say the money might not have been collected if a suit had been instituted when the note fell due. They were not called on to express an opinion, whether the plaintiff could pass a term with safety; for, however that might be, there was no doubt that 17 months would discharge from the guaranty. The expression, that a term should not have been lost, may be regarded in that case as an obiter dictum. Admitting, however, that it is to be considered as authority, it must be understood as applicable to the case then under consideration, where there was no evidence to show that the money could not have been collected by due course of law. It would not, I apprehend, have been laid down as a rule, had the facts corresponded with this case. In the case of Kies v. T. & S. Tifft, (1 Cowen, 98,) the facts were these: the defendants gave a note to the plaintiff, payable February 1,1820, and the plaintiff assigned to the defendants a mortgage against Lewis and Tifft, the last instalment of which was payable on the same day. By a condition to the note under written, the defendants agreed that if the mortgage should be collected by thé time set forth, then tire note to be payable at the time therein specified; if not, the note was not payable until the money was collected on the mortgage by due course of law. It did not appear that the defendants had ever prosecuted Lewis, the mortgagor. On the 8th August, 1820, Kies commenced his action on the ground that the defendant had not used" dúé diligence. It was not pretended that Lewis was not of sufficient ability to pay. The Court held that the defendants, were liable, that they ought not to have suffered a term to pass without a prosecution, particularly as they ,vere so directed by the plaintiff. This case is also clearly distinguishable from the present. There was no insolvency of the mortgagor proved,, or that he was destitute of property, nor that the premises mortgaged were not abundantly sufficient to' satisfy the debt. No cause is assigned for not prosecuting". The" inference is, that the defendants did not elect' so to do, áñd consequently could have no well founded complaint for being held liable to pay the note.

The next objection is, that the plaintiff has not preved notice of the proceedings to the defendant, and a demand of payment. The declaration avers notice of the proceedings against Streeter and his insolvency; the truth of this aver ment is admitted by the pleadings. By the plea of non est factum, the execution of the instrument only is put in issue; all the other material facts are .thereby admitted. (10 John. 47.)

The other pleas put in issue the solvency of Streeter, and that the plaintiff might have enforced payment by due process of law. The averment of notice is not traversed. It was, therefore, unnecessary to offer further evidence on that point, at the trial. The liability of the defendant rested on this, that the plaintiff had done all that the covenant required of him.

If the facts, of which the defendant was notified, are, in judgment of law, sufficient to charge him, then his duty required him to pay without a demand. By the express terms of the covenant, he is to pay, if the plaintiff cannot obtain payment by due process of law. After knowledge of this, to insist on a demand, is to make a requisition not required by the contract. There is a difference between a mere duty and a collateral sum. Where the first is promised to be paid on request, no actual request is necessary; but it is, on a promise to pay a collateral sum upon request; and had the contract in this case contained that stipulation, the plaintiff could not recover without proving it; but it is not provided for, and was, therefore, unnecessary to be proved. (1 Saund. 33.)

It is also objected, that the facts proved on the trial do not show that the money could not have been collected of Streeter in 1814. I have, in some measure, anticipated this objection. It may safely be conceded that they do not conclusively establish that fact, but do they not remove all reasonable doubt on this subject, and satisfy the mind, that m the exercise of a sound discretion, the plaintiff might well consider it immaterial whether a suit was commenced a term sooner or later 1 If there is sufficient ground for deeming the difference of time immaterial, which I think there is, then there was no want of due diligence in permitting the May term to pass without a suit.

It is also urged, that a ca. sa. ought to have issued after the return of afi. fa.. The contract does not, in my view, require it, when it is evident that no benefit could be de rived by issuing that process, nor any injury to the defen dant sustained by the omission. The certain consequence would have been, the accumulation of costs to be paid by thé plaintiff, without any prospect of remuneration. It is enough that all reasonable measures be pursued, such as a prudent man would take in conducting his affairs with skill and judgment. To take every possible step, and exhaust every legal process, to no valuable purpose, does not seem to be demanded by the contract of the parties. I am of opinion that the plaintiff is entitled to judgment.

Sutherland, J.

(after stating the facts.) It is contended on the part of the defendant that the plaintiff is not entitled to recover. 1. Because he has not used due diligence in prosecuting Streeter, the obligor. 2. Because he has not used all legal means to collect the money from him, no ca. sa. having been issued on the judgment. 3. Because he has neither averred nor proved a demand of payment from the defendant of the sum in arrear before suit brought.

