Union Trust Co. v. Monticello and Port Jervis Railway Co. UNION TRUST COMPANY V. THE MONTICELLO AND PORT JERVIS RAILWAY COMPANY. (63 N. Y. 311) Payment when obligations extinguished by subrogation. 5. advanced money to a railway company to enable it to pay its past-due coupons under an agreement that he should hold the coupons thus paid as security. The property of the railway was afterward sold under the mortgage given to secure the bonds and coupons, and the proceeds being less than the indebtedness, S., as holder of such coupons, claimed a pro rata share with the holders of other bonds and coupons. Held, that as the bondholders were ignorant of the arrangement between S. and the company, the coupons when paid became, as to them, extinguished, and that S. was not entitled to share. A CTION to foreclose a mortgage executed by defendant, The Monticello and Port Jervis Railway Company, to plaintiff, as trustee, to secure the payment of 500 coupon bonds of $1,000 each, with interest. The facts sufficiently appear in the opinion. Daniel T. Walden, for appellants. The lien of interest coupons is not affected by detaching them from the bonds. Sewall v. Brainerd, 48 Vt. 364; Miller v. R. W. R. R. Co., 40 id. 399. The coupons are outstanding obligations whose payment is secured by the mortgage to plaintiffs. Champney v. Coope, 34 Barb. 543; 32 N. Y. 551; Harbeck v. Vanderbilt, 20 id. 398; Graves v. Mumford, 26 Barb. 94, 101; Robinson v. Leavitt, 7 N. H. 100; Moore v. Beason, 44 id. 225; Hatch v. Kimball, 16 Me. 146; Holder v. Pike, 24 id. 437; Hough v. De Forrest, 13 Conn. 473; James v. Johnson, 6 Johns. Ch. 423; White v. Knapp, 8 Paige, 173; Miller v. R. & W. R. R. Co., 40 Vt. 399; Marvin v. Vedder, 5 Cow. 671, 674-675; Banta v. Garmo, 1 Sandf. Ch. 383, 385. The transaction between plaintiffs and Smith was an assignment and not a satisfaction of the mortgage. Robinson v. Leavitt, 7. N. H. 100; Brown v. Lapham, 3 Cush. 554, 555; Starr v. Ellis, 6 Johns. Ch. 393, 396; Harbeck v. Vanderbilt, 20 N. Y. 397; Miller v. R. & W. R. R. Co., 40 Vt. 399, 400; Graves v. Mumford, 26 Barb. 94. The position of the claimant is like that of an indorsee who has accepted and paid a bill for the honor of the drawer, and he is entitled to the benefit of the mortgage security. 1 Hill. on Mort. 171; Pratt v Cank., etc., 10 Vt. 294; Keyes v. Wood, 21 id. 331; Belding v. Manby id. 550; Jackson v. Willard, 4 Johns. 43; Johnson v. Hart, 3 Johns. Cas 322; Olds v. Cummings, 31 Ill. 188; Swartz v. Leist, 13 Ohio (N. S.) Union Trust Co. v. Monticello and Port Jervis Railway Co. 396; Herring v. Woodhull, 29 Ill. 92. The agreement that the claimant should hold the coupon as security is sufficient to preserve the lien under the mortgage in his favor, without reference to an assent of the former holder. Miller v. R. & W. R. R. Co., 40 Vt. 309, 407, 408; White v. Knapp, 8 Paige, 173. The holder of the coupons is entitled te recover the amount thereof with interest from the time they became due. N. Penn. R. R. Co. v. Adams, 54 Penn. 94; Redf. on Railways, 527, note; Beaver Co. v. Armstrong, 44 Penn. 63; Gelpcke v. Dubuque, 1 Wall. 206; Aurora City v. West, 7 id. 82, 105; V. & C. R. Co. v. V. & C. R. Co., 34 Vt. 1; Williams v. Sherman, 7 Wend. 109, 112; 2 Pars. on Bills and Notes, 393. Henry Day, for respondent. EARL, J. The Monticello and Port Jervis Railway Company issued 500 bonds of $1,000 each, with interest coupons attached, payable quarterly, on the first days of January, April, July and October, and it executed and delivered to the plaintiff a mortgage upon its property to secure the payment of the bonds and coupons. Default having been made by the railway company, the plaintiff commenced a foreclosure of the mortgage; and the premises mortgaged brought, on the sale under the decree, less than the amount of the face of the bonds. A reference was ordered in this action, to a referee, to ascertain, among other things, the holders of the bonds and coupons who were entitled to share in the proceeds. It appeared upon such reference that the railway company being unable to pay the coupons due July 1 and October 1, 1872, and January 1, 1873, one A. F. Smith