MILK v. WAITE

MILK v. WAITE N. Y. Supreme Court, Eighth District, Special Term; March, 1886. Again, Fifth Department, General Term; October, 1886. 1. Indemnity of sureties to undertaking to discharge from arrest; extent.] The sureties to an undertaking, given to procure a discharge from arrest, which required their principal at all times to render himself amenable to any mandate which might be issued in the cause, may recover from him the necessary expenses incurred by them in pro- ' curing his arrest and surrender in their own exoneration after he had absconded. 2. The same; foreclosure of mortgage.] Where their principal had secured them for becoming sureties by a mortgage expressed to be given as security “ for the payment of such sum of money as the party of the second part shall be compelled to pay, suffer or forfeit to or for the use of the party of the first part by reason or in consequence of” the undertaking in question, and “ in case the party of the first part shall at all times keep and save the said party of the second part harmless from all cost, damage, and expense by reason of the execution of said recognizance and the party of the first part shall pay all such sums of money as the party of the second part shall be liable to pay by reason of such recognizance, this conveyance shall be void,”—Held, that this mortgage might be foreclosed for failure to reimburse the sureties for such expenses. I. Special Term, March, 1886. Trial of demurrer. Garret Milk brought this action against Benjamin Waite and Jdarrisen Judd, to foreclose a mortgage upon certain real estate executed by Waite to plaintiff and defendant Judd. The following facts appeared in the complaint: In an action commenced October 19,1877, in the Supreme Court of Cattaraugus county by one Pritchard against said Waite, an order of arrest was issued and delivered to the sheriff of that county by the terms of which he was commanded to arrest Waite, and hold him to bail in the sum of three thousand dollars. Under such order, the sheriff arrested Waite, and took him into actual custody. Waite then requested the plaintiff Milk and the defendant Judd to execute with him such an undertaking as was required by law to procure his discharge from such arrest; and for the purpose of inducing the plaintiff and Judd to execute such undertaking, and as security therefor, Waite executed and delivered to plaintiff and Judd the mortgage described in the complaint. Whereupon plaintiff and Judd united with Waite in the execution and delivery of the undertaking required by law for the discharge of Waite from arrest, and he was thereupon released. The action in which the order of arrest was issued was duly noticed for trial and put upon the calendar of the Circuit Court appointed to be held for the county of Cattaraugus on the second day of September, 1878. At that time Waite was a resident of the town of Dayton, Cattaraugus county. A short time before the action was reached on the calendar, Waite, while the order of arrest was in full force, absconded and went secretly out of the State of New York, and beyond the jurisdiction of said court with intent not to render himself amenable to such mandate of the court, but with intent to avoid such mandate absconded from his said place of residence, and kept himself secreted beyond the jurisdiction of said court. Plaintiff and Judd, to save themselves from greater loss and damage by reason of their liability upon said undertaking, were compelled to procure a certified copy thereof and to duly authorize a competent person to pursue Waite and arrest him, and return him to the custody of the sheriff of said county, and they did cause him to be arrested in the State of Iowa, and to be returned to the county of Cattaraugus, and delivered to the custody of the sheriff of that county in the month of September, 1878. Plaintiff was compelled to pay all the expense thereof, which was the sum of three hundred dollars; such expense was necessarily incurred in making said arrest; said Waite refused to pay any part thereof; and on March 8, 1879, judgment was recovered against Waite in such action for $851.74. The mortgage executed by Waite to the plaintiff and Judd, and described in the complaint, contained the following condition : “ This grant is intended as a security for the payment of such sum of money as the said party of the second part shall be compelled to pay, suffer or forfeit to or for the use of the party of the first part by reason or in consequence of a certain bond or recognizance this day executed by the said parties to the sheriff of Cattaraugus county, and in case the said party of the first part shall at all times keep and save the said party of the second part harmless from all costs, damages and expenses by reason of the execution of said recognizance, and the party of the first part shall pay all such sums of money as the party of the second part shall be liable to pay by reason of such recognizance, this conveyance shall be void.” The defendant Waite demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action against liim. Henderson & Wentworth, for the plaintiff. Allen, Thrasher & JBixby, for the defendant