Churchill v. Hunt , 3 Denio 321 ( 1846 )

By the Court, Beardsley, J.

When this bond was given, the note to which it has reference'was overdue, and the plaintiffs, as makers, were liable to be sued upon it at any timé. By the condition of the bond Henry Hunt, one of the obligors, was to save harmless and indemnify the plaintiffs against théir" liability as such makers, and also to pay or cause said note to be paid without fraud or other delay.

So far as respects a recovery of the amount of the note and interest thereon, this case, in principle, is like that of Thomas v. Allen, (1 Hill, 145.) It is true that in one particular, but which seems to me wholly immaterial, they differ in matter of fact. In Thomas v. Allen, the debt to be paid had not become due when the bond was made, whereas in the present case the'note had been for some time overdue when this bond was executed! In Thomas v. Allen, the bond was conditioned to pay a certain debt when it should become due and to save the plaintiff harmless ; but in the present case the condition of the bond is to pay a debt already due, and to save the plaintiffs harmless and indemnify them against their liability therefor.

It was held in Thomas v. Allen, that the bond in suit in that case was more than a mere bond of indemnity, as it bound the defendant to fay off the plaintiff’s debt when it fell due, and that the breach, alleging the debt had not been paid by the defendant at the day when it was payable, was well assigned. Upon such an obligation the right of action becomes complete on the defendant’s failure to do the particular thing he engaged to perform. Where the covenant is to pay the plaintiff’s debt, it is enough to show that it was not paid at the stipulated time. The plaintiff need not go further and show that he had himself paid the demand, or been otherwise damnified by the defendant’s neglect to perform his engagement. These principles are settled in the case of Thomas v. Allen, which is fully sustained by the authorities there referred to; and the point adjudged admits of no doubt.

By the condition of the bond in the present case, Henry Hunt was bound to pay off the plaintiffs’ note, but no particular time of payment was specified. The note was then overdue, as the condition of the bond shows; and no certain time of payment being specified in the condition, the law required payment to be made immediately, that is, on the day when the bond was given. (Hurlst. on Bonds, 40 ; Bothy’s case, 6 Ref. 31; Shep. Touch. 369; Farquhar v. Morris, 7 D. & E. 124.) As the note had not been paid when the suit was commenced, the condition of the bond was broken, and a good right of action shown; the motion for a nonsuit was therefore correctly refused.

The defendant had no right to set up that the note was usurious, although that defence might have been interposed by the plaintiffs in the action brought against them on the note. This bond was given to the plaintiffs, by whom the note had been made, and not to the supposed usurer, whoever he may have been. Nor was the payment to be made to such supposed usurer ; for the note, as the condition of the bond shows, had been transferred to Clark & Sharp, who then held it, and the obligors were bound that it should be paid without delay. Their engagement to the plaintiffs was equivalent to an absolute promise to. pay them the amount of the note; and on no principle can I see that the obligors in the bond had any concern with the question of usury. Their engagement was with the plaintiffs. It was an engagement to pay the amount of a certain note given-by the plaintiffs and then held by Sharp and Clark; and, in my opinion, the defendants were clearly bound to make the payment according to their covenant, whether the plaintiffs were liable to Sharp & Clark or not. What concern had these obligors with that question? They were not the victims of an usurer, nor were they sued upon an usurious obligation. If the bond had been a mere bond of indemnity, a different question would have been presented; but being an absolute engagement to pay, I entertain no doubt that the alleged defence of usury was properly excluded.

A right of action having been shown, and the question of usury not being in the case, the only remaining point has reference to the amount of damages.

The plaintiffs were undoubtedly entitled to recover the amount of the note and interest thereon; for to that extent the condition of the bond was express and absolute. (Port v. Jackson, 17 John. 239, and authorities there referred to ; In the matter of Negus, 7 Wend. 499.) To this extent a recovery of damages was proper, although nothing had been paid on the note by the plaintiffs, nor had they in any other manner been actually damnified by the refusal' of the obligors to make payment of the note according to their engagement.

There is an express clause in the condition of this bond, that Henry Hunt should pay the. plaintiffs’ note, but none that he should pay such costs as might be adjudged against them in an action for its recovery. The costs so made, and which the plaintiffs would be bound to pay, could not be recovered upon an alleged breach of the condition to pay the note. The nonpayment of the costs would not be a breach of that clause in the condition of the bond ; and they were to be recovered, if at all, on that part of the .condition which bound the obligors to indemnify the plaintiffs against their liability as makers of the note. This was but an ordinary covenant of indemnity, and at .common law a recovery cannot be had upon such an engagement, without showing payment or other actual injury sustained. The costs and interest thereon should not have been allowed in the assessment of damages, and so far the amount of the recovery was erroneous.

It was argued that the rule which allows a sheriff, in an action on a bond for the jail liberties, to recover such costs 90 had been adjudged against him in an action brought for the escape of the prisoner, would authorize an allowance of the costs for which these plaintiffs had become liable. There is no doubt the sheriff may in such case recover the costs, as he also may the full amount of a judgment recovered against him for such escape, although nothing has actually been paid by him. He is liable for such amount, and that, on a bond for the liberties, is sufficient. (Kip y. Brigham, 7 John. 168 ; Rockfeller v. Donnelly, 8 Cowen, 640, 6.65.) But this is for the plain reason that the statute, under which these bonds are giyen, expressly provides for such recovery before payment has been made by the sheriff. Such is tlie letter qf the statute. (2 R. S. 432, Art. 3; 1 R. L. of 1813, pp. 429, 430, §§ 7,8, 9.) A bond given in conformity yhth the statute, for the support qf a bastard child, is intended to be for the indemnity of the town ¡ and yet it has been adjudged, upon the spirit aqd intent of the statute requiring such bqnds to be taken, that in an action on the bond, it is unnecessary to show actual payment or other damage sustained by the town. Such a bond was held t.o be forfeited by the mere fact that the town had become liable for the support of the child. (Rockfeller v. Donnelly, supra.)

These authorities seem to me to prove nothing in favor of allowing a recovery of the costs adjudged against these plaintiffs, on the mere ground of such liability: they rather, as I think, look ill the opposite direction. This bond is a common law obligation, and the part of the condition now in question is but an engagement to indemnify the plaintiffs against their liability as makers of the note. Notwithstanding what is said in the case of Chace v. Hinman, (8 Wend. 452,) I must say that I am not aware of any distinction, at common law, between an indemnity against damage, and one against liability, which warrants a recovery on the latter on simply showing the fact of liability. In both, as I think, there must be evidence of actual damage, by the payment of money or otherwise. We have seen that a different rule prevails in regard to bonds for the liberties and for the support of bastard children: but this is for the reason that the statutes, under which such bonds are made, give to them an effect which they would not have had at common law.

The costs and interest thereon, amounting to $73,72, should not have been allowed as damages, as they had not been paid by the plaintiffs. If the plaintiffs remit that amount from the damages, the verdict may stand, and they may take judgment and have execution accordingly; otherwise a new trial must be granted.