made an agreement with its president to advance the money to pay the coupons due at the dates mentioned, and to hold the coupons for his security. In pursuance of this agreement, he went to the plaintiff, where the coupons were payable, and left with it the money to pay the coupons when presented, it agreeing with him to take and deliver them to him uncanceled, that he might hold them as his security for the money advanced. The holders who presented the coupons for payment generally knew nothing of this arrangement, and supposed when they received the money and delivered up the coupons that they were paid. Smith thus took up 1,500 coupons, 500 at each of the dates mentioned, and now claims to share in the funds pro rata with the other holders of bonds and coupons. The referee disallowed his claim, and his decision was sustained both at Special and General Terms. The coupons were secured by the mortgage, and their detachment from Union Trust Co. v. Monticello and Port Jervis Railway Co. the bonds did not deprive the holders of them of the security of the mortgage. That remained security for their payment until paid, whether attached to or detached from the bonds. County of Beaver v. Armstrong, 44 Penn. St. 63; Miller v. R. & W. R. R. Co., 40 Vt. 399; Haven v. Grand Junc. R. R. Co., 109 Mass. 88. Here the holders of the coupons did not agree to assign or transfer them to Smith, and did not in fact do so. When they delivered these coupons to the trust company they supposed they were receiving payment of them, and Smith undoubtedly knew this. He, however, intended to take and hold them, and keep them in being as his security for the money advanced. This he could do as against the railway company; and as against it the mortgage could be enforced for his benefit. It had not paid the coupons, was in no way harmed by their payment by Smith, and he advanced the money for its benefit upon the request of its principal officer. But a different rule applies as between Smith and the bondholders. They had a direct interest in having the coupons paid, so as to preserve the value of their security. They delivered them up to the trust company for payment, and supposed they were paid. If they had known the true state of the case, they might, and probably would, have refused to assign the coupons, and to have them kept in life, and thus, by an accumulation of interest, to have impaired the value of their security. And they could have caused a foreclosure of the mortgage for default in the pay. ment of the interest. If the creditors who now contest Smith's claim had purchased their bonds in the belief that the coupons had actually been paid, there could be no question that Smith would be estopped as against them from claiming that he took a transfer of them, and that they were still secured by the mortgage (109 Mass., supra); and I cannot perceive why, upon the facts presented, their present position is not equally strong. There are many cases where money is paid upon mortgages and judg. ments by persons not parties to them, in which, whether the security shall be regarded as extinguished, or held to be in force for the benefit of the party paying, depends upon the intent of the party paying. Equity. will keep the securities in life in such cases to promote the ends of jus tice; but not against any person having a superior equity. Harbeck v. Vanderbilt, 20 N. Y. 398; Robinson v. Leavitt, 7 N. H. 100; Miller v. Rutland & Wash. Railroad Co., supra; James v. Johnson, 6 Johns. Ch. 423; Haven v. Grand Junction Railroad Co., supra. Here the bondholders did not agree that Smith should take and hold the coupons, and they did not agree that he should have any interest in the mortgage security. To give him the benefit of the security would Dalrymple v. Williams. now be detrimental to them, and as between them and him would be inequitable. I am therefore of opinion that the case was properly disposed of, and that the order should be affirmed with costs. All concur. Order affirmed. DALRYMPLE V. WILLIAMS, appellant. (63 N. Y. 361.) Verdict-affidavits of jurors admissible to correct. The foreman of a jury by mistake announced a verdict different