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on an improvement, a right of action in his own name to
collect the assessment. It does not appear that the assess-
ment is made a debt and collectible as such, but a right of
action is given by statute against one who sustains no con-
tract relation in fact or in law to the plaintiff. In such a
case it may well be held that the plaintiff must allege and
prove every fact necessary to show that his case is within the
purview of the statute. In this case the statute goes fur-
ther and declares that the relation between the parties shall
be that of creditor and debtor. Here the rules of pleading
in actions for the collection of debts prevail ; there, the prin-
ciples applicable to actions founded on statutes prevail.
While there are some analogies between those cases and
this, yet in some respects they are quite dissimilar ; so much
so that we do not consider them as entitled to great weight.

We have hesitated somewhat from the fact that in the
analogous case of a tax to foreclose a tax lien, the form pre-
scribed under the Practice Act states with great particularity
the proceedings in levying the tax. That form is doubtless
an authority for holding good a complaint which foUows it,
but it does not necessarily preclude the court from sustain-
ing a simpler and shorter complaint. However that may be,
since the Practice Act went into operation in 1881 a statute
was enacted providing that "all taxes, properly assessed,
shall become a debt, * * * and may be, in addition to the


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526 APRIL, 1890.

Kockville Bank v: Holt

other remedies provided by law, recovered by any proper
complaint or proceeding at law." Gen. Statutes, § 3901.
The object of that statute was to give a simple remedy for
the collection of taxes by an ordinary action and to dis-
pense with prolixity in pleading.

The judgment of the District Court is erroneous and is

In this opinion the other judges concurred.

RocKviLLE National Bank vs. Royal G. Holt.

Hartford DisL, March T., 1890. Andrews, C. J., Cabpenteb, Sky-
MOUK, Fenn and Thayer, Js.

The plaintiff, who held the notes of an insolvent corporation indorsed by
the defendant, signed a composition deed by which the creditors as-
signed tlieir claims to a reorganizing committee and agreed to take in
payment the stock of the reorganized company, to be issued to them
by the committee. When the plaintifP signed the agreement he added
to his signature the following: — ** reserving all rights against R. 6. H."
(the defendant.) Held that, with this qualification, the signing of the
agreement did not discharge the defendant from his liability as surety.

And where a surety has knowledge of and assents to the giving of time to
the principal debtor or tlie making of a new contract with him, he is
not discharged.

In this case the defendant, who was himself a creditor of the insolvent
corporation, signed the composition deed before the plaintiff. It was
necessary to the carrying out of the object intended that the other
creditors should also sign. Held that the defendant's signing the
agreement might be regarded as a request to the others to sign also,
and that the plaintiff's subscription was to be regarded as made with
the defendant's knowledge and assent

[Argued March 11th— decided April 15th, 1S90.]

Action against the defendant as indorser of sundry notes
and bills of exchange; brought to the Superior Court in
Tolland County, and tried to the court before Torrance^ J.
Facts found and judgment rendered for the plaintifiF, and


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APRIL, 1890. 527

Rockville Bank v. Holt.

appeal by the defendant. The case is fully stated in the
opinion. -^

C. Phelps^ for the appellant.

The Smith Rubber Company, being indebted to the de-
fendant, gave him three promissory notes, and accepted
three bills of exchange, representing the indebtedness, all
of which were payable to the order of the defendant and
indorsed by him, and were discounted by the plaintiff.
Subsequently the Rubber Company failed, owing the de-
fendant the above debt, and he soon afterwards made an
assignment in insolvency and his estate paid fifty cents and
two mills on a dollar. The defendant afterwards becoming
possessed of certain property, the plaintiff attached it in a
suit to recover the balance due. During the pendency of
the snit the plaintiff signed a composition agreement which
contained the following language :-^" The parties of the
first and fifth parts" (including the plaintiff) "shall upon
demand transfer, and shall be deemed to have transferred,
to the reorganizing committee, hereinafter appointed, all
claims, demands, suits and proceedings against the Smith
Rubber Co." To this committee therefore the plaintiff, for
value, transferred its claim, for the recovery of which this
suit is brought, but added after its signature the followiiig :
'* Reserving all rights against R. G. Holt, and against his
estate, or assignee for the benefit of creditors."

