Barnes agt. Mott.

The question is therefore presented, whether on this state of facts the learned chief justice before whom this cause was tried, was correct in adjudging and decreeing that the said premises should be released and discharged from the levy made thereon by the sheriff, and that the enforcement by execution or otherwise of any lien by reason of the said judgment against the said premises should be perpetually enjoined and restrained. We think he was for the following reasons:

1st. Burr was a bona fide purchaser of the real estate in question, and he and his successors stood as respects the property in the relation of sureties for the payment of the judgment against Britton (Ingalls agt. Morgan, 10 N. Y., 178). It is true no liability could attach to them personally, and their property only was bound for the satisfaction of the judgment. Nevertheless, a person whose property is thus situated has all the rights and remedies of a surety who is personally bound (Ingalls agt. Morgan, supra; Niemcewiez agt. Gahn, 3 Paige, 614; S. C., 11 Wend., 312). If, therefore, the plaintiffs had been compelled to pay the judgment in order to preserve their estate in the said premises, or if the same had been taken to satisfy the judgment, they would in equity have been entitled to be substituted in the place of the creditor, not only with respect to the judgment itself, but also as to any other security, fund or lien which the creditor had or to which he might resort for payment (Boyd agt. Finnegan, 3 Daly, 222, and cases cited).

2d. As between the first sureties bound in their property, and Wilson and Darrow the subsequent sureties, bound personally on their undertaking, the latter are primarily liable. They, with knowledge of the conveyance to Burr, executed the undertaking on appeal to the court of appeals, and thus delayed the enforcement of the judgment against the principal debtors for several years. Their intervention not only might have prejudiced, but actually did prejudice and injure the prior sureties, the judgment debtors in the mean time having become insolvent., The equities of the later sureties

Barnes agt. Mott.

are, therefore, subordinate to those of the prior sureties (Hinckley agt. Kreitz, 58 N. Y., 583). Hence, if the plaintiffs had paid the judgment, they would have been entitled to be subrogated to the rights and remedies of the judgment creditor as regards the undertaking executed by Wilson and Darrow. But the latter, on payment of the judgment, would not have been entitled to be put in the place of the creditor with the right to enforce the judgment against the land of the prior sureties (Id.).

3d. In general, if a creditor does any act which is prejudicial to the surety or in contravention of his rights as such surety, or if he omits to do some act which his duty imposed upon him, and such act affects the surety injuriously, the latter will be released from all liability (Hinckley agt. Kreitz, supra; Ingalls agt. Morgan, supra). In this case Wagner, with knowledge of all the facts, discharged Wilson and Darrow from all liability on their undertaking on the appeal to the court of appeals. This act clearly injured and prejudiced the prior sureties, because it deprived them of their remedy over against Wilson and Darrow, the subsequent sureties. Consequently, the judgment creditor, Wagner, lost the right of enforcing the judgment against the property of the first sureties. And his assignee, Mott, who is the present owner of the judgment, occupies the same position. He could acquire no other or greater rights than his assignor Wagner had.

It follows from what has been said that the judgment appealed from should be affirmed with costs.

LARREMORE and J. F. DALY, JJ., concurred.

Kemp agt. Knickerbocker Ice Company.

NEW YORK COMMON PLEAS.

JOHN KEMP et al. agt. THE KNICKERBOCKER ICE COMPANY. Breach of executory contract-fraud-damages.

Where defendants, wholesale ice dealers, enter into a written contract with the plaintiffs, retail ice dealers, for the sale and delivery to the latter of a certain amount of ice in one year, at a stipulated price, and the contract provides "that, in case of the inability of the defendants to lay up a full supply of ice, or other casualties, then the defendants are bound only to deliver to the plaintiffs such proportion of the above amount during such year as the quantity of ice laid up be to their full supply:"

And, under this clause, the defendants inform the plaintiffs that they had been unable to lay up a full supply of ice for that year, and, upon measurement of the whole amount, the plaintiffs were entitled only to twenty-nine thirty-thirds per cent of the amount stipulated to be delivered as their proportion, and thereupon procured from the plaintiffs a defeasance, or modification of the contract, to that extent (the plaintiffs not then having the means of ascertaining, other than the defendants' statement, the correctness of such information),

When, in fact, the defendants had then their full and usual supply of ice, but claimed that the amount of new ice which defendants had received and laid in from two different sources was the supply to which the plaintiffs were limited, when no limitation of the quantity, nor the obtaining of it from any particular source, was mentioned in the agree

ment:

The defendants not only grossly violated their contract, but, in doing it, perpetrated a palpable fraud on the plaintiffs in procuring from them a modification of the contract accepting a portion of the ice, when they were justly entitled to their full amount.