Waite. [MAJORITY — Childs, J.] Childs, J. The undertaking executed by Waite and his sureties required the defendant Waite to at all times render himself amenable to any mandate which might be issued to enforce a final judgment against him in the action, or any mandate of the court, during the pendency of the action. When Waite, with the intent not to render himself amenable to such mandate of the court, but with intent to avoid the same, absconded from this State and kept himself secreted beyond the jurisdiction of the court, he was guilty of such a breach of the condition of the undertaking as fixed the liability of the plaintiff and Judd upon the undertaking, and made them liable to •pay the amount of any recovery had by the plaintiff in the action against Waite. Milk and Judd, by the execution and delivery of the undertaking, had become the custodians of Waite with the right to at any time surrender him to the custody of the sheriff in their own exoneration as bail. Code Civ. Pro., §§ 591, 592, 593. This was the only means within their reach for their protection as the sureties of Waite; unless they should elect to permit the action against Waite to proceed to judgment in his absence and discharge such' judgment, having recourse only to their mortgage security. They elected to pursue the former course, and in causing such arrest and surrender the plaintiff Milk was obliged to expend the sum of three hundred dollars, which sum the plaintiff now seeks to recover by the foreclosure of the mortgage referred to and a sale of the premises therein described. The execution of the undertaking by Waite, jointly with his said sureties, was an agreement on the part of Waite that he •would at all times render himself amenable to any mandate which might be issued to enforce a final judgment against him ; and an agreement upon which his sureties liad the right to rely, and one which materially affected the risk assumed by such sureties in becoming jointly obligated with Waite for the purpose of securing his release. And it may well he that, but for the reliance upon such agreement, these parties would not have assumed the responsibility attaching to their position as sureties for Waite, for reasons which are apparent. The property mortgaged may not have been of sufficient value to indemnify the sureties in case they were called upon to pay the judgment recovered against Waite. Or their pecuniary condition may have been of such a character as that they could not pay such recover}’, looking to the mortgage security for reimbursement, ,without danger of distressing themselves pecuniarily. The act of Waite in absconding and secreting himself beyond the jurisdiction of the court, with the intent alleged, was gross bad f faith to his sureties, and justified them in adopting any means within their power to protect themselves from loss or injury by reason thereof. It is, however, contended by the defendant Waite that the expenditure incurred by the plaintiff in procuring his arrest and surrender in exoneration is not secured to the plaintiff within the terms of the condition contained in the mortgage security; that such condition cannot be enlarged, and that, al. though Waite should be held liable to the plaintiff for the money thus expended, yet that the sum is not secured by the mortgage in suit. H. General Term, October, 1886. From the interlocutory judgment on the demurrer the defendant Waite appealed to the General Term (James C. Smith, P. J., Babkee, Haight, and Beadley, JJ.), which affirmed the judgment with costs upon the opinion of the Special Term, with leave to defendant Waite to withdraw the demurrer and answer within twenty days on payment of the costs of the demurrer and of the appeal. The parties must be deemed to have entered into the relation created by the execution of the undertaking and mortgage with the full understanding of all the legal rights, duties and obligations created thereby; among which was the right of plaintiff to arrest and surrender the defendant, which would be, in case that were done, necessarily accomplished at the expense of the plaintiff; and the expense so incurred would create an obligation in favor of the surety against Waite which could be enforced by action. Harp v. Osgood, 2 Hill, 216. This being so and the plaintiff having incurred the expense sought in this action to be recovered, in the exercise of an undoubted legal right, and one which must be deemed to have been within the contemplation of the parties at the time of the execution and delivery of the security set forth in the complaint, and the language of the condition aptly expressing and securing such liability, the complaint does state facts sufficient to constitute a cause of action. The plaintiff must therefore have judgment on the demurrer with costs, with leave to the defendant to answer on the merits within twenty days after the entry and service of a copy of the interlocutory judgment, on payment of costs of the demurrer; and in case of the failure of the defendant to answer as herein provided, final judgment may be entered by the plaintiff for the relief demanded in the complaint, after the expiration of such time to answer.