
    DUDEN v. WAITZFELDER.
    N. Y. Supreme Court, First Department; at Circuit,
    
    
      April, 1877.
    Motion fob Mew Tbial.—Payment.
    Amotion for new trial may be made on the judge’s minutes, although there was no verdict, but the complaint was dismissed.
    
    The rule that taking from the debtor the obligation of a third person in payment, in ignorance of the fact that he was at the time insolvent, is not payment,—may apply even where the debtor gave the creditor at the same time with it, substantial collateral security for its payment. If the collateral security proves inadequate the creditor, after applying it, may recover against the original debtor for so much as remains unpaid.
    
      Motion for new trial.
    William Duden and three others sued Clara Waitzfelder, alleging that she made her bond, to them as partners, secured by a mortgage on real property. That afterward, being in arrear with interest, she wished to transfer the mortgaged premises to one" Silber, who refused to take them unless the interest was paid and the amount due on the mortgage thereby reduced ; and thereupon, on defendant’s request, and her promise to pay the plaintiff’s the sum of $804.16,' and her offer to them of the note of one M. Waitzfelder, secured by a pledge of certain camel’s hair shawls, the plaintiffs released and discharged the bond and mortgage to the extent of that sum. Silber thereupon took a conveyance of the premises subject to the mortgage, but under a representation from both mortgagor and mortgagee that such interest had been paid, so that thereby plaintiffs were estopped from enforcing the bond and mortgage in respect to that interest; and Silber subsequently paid the residue. Plaintiffs further alleged that they had recovered judgment against M. Waitzfelder upon his note and issued execution, and the sheriff seized the shawls which had been lodged with plaintiffs as security, and sold them for the sum of $250, leaving over $600 unpaid upon the judgment. Plaintiffs further alleged that at and before the making and delivery of the note M. Waitzfelder was insolvent and the note worthless, and the, release of. the defendant Clara Waitzfelder from her liability for the interest was without consideration to the amount of $600, uncollected on the judgment; that the note was taken in ignorance of his insolvency and under mistake of fact.
    The answer, after denying various allegations, alleged that the shawls were reasonably worth $1200, but they brought less than their value through plaintiff’s connivance with the sheriff, who sold them at plaintiffs’ store, contrary to the custom; and alleged plaintiffs’ negligence in not inquiring into the responsibility of Waitzf elder, before taking the note.
    At circuit the complaint was dismissed without submitting the cause to the jury, and plaintiffs moved on the minutes of the judge for a new trial.
    
      D. M. Porter, for plaintiffs,
    Cited, Roberts v. Fisher, 43 N. Y. 159, and Bruce v. Burr, 5 Daly, 510 ; and insisted that it was obvious that plaintiff’s relied on the note as well as on the shawls, otherwise the shawls would have been taken without the note ; and, moreover, as the note was part of the consideration, its proving uncollectable was a partial failure of consideration.
    