The damages to which the plaintiffs are properly entitled to recover of the defendants for the breach of the contract is the difference between the contract-price and the market-price on the ice not delivered under the contract at the time of the breach.

In the contract was a clause, in substance, that the plaintiffs agree to pay, and the defendants to forfeit, one dollar for each ton of ice unaccepted

Kemp agt. Knickerbocker Ice Company.

or undelivered. This sum of one dollar thus agreed to be paid on the one part and forfeited on the other, must be regarded as a penalty for a forfeiture, and not as stipulated damages for a breach of the contract.

General Term, February, 1876.

THE defendant, a corporation organized under the laws of this state, entered into two contracts with the plaintiffs, dated respectively February 25, 1864, and October 25, 1869, for the sale and delivery of ice during a period of several years at a stipulated price. Two thousand tons were to be delivered under each contract in the year 1870, the ice to be delivered daily (Sundays excepted) from defendant's depots in the city of New York, and to be sold by plaintiffs, in their retail business, at such price or prices as the defendant might, and which it subsequently did, establish for that year. Defendant reserved the right to cancel said contracts if the plaintiffs should at any time sell all or any of such ice otherwise than at retail to customers for consumption.

The following provision in each of the contracts is the subject of the present controversy:

"It is, however, provided, and so understood by the parties to this agreement, that in case of the inability of the parties of the first part to lay up a full supply of ice or other casualties, then and in that case the parties of the first part are bound only to deliver to the parties of the second part such proportion of the above amount, 2,000 tons of ice, during such year as the quantity of ice laid up be to their full supply."

Defendant, in 1870, gathered and stored in its own ice houses on the Hudson river and Rockland lake 147,064 tons of new ice. It had also a supply of other large quantities, viz., old ice in the same ice houses and in barges 18,088 tons; also, large quantities of new pond ice, 25,548 tons; also, certain other large quantities of ice gathered and stored in stacks at various points on the Hudson river and elsewhere, 10,500 tons; also, ice gathered and stored on joint account with and

Kemp agt. Knickerbocker Ice Company.

in the name of the Washington Ice Co., between 60,000 and 70,000 tons, of which the defendant was entitled to two-thirds; and, also, certain other large quantities of ice secured by purchase from other parties, for use as a part of its supply for the year 1870.

On or about May 25, 1870, the defendant represented to plaintiffs that it had been unable to lay up a full supply of ice for the year 1870; that it had measured the ice it had, and that 29.33 per cent of the 2,000 tons stipulated to be delivered or 587 tons on each contract was the full and fair proportion which the plaintiffs were entitled to receive. Believing and relying upon this representation, and without knowledge to the contrary, the plaintiffs were induced to execute two indorsements on the original contracts, in the words following:

NEW YORK, May, 1870.

"In consideration of one dollar and other considerations, I agree to accept 587 net tons of ice as my pro rata of this contract for the year 1870, on the same terms and conditions mentioned in this contract.

“J. & W. KEMP & CO."

The 29.33 per cent thus allowed and accepted was estimated upon a measurement of the new ice only (147,064 tons), and plaintiffs did not know, or have the means of knowing, what supply of ice defendant actually had. After the execution of these subsequent agreements, and during the year 1870, plaintiffs took and received from the defendant 1,180 tons of ice in addition to the 587 tons delivered under said contracts, and paid therefor to defendant, from time to time, the same price paid by parties having no contract, viz., from thirteen dollars to sixteen dollars per ton, whereas the prices named in the contracts above mentioned were respectively two dollars and two dollars and fifty cents. per ton.

In April, 1873, plaintiffs brought this action for the rescission of the two agreements of May 25, 1870, on the ground VOL. LI

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