#### Overstreet and Another v. Marshall.

Wednesday, July 1, 1807.

Bond -with Condition — Action on — Form of Judgment* —A. executes a writing- obligatory to B. for the payment of tobacco, under a pecuniary penalty, with a condition annexed, that it shall be void if C. shall pay the tobacco, or its value to A. In an action' brought on this writing the declaration assigns a breach of the condition, and the defendant pleads payment. The verdict and judgment ought to be for the penalty, to be discharged by payment, not of the tobacco with interest thereupon, but of damages, for breach of the condition.

Same — Scaling the Penalty. — The penalty of such a *175writing obligatory, where it was executed in the time of depreciated paper money, ought to be reduced by the scale.

*

 See monographic *note*on “Bonds” appended to Ward v. Churn, 18 Gratt. 801.

Marshall brought an action of debt against Overstreet and Holcombe in the District Court of Prince Edward. The declaration set forth, that, on the 18th of April, 1781, the defendants gave their writing obligatory to the plaintiff, for the payment of 14,000 pounds of tobacco, under the penalty of 20,0001. lawful money of Virginia, with condition to be void, if the state of Virginia should pay unto the plaintiff 14,000 pounds of tobacco, or the value thereof, for a certificate which he had received from the defendant, Overstreet; and assigned for breach, that neither the state nor the said defendants had paid the tobacco to the plaintiff, although the defendant, Overstreet, had possessed himself of the certificate, and applied it to his own use. The defendants pleaded “payment,” on which issue was joined. The Jury found a verdict for the plaintiff, and assessed damages to one penny; and thereupon judgment was entered for 20,0001. to be discharged by the payment of 14,000 pounds of inspected tobacco, with interest at five per cent, from the 18th of April, 1781, till payment with the damages and costs.

this judgment a writ of super-sedeas was obtained by Overstreet & Holcombe.

Wickham, for the plaintiffs in error, contended that the penalty of the bond ought to have been scaled, according to the act of Assembly passed in 1781. (a) The verdict of the Jury had no reference to the currency in which the bond was given ; and of course the first section of the act of 1781, just cited, cannot apply so as to permit the debt to be settled on equitable principles. The penalty, being the debt, in law, must be scaled, although the condition be for the payment of tobacco. On the same principle it was decided, that the scale should be applied to a guardian’s bond.

The penalty of the bond being in money, the condition, which was for the payment of tobacco, was collateral to the bond; and, for that reason, as well as on account of the form in which the plaintiff thought fit to declare, the judgment ought to have been given for the penalty of the bond, to be discharged by the payment, not of tobacco, but of such damages in money as should have been assessed by the Jury; and no judgment could lawfully be given until such assessment. At common law, tobacco stood on the same footing with wheat or any other commodity; and the same kind of action ought to have been brought for its recovery. The act of Assemblj', (b) indeed, puts tobacco on a different footing from other commodities, and allows an action of debt to be maintained on a bond given for the payment of it; but, that being an innovation on the common law, the act must be strictly pursued. In this case the suit is on the penalty of the bond for money. It is, consequently, not embraced by that law, but by the act which directs the mode of proceeding on bonds with a collateral condition, (c) A collateral condition is defined in Coke on Littleton to be, where the condition is collateral to the penalty.

But there are other circumstances which make the condition of this bond collateral: —the obligor is to pay, in the event that the state of Virginia does not: — it is also in the alternative, either to pay money or tobacco; and, in this case, the party has not his choice to demand which he pleases, because there is no day limited.

No part of the record or proceedings warranted the giving judgment for interest on the tobacco, from the date of the bond, or from any other definite period, because, tobacco x'being merely a commodity, the obligor was not bound to carry it to the obligee, and interest would not run, till a demand was made.

Hay, for the defendant in error. The bond was to pay tobacco, under a pecuniary penalty; — of course it was a tobacco debt. There was a contract annexed, that, if the state should pay the debt, the obligation should cease. The practice in the old General Court was said to be, to enter up judgment for the penalty, to be discharged by the tobacco mentioned in the condition.

