
    Moritz L. Ernst et al., Respondents, v. The Estey Wire Works Co., Appellant.
    (Supreme Court, Appellate Term,
    May, 1897.)
    1. Payment — Assigned claim.
    A payment made by a debtor to his creditor after notice of an assignment of the claim does not operate to discharge the indebtedness.
    S. Samo — Ratification.
    An acceptance by the assignee of additional security from the assignor and an agreement not. to sue him for tort is not a ratification of such a payment, where it is not shown that he had any knowledge of such payment at that time.
    Appeal by defendant from judgment of the Second District Court.
    E. F. Brown, for appellant.
    Mas Cohen, for respondents.
   McAdam, J.

The action is on two claims for goods sold and delivered by the Kilmer Manufacturing Company to the defendant, which were assigned with other demands to the plaintiffs April 26, 1895. The defense was payment to the Kilmer Manufacturing Company, August 5, 1895, and that the plaintiffs subsequently and on October 19, 1895, ratified the payment by accepting further security from their assignor and agreeing not to prosecute the directors thereof for conversion or any tortious act.

There was sufficient evidence to warrant the justice in finding, first, that the defendant, prior to the payment by it, had written notice of the transfer of the two demands to the plaintiffs; and, second, that at the time of accepting the additional security and executing the so-called ratification agreement the plaintiffs did not know that the Kilmer Manufacturing Company had collected the assigned claims from the defendant. Indeed the new agreement does not substitute new securities for those previously transferred, for it expressly provides that they are additional ” securities. The legal effect of such findings is that the payment made by the defendant did not operate to discharge the two demands against the defendant which were then owned by the plaintiffs.

No act of the Kilmer Manufacturing Company after notice of the assignment could prejudice the plaintiffs, and the evidence offered by the defendant to show such acts was properly excluded.

The point that the plaintiffs elected to discharge the defendant by agreeing not to 'prosecute the directors of the assignor for tort is without merit. The promise -related' merely to the form of any remedy the plaintiffs might invoke for any wrong accomplished by the assignor and it is not binding, as an election to discharge the defendant; for there is no evidence to show that the plaintiffs had any knowledge that the defendant had paid their claims to the Kilmer company, so as to raise the implication that the said claims were referred to; and after serving notice of the assignment to them the plaintiffs had the right to assume that such payment had not been made. Benninghoff v. Agricultural Ins. Co., 93 N. Y. 501; Clark v. Woodruff, 83 id. 525; Mack v. Phelan, 92 id. 27.

In Fowler v. Bowery Savings Bank, 23 Abb. N. C. 133, the plaintiff not only knew that a wrongful claimant-had collected his money, but proceeded against him to judgment, and it was only after the judgment proved unproductive that he sought his remedy against the bank which made the erroneous payment. That was a clear case of election by the creditor. There is nothing in the .record which suggests that the doctrine of estoppel applies to the plaintiffs to disable them from asserting their legal rights against the defendant.

The so-called ratification agreement in no manner prejudices the defendant as to any remedy over it may have against the Kilmer company or any person assuming to act on its behalf for the moneys wrongfully collected. The payment was not accepted by any one for or on behalf of the plaintiffs, so as to call upon them at once for disaffirmance, and they repudiated the payment when .they heard of it by prosecuting the defendant on the claims.

The controlling features of the case are covered by the findings of the justice in favor of, the plaintiffs, before referred to, and as these are sufficiently sustained by the evidence the judgment must be affirmed, with costs.

Daly, P. T., and Bisoholf, J., concur.

Judgment affirmed, with costs.  