Case Name: Benjamin L. Lombard versus Ezra Fiske & al.
Court: Maine Supreme Judicial Court
Jurisdiction: Maine
Decision Date: 1844-06
Citations: 24 Me. 56
Docket Number: 
Parties: Benjamin L. Lombard versus Ezra Fiske & al.
Judges: 
Reporter: Maine Reports
Volume: 24
Pages: 56–70

Head Matter:
Benjamin L. Lombard versus Ezra Fiske & al.
Where the defendants, by a contract in writing, undertook “ to clear him (the plaintiff) from all liabilities, tax, or assessment, that have or may arise, from his one share in the Scythe Factory,” the name used by a company of unincorporated individuals who had associated to carry on the manufacture of scythes, of whom the plaintiff was a member, it was held, that the meaning was, that the defendants would indemnify the plaintiff for whatever of damage he might unavoidably sustain from his liabilities, that were strictly legal; and that if the plaintiff' should be compelled to pay company debts, he should first seek his remedy over against his associates for all, except his share, and for the whole, if there was company property sufficient.for the purpose.
And where a creditor of the company had obtained judgment against the individuals composing it, including the plaintiff and principal defendant, and had taken out execution, and the judgment debtors had been arrested thereon, and had severally given bonds; and afterwards one of the number agreed with the creditor to pay him the amount, and take an assignment of the judgment and bonds for his own benefit, to a third person, and the money was paid and the assignment was executed; and then a suit was brought, in the name of the creditor, against the plaintiff on his bond, and judgment was rendered by default for debt and costs, including the extra interest, given against the principal in such bonds by the statute, without notice given by him to the defendants, and the same was paid by the plaintiff; -it was held, that even if the payment by one of the judgment debtors on the assignment to a third person, was not a payment and discharge of the judgment and bonds, the plaintiff was not entitled to recover of the defendants the extra interest so paid.
This is an action upon the following obligation. “ Know all men by these presents, that I, Allen Fiske of Wayne, County of Kennebec, Stale of Maine, as principal, and Ezra Fiske and Moses Hubbard, do covenant and bind ourselves in the sum of three hundred dollars to K L. Lombard of said Wayne, to olear him from all liabilities, tax or assessment, that have or inay arise from said Lombard’s one share in the Scythe Factory in said Wayne. Given under our hands this 20th day of July, A. D. 1839.” Signed by the above named E. and A. Fiske and Hubbard. The plaintiiF proved, that at the time of the execution of said obligation he assigned, as the consideration therefor, his share in said factory as aforesaid, to Allen Fiske. It appeared in evidence that there was a voluntary association by articles of agreement, called the Wayne Scythe Manufacturing Company, with a capital stock of $4,000, divided into 40 shares of $100, each; that the said company, prior to the said assignment of the plaintiff’s share, became indebted to Jonathan Hyde & Son, for articles procured of them for the use of the company; that the said Hydes caused their said demands to be sued against ten persons, as members of said company, among whom were Allen Fiske, Francis N. Fiske, Moses Hubbard, Asa Gile, and the plaintiff, and recovered judgment against them at the Middle District Court, in said county, Dec. Term, 1840, for the sum of $351,06, debt, and $19,98, costs; that, execution on said judgment was duly issued and committed to an officer for service; that said officer arrested the plaintiff and all the other judgment debtors, save one, on said execution, and they severally gave a bond to the creditors, conditioned within six months to pay the debt, &c. agreeably to law in such cases; that prior to Nov. 23, .1841, $220, had been paid on said judgment and execution; and at that time a balance of $ J 91,85 only was due thereon. The bonds aforesaid had all been forfeited before the 23 d of Nov. aforesaid ; that an action in the name of said Hydes was brought Feb. 25, 1842, against the said plaintiff and sureties, and four others and sureties, on the bonds by them respectively given upon their arrest, and judgment rendered in the action against the plaintiff and sureties upon defaults at said District Court, April Term, 1842, for the sum of $413,73, debt, and $9,32, costs; that two executions were issued upon said judgment, one for the sum of $413,73, debt, and $9,32, costs, and the other for the sum of $60,23, extra interest upon said bond; that May 24, 1842, the plaintiff paid $165; Aug. 31st, 1842, $57,47, and on the same day, $54,20, on the execution for extra interest. The writ in this case bears date May 5, 1842.