The Smith Rubber Co. and the defendant hold the rela-
tion of principal and surety. Murray v. Judah^ 6 Cowen,
484. A surety cannot be charged beyond the positive obli-
gation of lii^ contract. Walsh v. Bailie^ 10 Johns., 180;
Lanuse v. Barker^ id., 812. ''A surety has the right to
stand upon the very terms of his contract, and any act or
omission which altei-s such terms, without his consent, will
extinguish his liability, even though such alteration be for
his benefit. It destroys the identity of the contract and it
ceases to be the contract to which he became a party."
6 Wait's Actions & Defenses, 231, and authorities there
cited. Any collateral contract ceases when the principal


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528 APRIL, 1890.

Rockville Bank o. Holt.

contract terminates. Chapman v. OoUins^ 12 Cush., 163 ;

. Wright v. Bu88el, 3 Wils., 530 ; Dry v. Davy, 10 Adol. &
El., 30. The contract of a surety is a collateral engagement
for another, as distinguished from an original and direct
agreement for the party's own act. Chitty on Cont., 499.

Applying these principles to the case at bar, the principal
cannot change his base, without the knowledge and consent
of the surety, without the surety becoming thereby dis-
charged. It is a familiar rule that the discharge of the
principal is in law a discharge of the surety. Does the fact
of a reservation appended to the plaintiff's signature, and
which does not appear in the body of the instrument, take
the case out of the rule ? On this point the case of " Farm-
ers' Bank v. Blair,'' 44 Barb., 642, speaks as follows : — "An
action being brought by the indorser of promissory notes
against two persons as joint makers, and two others, B. and
M., as joint indorsers thereof, one of the makers died ;
whereupon a compromise was entered into between the
plaintiff on the one part and the surviving maker and M.,
one of the joint indorsers, on the other, by which the plaint-
iff, on being paid one half the amount of the notes, exon-
erated and discharged the surviving maker and M. from all
liability upon the notes in suit. Held that this discharge
of the surviving maker of the notes operated as a discharge
of B. the indorser; and that he might set up such a dis-
cl)arge as a defense to the action." And further — " As be-
tween the maker and indorser of a promissory note, their
relation for most purposes is that of principal and surety.
And if the holder, without the privity and consent of the
indorser, by a valid contract with the maker, discharges the
latter, the indorser is also discharged. And this notwith-
standing it is declared in the release that the discharge of
the maker therein provided for is not intended, nor shall be
used, to impair the rights of the holder against the other

-parties to the note."

As evidenced by the composition agreement the reorgan-
izing committee bought and owned the very causes of ac-
tion upon which the plaintiff's claim was predicated, and


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APRIL, 1890. 529

Rockville Bank v. Holt.

apparently for full value. On the claim so purchased the
committee could at once proceed against the defendant,
and in this very suit could have successfully asked to be
made a party plaintiff. The reservation appended to the
signature adds nothing and subtracts nothing, for it is en-
tirely inconsistent with the burden, object and purport of
the instrument signed. An assignment carries with it all
of the incidents of the thing assigned. As for instance in
a mortgage, " the debt is the principal, and the security
the incident; the assignmei^t of the principal draws after
it the incident." Oreen v. ffart^ 1 Johns., 580. When a
debt is sold or assigned, the veiy object and purpose of the
surety vanishes. It operates upon the surety in the same
manner as if the debt were extinguished. See Webb v. ffevh
itt^ 3 Kay & Johns., 438. The head note declares that "a
creditor upon giving time to his principal debtor may re-
serve his rights against the surety, and this without commu-
nicating the arrangement to the surety. But when the
creditor gives a release to the debtor he cannot reserve any
right against the surety, because the debt is gone at law."

But there is a further principle involved in the case at
bar, for in equity there has been an adjustment of the debt
and an arrangement of the claim. The plaintiff is to re-
ceive for its claim a certain proportion of preferred and
common stock of a new company, formed after capitalizing
the debts of the old one, based upon the full amount of the
plaintiff's claim. For each dollar of indebtedness it receives
a dollar's worth of stock ; some of it preferred, and some
of it common. "An adjustment between the debtor and
creditor, and an arrangement that the sum agreed upon
shall be paid in instalments, has the effect to discharge the
sureties." 5 Wait's Actions & Defenses, 231. See also
Steele v. Boyd^ 6 Leigh, 547. If the defendant is still holden
in the same manner as before the adjustment, transfer and
assignment, then is he "subjected to the demands of two
different creditors instead of one," which the law has never
contemplated. 17 Atlantic Reporter, 1048. A court of
equity should restrain the plaintiff from pursuing a claim
Vol. Lvin. — 84


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630 APRIL, 1890.

