William F. Russell, Administrator, etc., Respondent, v. Benjamin I. Freer et al., Appellants

William F. Russell, Administrator, etc., Respondent, v. Benjamin I. Freer et al., Appellants. (Submitted February 9, 1874; decided February 17, 1874.) M., plaintiff's intestate, held the office of collector of internal revenue; proposing to appoint 0. as his deputy, he required security that 0. would pay over moneys collected, etc.; for this purpose a bond was prepared, which was executed by H. and F. and delivered to 0.; when they signed it the name of J. appeared as co-obligor in the bond, and they were told by 0. before signing that J. would sign it also, and they signed with this expectation. The name of J. was subsequently stricken out of the bond without their knowledge or consent, and it was delivered to hi., who had no knowledge of the facts and who thereupon appointed 0. deputy. In an action on the bond, held, that H. and F. having placed it in the power of 0. to deliver the bond as a valid and complete instrument, it having been so delivered, and M. having incurred responsibility relying thereon, it was valid and binding. The names of the obligors were written in the body of the bond by the justice who administered the oath to the justification; held, that the appearance, of the name of J. as erased therein, was not, under the circumstances, a sufficient notice to M. to put him upon inquiry. People v. Bostwick (33 N. Y., 445) distinguished and questioned. Appeal from judgment of the G-eneral Term of the Supreme Court in the third judicial department, affirming a judgment in favor of plaintiff, entered upon the report of a referee. This action was brought upon an official bond given by-defendant, Charles J. Dolson, upon his appointment as deputy collector of internal revenue. William Hasten, plaintiff’s intestate, was collector; proposing to appoint said Dolson as his deputy, he required of him a bond, in substance conditioned that he would pay over and account for all moneys collected by him as such. Two of the obligors, defendants Freer and Hasbrouck, defended upon the ground that, at the time of signing by them, the name of James Dolson appeared in the body of the bond, and that they executed with the expectation that he would also execute it before delivery, but that his name was subsequently erased without their knowledge or consent. The referee found upon that subject as follows: “ That at the time the said bond was executed by the parties, one James Dolson was named in the bond as one of the obligors therein; before the said defendants, Abner Hasbrouck and Benjamin I. Freer, signed the bond they were told by the defendant, Charles J. Dolson, that the said James Dolson was to sign the bond, and at the time they signed said bond they .expected that the said James Dolson would sign the bond, that after they signed the bond the name of James Dolson was struck out of the bond without the knowledge of the said Abner Hasbrouck or Benjamin I. Freer. That the said William Hasten was not present at the time the bond was executed, and there is no evidence that at the time the bond was delivered to him that he knew or had any information of the above facts. , The bond a few days after it was executed was delivered to the said William Hasten by the defendant, Charles J. Dolson. “After the said bond was executed it was left with the defendant, Charles J. Dolson, without any direction by the said defendants, Abner Hasbrouck and Benjamin I. Freer, or any of the parties to the bond, that it was not to be delivered to William Hasten the obligee, until it should be signed by James Dolson, nor do I find that it was signed by the said Abner Hasbrouck or Benjamin I. Freer, upon the condition that the said bond was not to be binding upon them or the bond not to be delivered if not signed by, the said James Dolson.” Further facts appear in the opinion. M. Schoonmaker for the appellants. Freer and Hasbrouck did not authorize the bond to be delivered until it was executed by James Dolson, and therefore they are not bound by it. (Pawling v. U. S., 4 Cranch [U. S. S. C. R.], 219; Lout v. Adams, 3 Wend., 380; Benson v. Noyes, 7 id., 188; People v. Bostwick, 32 N. Y., 445, 449.) P. Cantine for the respondent. An expectation or promise that another should sign the bond will not relieve defendants. (York Co. M. F. Ins. Co. v. Barks, 51 Me., 506; Loomis v. Fay, 24 Vt., 240; Martin v. Stribting, 1 Speers, 23; Dillon v. Anderson, 43 N. Y., 231.) Striking out the name of James Dolson did not vitiate the bond. (York Co. M. F. Ins. Co. v. Barks, 51 Me., 506; Luttro v. Middlecof, 8 Grat., 54; Barry v. Homan's Com., id., 48; Ex parte Fulton, 7 Cow., 484; Williams v. Marshall, 42 Barb., 524, 528; Smith v. Crocker, 5 Mass., 538; Hatley v. Commonwealth, 3 Grant’s Cases, Penn.) [MAJORITY — Grover, J.] Grover, J. The counsel for the appellants insists that the referee erred in refusing to find the fact that Abner Hasbrouck signed the bond upon the condition that it should thereafter be signed by James Dolson. If the evidence conclusively proved this fact, and its finding in connection with the other facts found would constitute any defence to the action, the point is well taken. Hasbrouck and Freer, both defendants in the action, to whose benefit the testimony would inure, gave evidence tending to prove this fact. Several other persons present at the time and participating more or less in the business then being transacted, and having an equal opportunity to hear the conversation testified