Summary
In Mann v. Sprout, 185 N.Y. 109, 111, 77 N.E. 1018, 5 L.R.A. (N.S.) 561, 7 Ann. Cas. 95, the court said: "When the sum tendered is less than the amount due, it is a conclusive admission of the indebtedness to the extent of the tender, regardless of the final result of the action, and not only does the party paying it into court lose all right to it, but the court itself has no power to make an order in the same action, which, in effect, retransfers the title.
Summary of this case from In re Brofer Coal Mining Co.Opinion
Argued April 17, 1906
Decided May 8, 1906
D.E. Brong for appellant.
George F. Thompson for respondent.
When a debt is due, a tender of the entire amount with no condition attached, and the payment thereof into court pursuant to its order, even if not accepted, is an absolute transfer of the money to the creditor. When the sum tendered is less than the amount due, it is a conclusive admission of the indebtedness to the extent of the tender, regardless of the final result of the action, and not only does the party paying it into court lose all right to it, but the court itself has no power to make an order in the same action, which, in effect, retransfers the title. Relief from mutual mistake, or mistake on one side and fraud on the other, can be had, if at all, only in an independent action brought for the purpose. Even if the verdict is for a less amount, or for nothing at all, the title has irrevocably passed and the result of the action has no effect thereon. The same rule prevails whether the action is in tort or on contract, for in either case the money paid into court by the defendant pursuant to a tender belongs to the plaintiff in any event. Refusal of the creditor to accept, or the death of either party, or the commencement of another action, does not change the effect, for the title passes by operation of law the same as if the tender had been accepted. The transfer is complete and cannot be changed without consent, or a decree in equity, from the moment the court takes control of the money. Acceptance by the court for the plaintiff has the same effect as acceptance by the plaintiff himself. Deposit in a bank, or with a third party, without the order of the court, does not prevent a withdrawal if there has been no acceptance, but the action of the court in a suit pending before it, whereby at the request of one party it takes money into its possession for the benefit of the other, has the same effect as actual acceptance, and ipso facto vests the title in him. The custody of the law is the custody of the plaintiff, and the action of the defendant operates as a final and irrevocable transfer. If the plaintiff goes on with the action and is nonsuited, or the verdict is against him or is for a sum less than the amount tendered and paid into court, still the defendant cannot take the money back, for it is not his, but has passed irrevocably to his adversary. If thereafter the fund is lost or stolen by the county treasurer, the loss falls on the plaintiff, not on the defendant, who has no further interest in the money. ( Taylor v. Brooklyn El. R.R. Co., 119 N.Y. 561; Wilson v. Doran, 39 Hun, 88; 110 N.Y. 101; Becker v. Boon, 61 N.Y. 317; Beil v. Supreme Council Am. L. of H., 42 App. Div. 168; Murray v. Bethune, Wend. 191; Slack v. Brown, 13 Wend. 390; Dakin v. Dunning, 7 Hill, 30; Bank of Columbia v. Southerland, 3 Cow. 336; Malcolm v. Fullarton, 2 Durn. E. 645, 648; 2 Parsons on Cont. [9th ed.] 789; 2 Whart. on Cont. § 976; 1 Beach on Cont. § 331.)
In the Taylor case, an action in tort, there was a tender of $200 and costs, the money was paid into court pursuant to order and notice given to the plaintiff. When the action was tried there was a verdict for the defendant, but still the plaintiff was allowed to take the money out of court and keep it. We held that the money thus paid into court, although the plaintiff refused to accept it until after judgment had gone against him, belonged to him and that his title thereto could not be disputed notwithstanding the result of the action. Judge GRAY, speaking for all the judges, said: "A tender is not effectual under the Code unless the money is accepted or is paid into court. If it is not accepted, in lieu of the acceptance, and in order to make his tender available in law, the defendant may deposit the amount in court. The payment into the court is then deemed equivalent to an acceptance by the plaintiff of the amount tendered. The money deposited is deemed in law a payment to the plaintiff on account of the contract obligation, or of a conceded liability for the injury."
Murray v. Bethune was an action in assumpsit against the executor of a testator, who in his lifetime had paid the money into court "in a previous suit brought against him by the plaintiffs." The court said that "it was a payment pro tanto. The plaintiff had a right to take it out of court and the defendant had not." The death of the defendant "subsequent to the payment, the survival of the action against his executor, or even the commencement of a new suit, did not change the effect of the payment."
It is, however, claimed, and this is the theory upon which the courts below proceeded, that when the court changes the issue by an order amending the answer, it has the power to authorize a withdrawal of the sum paid into court as incidental to its right to permit such amendment and necessary to make it effective.
There is no statute which expressly permits this, and unless it is impliedly authorized by the Code, the rule that a tender and payment into court is an absolute transfer of title to the fund, must control, and the party making the tender held to have run the risk thereof, regardless of the subsequent proceedings in the action. The provisions of the Code somewhat amplify those of the Revised Statutes. (2 R.S. 553, 554.) They regulate the procedure relating to tender, provide for the care and investment of the fund and expressly discharge the party bringing the money into court pursuant to its order "from all further liability to the extent of the money so paid in." (Code Civ. Pro. §§ 731-735; 743-748.) The authority to amend is broad but not broad enough to permit the transfer of title without a trial. (§ 723.) The power to withdraw is not incidental to the power to amend. Power to amend a pleading is simply power to change the issues which control the admission of evidence. It cannot of itself change the title to property, or transfer to the defendant that which previously belonged to the plaintiff. That is not the office of a pleading and cannot be held an incident thereto. Pleadings define the issues, but do not try them. While a party may by amendment be relieved from an inadvertent admission in his answer, he cannot thereby be relieved from the effect of an act which, wholly independent of his answer, irrevocably transferred the title to money. A party by his pleading admits or asserts a right, but when by his act outside of his plea he transfers a right, he cannot by amendment revoke the transfer. The pleading may be changed, but the act stands the same as an actual payment voluntarily made, and thus differs essentially from an offer to compromise. No amendment of the answer could permit the recall of money actually accepted, and payment into court has the same effect on the title as actual acceptance. While the rule may operate harshly in this case, it is the law, which we can announce but cannot change.
The order, so far as appealed from, should be reversed, and that part of the motion which asked leave to withdraw the sum tendered and paid into court denied, with costs in all courts.
CULLEN, Ch. J., GRAY, EDWARD T. BARTLETT, HAIGHT, WILLARD BARTLETT and CHASE, JJ., concur.
Order reversed, etc.