Ehrlich v. Sklamberg

Seabury, J. This is an action upon an undertaking. The plaintiff brought an action against one Rinzler and in that action obtained a warrant of attachment under which the property therein described was seized by a marshal of the Municipal Court. The defendant Salman, claiming to be the owner of this property, signed with his codefendant an — 6 — undertaking which contained the following clause: “ that if in an action upon the bond commenced within.three months thereafter the said claimant, Sam Salman, will establish that he was the general owner of the property claimed at the time of seizure; or if he fails so to do that he will pay to the said Abraham Ehrlich the value thereof with interest, then the obligation to be void, otherwise to remain in full force and virtue.” The attorney for the defendant Salman served on the plaintiff’s attorney, on September thirtieth, a copy of this undertaking together with a notice that, pn October second, the bond would be presented to a justice of the Municipal Court for approval and justification of sureties. The attorney for the plaintiff made the following indorsement upon the undertaking: “ I hereby approve of the within undertaking both as to the form thereof and as to the sufficiency of the sureties therein named.” The original bond was delivered to the attorney for the defendant Salman, who did not cause it to be filed as required by section 85 of the Municipal Court Act. Whether the bond was ever approved by a justice of the Municipal Court does not appear from the record which is now before us. On October first, Rinzler, the defendant in the action in which the plaintiff obtained the attachment, was adjudicated a bankrupt; and at this time the property seized was still in the possession of the marshal. A receiver of the bankrupt’s property having been appointed, that officer demanded the possession of the property from the marshal. Pursuant to this demand the marshal delivered the property to the- receiver. Subsequently the receiver released all his right, title and interest in the property as receiver to Salman, upon the latter executing and delivering to him a bond for his protection as receiver. The learned court below found as a fact: “ That Salman was a party to a fraud to conceal the goods from the creditors of Rinzler and that the goods in question were taken from Rinzler’s premises and hidden in the basement of 167 Essex street, owned by a relative of his, which basement Salman claims to have hired, but which is far removed from the regular place where he conducts business.” — 7 — The present action, was commenced within the three months prescribed in the bond, and the court below has rendered judgment for the plaintiff. As I understand the argument which is made in favor of the reversal of this judgment, it is based primarily upon the view that there was no delivery of the bond because only a copy was served on the attorney for the plaintiff and approved by him, and the original was not filed and approved as required by section 85 of the Municipal Court Act. It is, of course, true that a bond is not perfected until it is delivered. It is necessary, therefore, to determine whether there was a delivery of this bond upon which this action is brought. “ The essence of the question whether or not there has been a delivery consists in the intent of the obligor to perfect the instrument and make it at once the absolute property of the obligee.” 5 Cyc. 740. An instrument may be delivered by words without acts; or by acts without words; or by both acts and words. The opinion delivered in the instructive case of Folly v. Vantuyle, 9 N. J. L. 153, reviews the authorities upon the question of what constitutes a delivery and makes it clear that any acts or words evincing an intent to deliver, provided such intent has reference to the present time, is sufficient to constitute a delivery. The action of Salman in serving or actually delivering a copy of the bond which had in fact been signed and sealed by the obligors, and the service of the notice of justification of sureties, and obtaining from the attorney for the plaintiff his approval of the bond, are clear, unequivocal acts, which were intended to denote and did denote that the obligors were firmly bound upon the bond. ¡Nothing further remained to be done but the formal act prescribed by the statute, that the claimant should file the bond. This statutory requirement was certainly not intended for the benefit of the obligors upon the bond, but for the protection of the obligee. The failure of the obligors, either through neglect or fraud, to give the obligee this additional protection to which by statute he was entitled did not forfeit the rights of the obligee under the bond. The action of the defendants in reference to this bond constituted a complete delivery of it to the obligee. — 8 — The failure of Salman to file the bond and the delivery by the marshal of the property seized to the receiver of Rinzler, rather than to the claimant, Salman, may and perhaps does prevent us from regarding this bond as a valid statutory bond. The fact, however, that this bond is not valid as a statutory bond does not impair its validity as a contract, nor prevent its enforcement as a common law obligation. Ryan v. Webb, 39 Hun, 435, 437; Toles v. Adee, 84 N. Y. 222, 237, 238. As was said in Toles v. Adee, supra: “ When the plaintiff’s attorneys consented to the proposition and accepted the undertaking, it became operative and binding, not as a statutory obligation, but as a common law agreement between the parties, for the breach of which an action would lie as