Furber v. McCarthy — 61 N.Y. Sup. Ct. 435

Majority

p. 435

ARTHUR FURBER, Appellant, v. ALEXANDER L. McCARTHY and WILLIAM C. SMITH, Respondents.

Headnote

Counter-claim — action on am undertalcing, given to procure am, arrest, is not an action on contract.

An undertaking, executed in the form required by the statute, on an application to obtain an order of arrest, does not create a contract obligation, and an action, brought for the recovery of damages thereon, is not an action upon contract to which a liability existing upon another contract can be interposed as a counter-claim.

Appeal by the plaintiff from judgment, entered in the office of the clerk of the county of New York, March 26,1888, dismissing the complaint after a trial by the court without a jury.

p. 436

Arthur Furber, appellant, in person.

F. P. Johnson, for the respondents.

The facts are as follows: In February, 1884, one De Berg gave his note of $261.25, for value, to the firm of Sbufeldt & Go., payable at four months after date, and which lias never been paid. Subsequently Sbufeldt & Go. sued De Berg for damages because of false representations. De Berg was arrested in that action, and, for tbe purpose of obtaining tbe order of arrest, Sbufeldt & Co. procured tbe defendants herein to execute an undertaking in tbe form required by law. The action was tried in June, 1885, and tbe defendant was successful, and on June 6, 1885, a judgment was entered in bis favor for $122.45 costs. On June eighth Sbufeldt & Co. assigned and transferred said note to tbe defendants. Other costs were awarded in tbe action, amounting to ninety-four dollars and ninety-eight cents. In November, 1885, De Berg assigned tbe said undertaking, and tbe cause of action, which bad arisen thereunder, to tbe plaintiff herein. On November 24, 1885, Sbufeldt & Co. paid said two bills of costs to De Berg’s attorney, and tbe judgment therefor was satisfied. De Berg became insolvent before tbe maturity of tbe note, and is still so insolvent. Tbe plaintiff bad knowledge of tbe existence of tbe note, and that it was unpaid, but be bad no knowledge, nor bad Do Berg, of tbe transfer of said note to tbe defendants until service of tbe answer in this action.

Tbe plaintiff, as assignee of tbe said undertaking, brought bis action to recover thereon from the defendants, tbe obligors in tbe undertaking. Tbe defendants sought to counter-claim tbe note, which was allowed by tbe court, and from tbe judgment thereupon entered this aj^peal is taken. Tbe sole question involved upon this appeal is whether tbe defendants could counter-claim this note to tbe liability which bad arisen upon tbe undertaking. The solution of this question seems to depend upon tbe question as to whether tbe undertaking was a contract or not. . That it was not a contract seems to be apparent when we consider what are tbe elements necessary to constitute a contract. A contract is defined to be “ a deliberate engagement between competent parties upon a legal consideration, to do, or to abstain from doing, some act.”

p. 437

The undertaking in question is not a contract because it is unilateral and the party for whose benefit it was given had no volition in the matter. It is merely a statutory obligation, having no consideration to support it, the only obligation arising under it being because of the provision of the statute. De Berg was not a party to it, and in no way consented to it. The undertaking is a statutory indemnity in the nature of a penalty, which the obligees in the undertaking incur, because of the wrongful act of the parties for whom they have become the sureties. The case seems to come distinctly within the principles laid down in the case of McCoun v. New York Central Railroad Company ( 50 N. Y., 176 ), where a contract was defined to be “ a drawing together of minds until they meet, and an agreement is made to do or not to do some particular thing.”

The court also held that “ a statutory liability wants all the elements of a contract, consideration, mutuality, as well as the assent of the party.” It seems to be reasonably clear that the undertaking in question not being a contract, an action upon it is not an action upon contract to which a liability upon another contract can be set up as a counter-claim.

The judgment appealed from should be reversed and a new trial ordered, with costs to the appellant to abide final event.

Brady and Daniels, JJ., concurred.

Judgment reversed and new trial ordered, with costs to the appellant to abide final event.