Rockville Bank 0. Holt.

against the defendant which has already been adjusted and
which the plaintiff does not own. If the stock taken by
the plaintiff for its debt be worth par, the bank is already
overpaid, for it received 60 and 2-10 per cent from the de-
fendant's estate. If it be worth but half its par value, still
has the bank received more than its claim.

(7. E, Qro88^ for the appellee.

Andrews, C. J. The L. B. Smith Rubber Company, a
corporation doing business at Setaiiket, New York, being
indebted to the defendant gave him three promissory notes,
and accepted three bills of exchange, representing such in-
debtedness and aggregating in the whole something mnre
than five thousand dollars. All of the notes and bills were
payable to the order of tlie defendant, were by him indorsed,
and at his request were discounted for his benefit by the
plaintiff. Shortly thereafter the Rubber Company failed.
That failure compelled the defendant to go into insolvency.
The plaintiff presented its claim against his insolvent estate
and received a dividend thereon. The defendant having
since that time acquired other property, the plaintiff brought
this suit and attached such other property. Since the bring-
ing of this suit the plaintiff, in common with nearly all the
creditors of the L. B. Smith Rubber Company, including
the defendant, signed an agreement which is fully set out in
the finding, but which it is not necessary here to repeat.
For the purposes of the present discussion it is suflBcient
to say that that agreement provided, among various other
things, that the creditors of the Rubber Company should
assign their claims to certain persons called a reorganizing
committee, and that this committee should proceed to reor-
ganize the company and should issue to each of the several
creditors in payment for their respective claims the stock of
the reorganized company, which the creditors agreed to ac-
cept. When the plaintiff signed the agreement it added to
its signature : — '* reserving all rights against R. G. Holt, or
against his estate, or assignee for the benefit of his credi-


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APRIL, 1890. 681

Rock?ill« Bank r. Holt.

tors." These words did not appear in the body of the in-

The defendant insists that by signing the agreement the
plaintiff assigned all its claim against the L. B. Smith Rub-
ber Company to the reorganizing committee, and that as he
is liable to the plaintiff only as a surety for that company
the assignment of the claim against the principal debtor dis-
charges him.

That an unqualified release of a principal debtor will be
a discharge also of the surety is admittedly good law. The
plaintiff, however, claims that by the reservation appended
to its signature it is not affected by that rule. The defend-
ant cites two cases, either of which by its terms fully sup-
ports his contention. But the authority of each of these
cases is greatly weakened, if not entirely overturned, by
later decisions in the same jurisdiction. Webb v. Semtt^ 3
Kay & Johnson, 438, is substantially overruled by Ghreen v.
Wynn, L. R., 7 Eq. Cas., 31, and L. R., 4 Ch. Appeals, 204;
and Farmers Bank v. Blair^ 44 Barbour, 641, by Morgan v.
Smith, 70 N. York, 645, Colvo v. Davies, 73 N. York, 211,
Nat. Bank v. Bigler, 83 N. York, . 61, and Shtdts v. Fingar,
100 N. York, 539.

It is stated in De Colyar on Principal & Surety, 418, that
such a reservation as was made by the plaintiff prevents
there being any discharge of the surety, and gives as au-
thority Keardey v. Cole, 16 Mees. & Wels., 128; Wyke v.
Rogers, 1 De G. M. & G., 408 ; Boaler v. Mayor, 19 C. B.
N. S., 76, 84; OwenY. Homan, 4 H. L. Cases, 997 ; and
Close V. Close, 4 De G. M. & G., 176. See also Tobey v.
Ellis, 114 Mass., 120 ; Kenworthy v. Sawyer, 125 id., 28 ;
Bank v. Lineberger^ 83 Nor. Car., 454 ; Morse v. Huntington,
40 Verm., 493 ; Hagey v. Hill, lb Penn. St., 108 ; Mueller
V. Lobschuetz, 89 111., 176. The weight of authority seems
to us to be strongly adverse to the defendant's claim.