The first instalment, and all the interest which became due upon it having been paid, and constituting no part of the plaintiff’s demand in this action, whether he was guilty of laches or not in the collection of that instalment, cannot effect his present claim. The evidence establishes, beyond all question, the insolvency of Streeter on the first day of March, 1814 ; and that he had no real property to be affected by a judgment. The principal question in this case arose in the case of Ten Eyck v. Tibbets,(l Caines, 427.) That was also an action of covenant upon an assignment of a bond payable by instalments. The covenant was substantially like the one in question. The plaintiff’s action was founded on the non-payment of the second instalment; and in his declaration, he neither averred payment of the first instalment, nor took any notice of it. It was objected that if the first instalment was not paid at the day, it was the duty of the plaintiff to have commenced a suit and obtained a judgment for the penalty, which would have operated as a security for the subsequent instalment; and that he ought affirmatively to have shown, either that it was paid at the day, or that a suit was commenced. In answer to this, Thompson, J. in his opinion, says, “ It is sufficient that no demand is made of the defendant for that instalment; and' the presumption is, that it has been paid. Any delay or laches of the plaintiffs in this respect, however, it appears to me, can only be alleged when a demand is made upon them for that instalment. If there were any circumstances (shown) whereby any loss might probably be sustained for want of due diligence in procuring payment of the first instalment, it might have been proper evidence for the defendant on the issue with respect to due diligence, &c.” The other Judges were of the same opinion.

But in the case before us, admitting the question of laches as to the first instalment to be open, I think it may well be doubted whether the plaintiff was in default. It does not appear when the proceedings for foreclosing the mortgage were commenced. The sale was in December, nine months after the first instalment became due. There is nothing in this fact from which the presumption necessarily arises, that there was any delay in instituting the proceedings. Every presumption is in favor of the diligence of the plaintiff, and it is for the defendant, affirmatively, to make out a neglect of duty. The sale may have been postponed for want of bidders,; or it may have been delayed for other justifiable reasons. It can hardly be contended that it was the duty of the plaintiff simultaneously to prosecute the bond and foreclose the mortgage. He must do both, if necessary, before he can resort to the defendant. But he may first try the effect of the one, and if that is unavailing, then resort to the other. Here the foreclosure produced more than sufficient to pay all that became due previous to the 1st of March, 1818 ; and if no suit had been commenced by the plaintiff on the bond, I am not prepared to say that his right would have been affected by the omission, unless it appeared that it had been injurious to the defendant. But here a suit was commenced in May vacation after the instalment became due; that is, within two months. This is prima facie sufficient. Where the plaintiff resided at the time does not appear. He may have lived in a remote part of the .state, from which pro. cegS coui¿ not, without extraordinary care and diligence. have been issued and served before the May term. Beg. sonable diligence is all that is required.

The dicta in Moakley v. Riggs, (19 John. 72,) and Kiev, Tifft, (1 Cowen, 98,) “ that a term must not be permitted to elapse before suit is brought,” must bo taken in connection with the fact in those cases. There was great and unnecessary delay in both.

In relation to the second instalment, the only laches imputed to the plaintiff is in not issuing a ca. sa. A testatum fi.fa. was issued immediately after it became due, which was returned nulla bona, aird the declaration avers that the . defendant had notice of the fact. This Court has held that where a party undertakes to' pay the debt of a third person, if it cannot be collected from him, it is necessary to issue, not only a fi. fa. but a ca. sa. against the original debtor, before recourse can be had-to the surety. I do not well see how this case is to be distinguished from that. The fact that here the proceedings are in the name of the guarantor, and that if the body of Streeter, the obligor, had been taken in execution, it would have been a satisfaction of the debt as between him and Woods, does not appear to me to vary the case. ' That is a risk which Woods assumed, if, by the terms of the covenant, it was the plaintiff’s duty to issue a eg. sa. before he could resort to him. ' The taking of Streeter in execution would not have affected the plaintiff’s right of action against Woods.

It is no answer to say, that Streeter was insolvent, and that there is no reason to suppose that a ca. sa. would have produced the money. Upon that point the witnesses enter- , tained different opinions ; and it is the right of the defendant to insist that the effect of it shall be determined, not by the opinion of witnesses, but by actual experiment. By the terms of the defendant’s covenant, the issuing of a ca. sa. against Streeter was a condition precedent to his liability ; and it was incumbent on the plaintiff to show a performance of that condition, or that its performance was dispensed with by the defendant, before he can resort to him. (Moakley v. Riggs, 19 John. 71-2, per Spencer, J.)

It was not necessary for the plaintiff to aver or prove a demand of payment from the defendant, before suit brought. The declaration contains all that was necessary to be averred on that point; notice to the defendant of the issuing of a fi. fa. against Streeter, and a return of nulla bona, and that Streeter was insolvent. If those facts established the position, that the money could not be collected from Streeter by due process of law (as the plaintiff supposed) this was enough. The defendant’s liability then immediately accrued. It was no part of the contract that payment should be demanded before suit brought. Notice of the facts from which the defendant’s liability necessarily resulted was all that was necessary to be averred. The bringing of the action was a sufficient demand.

But upon the second point I have come to the conclusion, though with reluctance, that the defendant is entitled to judgment.

Savage, Ch. Justice, concurred with Mr. Justice Wood-worth ; and proceeded to estimate the amount which the plaintiff ought to recover, according to the principles laid down by him. And a majority of the Court finally concurred in a judgment for the plaintiff for $476 60.

Judgment for the plaintiff.