from that agreed to by the jury, and the verdict was so recorded. Held, that affidavits of the jurors were competent evidence to prove the mistake. ACTION for fraud against Williams and another. The foreman of the jury announced as their verdict a general verdict in favor of plaintiff against both defendants, and it was so entered. Upon application, made upon the same day to the judge holding the Circuit, on behalf of defendant Williams, an order to show cause at a day specified, during the same Circuit, why the verdict should not be corrected, was granted. The application was based upon the affidavits of all the jurors stating, in substance, that the verdict as agreed upon by them was in favor of defendant Williams and against the other defendant, for the amount named in the verdict entered, and that the announcement of the foreman was made through mistake and inadvertence. The court, upon hearing under the order to show cause, directed the verdict to be amended so as to conform to the actual finding. upon Samuel Hand, for appellant. The court at Special Term had power, proper proof, to amend the verdict. Code, 173; 2 R. S. 343; Burhans v. Tibbits, 7 How. Pr. 21, 24, 25, 74; Clark v. Richards, 3 E. D. S. 89; Jones v. Kennedy, 11 Pick. 125; Scott v. Galbrath, 1 Dal. 134; Cagan v. Eben, 1 Burr. 383; Clark v. Lamb, 6 Pick. 512; Well v. Cox, 1 Daly, 515. The affidavits of jurors are competent evidence to prove a mistake in announcing the verdict actually agreed upon. Cagan v. Eben, 1 Burr. 383; Noah v. Dickenson, 15 Johns. 309; Ser gent v. — Dalrymple v. Williams. 5 Cow. 106; Smith v. Cheatham, 3 Cai. 57; Thomas v. Chapman, 45 Barb. 98; Cochran v. Street 2 Wash. 79; Blakley v. Sheldon, 7 Johns. 32; 1 Am. Dig. 224; Mayo v. Archer, 1 Str. 514; Jackson v. Dickinson, 15 Johns. 309, 317. A. M. Bingham, for respondent. It was not proper to receive in evidence the affidavits of the jurors to impeach their verdict for mistake or error as to the merits, or to prove irregularity or misconduct. Clum v. Smith, 5 Hill, 560; Ex parte Caykendoll, 6 Cow. 53; People v. Col. Com. Pleas, 1 Wend. 297; Jackson v. Williamson, 2 T. R. 281; Mullins v. Christopher, 36 Ga. 584; Walker v. Comrs., etc., 9 Miss. (1 S. & M.) 372; Bernard v. Young, 5 Humph. (Tenn.) Verdicts cannot be amended, upon motion, in a matter of substance. Warner v. N. Y. C. R. R. Co., 52 N. Y. 437; Bemus v. Beekman, 3 Wend. 667; Brush v. Kohn, 9 Bosw. 589; U. S. T. Co. v. Harris, 2 id. 72. ALLEN, J. If the fact alleged is properly before us, there should be no doubt either as to the right of the plaintiff to have or the power of the court to grant the relief demanded. It would be a reproach upon the administration of justice if a party could lose the benefit of a trial and a verdict in his favor by the mere mistake of the foreman of the jury in reporting to the court the result of the deliberations of himself and his fellows. The power of a court of record over its records, and to make them truthful, is undoubted, and has been exercised without question. See cases cited by Judge HARRIS, in Burhans v. Tibbits, 7 How. Pr. 21. The question whenever the court is asked to reform its records so as to conform to the truth, is not as to the power, but whether a case is made calling for its exercise. The material question here is, whether the affidavits of the jurors can be received to show the mistake. If they were properly before the court the fact alleged was clearly established and is uncontradicted, and in addition we have the fact that the judge at the Circuit was satisfied of the mistake, and that the defendant was entitled to the correction asked, else he would have denied the motion altogether or modified the relief demanded, by merely granting a new trial. It was competent to give relief in either form, and had the judge doubted as to the right or the equities of the case he would have only set the verdict aside and put the parties to a new trial. There are reasons of public policy, why jurors should not be heard to impeach their verdicts, whether by showing their mistakes or their misconduct. Neither can they properly be permitted to declare, with a view VOL. XX.-69 |