Hoops v. Schmidt — 24 N.Y. St. Rep. 129

Majority

p. 129

John Hoops et al., v. Diederich Schmidt.

(City Court of New York,

Trial Term,

Filed February 14, 1889.)

Headnote

1. -Contract—Or suretyship—For payment or rent—By whom not enrorceable.

The defendant became surety for the payment of certain rent by the plaintiff’s assignees; the agreement, signed by defendant, was made to the landlord, and was in the nature of a covenant “ under seal ” to pay “ him.” Held, that as it was not a covenant to pay any money to the plaintiffs on the happening of any default, but was made to the landlord, it is not enforceable by plaintiffs.

2. Same—When obligation or surety inoperative.

A surety has a right to impose any lawful condition he pleases upon the delivery of his obligation, and it remains inoperative until it is performed.

3. Same—When contract or no errect.

A contract of suretyship may be complete in itself, and yet, as long as it remains in the hands of the parties executing it, be of no effect.

p. 130

On August 22, 1885, George W. Libby, as landlord, leased to the plaintiffs, as tenants, the first floor and cellar of No. 136 Orchard street, Newark, N. J., for five years from April 1, 1886, at the yearly rental of $480, payable monthly in advance. The plaintiffs started the grocery business on the premises, and on November 14,1886, sold it to Adolph Koch and George Beauermann, and on the same day transferred to them the lease. Before making the transfer, the plaintiffs insisted on security that the rent for the balance of the term would be paid to the landlord. The defendant agreed to become the surety, provided the consent to the transfer could be obtained from the landlord (the lease containing a provision that it was not to be assigned without such consent, under the penalty of forfeiture and damages). The landlord refused to sign the required consent, whereupon the defendant (who had in the meantime signed the agreement of suretyship) refused to deliver such agreement to any one as a binding obligation.

The landlord afterwards accepted rent from the assignees, but they failed to pay for the months of November and December, 1888, and the plaintiffs were required to pay the same, amounting to eighty dollars. The plaintiffs now sue the defendant as surety to recover this amount.

Robert Godson, for pl’ffs; Busteed & Blankman, for def’t.

The parties evidently contemplated that by the transfer of the lease, with the written consent of the landlord, the tenants would be relieved from further liability, and that Koch and Beauermann, as assignees, would be substituted thereto, for the agreement signed by the defendant as surety was made to George W. Libby, the landlord, and is in the nature of a covenant “under seal” to pay him such sums of money as may be required to satisfy the conditions of the lease.

It was not a covenant to pay money to the plaintiffs on the happening of any default, for their names do not appear in the instrument, which, being under seal, and made-to Libby, is not enforceable by the plaintiffs. Nevins v. Gardner, 1 City Ct. Rep., 407.

The fact that the instrument was not delivered to the plaintiffs, that they never claimed possession of it, that it was taken to Libby, the landlord, and offered to him, if he-would sign the consent to the transfer, indicates that it was not intended that the plaintiffs should, in any event, be allowed to sue upon it. Libby refused to accept the defendant as surety, declined to sign the consent, and expressed a determination to look to the tenants for the rent till the end of the lease, whereupon the defendant declined to de

p. 131

liver his agreement of suretyship, and it was produced by him at the trial as an instrument still in his possession.

It is unnecessary to decide whether the receipt of rent by the landlord subsequent to the assignment, with knowl-' edge of the transfer, dispensed with the legal necessity of the landlord’s written consent, or what effect the consent w'ould have had, if it had been obtained, for a surety has the right to impose any lawful condition he pleases upon the delivery of his obligation, and it remains inoperative until it is performed. People v. Bostwick, 43 Barb., 9 ; affirmed 32 N. Y., 445 .

A contract of suretyship may be complete in itself, and yet, as long as it remains in the hands of the parties executing it, be of no legal efféct. Baylies on Sureties, 97.

It seems clear, therefore, that as there was no delivery to give legal inception to the contract, and no performance of the condition on which it was to be delivered, that no liability was created by the mere execution of the writing.

For the several reasons stated, there must be judgment for the defendant.