Until application was made to the state, it was a tobacco contract; and upon the failure of the state to pay, the appearance of the contract was, indeed, changed, but it remained substantially the same; and the bond might have been discharged by the payment of 14,000 pounds of tobacco.

This case comes within the provisions of the latter clause of the act of Assembly last quoted by Mr. Wickham, which directs,' that in actions brought on bonds for the payment of monej', judgment shall be entered for the penalty, to be discharged by the principal sum expressed in the condition, with interest.

In England judgment could only be entered for the penalty, to be discharged by the principal sum of money expressed in the condition, with interest; because, in that country, tobacco is only a commodity; but, here, the law authorises an action of debt for its recovery. Hence, in England, the condition of a bond to pay tobacco would be collateral; but in this country it would not, because it would only be to pay what the law authorises you specifically to recover. English authorities, therefore, do not apply. As, in this country, judgment may be entered, and execution issued for tobacco, there is no good reason why the judgment should not be entered as it has been in this case.

There was no necessity for the Jury to inquire into the value of the tobacco, because a judgment may be rendered for tobacco itself. The comparison of tobacco with wheat would be just in England, but not in this country: for here you can obtain judgment for tobacco but not for wheat; nor can you get judgment for either in England. The true definition of a bond with a collateral condition is, where the condition is for a thing for which debt will not lie.

If the stipulation be, that a third person shall pay a sum of money, it is not collateral ; nor would it be necessary *for a Jury to inquire into the value *176of the thing; because, being money, the value is already ascertained. But, if the condition be, that a specific act shall be performed bjr a third person, it is collateral.

The payment not having been made by the State, the parties were thrown back on their original bond, as if no such stipulation had been annexed thereto; and Marshall had a right to demand interest, which, being only at five per cent, was less than he would have received, if payment had been made by the State.

The essence of this contract was for the payment of tobacco — the bond is expressly for the payment of 14,000 pounds of tobacco, under a pecuniary penalty; of course, the scaling law does not apply to it; nor is ■ it within the reason of a guardian’s bond, which is for the payment of money.

The law ought to be literally interpreted; and, where the contract was originally for tobacco, it would be highly unjust to defeat the party of his just claim to tobacco, even if the form of the contract was subsequently changed, which is not the case here.

Wickham, in reply. The stipulation annexed must be considered as part of the condition of the bond. The case of Gordon v. Frazier and Cosbie(a) proves this, and was a stronger case than the present. There, the obligees alone made an indorsement on the bond; here, the stipulation was in the body of the instrument, and the act of both parties.

The condition of an obligation is always collateral where it is to pay or deliver a thing different in its nature from the penalty, or where an act is to be performed by a third person.

In this case there being no liability on the obligors, till there was a default on the part of the State, and notice thereof given, no interest could accrue till such notice, and a demand made.

The scale of depreciation certainly applies to this case: for judgment could not have been entered otherwise than for the penalty, and, of course, ought to have been according to the scale.

Thursday, July 2.- — By the Court, consisting of Judges Lyons, Fleming, and Tucker, (Judge Roane being absent, occasioned by indisposition,) the judgment of the District Court was unanimously reversed; because, “the plaintiffs in error having pleaded ‘payment,’ and the Jury, ^having found, that the debt was not paid to the defendant in error, should have assessed damages from the breaches, assigned in the declaration, of the agreement in the condition of the obligation mentioned, and judgment should have been entered for the penalty of the bond, which, being in the time of depreciated paper money, should Have been reduced to specie, according to the scale, as settled by law, at the date of the said bond; and, when so reduced, to be discharged by the payment of the damages assessed by the Jury, and the costs, and not by the payment of the tobacco, which the State of Virginia was to pay in discharge of the said bond, according to the condition thereof.”_

(a)

 Chan. Rev. 147.

(b)

 Rev. Code, c. 29, sect. 3, p. 36.

(c)

See Rev. Code, c. 76, sect. 21, p. 110.

(a)

2 Wash. 130.