Case ID: scl_38/html/0243-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John A. Folk and others, assignees of A. G. Summer, vs. S. Cruikshanks.
    
    An agreement, under seal, indorsed by sureties upon an ordinary money bond, whereby the sureties severally agreed to pay to the obligee each a specific sum, part of the condition of the bond, in case the obligor, their principal, should make default in the payment of the bond, teld to be assignable under the Act of 1798, so as to enable the assignee to sue thereon in his own name.
    
    The sum stipulated to be paid in the bond, the obligor had, before the execution of the bond, agreed, in writing, with the obligee, to secure by bond, mortgage and approved personal security. Held that the failure of the obligee to take the mortgage was no discharge of the sureties.
    
      Before O’Neall, J., at Charleston, May Term, 1850.
    Debt on bond. The declaration alleged “that whereas the said Cruikshanks, on 11th December, in the year of our Lord 1845, at Charleston, in the District and State aforesaid, by certain writing obligatory, called a bond or contract, sealed with the seal of the said Samuel Cruikshanks, acknowledged and agreed to be held and firmly bound unto the said A. G. Summer in the aforesaid sum of $500, to be paid to the said A. G. Summer when he should be thereunto afterwards required, in the manner following : ‘ We do severally and each, in and for the sum of $500, agree to secure to the said A. G. Summer the payment of the sum mentioned in the condition of the within bond; in case of default made in the payment of the same, each of us will be liable to the extent of the sum of $500; to the payment of which we severally bind ourselves, our heirs, executors and administrators. In witness whereof, we have hereunto set our hands and seals, this 11th December, 1845.’ Signed by S. Cruikshanks et al.; which said bond or agreement was indorsed upon the bond of B. R. Carroll to the said A. G. Summer, dated the 11th day of December, 1845, in the penal sum of $9,000, and, being unpaid, was, together with the said obligation, assigned to the said plaintiffs ; and the said J. A. Folk et al. say that the said sum of money was not paid according to the bond aforesaid, and the condition thereof.”
    The defendant pleaded several pleas. The 3d was as follows :
    “And the said defendant, for further plea in this behalf, by leave and so forth, saith and so forth. Because he saith that on or about the 11th day of December, Anno Domini 1845, the said A. G. Summer and B. R. Carroll entered into an agreement, in writing, wherein and whereby the said A. G. Summer agreed to sell to the said B. R. Carroll one-half of the paper and printing-office known by the name of the South Carolinian, together with all the property belonging to the same, excepting the advertising accounts due on the first day of January, Anno Domini 1846. And in consideration thereof, the said B. R. Carroll agreed to pay the said A. G. Summer the sum of §5,500, in sums as follows, to wit: — §1,000 cash on the first day of January, A. D. 1846, and the balance in a bond, bearing seven per cent, interest, payable in five equal annual instalments, the first payable with interest on the first day of January, 1847, secured by a mortgage of the paper, and approved personal security. And the said defendant further says that, in the day and year aforesaid, to wit, on the ilth of December, 1845, he, this defendant, to enable the said B. R. Carroll to give the personal security stipulated for in the said agreement between the said B. R. Carroll and the said A. G. Summer, became one of his securities, and executed the bond or instrument in writing in the said declaration set forth. And this defendant further saith that the said mortgage, so as aforesaid stipulated for in the said agreement, was never executed and delivered by the said B. R. Carroll to the said A. G. Summer, but the same was altogether dispensed with by the said A. G. Summer, without the knowledge or consent of the said defendant; and the said agreement to mortgage was never entered of record in the proper office of registry, according to law. And afterwards, to wit, on or about the 20th day of February, A. D. 1847, the said B. R. Carroll purchased from the said A. G. Summer the other moiety of the paper, and so forth. And after-wards, to wit, on or about the 5th of April, 1847, the said B. R. Carrolb sold the whole of the said paper, and so forth, to the said A. G. Summer. And afterwards, to wit, on or about the day of , A. D. 1848, and before the commencement of this suit, the said A. G. Summer sold and conveyed the said paper, and so forth, free from all lien or incumbrance by the said agreement to mortgage of the 11th of December, 1845, to certain other persons, to wit, Cavis and Johnston.
    “And so this defendant saith, as surety as aforesaid, that he is altogether discharged from liability in respect of the said bond or instrument in writing, and the same is wholly void. And this he is ready to verify. Wherefore he prays the judgment of this Court, if the said plaintiffs ought to have or maintain their aforesaid action against this defendant, and so forth.”
    The plaintiffs replied; and the defendant to the replication demurred specially.
    
      Per Curiam. The demurrer carries us back to the first fault in pleading. There is nothing in the objection that the assignees cannot sue. The paper sued on is a bond within the words and meaning of the Act of 1798. The third plea is bad; for the agreement to take a mortgage, and a failure to do so, is no discharge of the liability of the defendant. The demurrer is sustained and the third plea and replication are overruled.
    The defendant appealed, and now moved this Court to reverse the decision of the Circuit Court, on the grounds—
    1. That the plaintiffs cannot maintain an action in their own names on the instrument sued on.
    2. That the 3d plea is a bar to the action.
    