There is another view of the case which makes it clear
that the defendant is not entitled to a discharge by reason
of the plaintiff's signing the agreement. Whenever a credi-
tor gives time to, or makes a new contract with, the princi-


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532 APRIL, 1890.





S6 582











K. York & N. England R. R. Co.'s Appeal from R. R. Commissioners.

pal debtor, of which new contract the surety has knowledge
and to which he assents, he is not thereby discharged.
Adams v. TFay, 32 Conn., 160 ; Corliea v. Ustes^ 81 Verm.,
658 ; Smith v. Winter^ 4 Mees. & Wels., 454. The compo-
sition agreement was beneficial to all the creditors of the
L. B. Smith Rubber Co., provided all entered into it. The
defendant and his trustee in insolvency signed it before the
plaintiff did. It was obviously for the advantage of each
that the other should sign. Without some such arrange-
ment neither could ever hope for any payment from that
company. With such an arrangement there was a chance
that they might both be paid in full. The plaintiff signed
with the knowledge that the defendant and his trustee had
previously signed. A composition deed implies not only an
agreement of the debtor with each of his creditors, but also
an agreement by each creditor with each of the others. The
signing of such a deed by any creditor is in some measure a
request to all the others to sign also. The circumstances of
this case show pretty clearly that the defendant knew of and
assented to the act of the plaintiff in signing the agreement.
There is no error in the judgment complained of.

In this opinion the other judges concurred.

, The New York & New England Railroad Com-

e9_j6i \ pany's Appeal from Railroad Commissioners.

58 ml

75 45l|

2LJ^ Hartford Dist., March T., 1890. Andhews, C. J.. Cabpemteb, To»-

BAJ^CB, Fenn and Thaykb, Js.

The act of 1889 (Session Laws, ch. 220,) which provides for an order by the
railroad oomndssioners for the change of a highway where crossed at
grade by a railroad laid out since the highway was made, and author-
izes the commissioners to apportion the expense of the alteration be-
tween the town and the railroad company, but limits the amount to be
set to the town to one quarter of the expense, and requires that the


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APRIL, 1890. 688

K. York & K. England R. R. Co.'s Appeal from R. R. Commissioners.

rest be paid by the railroad company, is not unconstitutional as con-
flicting with the provisions for " due course of law " in taking property,
in the 14th amendment of the constitution of the United States, and
in article 1, sees. 9 and 12 of the constitution of this state.

[Argued March 12th— decided April 22d, 1890.]

Appeal from an order of the railroad commissioners;
taken to the Superior Court in Windham County.

The town of Killinglj made an application to the railroad
commissioners under the act of 1889, (Session Laws of 1889,
ch. 220,) for an alteration of a highway which was crossed
at grade by the railroad of the appellants, and which was in
existence when the railroad was laid out. The appellants
were made parties defendant to the application. The com-
missioners heard the application and made an order for the
alteration of the highway, and apportioned one, fourth of the
cost of the alteration to the town, and three fourths to the
railroad company, the statute authorizing an apportionment
of the cost between the town and the railroad company, but
limiting the share to be set to the town to one fourth of
the amount and requiring the i*ailroad company to pay what-
ever should not be apportioned to the town. From this
order the present appeal was taken to the Superior Court,
the statute authorizing such appeal.*

* The fii*st section of the act referred to, wliich is all that is important to
the present case, is as follows : —

The selectmen of any town, the mayor and common council of any city,
the warden and burgesses of any borough, within which a highway crosses
or is crossed by a railroad, or the directors of any railroad company whose
road crosses or is crossed by a highway, may bring their petition in writing
to the railroad commissioners, therein alleging that public safety requires
an alteration in such crossing, its approaches, the method of crossing, the
location of the highway or crossing, the closing of a highway crossing and
the substitution of another therefor not at grade, or the removal of ob-
struclions to the sight at such crossing, and praying that the same may be
ordered; whereupon the railroad conmiissioners shall appoint a time and
place for hearing the petition, and shall give such notice thereof as they
judge reasonable to the petitioner, the railroad company, the municipali-
ties in which such crossing is situated, and the owners of the land adjoin-
ing such crossing and adjoining that part of the highway to be changed iu
grade; and after such notice and hearing said commissioners shall deter-
mine what alterations, changes or removals, if any, shaU be made, and by


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684 APRIL, 1890.

