Coleman v. Wade — 6 N.Y. 44

Majority

p. 47

Coleman v. Wade and another.

Headnote

Effect of award. — Discharge of surety.

A good award is a bar to a suit on the original cause of action; if it extend the time of payment beyond that fixed by the contract, a surety for the principal debtor is discharged.

Appeal from the general term of the Superior Court of- the city of New York, where a motion for a new trial had been denied, and a nonsuit, entered upon the trial, affirmed.

This was an action of assumpsit, commenced in the supreme court, by William Coleman against James Wade and David H. Van Amburgh, as sureties for George Wade, on a lease of a mill and the appurtenances, in Orange county, for the term of one year from the 1st November 1843, at the rent of $650, payable quarterly; with a covenant on the part of the lessee to keep the mill in good order and repair. At the foot of the lease, the defendants signed a contract of guaranty, as follows:

“In consideration *of the letting of theprem- [* 45 ises above mentioned, by William Coleman to George Wade, we hereby guaranty to said Coleman, the payment of the rent above expressed, by the said George Wade, in the manner, and at the time, above mentioned, and the faithful performance by said Wade, of all the agreements within contained, on his part to be kept and performed. New York, October 30th, 1843.”

The cause was subsequently transferred to the superior court, where, on a trial before Sandeobd, J., after proof of the lease and guarantee, the occupation of the prem

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ises by the lessee, and the payment of the quarter’s rent ending 1st November 1844; it was shown, by the defendants, that on the 10th October 1844, the plaintiff and George Wade, the lessee, entered into mutual bonds, whereby they submitted to three persons therein named, as arbitrators, to award and determine the amount of rent due to the plaintiff on the 1st August 1844, and of and concerning all claims, demands and damages of the plaintiff against the said George Wade, by reason of any misconduct or neglect of the said lessee to the demised premises ; so as the said award be made in writing, ready for delivery to the parties, on or before the 25th October instant. Also, an award by the arbitrators named in the submission, dated the 25th October 1844, whereby they awarded that the said George Wade, the lessee, should, “on or before the 10th day of November then next,” pay to the plaintiff the sum of $266.90, in full of all rent to 1st August 1844, and of all damages to the time of submission.

The plaintiff’s counsel objected to the admission in evidence of the submission and award, as a bar to the action; but the learned judge decided that they constituted a bar, and nonsuited the plaintiff; to which he took an exception. The court, at general term, denied a motion for a new trial, and affirmed the judgment of nonsuit; whereupon, the plaintiff took this appeal, which was prosecuted by his administrators, after his decease.

Noyes, for the appellants.

Sherwood,, for the respondents.

— The lease between Coleman J and George Wade, provides for the payment of the last quarter’s rent, on the first of November 1844. The defendants, as sureties for George Wade, guarantied

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the payment of the rent, in the manner specified in the lease, and the performance of all other covenants upon the part of their principal.

On the 18th of October 1844, the lessor and lessee entered into bonds to arbitrate, as to all matters between them, arising out of the demise, and the arbitrators awarded $269.94, in full satisfaction of all rent due to, and including the first day of August 1844, and all damages up to the 10th October of the same year, to be paid by the lessee, on or before the tenth day of November 1844. By the terms of the lease, the lessee was bound to pay this rent on the 1st of August, and the damages for breach of his covenants, as they accrued, during the continuance, and at the close of the term. These provisions were so far modified by the award, as to be paid in a gross sum, on the 10th of November; this was a change of the contract, in a material matter, competent for the parties to make, but which discharged the sureties of the lessee. The last quarter’s rent was paid, as proved by the receipt of the lessor, on the first of November 1844.

The arbitration discharged the sureties from all obligation for the rent, prior to the first of August, even if their undertaking is considered as divisible, and that the award extinguished, as to them, the rent only, which was therein specially provided for. I think, the nonsuit right, and that the judgment should be affirmed.

— There is no doubt, that if a suit # had been commenced on this lease, by the lessor *- against the lessee, a plea in bar, of this arbitrament and award, would have been good. (Watson on Arb. and Awards 147, § 2, and cases there cited; Fidler v. Cooper, 19 Wend. 285 .)^[1] So, too, if the lessor had recovered a judgment against the lessee, and a second suit had been

1 The original consideration of a claim merges in an award. Campbell v. Champlain and St. Lawrence Railroad Co., 18 How. Pr. 412 , 419.

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commenced, a plea in bar, of the former recovery, would have been good. The recovery of such a judgment, being against the original debtor, would not have impaired the rights of the lessor against the sureties; but the difference between a judgment, and an arbitrament and award, so far as the rights of a surety are concerned, is great. If the surety pays the debt, after a judgment is recovered, his right of subrogation gives him the judgment, and thereby the means of enforcing payment, at once, from the property of the original debtor. But if he pays after the award, his right of subrogation gives him only the legal remedies for the enforcement of it; whereas, by his contract, he would be entitled to all the remedies the law gives on the lease. The effect, therefore, of the submission and award is, to change the character of the rights and remedies to which the party is entitled on payment of the debt. When that is done by the creditor, without the assent of the surety, it is well settled that the latter is discharged. (Colemard v. Lamb, 15 Wend. 332 , and cases there cited.)

There is still another ground on which the sureties in this case were discharged. The submission suspended the right of action on the lease, from the date of it, viz., 10th October 1844, to the 25th of that month, when the award was delivered. Although a submission may not be pleaded in bar, unless followed by an award, yet it does suspend a suit, and the effect of it may be had, by motion. If made before a suit is brought, the proper mode to' avail of it would probably be, by plea in abatement. (Smith v. Barse, 2 Hill 387 , and cases there cited, particularly case of Wells v. Lain, 15 Wend. 99 , cited by gQ Hill, note b.) But in whatever *form availed of, J it is a serious obstacle, and a substantial suspension of the right of action, and that, by all the cases, discharges the surety.

Judgment affirmed.

McCoun, J., dissented

Cases cited

Fidler v. Cooper 19 Wend. 285 N.Y. Sup. Ct. p. 49
Wells v. Lain 15 Wend. 99 N.Y. p. 50