Seymour & Bouck v. Van Slyck

8 Wend. 403

• Court: New York Supreme Court
• Decided: January 15, 1832
• Status: Published

Opinion

By the Court, Sutherland, J.

The first question which arises in this case is as to the time when the bond, upon which the action is founded, was delivered and accepted. The evidence adduced by the defendants, I am inclined to think, was not sufficient to countervail the legal presumption of the delivery of the bond on the day of its date. The practice of the canal commissioners, requiring a certificate from some judge of the court of common pleas of the sufficiency of the sureties in these bonds before they accepted them, was a mere voluntary regulation on their part, not prescribed by law, adopted as a matter of precaution and convenience, but which they might dispense with in any given case without a violation of their official duty. It would be giving an undue influence to such a regulation to permit it to decide the time of the delivery of the bond, whenever its date varies from the date of the certificate. Mr. Seymour in this case has no knowledge or recollection upon the subject; he says so expressly. If we were to hold, therefore, that the bond did not take effect until the date of Judge Samson’s certificate, it would be solely upon the ground that the commissioners must be presumed not to have accepted the bond until such certificate was endorsed upon it, because it was their general practice to require such certificate ; but a practice entirely voluntary, not required by law, and which might be disregarded without any prejudice to the public interest. It will be recollected also that this evidence is drawn from the declarations or admissions of the plaintiffs on the record, and that those declarations may not have been accompanied with the explanations and qualifications which might have been given, if it had been competent to produce them as witnesses in the cause. There may have been a delivery and a conditional acceptance, to become absolute when ihe certificate was obtained, which, by relation, would .make it a valid delivery and acceptance from the date of the bond. * 1 The charge of the judge thereof was correct, that the evidence was not sufficient to repel the legal presumption that the bond was delivered and accepted on the day of its date.

The next inquiry is as to the proper application of the sum of f12,571,54, which was paid by Van Slyck, and credited on the books of the comptroller on the 22d day of July, 1825. This has been applied as a credit towards the tolls received by Van Slyck in the month of May, 1825, before the bond in question was given. The sureties contend that it should be applied towards the tolls received after they became sureties, especially as the payment was made, as they allege, out of monies collected for tolls which accrued after they became sureties, and that the state had no right to apply the payment to the extinguishment of a defalcation of Van Slyck existing prior to the execution of the bond in question, and while he had other sureties. It was admitted that Van Slyck held the office of collector during the year preceding the execution of the bond, and had other sureties that year; and that the bond executed by the defendants expired on the 14th of April, 1826, when Van Slyck gave new bail. The defendants were his sureties from the 1st of June, 1825, the date of the bond, to the 14th of April, 1826. The former comptroller testified that the accounts of Van Slyck were kept with him, from the commencement to the termination of his office; that there was no account opened or kept with the sureties of Van Slyck, and that he did not know, when the payment of 12,571,^%-was made, that a new bond had been executed and the sureties changed; that the sureties of Van Slyck made no application of, and gave no notice to the witness in relation to the payments made by Van Slyck; and that as soon as drafts or certificates were received from him, they were passed to his credit in the books of the office; that no directions were given by Van Slyck, at the time of the payment of this sum, as to its application; and the witness made no other application, except to credit it to his account generally at the time when it was received; that at that time there were no charges in his office against Van Slyck for tolls, except for the months of March, April and May, the returns for the month of June not having been received until after the 28th of July; that the charge for the month of March, 1825, was 15,84, that for April, $9,939,63, and that Van Slyck paid on the 30th of May, 1825, $9,936,63, being within $3 of the tolls of April, and leaving due on the 22d day of July the sum of $18,84 on account of the months of March and April, and the sum of $12,571,54 for the month of May; that the collectors were required to make out their returns monthly immediately after the end of the month, but as they were voluminous, they were not generally completed until after the middle of the succeeding mbnth, and were not often received at the comptroller’s office until the latter end of such succeeding month ; that until the returns came in, there were no means of knowing at the comptroller’s office what had been received by the collectors, nor what sum was to be charged to them; that from the 30th of May to the 22d of J uly, 1825, no payment was made by Van Slyck on account of tolls, and that the amount received by him in the month of May was not known, nor charged to him at the comptroller’s office until the coming in of the return for that month, which, having been sworn to at Rochester on 20th of June, was not probably received at the comptroller’s office until six or eight days after; that from the manner in which Van Slyck kept his accounts of tolls received, he could know the amount received at the end of each month, whether he sent in his return to the comptroller or not. The return for the month of May shewed that the tolls collected in that month amounted to the sum of $12,571,54, the precise sum paid on the 22d of July following ; and the return for the month of June was $11,436,29, which was the precise amount of the next payment made by Van Slyck on the 23d day of August ensuing.

