Case Name: Tate v. Booe and Another
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1857-05-25
Citations: 9 Ind. 13
Docket Number: 
Parties: Tate v. Booe and Another.
Judges: 
Reporter: Indiana Reports
Volume: 9
Pages: 13–16

Head Matter:
Tate v. Booe and Another.
Complaint upon a penal bond, conditioned for the payment by B., G. and D. of tlie indebtedness of A. and B., who had been partners, and for the exemption and security of A., the plaintiff, from all liability on account of the partnership. Breach, that a judgment had been recovered against the late firm, for which the plaintiff was liable. Held, bad on demurrer.
If the complaint on .such a bond does not show that the plaintiff lias sustained' actual damage, he can at most recover only nominal damages; and for such a recovery, a judgment will not be reversed.
APPEAL from the Fayette Circuit Court. ‘
Monday, May 25.

Opinion:
Davison, J.
. John B. Tate sued Wilson Limpus, George Booe and Lewis Me Cormaclc upon a bond, in the penalty of 3,000 dollars. The bond is dated December the 24th, 1852, and is conditioned as follows:
"Whereas, Wilson Limpus has this day purchased all the right, title and interest of John B. Tate, in and to the clothing establishment heretofore conducted by them, (Limpus and Tate,) in Gonnersville, Indiana, as partners, and has individually assumed the payment of all the debts contracted by them as such partners, or by either of them on account of the partnership: Now, therefore, if the said Wilson Limpus shall fully and entirely discharge all obligations due from said parties as a firm, and shall secure, exempt and defend John B. Tate from all liability, responsibility, or obligation that has accrued, or may accrue by reason of the partnership, then the obligation to be void," &e.
For breach, it is averred that they, (Limpus and Tale,) on the 27th of August, 1852, executed their promissory note to one Joseph Newhouse, for store goods at that date purchased by them as partners; and that since the execution of the bond in suit, viz., on the 26th of July, 1854, New-house recovered a judgment against them on said note, in the Fayette Common Pleas, for 123 dollars, &c., which judgment remains in full force and unsatisfied. And that, at all times since its rendition, Limpus has been, and he still is insolvent, and has wholly failed to pay the judgment or any part of it; nor could the same, or any part thereof, have been collected of or from him, at any time since the recovery against them. Wherefore the plaintiff says that he is liable and responsible to Newhouse /or said judgment, interest thereon, and costs, which in the aggregate amount to 130 dollars.
As to Limpus, process was returned not found. The other defendants appeared, demurred to the complaint, and their demurrer was sustained. Judgment was accordingly rendered, &c.
The only question to settle in the case is this: Does the complaint — there being no averment that the plaintiff had satisfied the judgment — state facts sufficient to constitute a cause of action?
Evidently it does not, if the principle that actual compensation can only be given for positive loss, applies to the case stated in the record; because the plaintiff has not shown that he sustained any injury from the alleged breach.
But it is insisted that the rule to which we have just referred, though applicable to mere covenants of indemnity, should not be allowed to control the decision of the case under consideration; that the instrument sued on is not a contract to indemnify, merely, but an affirmative covenant for the performance of a specific thing, viz., to pay the debts of the firm of Tate and Limpus; and that the plaintiff, though he has not satisfied the judgment, is entitled to recover the amount of his liability. The doctrine thus stated is sanctioned by various authorities. See 17 Johns. 239; 1 Hill, 145; and 9 Mees. & Welsb. 657 .
But a different rule of decision has been adopted in this Court. Schooley v. Stoops, 4 Ind. R. 130, was debt upon a bond to be void upon the condition that Schooley would, within 75 days from the date of the obligation, satisfy a mortgage resting on certain real estate then sold and conveyed by him to Stoops. Breach, that Schooley did not satisfy the mortgage. Held, that the latter was liable only for nominal damages.
A late writer on the subject of damages says that, "Any rule by which actual damages are given, where no actual loss is sustained, is, in truth, nothing but an effort to engraft on Courts of common law a species of specific performance, irregular and illegitimate, and which neither their forms of procedure, nor the general arrangement of their system enable them to exercise, without great danger of injustice and abuse. The rule should be considered cardinal and absolute, that actual compensation shall only be given for actual loss." Sedgwick on Damages, 311. These remarks seem to possess great force, and, in our opinion, enounce a correct exposition of the law. Suppose, in this instance, a recovery against the defendants. We know of no rule of procedure, whereby the plaintiff could be compelled to apply the proceeds of his recovery in discharge of the partnership debt. Such proceeds may or may not be so applied; and the partner who executed the bond may still remain liable upon the judgment against the firm. This result would not accord with any principle of justice. The conclusion thus indicated is fully sustained in Schooley v. Stoops, supra; and we are inclined to follow that decision. PerhapS the facts set forth in the complaint would entitle the plaintiff to nominal damages; but for such recovery merely, the judgment will not be reversed. 5 Ind. R. 250.
B. F. Claypool and N. Truslér, for the ajopellant.
Per Curiam.
The judgment is affirmed, with costs.
See also, Rockfeller v. Donnelly, 8 Cow. 623 and 639; Chace v. Hinman, 8 Wend. 452; Ex parte Negus, 7 id. 499; Webb v. Pond 19 id. 423; Aberdeen v. Blackmar, 6 Hill, 324; Churchill v. Hunt, 3 Denio 321; Crippen v. Thompson, 6 Barb. S. C. 532; Gilbert v. Winman, 1 Comst. 550, whore the foregoing cases are reviewed; Jeffers v. Johnson, 1 Zab. 73; Ohio Life Ins. and Trust Co. v. Reeder, 18 Ohio R. 47; Sedgwick on Damages, pp. 308 to 313, second ed., where the cases are reviewed; Hancock v. Clay, 2 Stark. 100—Ellenborough; Wood v. Wade, 2 id. 167—Ellenborough; and other English cases.