Auerbach v. Rogin

Gildersleeve, J. The pleadings are oral. The complaint is “by a surety against his principal for money paid, laid out and expended upon a breach of contract in writing.” The answer is. a “general denial, bill of particulars.” The summons is dated February 16, 1903, and requires defendant to appear, “ immediately after your (defendant’s) arrest in this action.” Municipal Court Act, § 58. On the same day an order of arrest was issued against defendant, which was based upon several affidavits and an undertaking on arrest. The charge against defendant, upon which the arrest was based, was that defendant had disposed of his property, with intent to defraud his creditors, including plaintiff. The Municipal Court has power to grant the order upon proof of such a charge. Municipal Court Act, § 56, subd. 4. A motion was made at the commencement of the trial to vacate this order of arrest, which motion was based upon the alleged insufficiency of the papers upon which it was granted. The justice held that the intent to defraud was sufficiently established by the affidavits, and denied the motion. Upon the trial the defendant offered no evidence whatsoever. The plaintiff showed that he had become surety on a bond for defendant, that defendant had contracted with plaintiff to hold the latter harmless, and to pay whatever loss the plaintiff might suffer by reason of being such surety, and that, by reason of such obligation, the plaintiff was compelled to pay $150 to Fried & Co., and to give his notes for $350 more, which notes are not yet due. The justice gave judgment for plaintiff for $500 damages, and $33 costs. Defendant appeals from said judgment and from an order denying his motion to set aside the said order of arrest. Upon the judgment is stamped the words “ Defendant subject to arrest and imprisonment.” As we have seen, the complaint was oral, and the only reference in the summons to the claim of plaintiff to the arrest of defendant is as follows: “You are hereby summoned, and required to appear, in this action, before one of the justices * * * immediately after your arrest in this action,” etc. We have also seen that the judgment states that defendant is "subject to arrest and imprisonment. Section 39 of the Municipal Court Act provides as follows: “ In an action where an execution may issue against the person, upon a judgment rendered in favor of the plaintiff, unless a verified complaint is served with the summons, a general reference to that fact must be indorsed by the clerk upon the summons, and upon the copy to be served on defendant, [697] in the following form, (Plaintiff claims defendant is liable to arrest and imprisonment in this case.’ In the event of there being no such indorsement, no execution against the person shall issue, and the proof of service of such summons must show that the copy served on the defendant likewise had such indorsement upon it.” Upon the trial of this action no question of a fraudulent disposal of property was raised, except by the motion to set aside the order of arrest, which motion was based, as we have said, entirely upon the alleged insufficiency of the affidavits in showing a fraudulent intent. This ground the justice held to be untenable. We agree with this conclusion of the court below. The affidavits show satisfactorily an intent, on defendant’s part, to defraud his creditors and plaintiff by the transfer of his property. The provision in the judgment, for the arrest and imprisonment of the defendant, was improper, however, as we have seen, under the above-quoted section 39 of the Municipal Court Act. The judgment, therefore, must be modified by striking out the ' words, “ Defendant subject to arrest and imprisonment.” The order, however, denying the motion to vacate the order of arrest on the ground of the alleged insufficiency of the papers upon which it was granted, must be sustained. This decision is not inconsistent with the above modification of the judgment. The order of arrest was a preliminary measure pending the trial of the action, and is merged in the judgment. For all intents and purposes, therefore, it has ceased to exist. However, the defendant appealed from the court’s refusal to set it aside, and we are called upon to pass upon the issue thus raised. We conclude, therefore, that the order, denying defendant’s motion to vacate the order of arrest, must be affirmed, with ten dollars costs and disbursements. The appellant claims that the justice was wrong in allowing $500, as damages, since it is conceded that, at the time of the trial, the plaintiff had paid only $150, while the remaining $350 were in the form of promissory notes, which plaintiff had not yet paid for the reason that they had not matured. Where a surety gives his negotiable note for the debt of his principal, and such note is received expressly in satisfaction of the said debt, this is to be regarded as equivalent to the payment of the money, and the obligation of the principal to th'é surety has accrued, although the note has not yet been paid. Elwood v. Diefendorf, 5 Barb. 398; 24 Am. & Eng. Encyc. of Law (1st ed.), 779. [698] In the case at bar, the witness Peilces, a member of the firm of M. Fried & Co., testifies as follows: “Q. Did yon accept his (plaintiff’s) notes of $500 in payment for the bond (Plff’s. Ex. 1), and the notes of defendant (Plff’s. Ex. 2) ? A. Yes, sir. Q. After he gave yon the notes for $500 did you deliver this bond and these notes to Auerbach (plaintiff)? A. Yes, sir. Q. And he has them now? A. Yes, sir.” It, therefore, appears that the notes of plaintiff were expressly received in satisfaction of the debt of the principal. As between the surety, plaintiff, and the principal, defendant, these notes are equivalent to money, paid by plaintiff to M. Fried & Co., in discharge of the principal’s obligation to said Fried & Co. We are of opinion that the justice was warranted in allowing to the plaintiff the whole amount claimed, including the $150 actually paid in cash by plaintiff to M. Fried & Co., and the $350 given in notes which have not yet matured. The judgment is modified, as above indicated, by striking out the words “ Defendant subject to arrest and imprisonment,” and, as thus modified, it is affirmed, with costs. Order denying motion to vacate order of arrest affirmed, with ten dollars costs and disbursements. Freedman, P. J., and Truax, J., concur. Judgment modified, as above indicated, by striking out “ Defendant subject to arrest and imprisonment,” and as thus modified, affirmed, with costs. Order affirmed, with ten dollars costa and disbursements.