to by Hasbrouck and Freer, testified that they did not hear it; or if so, they had forgotten it. Hasbrouck and Freer were parties defendants in the action, testifying in their own behalf, and to protect their own interests, which were large. Their credibility under these circumstances was for the consideration of the referee ; and it cannot be said that it was a legal error to discredit it. (Pawling v. The United States, 4 Branch [H. S. S. O. R.], 219.) It is therefore unnecessary to determine whether the fact, if found, would have been at all material. The question is whether the referee erred in his legal conclusion that upon the facts found the plaintiff was entitled to recover; or, in other words, whether the facts found from evidence introduced by the defendants, showed that they never became liable upon the bond. The plaintiff’s intestate had been appointed collector of internal revenue by the government of the United States, and proposed to appoint the defendant, Charles J. Dolson, a deputy collector, and required security from him to account for and pay over the money received by him as such deputy. For this purpose the bond in question was prepared for execution; as to which the referee finds the following facts: That at the time the bond was executed by the parties, one James Dolson was named in the bond as one of the obligors therein. Before the defendants, Hasbrouck and Freer (the appellants) signed the bond, they were told by the defendant, Charles J. Dolson, that the said James Dolson was to sign the bond; and at the time they signed said bond they expected that the said James Dolson would sign the bond; that after they signed the bond the name of James Dolson was struck out of the bond, without their knowledge and consent. That the plaintiff’s intestate /was not present at the time the bond was executed, and that there was no evidence that at the time the bond was delivered to him he knew or had any information of the above facts; that a few days after its execution it was delivered to the intestate by the defendant Charles J. Dolson ; that after the bond was executed it was left with the defendant Charles J. Dolson, without any direction by the defendants, Hasbrouck and Freer, or any of the parties to the bond that it was not to be delivered to the intestate until it should be signed by James Dolson. The only inference that can be drawn from these facts is that the bond was executed by Charles J. Dolson as principal and by the others as his sureties, and left by the latter with the former, to be delivered to the intestate for the purposes intended, but that the sureties expected that before such delivery it would be executed by James Dolson as co-obligor and co-surety with them. It is clear, upon these facts, both upon principle and authority, that the bond was a valid obligation upon those who executed it. Upon principle, for the reason that the sureties knew the purpose of making the bond was the protection of the intestate from loss from the acts of Charles J. Dolson as deputy collector. They left the bond in his hands for delivery to the intestate for that purpose, expecting that he would, before that, procure its execution by James Dolson. The intestate knew nothing of this expectation; he relied upon the bond, and so relying appointed the principal deputy collector; and thus became himself responsible for his acts as such. The appellants by executing the bond and leaving it with Dolson, the principal, placed it in his power to deliver it as a valid and complete instrument. He did so deliver it, and thereby the intestate was induced to appoint him deputy and incur the responsibility consequent upon the appointment. It is a case for the application of the maxim that when one of two innocent parties must sustain a loss from the wrongful act of a third, the loss must be borne by the one who has enabled the wrong-doer to commit the act. It is insisted by the counsel for the appellant that the bond^ upon its face, showed that the name of James Dolson had been inserted in the body as an obligor, and erased therefrom, and that this should have put the intestate upon inquiry to ascertain why it was not executed by him. The case shows that all the names in the body of the bond were written by the justice who took the acknowledgmehts of those who executed it and by whom the oath to the justification was administered. Under these circumstances the erasure of a name of a person, who did not execute, from the body of the bond, would not excite suspicion of wrong if it would in: the absence of these facts. The authorities are conclusive against the defence upon the facts found. (Dair v. The United States, 16 Wallace, 1; State v. Peck, 53 Maine, 284; State v. Pepper, 31 Indiana, 76; McCormick v. Bay City, 23 Michigan, 457.) Chouteau v. Suydam (21 N. Y., 179), cited by counsel for the appellants, has no application to this case. The facts do not bring the case within the principle of The People v. Bostwick (32 N. Y., 445), assuming that that case was well decided; which may well be questioned. (See Dair v. United States, and other cases, supra.) But in that case stress was laid and the judgment was based upon the fact that the agent of the principal was directed by the sureties executing the bond, not to deliver it to the auditor unless it should first be executed by Dickerson as co-surety, and that he did deliver it without doing this. Ho such fact is found in this case. The judgment must be affirmed, with costs. All concur. Judgment affirmed.