Warfield v. Watkins

By the Court, T. R. Strong, J. The payment by the plaintiff, of part of the costs of the action on the note, formed an ample consideration for the agreement in question. Whether the action had been previously discontinued or not, makes no difference in regard to this point. If it had been, clearly there was no legal claim against the plaintiff for any portion of the costs; if it had not been, he was under no obligation to pay the costs while the action was pending. Costs do not become a debt against a party to an action until judgment; unless he agrees to pay them. (Supervisors of Onondaga v. Briggs, 3 Denio, 173. Hunt v. Middlebrook, 14 How. Pr. Rep. 300. Torry v. Hadley, Id. 357.) Section 322 of the code has nothing to do with the case. That section merely prohibits the demanding from a defendant, as costs, upon a settlement before judgment, beyond certain rates. It applies only to a case where the settlement is upon the terms of paying costs by the defendant. If a settlement before judgment is without any provision for the payment of costs, the plaintiff loses them, (iJohnston v. Brannan, 5 John. 268.) He may refuse to settle without payment of costs; so a defendant may refuse to pay them for the purpose of a settlement. If a defendant does agree to pay the costs, on a settlement in such a case, that section regulates the amount. The principle relied upon by the defendant’s counsel, that payment of what a party is legally liable for is not a sufficient consideration for a promise, is therefore wholly inapplicable to the present case. There was no legal liability of the plaintiff for costs when the agreement for a settlement was made. He paid what he was not [402] at the time under a legal obligation to pay, in consideration of the. agreement; and that was a legal consideration. By the agreement, the defendant agreed “to use care and diligence in the collection of the said note and costs out of the said Scott,” the principal debtor in the note, and when the same was collected, to pay the plaintiff one half of all he might-be able to collect on the note. I think it is not a valid defense for the defendant in this action upon the agreement, that Scott might, by reason of the payment to the defendant, by the plaintiff, of one half of the note and costs, and by the other surety, subsequent to the agreement, of the other half of the debt, have defended successfully an action against him on the note. The agreement required the defendant to make the effort to collect of Scott; and it was his duty to do so, by resorting to legal proceedings for the purpose, if necessary. Scott might not have availed himself of the payments by the sureties; he was equitably bound to pay the amount of the debt; for the benefit of the sureties, and might not have thought proper to interpose any obstacle to an action on the note itself; and if he had done so, he might not have been able to establish that his liability on the note was discharged. But if he would have defended, and could have prevailed, the defendant having agreed to make the effort to collect the note of him, was bound to do so, He can no more set up that the effort would have been fruitless, than could the holder of a note, in an action on a guaranty for its collection. The am s.wer in both cases is that the contract required it. In regard to an action on a guaranty, Newell v. Fowler, (23 Barb. 628,) and the cases there cited, are in point, and I think the principle of them applicable to this case. The last clause of the' agreement does not qualify the defendant’s obligation “ to use due care and diligence in the collection.” It simply limits the obligation to pay over, to what he might be able to collect, on using such care and diligence. It is argued on the part of the defendant that his agreement, in reference to the collection of the note, was impossible [403] of performance, and therefore void. The case of Beebe v. Johnson (19 Wend. 500) shows there is no force in this position. There was no such impossibility as would relieve from the obligation of a contract. [Monroe General Term, December 5, 1859. The view of the case now taken renders the consideration of the question as to the effect of the payment, in regard to extinguishing the liability of Scott on the note, unnecessary. It is also in accordance with the equities of the case. Upon the face of the agreement it is apparent that the parties intended the payment by the plaintiff to the defendant should not affect the liability of Scott on the note; and, in respect to the payment by the other surety, to the defendant, it does not appear that the defendant ever sought to make an arrangement whereby the payment would not impair the obligation of the note against Scott. Whether the note did not remain in life as to Scott, under the circumstances, I repeat, need not be considered. It follows that the judgment of the county court should be reversed, and that of the justice affirmed. T. R. Strong, Welles and Smith, Justices.]