#### Jonathan Lucas vs. O’Neale & Bird.

Tried in Charleston, May Term, 1835, before his Honor Judge Eakle.

The defendants made a contract with the plaintiff to build and de. liver to him a ship of 330 tons, of which they were to furnish all the materials. To secure the faithful performance of their contract, they executed to the plaintiff, on the 24th April, 1882, a bond of indemnity, with condition to deliver the said ship to the plaintiff, furnishing themselves all the materials, at their own charges ; and with the further condition to “ indemnify and fully save harmless the said Jonathan Lucas, his heirs, &c *.from, all and every damage or loss, charges or expenses, which he shall or may incur, or be put to, from or by*rea*son of any moneys which he has paid, or which he shall hereafter pay, or cause to be paid, to the said O'Neale and Bird, and either of them*; and also from all and every damage or loss which shall or may arise or accrue to him, the said Jonathan Lucas, his heirs, &c., from or by reason of the negligence, omissions, or misfeasances of them, the said O’Neale imd Bird, or either of them, in and about the building, or finishing of the said hull, or ia and about accounting for, or pay. ing, or making good any sum or sums of money to the said Jonathan, ■which have been paid, or which shall hereafter be paid by him, to the said O’Neale and Bird, or either of them, or upon their account, or by their direction.”

Upon this bond judgment was confessed at the time of its execution, and afterwards a rule was taken out by the defendants to submit its condition to a jury, whereupon the following case was made.

On the 20th March, 1832, the defendants went to the lumber yard of Thomas Bennett, and ordered the lumber necessary for the ship. Mr. Bennett informed them that the lumber would be furnished, but that as the ship was for his son-in-law, Mr. Lucas, he intended to make him a- present of the lumber which would be required to build it; that as the defendants, O’Neale and Bird, were bound to furnish the lumber, he, Mr. Bennett, would have the items entered separately « for the new ship,” so that they and Mr. Lucas could settle lor the *31Same, and that the amount of this lumber bill should be considered an advance of that amount of cash by Mr. Lucas. To this arrange* ment the defendants assented, and upon the faith oí it the lumber Was furnished.

Before the vessel was finished, the defendants became insolvent, and made an assignment. Shortly thereafter, the clerk of Mr. Bennett called on them with an account, in which he had entered, by mistake, the materials for this ship in common with the other articles of lumber furnished O’Neale and Bird. The defendants objected to the account on the ground that they were to settle with Mr. Lucas for the lumber for the ship, and insisted that it should not have been charged against them in Mr. Bennett’s bill. The clerk reported this to Mr. Bennett, who informed him that O’Neale and Bird were correct, and that he, the said clerk, had erred in uniting both accounts. That accordingly the clerk again saw the defendants, struck out the said lumber bill, amounting to $1435,10, took the defendants' note for the balance, and gave them, in behalf of Mr. Bennett, a receipt in full.

The plaintiff, Mr. Lucas, claims that the said sum of $1435,10, was an actual advance by him to the defendants, by their own assent; that the gift of the lumber to him by Mr. Bennett, made the property his ; that it was so much money paid by him for the use of O’Neale •and Bird, for materials which they had bound themselves to furnish; and that by their own agreement, and (to use the words of Mr. Bird, the defendant himself, while giving testimony in the case,) “ they ex. pected to have it to pay to Mr. Lucas and that under these circumstances it comes within the condition of his bond of indemnity.

The following is the testimony in the case copied from the judge’s notes:—

Thomas Bbnwett deposed as follows—

Mr. Lucas was to pay for the ship by the ton ; $40 per ton. This was to defray all the expenses of the hull. Defendants were to furnish all the materials. Witness’ mills furnished a portion of the plank, witness having na interest in the account for himself, Defendants had long been customers at the mill. When the defendants began to give orders at the mills for the lumber, they were informed that the lumber procured at the mills was a gift to the plaintiff. The defendants assented to this arrangement. They could have no motive to do otherwise. (The lumber bill being produced, is verified by Mr. Bennett.) The defendants have never been considered responsible for the bill, and never have been called on for it. It was kept separate from the other accounts for this especial purpose, else it would have been put down in their general bill. The amount is $1435,10.