upon any other assumpsit.” The presence of a seal upon the undertaking removes any question as to its being founded upon a sufficient consideration. When the bond was signed, sealed and served by the defendant upon the plaintiff’s attorney and accepted and approved by the latter, it was a complete contract; and the fact that it was not approved by a justice of the Municipal Court and was not filed as required by section 85 of the Municipal Court Act did not make it any the less a contractual obligation. The requirement of section 85 of the Municipal Court Act that .the claimant may “ execute and file with the clerk a bond to the plaintiff, etc.,” is provided not for the benefit of the obligors, but for the protection of the plaintiff, if the claimant failed to prove that he was the owner of the property. Haywood v. Townsend, 4 App. Div. 246. The bond was not conditional upon its being filed or approved by a justice of the Municipal Court; and the defendant Salman, who is one of the obligors upon the bond, ought not to be permitted to take advantage of the fact that he did not cause it to be filed or approved by a justice of the Municipal Court. To permit him to do so is to enable him to take advantage of his' own wrong. Under the terms of the bond the defendants are liable unless they establish, in an action upon the bond, that Salman “ was the general owner of the — 9 — property claimed, at the time of the seizure.” This fact the defendants utterly failed to establish, and, consequently, the court below properly held them liable upon the bond. The evidence shows and the trial court has found that Salman was a party to a fraud; and his failure to file the bond and cause it to be approved was, I think, an effort to reap the benefit of the fraud and to enable him to repudiate the obligation of his contract which was expressed in the bond. The fact that the marshal did not deliver the property to the claimant, but delivered it to the receiver in bankruptcy of Binzler who in turn delivered it to the claimant, in no way relieves Salman from his obligations under the bond which he executed. After the bond was executed and a copy thereof delivered to the plaintiff’s attorney and the defendant Salman had noticed it for approval, the plaintiff was justified in looking solely to the bond and was not required to look after the property which, up to that time, had been securely held hy the lien of his attachment. The fact that the marshal delivered this property to the receiver and that the receiver, after taking a bond for his own protection from Salman, delivered it to the latter, does not- enable Salman to repudiate the obligation he contracted when he signed the bond and delivered a copy thereof with the intention that it should discharge the property. The roundabout way in which Salman acquired the property was a mere subterfuge which is so transparent as to clearly reveal Salman’s effort to get the property and at the same time avoid his liability upon his undertaking. This purpose being apparent, and Salman having gotten the property which under the law he could take only in the event of his giving a bond, the court ought not to be astute to hold that, because Salman obtained the property from the marshal indirectly through the receiver instead of directly from the marshal and failed to file the bond as he was required by law to do, he may, therefore, keep the property and at the same time repudiate the obligation of his bond, although he has not proved his title to it. While the circumstances that Salman obtained the property circuitously instead of directly may perhaps make it impossible — 10 — to hold him upon the statutory bond, it does not in any way impair the force of his common law obligation. ISTor does the fact that Einzler, the defendant in that action in which the plaintiff obtained his attachment, was adjudicated a bankrupt avoid the obligation of these defendants upon the bond, or in any way affect the question involved in the controversy between this plaintiff and these defendants. The liability which the plaintiff is seeking to enforce arises out of the bond and is dependent upon this common law obligation. The question of fact to be determined in this action is whether Salman was the owner of the property at the time of its seizure. The fact that the receiver in bankruptcy of Einzler claimed the property, or that such receiver subsequently transferred any title that he had in the property to Salman, was not material upon the question as to whether Salman was the owner of the property at the time of the seizure. The contentions now urged by Salman are inconsistent. If the receiver or Einzler was the owner of the property, then Salman had no right to claim it in the attachment proceeding and was not its owner; and, under the bond, the defendants are liable to the plaintiff. If the receiver was not the owner of the property, this fact did not establish that Salman was its owner - and, Salman having failed to prove this fact, the defendants were properly held liable upon the bond. The defendants’ undertaking was conditioned only upon Salman proving his ownership of the property. The burden of proving ownership was upon fíalman. Éisenbud v. Gellert, 26 Mise. Eep. 367; Goldstein v. Goldman, 74 App. Div. 356. This burden was not sustained. The court below has properly found upon the evidence before it that Salman was not the owner of this property, but merely a party to a fraud designed to enable Einzler to put the property out of the reach of his creditors who were honestly entitled to it. The judgment should be affirmed, with costs. Gildersleeve, J., concurs.