Opinion
March, 1905.
D.E. Brong, for the appellant.
George F. Thompson, for the respondent.
The question presented by this appeal is whether or not the court has power to permit an amendment of an answer which shall be effectual where the defendant has paid into court an amount tendered to the plaintiff under a mistake of fact. The question as to whether or not the court improperly exercised its discretion in permitting the defendant to serve an amended answer in this case is not involved, as that part of the order is not appealed from. The question is: Has the court power to relieve a defendant from the effect of a tender which, after the commencement of the action, is, by order, paid into court?
A tender is an admission by a defendant that he is indebted to the plaintiff in a sum at least equal to the amount thereof. If accepted it ends the litigation. If not accepted the rights of the parties remain unchanged. If such tender is paid into court after action brought, for the purpose of keeping it good, the plaintiff may accept it at any time. If he does not accept it, the litigation proceeds exactly as if such tender had not been made, and it only affects the amount of costs which the parties are entitled to recover, except that in any event the plaintiff is entitled to the amount of such tender. Under those circumstances it has been held that the amount so paid into court becomes the property of the plaintiff and that the title passes from the defendant to the plaintiff. ( Becker v. Boon, 61 N.Y. 322; Beil v. Supreme Council, 42 App. Div. 170; Wilson v. Doran, 39 Hun, 88.)
In Becker v. Boon ( supra) the court said: "The object of payment into court is to place the money tendered where plaintiff will be sure to get it. It then becomes the plaintiff's money and the defendants cannot dispute his right to it."
The foregoing and similar expressions of the courts, we think, must have reference to the condition of the pleadings or issues at the time the payment into court was made.
In Taylor v. Brooklyn Elevated R.R. Co. ( 119 N.Y. 561) it was held, where such a tender was paid into court, that although the plaintiff failed to prove a cause of action he was entitled to the amount of the tender. Such holding was strictly in accordance with the pleadings in that case. The defendant admitted that Taylor was entitled in any event to recover the amount paid into court and the court by its decision simply gave effect to such unqualified admission. That is not the attitude of the parties in the case at bar. By his original answer the defendant admitted an indebtedness to the plaintiff for a certain amount. In order to avoid costs he tendered the amount, and after suit brought, in order to make such tender effectual, he paid the same into court. As the pleadings then stood the plaintiff was entitled to recover the amount of the tender. Then the pleadings were changed, the issues to be tried were changed, the admission in the answer that the defendant was indebted to the plaintiff was eliminated, and it seems quite clear that the payment into court, which was only made for the purpose of making such admission effectual, should also be eliminated. Suppose that A demands payment from B of a promissory note for $500 made by him, claiming that the whole amount is due and unpaid. B, honestly believing that he has already paid only $100 upon the note, tenders to A the balance, which he refuses to accept and brings an action to recover the face of the note. B in his answer alleges the payment of $100 and pays the balance, $400, into court, which A refuses to take or accept. B thereafter discovers that he has paid the full amount of the note; that he has it in his possession marked paid and satisfied by A. Is B without remedy? May not he be allowed to amend his answer and be relieved from his act of payment into court? We think the power of the court is sufficiently broad to prevent an injustice of that character, and that the fact that payment into court has been made under such circumstances does not restrain the court in that regard.
In the case at bar, it being practically conceded that the court properly exercised its discretion in permitting the defendant to amend his answer by withdrawing his admission of any indebtedness to the plaintiff and by setting up a counterclaim and demanding an affirmative judgment, we think the court had the power and was justified in permitting the defendant to withdraw the money paid by him into court, which only was made for the purpose of making effectual his admission of indebtedness, which was eliminated by the amended answer.
It follows that the order appealed from should be affirmed, with costs.
HISCOCK and STOVER, JJ., concurred; SPRING, J., dissented in an opinion, in which WILLIAMS, J., concurred.
The defendant tendered the money to the plaintiff before the action was commenced, and after its commencement paid the money into court pursuant to an order therefor (Code Civ. Proc. §§ 731-733), which provided: "It is ordered that the defendant have leave to bring into court the sum of $51.35 admitted by them to be due plaintiff by paying the same to the County Treasurer of Niagara County.
"And it is further ordered that the plaintiff have leave at any time to take said money out of court."
The attorneys for the plaintiff were notified of the tender.
The effect of this tender was to vest the title to the money tendered in the plaintiff. The payment into court was tantamount to a payment to him. He could take it at any time. It was not an extinguishment of his claim, but only a payment pro tanto. The defendant admitted he was indebted that much at least. If the plaintiff recovered only one-half of the sum tendered, still he could retain the whole sum, and that would be so even if the defendant obtained a verdict in his favor. ( Taylor v. Brooklyn Elevated R.R. Co., 119 N.Y. 561; Beil v. Supreme Council, 42 App. Div. 168.)
The first case cited was for personal injuries. The defendant, pursuant to an order, paid into court $200 and costs, which money was not taken by the plaintiff. The defendant obtained a verdict at the trial. Thereafter the court ordered the money deposited to be paid to the plaintiff. This was in recognition of the proposition which is fundamental that where a tender is made and the money is paid into court it irrevocably belongs to the plaintiff. The court say: "The moneys belonged to the plaintiff from the moment of their deposit, by force of their payment into court under this order. * * * 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. * * * The Revised Statutes and the Code have extended the common-law right of tender, so as to permit a tender of moneys, or their payment into court where the tender is refused, during the pendency of an action. But the effect under the statutes, as now under the Code, has always been considered to be that the plaintiff recovers in any event the amount of the tender."
This money belonging to the plaintiff he had a right to it at any time ( Becker v. Boon, 61 N.Y. 317), and it follows inevitably that the defendant had no right to withdraw it. ( Murray v. Bethune, 1 Wend. 191; Wilson v. Doran, 39 Hun, 88; revd. but affd. as to this proposition, 110 N.Y. 101; 1 Rumsey Pr. [2d ed.] 758.) The rule is thus stated in a sentence in the Encyclopædia of Pleading and Practice (Vol. 21, p. 580): "As money paid into court in pursuance of a tender belongs to the opposite party at all events, it follows that the party paying the money has no right to withdraw it."
The acceptance of the money before trial is not essential to transfer ownership to the person to whom it is tendered. The liability of the defendant does not rest upon the action of the plaintiff. The defendant desired to stop interest and save costs, and consequently he offered the plaintiff a certain sum, which the latter declined to accept, and the defendant paid the money into court, which in effect was a payment to the plaintiff, and the defendant received the benefit of it. He cannot after a trial and disagreement of the jury as in this case or at any time be relieved of the effect of his tender, for he voluntarily parted with the title, receiving benefit therefor deemed adequate to him.
The illustration is made that a man may make a payment into court on the supposition that he owed the plaintiff but afterward learn he was in error, and the suggestion is that he should be relieved from his imprudent conduct. If in the case instanced the plaintiff had absolutely taken the money, I assume there would be no claim that any relief could be afforded to the defendant. In the case suggested the taking is of no consequence for he only withdrew what concededly belonged to him. Whether in the court or in his vest pocket is of no importance to the defendant. There is no greater hardship to the defendant in the supposititious case than in Taylor v. Brooklyn Elevated R.R. Co. ( supra) where the defendant made his tender and then succeeded but still lost the amount tendered.
The bedrock of the principle in all these cases is that the tender transferred the title beyond any regaining by the defendant.
The order, so far as appealed from, should be reversed, with costs, and the application to withdraw the tender should be denied.
WILLIAMS, J., concurred.
Order affirmed, with ten dollars costs and disbursements.