A. Trouche testified upon a matter which was subsequently yielded by the defendant’s counsel, so that his evidence is now immaterial.

Wiixiam Bird, one of the defendants, was produced in behalf of the defendants, by consent. He deposed, “ that the actual tonnage of the ship was 830 1-2 tons, from the entry at the custom house. The contract was $40 per ton, custom house measurement, *32{The witness produces the order for the lamber, or an exact copy? date 20th March, 1832, signed by O’Neale and Bird.) Had been customers and purchasers ou credit at the mills; never requested plaintiff to pay this bill, and never heard of O’Neale’s doing it. Never heard that plaintiff had paid the bill. (The witness examines another bill for some lumber, which was rendered in to defendants for payment, by Bennett’s clerk or collector.) Lanneau, (Mr. Ben,nett’s clerk,) presented the bill. Witness requested him to leave it a day or so for examination. Witness had heard from O’Neale that the plank was a present from Mr. Bennett to Mr, Lucas, and then told Lanneau of it, and asked why he had brought the bill for the whole, including that presented by Bennett to Lucas. Mr. Lucas never informed whness that he would call on defendants for that bill,- and he never heard that they were to be made responsible to the plaintiff for the same, until after the failure of defendants. Alter the ship was finished and delivered, the plaintiff frequently said he would enter satisfaction on the judgment. Often promised to do so, but put it off from time to time, without making any objection. 'Defendants are insolvent. Knew that they would be so, before the lumber was all furnished. Mr. Bennett must have known it. No doubt that the lumber was furnished on the faith of the arrangement with Lucas; but he does not know how it was. Supposed so only from what O’Neale said. After the lumber was furnished, *witness declined pay* ing Bennett, ejecting to have it to pay tor, to Lucas;*but was in hopes, rather thought, that as they had made a losing bargain, that it would be turned over to witness, and would not be exacted from them. The lumber was to be paid for. The final settlement was made after the assignment. The failure of defendants was anticipated from the loss on the contract. If Mr. Bennett, himself, had brought the account, and demanded the note, he would have given it."

Mr. Lanxeaxt, called in reply, stated, that he was the clerk of Mr. Bennett, was privy to the furnishing the lumber from the begivni ig. *Does*not know what the contract was, but charged the lumber accord, ing to the directions of Mr. Bennett.

Thomas Beotostt recalled. When the lumber was about to be delivered, witness called at the ship yard, and said to Mr. Bird, “ this lumber will be charged to you, but it was a gift to Mr Lucas, and was not to be paid, but was to be settled out of the ship.” On the failure being about to take place, the defendants com mnicated the fact to witness — and he was about to furnish them aid, when it was found that they could not go on. They were distinctly informed of the amount necessary to complete the ship, including the lumber in. question. They said about ¡¡¡>7000, and witness supposed that they both fully understood it, and that the sum for the lumber was to be allowed Lucas out of the sum to be paid by him for the ship. They were still engaged in framing the ship when the conversation took place. When witness first communicated the arrangeme it to' the defendants, it was at a time when he had a perfect confidence that they would pay him.

Upon this evidence the judge charged the jury, that the iefe dents bad been originally liable to Mr. Bennett; that that liability still con *33Sinned, and Mr. Bennett might yet maintain his action for the account ; that this liability to.Mr. Bennett could not be transferred by him to Lucas ; and that if the defendants were ever liable to Mr. Bennett for the lumber bill, the plaintiff could not recover. He further in. structed the jury, that putting the bond out of the question, Lucas could not now have maintained an action for this demand, and that there was no consideration moving between Lucas and the defend, ants ; that if the plaintiff could not recover in an action of assump. sit on the original demand, he could not recover the bond.

The jury found for the defendants, and the plaintiff moved for a new trial, on the following grounds :—

1. Because his-Honor instructed the jury, that upon his construetion of the bond, the plaintiff could not recover.

' 2. Because his Honor further instructed the jury, that if the de. fendants were ever liable to Mr. Bennett for the lumber bill, the plaintiff could not recover.

