Finkelstein v. Punie

Ingraham, P. J.:

I think the determination of the Appellate Term was right and should be affirmed. I do not understand that the provision with respect to the failure of the surety to justify was enacted primarily for the benefit of the respondent on appeal. Nor do I see how that is at all material. The provision in question, section 1335 of the Code of Civil Procedure, is under the title of the Code that relates to appeals to the Court of Appeals and this is made applicable to appeals to the Supreme Court from an inferior court by section 1341 of the Code. That section 1335 provides that it is not necessary that the undertaking should be approved, but the attorney for the respondent might within ten days after the service of a copy of the undertaking with notice of the filing thereof, serve upon the attorney for the appellant a written notice that he excepts to the sufficiency of the sureties. Within ten days thereafter, the sureties, or other sureties in a new undertaking to the same effect, must' justify before the court below, or a judge thereof, or a referee appointed by the same, or a county judge. If the court or judge finds the sureties sufficient, he must indorse his allowance of them upon the undertaking, or a copy thereof, and a notice of the allowance must be served upon the attorney for the exceptant. Then follows this provision: “ The effect of a failure so to justify and procure an allowance, is the same as if the undertaking had not been given. ” The meaning of this section seems to me to be plain. If an exception to the sureties is taken, the sureties, or other sureties in a new undertaking to the same effect, must justify within ten days. If, after such justification, the judge allows the undertaking, the sureties remain liable, and when the undertaking is given to stay a judgment, the judgment is stayed. Undoubtedly the parties to the action could waive justification, even after the sureties thus excepted to, or the attorney for the respondent could withdraw the exception and allow the undertaking to stand as approved even without a formal approval by the judge, within the time which by the provision of the section the sureties are required to justify. When the ten days have expired, the Code then in express terms regulates the effect of a failure to justify, i. a.: “ The effect of a failure so to justify and procure an allowance, is the same as if the undertaking had not been given.” If the undertaking is not so “ approved,” the proceedings to enforce the judgment are not stayed. It would be unjust to hold the sureties liable to pay the judgment when the giving of the undertaking has been ineffective for any purpose. The respondent may accept the sureties by failing to file exceptions. If he files exceptions, he gives notice both to his opponent and to the sureties that he has not accepted them, and then to make the undertaking effective for any purpose they must justify within ten days after notice is given. When that fact is communicated to the surety he has the option either to continue to remain upon the bond as a surety or to be relieved of his responsibility as a cosurety by refusing to justify.

In this case the surety was notified that the respondent had excepted to his sufficiency and he was asked to justify. He refused, thus evincing an unwillingness to longer remain a surety. Whether that fact was communicated to the respondent’s attorney or not seems to me entirely immaterial. He knew that he had excepted to the sufficiency of the sureties. He also knew that the surety had failed to justify within the ten days allowed, and there was no written stipulation extending the time for the surety to justify. His incidental conversation with the attorney for the appellant, it seems to me, is entirely without effect to bind the surety or to avoid the consequences which from the section of the Code (§ 1335) itself follow from a failure of the surety to justify. The surety was entirely justified in considering himself relieved from further obligation on the undertaking, and, therefore, from taking any further steps to protect himself. Certainly, if no undertaking had been given, the surety could not be liable to the plaintiff in the action or to contribute to the other surety on the bond, and yet the Code expressly says (§ 1335) that the result shall be the same as if no undertaking had been given. In Manning v. Gould (90 N. Y. 476) this section of the Code was before the Court of Appeals, and the court said: “The meaning of this language is too obvious to admit of doubt. Failure of the sureties to an undertaking upon an appeal to justify, when excepted to, defeats entirely the object and purpose of the undertaking.” The court then, speaking of the option of the respondent to refuse to accept the sureties tendered by the undertaking except upon condition that they appear before the judge, are examined as to their responsibility, and the judge approves them after such examination, calls attention to the option that the appellant has either to give notice of the justification of the sureties or to tender other sureties to a new undertaking to the same effect, who must justify before the court below or a county judge, and adds: “ If he does neither, then the case stands as if no attempt to give an undertaking had been made. No reason can be suggested why the respondent should be permitted to disregard the undertaking and proceed upon the judgment as if none had been given, and yet have all the advantages that the undertaking was intended to secure. * * * The undertaking was tendered by the appellant and rejected by the respondent, and never perfected by the appellant. It is unnecessary to determine whether or not the exceptant might have waived her exception at any time before the refusal of the sureties to justify. No waiver in this case was made or attempted.” Then it was held that the sureties were not bound. Apparently what I have quoted from that case expressly applies to this case at 'bar. This construction was also upheld in Hoffman v. Smith (34 Hun, 485).

In this case the respondent never did withdraw his exception to the sufficiency of the defendant as a surety. He examined the other surety, and, being satisfied with his solvency, consented to the approval of the undertaking without further investigation. Just what effect this had upon the liability of the surety who has justified is not necessary for us to determine, but there was no withdrawal of the exceptions, to the sufficiency of the defendant as a surety, and he never justified, but positively refused to justify, and certainly, as to him, it must be held that the condition was the same as if the undertaking had not been given.

The determination should, therefore, be affirmed, with costs.

McLaughlin and Dowling, JJ., concurred; Laughlin and Scott; JJ., dissented.