The general doctrine in relation to the appropriation of payments, where there are several accounts or transactions between the parties, is too well settled to require discussion. The debtor has a right to direct to which account the payment shall be applied. If he gives no direction, the creditor may apply it to which he pleases. If no application is made by either party, the law will appropriate it according to the justice and equity of the case; and as a general rule, in the absence of all indication of the will or intention of the parties, the law will apply the payment to the extinguishment of the debt according to the priority of time. This latter position is subject to certain qualifications and exceptions, which, however, it is now unnecessary to notice. 1 Lord Raym. 286. 2 Strange, 1194, and cases there cited. 14 East, 239,244, note a Peake’s Ev. 251. Peake’s N. P. Cas. 64. 2 Esp. N. P. Cas. 66. Peters v. Anderson, 5 Taunt. 596. 1 Com. Law. R. 201, 56. 4 Cranch, 320. 9 Wheat. 737. 3 Caines, 14. The intention of the parties, either debtor or creditor, in relation to the appropriation, may be inferred from circumstances, where it has not been expressly declared. It has already been stated that Van Slyck gave no directions in relation to the application of this payment; that at the time when it was made, the charge for the May tolls was the only charge on the books of the comptroller against him, and that he knew the fact, (except a small balance of 118,84, for the months of March and April) that this payment corresponded precisely in amount with the charge for the May tolls, and that it was passed to his general credit on the books of the comptroller. These circumstances would justify a jury in finding that Van Slyck intended this payment for the tolls received in the month of May ; so the jury in this case were instructed by the judge who tried the cause, and I think were correctly instructed. The presumption that Van Slyck intended that the payment should be applied to the tolls for the month of May, and not to those for the month of June, is strengthened by the circumstance that his next payment made in August was the precise amount of the June tolls; sucha coincidence between two successive returns and payments could hardly have been accidental.

But independently of the presumed intention of Van Slyck, I am inclined to think that the state must be considered as having appropriated this payment, at the time it was made, to the May tolls. Those tolls were the only charge, of any importance, at that time existing on the books of the comptroller against Van Slyck, and the passing of this payment to his general credit must certainly, prima facie, be an application of it to such previous indebtedness. Judge Story, in the United States v. Kirkpatrick, 9 Wheat. 737, 8, says, in cases of running accounts, where debits and credits are perpetually occurring, and no balances are otherwise adjudged than for the mere purpose of making rests, the court are of opinion that Payments ought to be applied to extinguish the debt according to the priority of time ; so that the credits are to be deemed payments pro tanto of the debts antecedently due. That case resembled this, in being an action against a public officer, (a collector of the revenue,) and his sureties; and it is believed, that as a general principle, the doctrine laid down by Judge Story is sound. The charge of the circuit judge, therefore, so far as it relates to this point, was substantially correct, and the exception to it was not well taken.