The defendants introduced S. P. Benson, Esq. who testified that he was attorney for the said Hydes to collect their aforesaid demand against said Company; that the said Fiskes and Asa Gile had been at his office to obtain respectively an assignment of the judgment and execution aforesaid in favor of said Hydes against said Fiskes, Gile and others, and he declined acting in the matter without direction from the judgment creditors; that said Asa Gile, on the 29th of Nov. 1841, brought to him a line from the Messrs. Hydes, authorizing him upon the payment of the balance of said judgment and execution against said Gile and others, to assign said judgment and execution to said Gile, or some person for Gile’s benefit; that on the said 23 d day of Nov. the said Gile paid said Benson $110 in cash, and gave his note for $81,86, to be paid in a few days, which was paid first week of the Dec. District Court, being balance of said judgment and execution, and the full amount of the said Hydes’ debt and costs; and that he, said Benson, in pursuance of authority brought by said Gile from the said Hydes, and upon the payment of said execution by said Gile, made an assignment of said judgment and execution to one E. E. Tuttle for the benefit of said Gile, leaving the execution undischarged for the balance aforesaid. The said Benson further testified, that in consequence of the following ■communication from the Messrs. Hydes, viz. “Bath, Jan. 19, 1842. S. P. Benson, Esq. Dear Sir, The bearer, Mr. Gile, has called on us to get our consent for you to assign to him, or some of his friends, certain bonds created by a suit of ours against the Wayne Scythe Company. In yours to us of Dec. 11, you say you have assigned to E. E. Tuttle the execution for the benefit of Asa Gile, and if you think proper you may assign the bonds to the same person, provided it can be done in a way that we shall have no further trouble in the affair. Please understand we have no particular wish in the affair, and leave it entirely with you. Jonathan Hyde & Son;” and that he, on the 8th day of Feb. 1842, assigned the aforesaid bonds to said E. E. Tuttle.
Upon the foregoing proof, the counsel for the defendants contended, that the action could not be maintained; that the payment of the balance of the execution to Benson by Asa Gile, one of the judgment debtors, was a satisfaction and discharge of said judgment and execution; that the assignment of the judgment and execution to E. E. Tuttle for the benefit of Gile was inoperative and void, and also the assignment of the plaintiff’s bond was void; that no action could be sustained on that bond against the plaintiff and his sureties; that the payment made by the plaintiff on the execution which arose from the bond, was made in his own wrong; that he was not bound to make it; that it was not one of the liabilities referred to in the obligation declared on ; that nothing was paid by the plaintiff till after this suit; and that if this action could be maintained, that the plaintiff would not be entitled to recover for the extra interest, nor any thing more than one fortieth of the debt and cost recovered by the said Hydes in the original action against the company, or at most, one tenth of the original claim, being debt and costs of the said Hydes against the defendants in the original action.
Shefuey J. the presiding Judge, instructed the jury, that the money paid by Gile to Mr. Benson was to be regarded as payment of the execution, and that the plaintiff would not be entitled to recover, unless they should be satisfied that it was paid in pursuance of an agreement before made to have the execution assigned to Edwin E. Tuttle, and to accomplish that object; and that it was so assigned; and that in such case, it would not operate as a payment, although the execution was assigned to Tuttle for the benefit of Gile, and the plaintiff might recover; and that he would in such case be entitled to recover the amount which he had been compelled to pay by virtue of the judgment recovered against him on his bond.
The verdict was for the plaintiff, and the defendants excepted to the instruction of the presiding Judge.
Emmons, in his argument for the defendants,
in support of his proposition, that the payment by Gile, one of the judgment debtors, to the attorney of the creditors, was a full discharge and satisfaction of the judgment and execution, and that of course, the bond given by Gile and others to discharge them from arrest on the same execution thereby became void, cited Hammatt v., Wyman, 9 Mass. R. 138; Brackett v. Winslow, 17 Mass. R. 153 ; Stevens v. Morse, 7 Greenl. 36.
That the legal effect of the assignment of the claim of Hyde & Son against Gile and others to a friend of his for his benefit, was the same as if assigned directly to him. 2 Story’s Eq. <§> 1291Law Lib. of March, 1843, 148. The prior agreement to have the assignment made to a friend, could not prevent the legal effect of the payment by Gile, who made the agreement, furnished the money, and was to have the benefit of the assignment.
In the construction of the obligation, the words are to be taken in a constricted sense. Sumner v. Williams, 8 Mass. R. 162.
II. W. Paine and L. M. 'Morrill, for the plaintiff,
contended, that as the payment to the attorney of Hyde & Son was not to- be-, nor to be considered, as a payment of the debt, but merely as the consideration for the assignment, neither that, nor the assignment, was a discharge of the debt. Allen v. Holden, 9 Mass. R. 133; Norton v. Soule, 2 Greenl. 341; Stevens v. Morse, 7 Greenl. 36 ; Herrick v. Bean, 20 Maine R. 51.
If then the assignment was valid, the rule for assessing damages was right. The only fair construction to be put on the contract, whether we look at the letter or the spirit of it, is, that the defendants were fully and entirely to indemnify the plaintiff from all claims against him, as a member of the Scythe Factory Company. Fiske purchased the plaiutiiT’s interest in that company, and was in ail respects to have his rights, and incur his liabilities. Fiske agreed to take the place of the plaintiff, and free him from all liabilities as member of that company. 20 Pick. 474.

Opinion:
The opinion of the Court, Sheri-ey J. dissenting therefrom, was drawn up by
Whitman C. J.
