Ludekens v. Pscherhofer

BRADLEY, J. The defendant Pscherhofer was treasurer of the National United States Savings & Loan Company, and, to secure to the company the performance of his duties as such treasurer, he, as principal, and the defendant Wagner as surety, executed a bond on the 30th day of August, 1890, of that date. This action is upon such bond. She alleges that the officers of the defendant withheld from her knowledge which they had, affecting the character for integrity of her principal in the bond, to her prejudice, and that, after she executed it, material alterations were made in the instrument, whereby it was, as against her, rendered void. Pursuant to the order of the court made when the action came on for trial, the question of fact for special finding of the jury was, “Is the bond set forth in the plaintiff’s complaint valid, as against the defendant Dora Wagner?” and all other questions of fact were to await the verdict upon that question. The jury found for the defendant. No question is raised as to the regularity of the trial of that issue alone. It appeared that the principal in the bond had applied to the Fidelity Company, of the city of New York, to become surety for him, and such company declined to do so, and expressed such declination by letter, which was produced and read in the presence of the board of directors of the National United States Savings & Loan Company on the evening prior to the execution of the bond in question. The letter was not produced at the trial. There was some evidence tending to prove that the Fidelity Company declined to 231 become surety for Mm because it did not consider Mm trustworthy. Whether the letter contained anything to that effect was, upon the evidence, a disputed question of fact. The omission to advise the defendant Wagner of the refusal of the Fidelity Company to go upon the bond was not, of itself, any defense. ; But if the Savings and Loan Company, through its officers, had knowledge, or had been informed, that the treasurer was dishonest, and for that reason untrustworthy, and, having the opportunity to do so, failed, before the bond was executed and received, to advise the surety of the fact, it would be chargeable with fraudulent concealment, which might be effectual to relieve her from liability as such upon the bond. TMs rests upon the ground that the surety is prejudiced by the risk assumed by the reason of the nondisclosure of the fact that the principal, for want of integrity, is not entitled to the confidence in the relation which Ms surety, as such, is induced to assume to him, and which concealment is deemed fraudulent. Anything short of that is insufficient to avoid the obligation of the surety. Machine Co. v. Farrington, 82 N. Y. 121; Telegraph Co. v Barnes, 64 N. Y. 385; Bank v. Van Slyke, 49 Hun, 7, 1 N. Y. Supp. 508. In the present case, as there was some evidence bearing upon that question, there was no error in submitting it to the jury. The question of the weight of the evidence is not here for consideration. The further inquiry has relation to the charge that there was an alteration of the instrument after its execution. It is not claimed that any change was made in the body of the bond itself, but that, in the affidavit of justification made by both the principal and surety, some erasures and insertions were made. The affidavit was one in which they both joined, and the evidence on the part of the defendant Wagner is to the effect that, when executed, it contained the statement that the principal was worth, in property, the sum of $10,000, and that it was afterwards altered by erasing the word “property,” and inserting in place of it the word “business,” and by striking out the figures “10,” and inserting the figure “5,” making “$5,000” in place of “$10,000.” It is not seen how this can be treated as a material, or any, alteration of the bond. The affidavit was no part of it. The liability of the defendants, or either of them, upon the bond, was made no less or greater, or in any manner affected, by it, as the obligation assumed was not in any sense dependent upon the affidavit of justification. It seems that no rights, interests, duties, or obligations of either of the makers of the bond were affected or changed by the alleged alterations, and it was therefore immaterial. People v. Muzzy, 1 Denio, 239; Vogle v. Ripper, 34 Ill. 100; Eddy v. Bond, 19 Me. 461; Inglish v. Breneman, 5 Ark. 377; Smith v. Smith, 1 R. I. 398. Whether the defendant Wagner supposed, when the affidavit was made,' that she was becoming surety for a principal worth $10,000 in property, or $5,000 in business, did not concern the obligee, any more than it affected the liability of the obligors, or either of them. It may be that the subject of his responsibility, as represented by him in the affidavit, was considered by the surety. If, for any reason, he afterwards altered it, the condition of his property or responsibility was not made any dif 232 ferent by the alteration, nor was the surety, by it, prejudiced in the means available to her for indemnity. These views lead to the conclusion that the exception was well taken to the submission of the question of the alteration to the jury with instruction that, if they so found the fact, they might find a verdict for the defendant Wagner, and for that reason the motion for a new trial should be granted; costs to abide the event. All concur.