Summary
In Coleman v. Wade (6 N.Y. 44), it was decided that submission suspends the original right of action, and that when an award is made before suit, the mode to make it available is by plea in abatement.
Summary of this case from New York Lumber & Wood Working Co. v. SchniederOpinion
December Term, 1851
W.C. Noyes, for appellants. S. Sherwood, for respondents.
The lease between Coleman 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 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 10 th day of November, 1844. By the terms of the lease, the lessee was bound to pay his 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, sec. 2, and cases there cited; Fidler v. Cooper, 19 Wend. R. 285.) So too, if the lessor had recovered a judgment against the lessee, and a second suit had been 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. R. 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. R. 99, cited by Hill, note b.) But in whatever form availed of, it is a serious obstacle, and a substantial suspension of the right of action, and that by all the cases discharges the surety.
McCOUN, J. dissented.
Judgment affirmed.