The next inquiry is whether the defendants were entitled to have the payments made by Van Slyck on the 21st of April and the 5th of June, 1826, after the bond had expired, applied to the payment of tolls received by him during the existence of the bond in, question. It will be recollected that the bond expired on the 13th day of April, 1826. On the 21st of April, a payment of $891,07 was made, and on the 5th June, another payment of $9417,89. Neither of these payments'.have been credited to Van Slyck in the verdict of the jury. The case does not disclose the particular time or manner in which they were made; they must be considered, therefore, as having been made in what is shown to have been the ordinary course of the collector, and to have been passed to, his general credit, when made, on the books of the comptroller. It will also be recollected 'that it appears from the testimony of the comptroller, that although the collectors were required to make their returns monthly, immediately after the end of the month, yet that they were not generally completed and received at the comptroller’s office until the latter end of the succeeding month; and the dates of the affidavits of Van Slyck attached to his monthly returns, deposing to their accuracy, show the correctness of this statement. Thus the affidavit subjoined to the return for May, 1825, was sworn to at Rochester; on the 20th June; that to the return for June, the 28th of July; for July, the 29th of August; for August, the 11thof September; for September, the 2d of November: for October and November, not until the 21st of February, 1826: the date ot the affidavits to the returns of December, 1825, and April, 1826, is not given. And it appears from an exhibit which gives the dates at which the various payments were received at the comptrollers’s office, that they were not „ generally received until about a month after the date of the affidavit to the last preceding return. The collector, therefore, was in the habit of retaining the tolls for from five to seven weeks after the end of the month for which they were received, before he paid them over or accounted for them to the comptroller. It seems, necessarily, to result from these facts that the payment of $891,07, made on the 21st of April, 1826, could not have been intended or understood, either by Van Slyck or the comptroller, as a payment of the tolls of that month; and the money, if in fact the proceeds of the tolls of April, must have been received before the 14th, when the bond of the defendants expired, as money received after that would hardly have reached the comptroller’s office, in the ordinary mode of remitting, before the 21st. The defendants, therefore, upon every principle, were entitled to the credit of that payment.

In relation to the $9417,89, paid on the 5th of June, the case is not so clear. According to Van Slyck’s return, the tolls received in the month of April were $9007, 85. A part of this payment, therefore, may have been the proceeds of tolls received after the 13th of April; how much was in fact received after that date, the evidence does not disclose. The whole could not have been, because it exceed $410, the receipts of the whole of that month; and the uniform and established course of business between the collector and the comptroller, repels the supposition that any part of that payment was designed or understood by the parties to be applicable to the tolls of the month of May, or to have been the proceeds of that month. We have not here as in the case of the payments of the 22d of July and the 23d of August, 1825, the important and controlling circumstance of a precise coincidence between the payment and the return of any preceding month, to aid in ascertaining the intention of the parties as to its application. We have nothing but the fact, that when the payment was made, there was a large balance against Van Slyck on the books of the comptroller, independently, of, and anteri- or to the return of the month of April, (whether the return for that month had then been received does not appear,) and that the payment was made and credited as on general account. Upon these facts, it appears to me that the payment of the 5th of June, 1826, cannot be considered as having been specifically appropriated, either by Van Slyck or the comptroller, and that the law must make the application according to its own notions of justice. I fully accede to the general proposition laid down by the supreme court of the United States in The U. S. v. Kirkpatrick, 9 Wheat. 737, that in cases of long running accounts, where debits and credits are perpetually occurring, and no balances are otherwise adjusted than for the mere purpose of making rests, payments ought to be applied to extinguish the debts, according to the priority of time. There can be no objection to this principle in the ordinary cases of debtor and creditor, where the whole indebtedness is from the same individual. But in a case like this, where, although the account is continued and unbroken, there has during its progress been a change of sureties, I am inclined to 'think the principle ought not to be applied. So far as the parties have not, either expressly or by necessary implication arising from the circumstances of the case, applied the payments, it is obviously just and equitable, as it regards the sureties, that each should have the benefit of the amount actually received by his principal during the period of his suretyship, so far as it can be ascertained. Such was the doctrine of the supreme court of the United States in The U. S. v. January & Patterson, 7 Cranch, 572. In that case a collector of the revenue had given two bonds at different times, with different sureties, and the supervisor of the revenue, to whom the collector’s payments were made, had promised the collector to apply them exclusively to the bond first given, although some of them' were for money collected and paid after the second bond was given. It was held that the promise of the supervisor did not bind the United States, and did not amount to an application of the payments to the first bond; and after stating the general rule as to the application of payments, the courts say that the rule adopted in ordinary cases is not applicable to a case circumstanced like this—where the receiver is a public officer, not interested in the event of the suit, and who receives on account of the United States—where the payments are"indiscriminately made—and where different sureties, under distinct obligations, are interested; and it will be admitted, they observe, that monies arising due, and collected subsequently to the execution of the second bond, cannot be applied to the discharge of the first bond, without manifest injury to the ■surety in the second bond. Justice between the different sureties can only be done by reference to the collector’s books. Applying this principle to the case at bar. it would entitle the defendants to be credited for so much of the amount paid by Van Slyck on the 5th of June, as can be shown to have been received by him for tolls prior to the 14th of April, 1826, when new sureties were given.