3. Because his Honor further instructed the jury, that Mr. Bennett might now maintain his action against the defendants, and could not transfer the liability; whereas,' it is respectfully submitted, that the evidence proved a discharge of the defendants bj Mr. Bennett, and a settlement of the claim by Mr. Lucas, at the request, -and for the account of the defendants.

4. Because the judge further instructed the jury, that an action of assumpsit was a fair test of the plaintiff’s right to recover, and that putting the bond out of the question, the plaintiff could not recover in such an action.

5. Because the judge further instructed the jury, that there was no consideration between the plaintiff and defendants.

6. Because the verdict is contrary to law, in not allowing the amount of the said lumber bill.

C. G. MEMMINGER, *Plaintiff’s Attorney.*

Debt on bond. The defendants were ship builders, and undertook to build a ship for the plaintiff, to whom they gave this bond, to indemnify and save him harmless for all advances he had made, or might make for and on their account. The bond was dated 24th April, 1832. Judgment had been confessed on it, and the condition was now submitted to a jury to assess damages. The question sub. mitted, was, whether the defendants were liable to the plaintiff for $1435,10, the value of certain lumber furnished by Mr. Bennett to them, as an advance, by the plaintiff, under the stipulation in the bond. The defendants were customers of Mr Bennett at the mills. They had a running account there, and gave their first order for the lumber in question, on 12th March, 1832 ; which was furnished, and delivered to them from that time forward, as they needed, and charged to them at the mills. The defendants, in the contract, were to sup. ply- all the materials. The lumber in question, was a gift by Mr. Bennett to the plaintiff, his son-in-law. But it was not proved that there was ever any express understanding in relation to this lumber, between the plaintiff and the defendants. The respectable witnesses, *34Mr. Bennett and Mr. Bird, who were both examined, did not entirely concur. Had the lumber been sawed for the plaintiff, had he delivered it, or had it been delivered on the order of the defendants, in pursuance of any understanding with him, it must have been considered an advance as much as if he had paid money for it. But it was delivered to the defendants by Mr. Bennett, as a gratuity to the plaintiff, and was charged to the defendants, and seems to have been marked on the books, “ for the new ship.” Mr. Bennett testified, when the lumber was about to be delivered, he-mformed the defendants that it was a gift to the plaintiff, that it could be charged, to them, but they were not to pay him for it, but it was to be settled out of the new ship, and that they assented to this arrangement, Mr. Bird testified, that Mr. Bennett’s clerk presented them a bill for payment, including the lumber in question. It was left for examination, and he was informed by his partner, O’Neale, that it was a gift to Lucas. It was then withdrawn, and another bill made out. They never assumed the payment ef the price of this lumber to Lucas, who never ir.iormed them that he held them liable, and they never heard they were to be responsible to the plaintiff, until after their failure. (N* B. They had failed, I think, during the progress of the work, and had made an assignment. T'sis was, in fact, a controversy between the plaintiff and the assignees.) On the contrary, after the ship was finished and delivered, the plaintiff frequently said he would enter satisfaction on the judgment, and promised to do so ; but put it off from time to time, without making any objection. But there was no doubt the lumber was furnished on the faith of the arrangement with Lucas. Supposes so, only from what O’Neale said after the lumber was furnished. He expected that he would have to pay Lucas for the lumber, but was in hopes as they had made a bad bargain, that it would not be exacted of them. And if Mr. Bennett had brought the account, and demanded a note, he would have given it. I charged the jury, that the question was, whether the plaintiff in relation to the value of this lumber, had made an advance to the defendants, or on their account, within the true meaning and intent of the condition of the bond ; that if the understanding and agreement *existed at the date of the bond,*that the lumber in question was to be ¿onsidered an advance to the defendants, for which they were to account to the plaintiff, and the bond was executed in reference to that as well as other advances, then the plaintiff was entitled to recover. That it was therefore important to ascertain the time when such understanding took place. If the defendants were liable to Mr. Bennett originally, then the demand could not be transferred by parol, as a gift or otherwise, so as to constitute a debt to the plaintiff; and in. that case, the plaintiff must sue in Mr. Bennett’s name. If they were not so liable to him, and the plaintiff could have recovered in his own name on the original demand, then he was entitled to reco-yer on the bond, not otherwise. The jury found for the defendants. The plaintiff appeals on the grounds annexed. What I have stated of the charge, will render further remarks unnecessary.