      Lyman Rindskop, for defendant.
    I. Section 264 of the Code does not authorize the granting of this motion. It provides that “the judge who tries the case may, in his discretion, entertain a motion to be made upon his minutes to set aside a verdict and grant a new trial upon exceptions or for insufficient evidence, or for excessive damages.” This only empowers him to set aside a verdict and grant a new trial thereupon, and there having been a dismissal, there is no verdict to Toe set aside, from which a new trial can follow. The only words that can give any color of right to the granting of a new trial are “and grant a new trial upon exceptions ; ” but even this will be found not to warrant the granting of this motion. They are connected by the copulative conjunction “and” with the words “to set aside a verdict,” and are intended only to show what disposition should be made of the case after the verdict is set aside. ■ If it had been intended to give a distinct power the word “or” would have been used instead of “ and.” The words “upon exceptions” do not mean upon exceptions taken to the dismissal of the complaint, but such as are taken in the course of the trial to matters that must have led to an erroneous verdict. That this construction is proper is evident from .the language used as well as the relation and connection of the words with each other. A new trial is defined to be “the judicial examination of the issues between the parties whether they be issues of law or fact” {Code, § 252). The words “new trial” presuppose that there was a previous trial, and since there was no “examination of the issues between the parties ” there was no such previous trial.
    II. Argument by both sides having been heard on a motion for dismissal, the order- of the court is res judicata, and if erroneous can only be reviewed on appeal.' If the plaintiff is entitled to be heard, it should be upon leave, and this will rarely be granted where there is a remedy by appeal (Bolles v. Duff, 56 Barb. 567; McGarry v. Board of Supervisors N. Y., 1 Sweeny, 217).
    III. The decision of the court is an order, and the making of that presents only a question of law. The cases in which new trials are granted for surprise are few and in such, where they are allowed, it has been solely upon proof of surprise in the facts and not in the law. This application is unprecedented in this State. Numerous cases are collected iu a note to the section of Code on new trials where new trials have been granted or refused upon allegations of surprise; but in none was a new trial asked for on any other ground than that of surprise in regard to matter of fact (Wait's Code, 215, title).
    IY. The counsel was apprised that the point upon which the complaint was dismissed would be raised, by the averment in the fifth paragraph of the answer. And if he failed to prepare himself to meet it, it was neglect from which he should not secure an advantage upon the pretense of surprise.
    Y. If this allegation of surprise is available, with due deference to the court, it is urged that there .is no efficacy in any dismissal. In most cases the plaintiff expects a recovery, and the direction of a nonsuit must, it seems from reason, surprise all nonsuited parties, and yet nonsuits are upheld until reversed by an appellate court.
    YI. But even if the court entertains this motion (and the defendant respectfully excepts to its right to do so) the nonsuit was properly granted, and the motion should be denied, (a) The plaintiffs did not show that they exercised reasonable diligence in ascertaining the financial condition of M. Waitzf elder, whose note they took. (b) It was shown that his solvency was not material to the making of the transaction, and did not form an element that induced them to discharge the defendant and to accept M. Waitzf elder’s liability; but that they relied solely upon the faith of the security offered and accepted. It is a rule in equity in cases of mistake, that if by reasonable diligónce the-complaining party could have obtained knowledge of the actual fact and did not exercise such diligence, equity will not relieve him (1 Story on Equity, chap. 5, § 146); and it is likewise a rule, that the fact with reference to which the mistake occurred must be material to the act or contract to entitle the party to relief (Id. § 141)
    
      
       The rule will be the same under the new Code of Civil Procedure. The provisions of that act applicable are as follows, the new part being in italic.
      “ § 999. The judge, presiding at a trial by a jury, may, in his diseretion, entertain a motion, made upon his minutes, at the same term, to set aside the verdict and grant a new trial, upon exceptions; or because the verdict is for excessive or insufficient damages; or otherwise contrary to the evidence, or contrary to law. If an appeal is taken from the order, made upon the motion, it must be heard, upon a case, prepared and settled in the usual manner.”
      | 998 provides that it is not necessary to make a case for the purpose of making the motion.
    
   Barrett, J.

In such a case as this, section 364 of the Code reasonably construed with reference to its spirit authorizes the granting of a new trial upon the minutes. But apart from that provision there is inherent power. That is asserted in Algeo v. Duncan, (39 N. Y. 314), and again in McDonald v. Walter (40 Id. 551). In the latter case it was held that the court had authority to set aside a verdict for inadequacy of damage. This although the section specifies excessive damage only.

On the merits Roberts v. Fisher (43 N. Y. 159) would be directly in point, if the shawls had not been taken as collateral security for Waitzfelder’s note. Does that change the aspect of the case % I think not. If the plaintiffs had relied solely upon the shawls they would have been received directly. It was the note, however, which was taken in payment, and it by no means follows that such note was not relied upon merely because the plaintiffs required it to be strengthened by collateral. The question on that head should have been submitted to the jury with instructions, in case they found for the plaintiffs, to take the value of the shawls into consideration in their estimate of the damages.

The motion for a new trial must be granted with costs to abide the event.  