The" omission of the comptroller to give notice to the endorsers of the non-payment of the $1000 note, left with him as collateral security by Van Slyck, did not, I apprehend, in Judgment of law, render the plaintiffs or the state chargeable with it. The note was not negotiable; it was made by Elisha Ely, payable to Harvey Ely and P. A. Van Slyck, three months after date—not to their order or bearer—and by them endorsed in blank." It is not essential to the validity of a bill of exchange, or promissory note, as an instrument under the statute or according to the custom of merchants, that it should be negotiable, 6 T. R. 123; Rex v. Box, 6 Taunt. 325; 1 Com. L. R. 401, S. C.; Chitty on Bills, 86; Downing v. Backenstors, 3 Caines, 137 ; 9 Johns. R. 217 ; although at one period it was seriously questioned. The endorsement and transfer of such an instrument is good, so as to make the endorsers liable to the endorsee, although it will not give the endorsee a right of action in his own name against the maker. Hill v. Lewis, 1 Salk. 132. Chitty on Bills, chap. 4, page 142. 1 Dall. 194. 2 Dall. 249. The endorsement in such a case is equivalent to the making of a new note; it is a guaranty that the note will be -paid—it is a direct and positive undertaking, on the part of the endorser, to pay the note to the endorsee, and not a conditional one to pay if the maker does not, upon demand, after due notice. Chitty on Bills, 142. Strange, 478. 3 East, 482. 6 Cranch, 222. 4 Mass. R. 258. The endorser in such a case, I apprehend, is not entitled to the usual privilege of an endorser of negotiable paper"; he stands in the relation of principal and not surety to his endorsee, and has no right to insist upon a previous demand of the maker, and notice of non-payment. An absolute guaranty may be written over his endorsement, upon which a recovery may be had against him. 12 Johns. R. 159. 17 Johns. R. 326. The endorsers in this case, therefore, were not discharged by the omission of the comptroller to give them immediate notice of the non-payment of the note; and the only .question is whether it was his duty to prosecute the note to judgment, and whether the defendants can avail themselves of the omission to do so. It will be recollected that Van Slyck, the principal in the bond on' which this suit is brought, was one of the endorsers upon this note. I consider the note as having been received as collateral security only, to be applied when paid to the credit of Van Slyck. The officers of the government did not intend to assume any responsibility in relation to it. It may admit of very serious question, whether if they did, the state would be responsible for their laches; whether they would not be considered, quoad hoc, the agents of the party who had been the means of imposing this office upon them, for his own accommodation, instead of paying promptly as it was his duty' to do, the balance due from him to the government. It is well settled in the courts of the United States, that the debtors of the government will not be discharged, by the neglect or omission of its officers to perform the duties which even the law imposes upon them. The government and its officers are considered the same, and the general principle is adopted that laches is not imputable to the government, and this principle is founded not on the notion of extraordinary prerogative, but upon considerations of public policy. 9 Wheat. 735. 11 Wheat. 184. 1 Peters, 318.

This disposes, I believe, of all the important questions raised upon the argument; and although the discussion of each might have been much more extended, it is believed that enough has been said to settle all the material questions which will probably arise upon a second trial.

New trial granted.