B. J. EARLE.

*35The opinion of the court was delivered by

Mr. Justice Q’NeaIiIi.

The condition of the defendants bond is preceded by a recital stating the agreement between the plaintiff and defendants, whereby the latter had agreed, in a substantial and workmanlike manner, to build and completely finish the hull of a ship, &c.; and at their own charges, to do and finish all the several works in and about the said hull, and to launch her into the river Cooper, and to deliver her safe to the plaintiff, on or before a specified day: also, that the plaintiff hath paid to the defendants certain large sums of money on account of the said work, and is about to pay and advance to them, certain other large sums of money, and that they are desirous of fully indemnifying and saving him harmless from any damage or loss.

The condition of the bond then sets forth, “ that if the defendants shall well and faithfully comply with their agreement with the plaintiff, in relation to the said ship, and shall in a substantial and workmanlike manner, at their own charges, finish and complete all the work in and about the hull of the said ship, according *to*the directions of the said plaintiff and shall launch and deliver her as aforesaid, to the said plaintiff, his executors, administrators, or assigns, and shall indemnify and fully save harmless, the said plaintiff his heirs, executors, administrators, or assigns, from all and every damage or loss, charges or expenses, which he shall or may incur, or be put to, from or by reason of any monies, which he has paid, or which he shall hereafter pay, or cause to be paid, to the said defendants or either of them; and also from all and every damage or loss, which shall or may arise, or accrue to him the said plaintiff his heirs, executors, administrators, or assigns, from or by reason of the negligence, omissions, or misfeasan-ces of the said defendants, or either of them, in and about the building or finishing of the said hull, or in and about accounting for or paying, or making good, any sum or sums of money, to the said plaintiff which have been paid, or which shall hereafter be paid by him to the defendants, or either of them, or upon their account, or by their direction.” This full statement of the condition of the bondy and the report of the presiding judge, will enable us to consider and decide, understandingly, the motion for a new trial. For the purposes of the plaintiff, it is only necessary to look to two of the covenants contained in the condition : 1st. That the defendants at their own charges, undertook to build the hull of the ship. 2d. That they were to account to the plaintiff for all monies paid or to be paid by him, to or for the defendants. The motion for a new trial makes the question, is the plaintiff entitled to recover for the lumber furnished *36by Mr. Bennett, under these covenants ? If he is, a new trial must be granted, for then the verdict rejecting the claim is contrary to law. Upon the first of these covenants, it seems to me to be clear, that the plaintiff is entitled to recover. The defe ldants were to build the said hull at their own charges. Have they done so ? If the plaiati/F has furnished a part of the materials, it is clear that they have not. How stands this part of the case? . It is not denied that Bennett furnished the lumber, and that he told QTNTeale that it was a gift to the plaintiff, and that the defendants so regarded it. If plaintiff had himseif furnished the lumber, the defendants must have accounted for it under this covenant of the bond, ior then they would not have built the hull at their own charges ; part of it would have been built at the charge of the plaintiff. The lumber given by Bennett, must be regarded as delivered by him for the plaintiff, and as received by the defendants with a knowledge of that fact.