This action is founded upon a written contract between the parties in which the defendants undertake "to clear him (the plaintiff) from all liabilities, tax or assessment, that have or may arise from said Lombard's one share in the Scythe Factory." This was the name used by a company of unincorporated individuals, who had associated to carry on the manufacture of scythes, of whom the plaintiff was one. A correct interpretation of this contract becomes essential in order to understand the ground of the exceptions taken at the trial to the instruction of the Court to the jury.
The meaning would seem to be that the defendants would indemnify him for whatever of damage he might unavoidably sustain from his habilites. Good faith was to be expected on his part; and that he would not wantonly allow himself to be subjected to greater damage therefrom, than might be unavoidable. The parties must have had in view liabilities that were strictly legal. If compelled to pay company debts, when he could have ample remedy over against his associates for all, except his share of them, or for the whole, in* case of there being company property sufficient for the purpose, it would have been reasonable, and could hardly be deemed otherwise than that the understanding of the parties, was that he should seek his remedy from such source. It should be observed, that it is at least doubtful, if the defendants, by virtue of their contract with the plaintiff, could have had recourse to the company for any thing they might pay for the plaintiff. No privity of contract as to such payment would have existed between them. Any such payment by the defendants would have been, as it respected the company, a mere voluntary act. It would not have been made as a member of the company. It surely could not be admissible for the plaintiff to pay all the company debts, and then turn round, by virtue of his contract with the defendants, and call upon them for the amount so paid, without an •effort first made to recover the same of his associates. If the •defendants were to reimburse him for such losses as were inevitable, it would seem that the terms of their contract, according to their true import, and according to what must have been the understanding of the parties, would be fulfilled.
How was the case here ? The company were liable to Messrs. Hyde & Co. for a debt of something short of $400, for which judgment had been recovered; on which execution issued, and, before the 23d of Nov. 1841, had been satisfied in part, leaving due on it only $191,85. Gile, one of the debtors in the execution, afterwards paid the balance due on it; and procured an assignment of it, as if unsatisfied in any part, to a confidential friend of his, and also of the bonds, which had been given by each of his associates, that of the plaintiff's being one of them, which had been given upon the arrest of each on the execution; and subsequently, in the name of Hyde & Co. caused suits to be instituted against several of them; and against the plaintiff among the rest, who suffered judgment thereon to be entered against himself, upon default, for the full amount due on the execution, as if no payments had been made on it; together with $54,20, for extra interest, as provided by law against the principals in such bonds, and actually paid for the benefit of his associate, Gile, this extra interest; and two hundred and twenty-two dollars of the principal ; and all this, so far as appears, without notifying the defendants of the existence of any such claim; and now calls upon the defendants, under the contract with them, for reimbursement of the whole amount so by him paid; and a verdict has been returned therefor in his favor.
It was objected at the trial, that, when Gile, he being one of the debtors, paid the balance due on the execution, it was satisfied; and that an assignment thereof to his friend, by the name of Tuttle, was nugatory; and that no action could there after be legally maintained upon the plaintiff's bond, given on arrest, on the execution, of himself, and the other associates. And at any rate, that nothing could be recovered for the extra interest paid by him in that case. The Court, however, ruled at the trial, and so instructed the jury, that if Gile paid the balance due on the execution, in pursuance of an agreement before made, to have the execution assigned to Tuttle; and to accomplish that object, it was so assigned, although for the benefit of Gile, that the plaintiff might recover the amount, which he had been compelled to pay by virtue of the judgment recovered against him on his bond. The jury found for the plaintiff, it may be presumed, as exceptions are filed by the defendant; and to the full amount claimed.
The question is, was the instruction such as ought to have been given ? Was the assignment, by Hyde & Co. of the execution and bonds, under the circumstances attending it, to Tuttle, for the benefit of Gile, of any validity ? or, in other words; did not the payment, by Gile, of the amount due, he being one of the debtors, render both fundus officio ? How does it vary the case that it was made nominally to his confidential friend, at his request, and solely for his benefit ? The law should not regard mere shadowy forms in the transaction of business; it should look to the substance of things. Gile, the debtor, paid the full amount due; and W'as liable for that amount. The creditors were completely satisfied. Could the execution and bonds afterwards be deemed in force in the hands of any one?
It would seem difficult to believe, that this recovery against the present plaintiff, could have been had without collusion between him and Gile. Gile in his own name, could have recovered of him not exceeding one tenth part of the amount due and paid by him, there having been ten debtors, against whom the execution issued; yet he seems voluntarily to have paid the whole; for he made not the slightest resistance to prevent the recovery of it of himself.
But clearly the exceptions must be sustained, and a new trial be granted in reference to the extra interest, a liability for which, was voluntarily incurred by the plaintiff. The plaintiff had been sued by Hyde & Co.; had suffered judgment to go against him by default, and execution to issue; and had given a bond in the usual form; and incurred a breach of its condition, without, so far as appears, calling upon or notifying the defendants of any such accruing liability. Surely they ought to have been apprised of these proceedings, if they were to be rendered responsible for the whole amount ultimately to be recovered. They should at least have been allowed an opportunity to take all needful measures in defence.
Exceptions sustained;
new trial granted.