Court Opinion

ID: 6616654
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:23:42.465476+00
Date Added: 2024-06-11T15:58:33.388755
License: Public Domain

ON MOTION FOR REHEARING.
Smith, P. J.
A re-examination of the grounds of our opinion has resulted in a change of my conviction. I may shortly state the reasons for that change.
It may be conceded that it is well established by a current of decision that, if there be a covenant to indemnify simply, and no more, then the damage must be shown before the party indemnified is entitled to recover, but if there be an affirmative covenant to do a certain act, or to pay a certain sum or sums of money, then it is no defense to say the plaintiff has not been damnified, and 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. Ham v. Hill, 29 Mo. 275; Gilbert v. Winan, 1 N. Y. 552; Willock v. Hoppock, 6 Wall. 94; Thomas v. Allen, Hill, 146; Port v. Jackson, 17 Johns. 239, 479; Mann v. Eckford’s Ex’rs, 15 Wend. 502; Ex parte Negrus, 7 Wend. 499; Lorsemore v. Radford, 9 Mees. & Wels. 657 ; Lathrop v. Atwood, 21 Conn. 117; Wilson v. Stilwell, 9 Ohio St. 467. How shall the contract in question be classified ? I think the plaintiff, by his pleading, has placed *581it in the former. The breach of the condition of the bond, which plaintiff in his petition assigned, was, that Hoos kept $2,000 out of the $6,000 paid him by-plaintiff, which he ought to have expended in good faith, in the erection of the buildings, “by reason whereof the notes and deeds of trust are inadequate and insufficient security to the extent of $2,000,” etc. “Wherefore plaintiff says he is injured and damaged by reason of the premises, in the sum of $2,000, and, therefore, he demands that judgment be entered for the amount of said bond (which is $6,000), as by law provided, and that his damages hereunder be assessed at $2,000.” If the rule in respect to affirmative covenants, which I have already mentioned, is applicable to the broken covenant in this case, then the measure of plaintiff’s damages is the amount of the penalty in the bond. But the plaintiff, by his pleading, alleges that his security has been rendered inadequate and insufficient to the extent of $2,000. Whether this was so or not, was an issue of fact made by the pleadings. The plaintiff was permitted to introduce evidence to support the affirmative of this issue, while the defendants were denied permission in like manner to show the negative. The defendants offered to show, and we are bound to presume they could show (Funk v. Gulware, 49 Conn. 124), that the plaintiff’s security was adequate and sufficient. The plaintiff showed no liability or loss and, therefore, no damage. Under the issues made by the pleadings, I think the circuit court erred in its ruling in this regard.
But if a different view be taken as to the propriety of the action of the court in excluding the defendant’s offer of evidence, I would still be of the opinion that the judgment should not stand for another reason. If the judgment should be discharged by the sureties of Hoos, this will not in any way diminish his liability on the notes secured by the deeds of trust. The notes, one or more of which are held, it seems, by persons other than *582the plaintiff, will still be an unaffected secured liability of Hoos. This case is reduced to this complexion according to the opinion ; that is, that the plaintiff, or whoever are the holders of the notes, may enforce payment of them, notwithstanding the sureties may discharge the judgment of the plaintiff. It results that the primary obligation of Hoos to pay the money borrowed will in substance be twice paid. I think that any principle that leads to this, in a case of this kind, is wrong, and should not be followed. But, if this harsh rule is unbending, and without exception, I can discover no reason why, under our system of practice, when the circuit courts are invested with jurisdiction in equity, as well as at law, and are authorized to administer equitable as well as legal remedies, the rights of Hoos and his sureties on his bond may not be saved by ordering the holders of the notes to be made parties, and permitting the sureties to pay the ■amount of the judgment on the notes pro rata to the holders thereof, and have the same credited on the judgment. In Ham v. Hill, supra, it was said that the “defendant being a copartner and liable to the partnership creditors, notwithstanding his bond to the plaintiff, if the situation of the plaintiff is such, or if there be circumstances that would make it just to do so, the court, on the trial, would, in rendering judgment, see that the defendant was made safe inpaying the judgment. This practice was expressly approved in Wilson v. Stilwell, supra.
If this is a case, as we have decided, where the bond sued on contains an independent covenant to do a specific thing, I think, even then, that we should reverse the judgment and remand the cause, with directions to the circuit court, to make the orders which I have indicated, to save the rights of the parties. Railroad v. Higgins, 89 Mo. 607; R. S., sec. 3776. I think the motion should be sustained.