Howe Machine Co. v. Farrington

Headnote

Bond to secure debts to become due from an agent — surety not discharged by the failure of the principal to disclose previous failures of the agent to account — what declarations admissible as part of the res gestee.

Appeal from a judgment in favor of tbe plaintiff, entered on tbe report of a referee.

Tbe action was upon a bond executed by one Davis and tbe defendant, as bis surety, conditioned for tbe payment of tbe indebtedness of Davis to tbe plaintiff, tben or thereafter existing. Davis was tbe agent of tbe obligee for tbe sale of machines. The plaintiff was to deliver to him machines for sale, and he was to make reports of sales and to remit proceeds weekly and to return to tbe company, on demand, all machines not sold. At tbe time of tbe execution of tbe bond Davis was indebted to tbe plaintiff for machines previously delivered to him, and be became further indebted for machines delivered from time to time after tbe execution of tbe bond.

The court at General Term after considering certain objections raised by tbe appellant, and overruling them said: “ Another position taken by the- appellant’s counsel is that at tbe time when tbe bond in suit was given, Davis was repeatedly and largely in default in respect to machines furnished to him by tbe plaintiff, which fact tbe plaintiff well knew but did- not disclose to tbe defendant. As we understand tbe rulings of tbe court of last resort in this State, those circumstances constitute no defense to an action against a surety for a debt or the like, in tbe absence of connivance or gross negligence. (McJTechnie v. Ward, 58 N. Y., 541 ; Atlantic and Pacific Telegraph Oo. v. Barnes, 64 id., 385.) However, it may be as to one who becomes surety for tbe honesty of another. (Id.)

“ It is contended that the declarations of Davis were not evidence that be received tbe machines, as against the defendant. Tbe proof was expressly limited to declarations made by him during tbe period of tbe consignments and after tbe execution of the

bond in suit, and consisted of admissions made by him of the correctness of plaintiff’s books on their being exhibited to him. The declarations were, therefore, a part of the res gestae and were admissible. It would have been otherwise if they had been made after the transactions were closed, for which the surety was bound. (1 Gr. Ev., § 187; Hatch v. Elkins, 65 N. Y., 489 ; Tenth National Bank v. Harragh, 1 Iiun, 111; Horn v. Pen*?/, 14 id., 409.”)