Case Name: David Wilson v. John Stilwell
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1859-12
Citations: 9 Ohio St. 467
Docket Number: 
Parties: David Wilson v. John Stilwell.
Judges: Scott, Sutliee, Peck, and Gholson, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 9
Pages: 376–379

Head Matter:
David Wilson v. John Stilwell.
Where S., a retiring member of a firm, took from bis late partner, T., a bond, with W. as surety thereon, conditioned that T. would pay all the debts of the late firm, which condition was broken: Held—
1. That S., without having first paid any of said debts, or been otherwise specifically damnified, is entitled to recover on said bond, against, the obligors therein, to the amount of such debts remaining unpaid.
2. In such action, it is proper that the creditors of the firm should be made parties, and that the court should, in the judgment, authorize the application of the amount recovered to the payment of the debts of the firm in discharge of the judgment.
In error to the Superior Court of Cincinnati.
The defendant in error, being plaintiff below, filed his *petition upon a bond executed to him by plaintiff in 'error and one John M. Tooker.
The petition in the court below sets forth that defendant in error, John Stilwell, and said John M. Tooker, were partners under the firm of J. M. Tooker & Co.; that they dissolved their partnership, and Stilwell sold to Tooker all his interest in the assets of the firm, in consideration that Tooker assumed to pay all the liabilities of the firm, and that he should give to Stilwell bond, with good security, conditioned for the faithful payment of the debts of the firm; that the bond was accordingly given, with plaintiff in error, David Wilson, as security, and the books and assets of the firm were surrendered to said Tooker; that Tooker did not pay all the debts of the firm, but certain debts in the petition enumerated were left unpaid, and judgments thereon had been rendered against both Stilwell and Tooker, of which Stilwell had given written notice to Tooker and Wilson, and had made formal demand upon them that they should pay them, but they had refused to do so.
The petition makes the holders of the said debts parties defendant, and requires them to set up their claims in that action, which they accordingly do, by their separate answers.
Tooker makes default; but Wilson, the plaintiff in error, answers, .admitting the execution of the bond, but claiming that the agreement between Stilwell and Tooker had been represented to him to have been that Tooker should faithfully apply the assets of the firm to the payment of its liabilities, so far as they would go, and that it had also fraudulently been represented to him that the bond was so drawn.
The proof in regard to the agreement between Stilwell and Tooker was conflicting; but the weight of evidence was that the agreement was that Tooker was to pay all the debts, without any reference to the value of the assets, and that Stilwell not only was not a party to any misrepresentations *made to Wilson, but was not present when any were made, nor aware that any wore made, if, indeed, any there wore.
The bond was for $3,000, and the condition is in these words :
“ The condition of this obligation is such that whereas the .above-bounden John M. Tooker has agreed to pay all the liabilities of the late firm of J. M. Tooker & Co. If the said John M. Tooker shall settle up and liquidate all the just claims against said firm of J. M. Tooker & Co., then this obligation is to be void and of no effect; otherwise to remain in full force and virtue.”
The court rendered judgment on the bond in favor of Stilwell, and against Tooker and Wilson, for $1,750.16, the aggregate amount of the claims set up in the petition, and with consent of Stilwell, the obligee in the bond, ordered that Tooker and Wilson might, at their option, see to the application of the money, by themselves paying to the different claimants the amounts found in the judgment to be due to them: any such payment to be credited, when •made, upon the judgment, in favor of Stilwell.
The giving of this judgment is assigned for error.
Gollins & Serrón, for plaintiff in error,
cited Adams v. Hansborough et al., 1 Freeman Ch. 533; Foote v. Garland et al., 1 Smedes & Marsh. 95; Sedgwick Meas. Damages, 307-318; Dabney v. Cattell, 12 Leigh, 383; Aberdeen v. Blackman, 6 Hill, 324; Chace v. Hinman, 8 Wend. 456; Waters v. Riley, 2 Harris & Gill, 305.
J. Burnet, for defendant in error,
cited Port v. Jackson, 17 Johns. 239, 479; Thomas v. Allen, 1 Hill, 145; Ex parte Negus, 7 Wend. 499; Lethbridge v. Mytton, 2 Barn. & Adol. 772; Sedgwick Meas. Damages, 309, 310.

Opinion:
Brinkerhoff, C. J.
The phrase " settle up and liquidate," in the condition of this bond, taken in connection *with the accompanying recital, is equivalent to the word pay, and imposes the obligation to pay all the debts of the late firm of J. M. Tooker 6 Co., and is readily distinguishable from an obligation to indemnify against a liability to pay. And the doctrine seems to be now well established, by a current of decisions both in this country and in England, that if there be a contract to indemnify simply, and nothing more, then damage must be shown before the party indemnified is entitled to recover; but if there be an affirmative contract to do a certain act, or to pay a certain sum or sums of money, then it is no defense to say that the plaintiff has not been damnified; and that the measure of damages in such case is the amount agreed to be paid, or the proper expense of doing the act agreed to be done. Port v. Jackson, 17 Johns. 239; S. C., in error Ib. 479; Mann v. Eckford's Ex'rs, 15 Wend. 502; Ex parte Negus, 7 Wend. 499; Loosemore v. Radford, 9 Mees. & Wels. 657; Lathrop v. Atwood, 21 Conn. 117.
But it is argued with great force by Waite, J., dissenting, in the case last above cited, and by Mr. Sedgwick, in his work on the Measure of Damages (p. 30G),t-hat the doctrine thus settled in favor of the right to recover at law, in a case like this, to the full amount agreed to be paid, is wrong in principle; because, it is said, a court of law, having no power to direct and control the application of the amount recovered, the obligor, if he be primarily liable, as Tooker was in this case, might be compelled to pay the same debt in substance twice — once to the obligee of the bond, and again to the original creditor; and that the same principle ought to operate in favor of the surety, whose liability in law can not be extended beyond that of his principal. It must be confessed, that these considerations, as applied to a recovery in a court, and in an action, at law .strictly, are entitled to very great weight; and, as Mr. Sedgwick remarks, serve to illustrate " the inconvenience and serious hardships that often flow from the separation *of the jurisdictions " at law and in equity. But the objec tion thus forcibly .urged to the doctrine as applied in eases at law, . by courts destitute of equity jurisdiction, has no application to the case before us. This being a ease under the code, and the court below exercising jurisdiction in equity as well as at law, and competent to administer equitable as well as legal remedies, very prop-1 erly saved the rights of the obligors of the bond and defendants in| the judgment, by ordering the creditors of the firm to be made' parties, and permitting the obligors to pay off the creditors of the-plaintiff, and to have the amount thus paid credited upon the judgment. And this, we think, ought always to be done where anyparty in interest, whether creditor or obligor, demands it.
Judgment affirmed-
Scott, Sutliee, Peck, and Gholson, JJ., concurred.