K. York A K. Engl&nd R. B. Co.'6 Appeal from R. R. Ck>mBi8Skmers.

The case was heard before Prentice^ J, The court af-
firmed the order of the railroad commissioners, and the
original appellants appealed to this court.

JS, 2>. Bobbins^ for the appellants.

This is the first case to arise under the act 1889. That
act went into force on August 1st, and on that day the town
of Killingly commenced this suit by its petition to the rail-
road commissioners. The whole statute does not oome into
consideration in the present suit, but only those {provisions
that apply where a town brings a petition for the separation
of the grade of a railroad from that of a highway which
was in existence when the railroad was constructed. It
provides that the commissioners in the first instance, and the

whom done; and if the aforeeaid petition is broagfat by the directors of
any railroad company, or in l>ehalf of any railroad company, they shall
order the expense of such alterations or removals, including the damages
to any person whose land is taken, and the special damages which the
owner of any land adjoining the public highway shall sustain by reason of
any change in the grade of such highway, in consequence of any change,
alteration or removal ordered under the authority of this act, to be paid
by the railroad company owning or operating the railroad in whose behalf
the petition is brought; and in case said petition is brought by the select-
men of any town, the mayor and common council of any dty, or the war-
den and burgesses of any borough, they may, if the highway affected by
said determination was in existence when the railroad was constructed
over it at grade, or if the lay-out of the highway was changed for the ben-
efit of the railroad after the lay-out of the railroad, order an amount not
exceeding one quarter of the whole expense of such alteration, change or
removal, including the damages as aforesaid, to be paid by the town, city
or borough in whose behalf the petition is brought, and the remainder of
the expense shall be paid by the railroad company owning or operating
the road which crosses such public highway. If however the highway af-
fected by such order last mentioned has been constructed since the railroad
which it crosses at grade, the railroad commissioners may order an amonnt
not exceeding one half of the whole expense of such alteration, change or
removal, including the damages as aforesaid, to be paid by the town, dty
or borough in whose behalf the application is brought, and the remainder
of the expense shall be paid by the railroad company owning or operating
the road which crosses such public highway.

The fifth section provides for the assessment of damages upon any snch
alteration of a highway, and the sixth for an appeal, by any party ag^
grieved, from the order of the railroad commissioners to the Superior Gonrt.


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APRIL, 1890. 585

N. York A K. Eugland R. R. Co.'s Appeal £1*0111 R. R. Cummissioners.

Superior Court on appeal, after hearing all parties in inter-
est, shall determine whether public safety requires any
alterations, and, if so, what alterations shall be made, and
by whom.

The railroads were generally built just as they now exist,
not only with the express sanction of law, but to the great
satisfaction of the public. In many instances the existing
crossing would not have been so constructed but for the
demand of the community to that effect. If the town had
so desired the railroad could, without additional expense,
have been built so as not to cross these highways at grade.
But the people wanted the railroad on a level with the high-
ways so that it might be more accessible from them and
from adjoining factory sites. In many instances the in-
creased danger which causes the town to complain of the
railroad crossing is due entirely to the growth and increased
prosperity of the community. But growth and additional
prosperity may properly be held to devolve on the town new
responsibilities to meet the new exigencies thereby genera-
ted. Towns as they grow into boroughs or cities have to
alter the grade and construction of other highways than
those which cross the railroads. The borough of Daniel-
sonville in the town of Killingly has been created by the
. existence of the Norwich & Worcester Railroad. It is not
wholly fair for the town to cheerfully accept its railroad as
lawfully established in so far as that has built it up, and to
refuse to accept the railroad as rightfully established in con-
nection with its responsibilities to make the highways safe for
the increased travel of the growing community. The town
is responsible for public safety on the highway, and the rail-
road company is responsible for public safety on the rail-
road. The law provides that they may be ordered to
cooperate in removing the danger caused by the intei*section
of the roads for which they are respectively responsible, and

Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 58 → online text (page 48 of 60)