This view has the sanction oí the judge below ; for he says, had the lumber been sawed for the plaintiff, had he delivered it, or had it been delivered on the order of the defendants, in pursuance of any understanding with him, it must have been considered an advanco, as much as if he had paid money for it. One of them was informed by Bennett, that it was a gift to Lucas, and he communicated it to his co-partner, by whom we are told in his testimony, when he speaks of the effect this information then produced on his mind, that he expected to have to pay Lucas for the lumber. From these facts, it seems to me, that on this covenant tho plaintiff might recover against the defendants. Upon the second covenant, by which the defendants were to account to the plaintiff for all sums of money paid, or to be paid to, or for the defendants, I am, also, with the plaintiff upon this part of the case. I differ in two points from my brother who tried the cause. In the first place,' he thought that to entitle the plaintiff to recover for the lumber under the bond, it was necessary, that the understanding and agreement, that it should be considered as an advance to the defendants, for which they were to account to the plaintiff, should have existed at the date, and that the bond was executed in reference to that, as well as other advances. The stipulation in this part of the condition of the bond, Contemplates future advances to be made, as well as it has regard to past. It speaks of moneys which the plaintiff has paid, or which he shall hereafter pay, or cause to be paid. If therefore, the lumber furnished, is to be regarded as money paid for-the defendants, the fact of the payment being made at a subsequent day *to*the date of the bond, or drat there was then no agreement that the lumber to be received *37from Bennett, was *to*be received as the lumber of the plaintiff, cannot affect the question of the defendants liability. For if it is money ,or moneys worth paid to the defendants by or for the plaintiff, it is ele a- that they must account for it, under the very words of their contract. In this connection, it is now necessary to inquire, can the lumber be regarded as money paid by- the plaintiff to the defendants 1 I h*.ie already shewn that it might be regarded as the lumbor of the plaintiff received by the defendants to build the vessel.' But if this be not so, still, whea Bennett told the defendant, O’Neale, that this lumber was a present to the plaintiff, and was to be paid for out of the new ship, and the defendants assented to this arrangement, it was in effect putting the value of the lumber as so much of the plaintiff’s money in the hands of the defendants ; when they agreed it should be paid for out of the new ship, it was the admission of a payment *pro tanto,*on the account thereof, and hence came clearly within the covenant to account for money to be paid by the plaintiff to the defendants, or either of them. In another point of view, I differ with the judge below ; he thought if the defendants were originally liable to Bennett, they could not be to the plaintiff. But this is, I think, a mistake. It is true, the account for the lumber could not be trans. ferred by parol, or otherwise, as a gift, so as to constitute it a debt to the plaintiff. But when Bennett consented to discharge the ’defend, ants from the charge for the lumber, by striking it out of their account to him, and leaving them to account to the plaintiff for it, it was the same as paying to them that much money for the plaintiff; or it had the same effect, as if the plaintiff had paid that much money to Bennett for them by their direction ; and in either point of view, it was within the bond. But it is said that this is a bond to indemnify the plaintiff against damage or loss arising out of the building of the ship, and if she has been built and delivered, what loss has the plaintiff sustained 1 From the statement of the accounts filed, if this item of the lumber be allowed, the defendants have received from the plaintiff on account of the ship, $1430,65, more than her price. This is the very damage’ covenanted to be accounted for. For the ship was to be paid for by the ton, and her price was therefore uncertain at the date of the bond; and in making payments for her, the plaintiff had a right to secure the refunding of an over-payment, and this is as we think done by the bond to indemnify him, from all and every damage or loss, charges or expenses, which he shall or may incur, or be put to, from or by reason ofiany monies which he has paid, or which he shall hereafter pay, or cause to be paid, to the defendants.

.Another clause of the condition, is a direct stipulation covering *38the objection made ; it covenants to indemnify the plaintiff for' any damage or loss, from or by reason of the negligence, omissions, or misfeasances of the defendants, in and about accounting for, or paying, or making good, any sum or sums of money to the plaintiff, which have been paid, or which shall hereafter be paid to the said defendants, or either of them, or upon their account, or by their direction. Tiic defendants have been unable to repay the amount overpaid to them by the plaintiff, on account of the ship, and hence he has sustained that much damage and loss, from and by reason of their omission and neglect to account for and pay the same.

The motion for a new trial is granted.

JOHN B. OTiEALL.

We concur,

HENRY W. DESAUSSURE,

J- S. RICHARDSON.

DAVID JOHNSON,

A. P. SUTLER.

J. JOHNSTON,