      James M. Walker, for the motion.
    
      Hunt, contra.
    
      
      D. J. Waring vs. Cheeseborough & Campbell.
      
      J. S., the obligee of a common money bond, assigned the same to W., and guaranteed “the payment according to the condition of the same.” W. assigned the “bond and the money to become due thereon” to the plaintiff, who brought covenant against J. S. on his guaranty to W. Held, that the bond and the guaranty were both assignable under the Act of 1798; that the terms of the assignment to the plaintiff carried the guaranty as well as the bond; and that the action was properly brought in the name of the plaintiff.
      The facts of this case (which was tried before Gantt, J.) are stated in the opinion delivered in the Court of Appeals, in March, 1832, by O’Neall, J., as follows:
      R,. D. Smith, on the 22d February, 1825, executed a bond to the defendants in the penalty of $5,000, with a condition to pay $2,500. In May, 1825, they assigned the bond to R. F. Withers, his executors, administrators and assigns, with the following guaranty: “and we do severally guaranty payment according to the condition of the same.” R. F. Withers assigned to the plaintiff, in the following terms: “I hereby, for value received, transfer and assign the within bond and the money to become due thereon to D. Jennings Waring, his executors, administrators and assigns, and I guaranty payment according to the condition of the same.” The plaintiff, as assignee, brought covenant on the defendant’s guaranty: a motion was made for á nonsuit, on the ground that the action could not be sustained by the assignee in his own name. The presiding Judge below sustained the motion, and a motion is now made to reverse his decision and set aside the nonsuit, on the ground that the action was well brought. No objection was raised that the guaranty was not under seal, and I therefore take it for granted that it was. The Act of 1798 authorizes the assignee of a bond, note or bill, not negotiable, to sue for and recover the same in his own name. To enable the plaintiff to maintain this action, it is necessary to show that the contract declared on is embraced by the provisions of the Act: for at common law there can be no doubt that he could not maintain this action. It was contended, and, I think, with great plausibility, that the term bill, used in the Act, might include within it this contract. Jacobs, amongst other definitions of the term bill, says that it is an engagement for the payment of money, (Jac. L. Die. Tit. Bill.) The defendant’s contract is a collateral engagement for the payment of money, and might therefore be called a bill, and be embraced by the Act as such. But I don’t choose to put the case on that ground, for the term bill, as understood generally, means nothing more than a bill of exchange, or a note, or other acknowledgment of indebtedness in a certain sum under seal, and it most probably was used in this restricted, and not in its more general and comprehensive sense, by the Legislature. The legal effect of the guaranty is, to make the guarantors collateral obligors in the bond. They undertake, if the first obligors do not pay, that they will. This makes them, in the event of non-payment, the same as sureties. Their guaranty is part of the bond, and must pass under the subsequent assignment. The assignee may maintain an action in his own name against the obligors of the bond, and why not against the guarantors ? It is their bond as well as that of the first obligors. It is true that, if the contract of guaranty was independent of the bond, then the guarantors would not, of necessity, be liable to the same remedy. But when it refers to the bond, and adopts it as the contract, it is the same thing as if the defendants had executed a collateral bond to secure the payment. That could be assigned, and upon it the assignee could maintain the action in his own name. The guaranty here is, in legal effect, the bond of the defendants, to secure the payment of the bond'assigned to the assignee, Withers, and is, of course, assignable, under the Act of ’98.
      The motion to set aside the nonsuit is granted.
      Johnson, J., concurred.
      
        Motion granted.
      
    
   Curia, per

O’Neall, J.

The first ground of appeal makes the question whether the instrument in suit is a bond within the Act of 1798 (5 Stat. 330); for if it be not, then the plaintiffs as assignees can maintain no action: and of course the objection appearing on the declaration, the defendant’s demurrer to the replication opens the way to consider and allow it.

But I am still clear that the instrument declared on is a bond. It is under the seal of the defendant; it binds him to pay a sum certain to the obligee. This is, beyond all doubt, a debt by specialty, and that is a bond. That it is to be payable upon a contingency to arise out of the default of another, can be no objection, if, as the declaration avers, that contingency has happened; for then il became absolute, fixed and certain. The case of Cay vs. Galliott (4 Strob. 282,) is, however, a conclusive authority against the defendant.

The 2d ground cannot avail the defendant. The contract between Summer & Carroll preceded the execution of the obligation of the defendant; and is, therefore, to be regarded as merged in it. It might have been that Carroll was unable to get persons to join him as sureties in his bond; and hence, being unable to comply in the way stipulated, he resorted to a quasi contribution among his friends, each becoming liable for a particular sum. If this satisfied Summer, he might waive the mortgage. It was for the defendant and his associates to secure themselves, if they thought it necessary.

The motion to reverse the decision below is dismissed.

Evans, Wardl aw, Withers and Whitner, JJ., concurred.

Motion dismissed.