The defendant, the D. G. Yuengling Brewing Company, came into existence in 1893, as the result of a reorganization of a preexisting corporation known as the D. G. Yuengling, Jr., Brewing Company. The plaintiff was the holder of two $1,000 bonds of the old corporation, and he brought this action against the new corporation to recover the amount of these securities, with interest, on the ground that the new corporation, in an agreement with the old one for the purchase of certain of its assets, assumed the indebtedness due to the plaintiff upon the bonds in suit.
The defendant prevailed at the Trial Term and in the General Term of the City Court of New York, where it was held that the assumption clause in the bill of sale, whereby the new corporation acquired the assets aforesaid, expressly excluded such bonds as those belonging to the plaintiff, and that the bill of sale was not affected in this respect by a resolution of the directors of the new corporation indicating their intention to assume a broader liability. The Appellate Term, however, which has succeeded the Court of Common Pleas as the reviewing tribunal in cases from the City Court, ‘was of the opinion that this resolution, rather than the bill of sale, should control, and hence that the plaintiff was entitled to judgment, inasmuch as the resolution was equivalent to an agreement to pay his bonds.
The facts are so fully stated in the opinions in the City Court and Appellate Term that no further statement of them is necessary here. (Fernschild v. D. G. Yuengling Brewing Co., 16 Misc. Rep. 278; 40 N. Y. Supp. 1119.)
The attempt of the old corporation to transfer the property specified in the bill of sale to the new corporation in such a way as to deprive the non-assenting bondholders of their equitable lien upon it, appears to have been unlawful as to the creditors of the old corporation, whose claims remain unpaid. (Cole v. Millerton Iron *31Co., 133 N. Y. 164.) But the plaintiff is not attacking that transfer in this suit! Here he is seeking to enforce a contract which lie alleges was made for his benefit by the new corporation. That contract, he says, was in substance an agreement to pay the bonds of the old corporation which he holds. The material inquiry, therefore, is what were the terms of the contract between the old and the new corporation upon which the plaintiff thus relies, and what are the obligations of the new corporation thereunder ?
The agreement was effected by means of the acceptance by the new corporation of a bill of sale from the old corporation. The new corporation did not execute this bill of sale as a party thereto. It became obligated thereunder solely by reason of accepting the same and acquiring the property which the instrument conveyed. Its obligation was entirely similar in character to that of a grantee of real estate, who accepts a conveyance stating that he is to pay off an incumbrance on the property. In such a case, although he has not joined in the execution of the deed himself, he is, nevertheless, just as much bound to pay the incumbrance as though he had. (Belmont v. Coman, 22 N. Y. 438; Spaulding v. Hallenbeck, 35 id. 205.)
The bill of sale thus accepted by the new corporation declares that it (the party of the second part) “ doth hereby covenant and agree that in consideration of said transfer as aforesaid it will assume, and doth assume, the payment of all the debts and obligations of the party of the first part [the old corporation], excepting the mortgage bonds of sand party of the first part, and excepting all other indebtedness otherwise provided for in a certain plan or agreement of reorganization of the said party of the first part, pursuant to the terms of which the party of the second part was organized.”
The exception in this assumption clause, which I have placed in italics, was plainly intended, I think, to exclude such bonds as those of the plaintiff. The learned counsel for the respondent argues that the words “ otherwise provided for ” may be construed as qualifying “ mortgage bonds,” and that inasmuch as the plaintiff's bonds had not been otherwise provided for at all, they were not excepted from the indebtedness which the new corporation undertook to pay. This is a forced construction of the language, however, and so manifestly so that I do not think we should be justified in adopting it, even by *32reason of the preference which the courts are required to give to an interpretation which will render a transaction valid rather than unlawful.
Under the terms of the bill of sale, then, if I am correct in the view that the clause above quoted excluded the plaintiff’s bonds from the beneficial operation of the instrument, a simple acceptance thereof would not bind the new corporation to pay those bonds. The measure of the obligation of the old corporation, which had not joined in the execution of the document, was expressed in the written statement of the new corporation’s undertaking, contained in the bill of sale itself. The defendant’s obligation thereunder could be extended only by some valid modification of the contract, which arises in such a case out of the delivery of the instrument of transfer on the one hand and its acceptance on the other
It is said, however, that the act of acceptance here was not unqualified, but that the old corporation, having withheld the delivery of the bill of sale until the new corporation would consent and agree to assume all its debts, only finally delivered the instrument after such consent and agreement had been made by means of the adoption of a resolution of the defendant’s board of directors assuming all such debts.
This resolution, though it appears upon the minutes of the defendant, is in no sense a written modification of the bill of sale. It is merely written evidence of the action which was taken by the board of directors with reference to the acceptance of that paper. The underlying question is, whether the contract to assume and pay, implied from the acceptance. of such an instrument of transfer — that is, to assume and pay in accordance with the express terms of the conveyance itself —- can be enlarged by parol so as to bind the transferee to assume and pay a greater indebtedness.
If the obligation can thus be increased in such a case as this, why not in the case of a conveyance stating that the grantee assumes and agrees to pay all of several specified incumbrances upon the land except one ? Would it be permissible to show that, when he took the deed, the grantee said he would disregard the exception and pay all the incumbrances? Clearly not, I think. A deed containing covenants to be performed by a grantee who has not executed it, but who has accepted it, is to be deemed an agreement made by him, so far as *33those covenants are concerned. (See Atlantic Dock Co. v. Leavitt, 54 N. Y. 35, 42.) The same rule must apply to a written transfer of personal property in which are expressed engagements to be performed by the transferee. After acceptance the latter is to be regarded as having become a party to the writing. It expresses the engagement and the whole engagement of both parties, and neither can vary it by parol.
If I am right in this, the terms of the bill of sale in the case at bar must control, and the parol transactions between the parties, in reference to the assumption of a greater liability by the new corporation than is provided for in that instrument, must be looked upon as negotiations for a modification of the bill of sale which did not ultimately enter into any written contract between them
In my opinion, the judgment of the Appellate Term should be reversed and the judgment of the City Court should be affirmed, with costs to the defendant.
All concurred except Bradley, J., who concurred in the result, and Goodrich, P. J., dissenting.