Court Opinion

ID: 6502639
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:15:15.759376+00
Date Added: 2024-06-11T15:54:39.104638
License: Public Domain

COLLIER, C. J.'
1. The declaration seems to us to be fatally defective. It recites the bond at length, avers that it was taken pursuant to the order of the judge who awarded the injunction, alledges the dissolution of the injunction, the recovery at law, *449the return of a. fieri facias against Robertson “no property found,” the insolvency of Robertson when the judgment was rendered and execution issued, and as a consequence thereof, deduces the forfeiture of the condition of the bond, and the liability of the defendant. This is not a good assignment of a breach. It is not co-extensive with the undertaking of the obligors, and does not comprehend its effect. They/engage to pay the plaintiff all damages he may sustain by the wrongful suing out of the injunction. The extent of these damages do not depend upon the dissolution of the injunction, the recovery of a judgment thereon, the insolvency of the principal obligor at that time and afterwards, and the return of “no property found” to a fieri facias on that judgment. Yet the plaintiff deduces the liability of the defendant, the surety, from these premises.
- It is in general sufficient to assign the breach in the words of the covenant, promise, &c. Thus in an action upon a covenant to repair, it is enough to alledge that the defendant did not repair; or upon a covenant not to permit an escape without a warrant from the sheriff, it is sufficient to say that the defendant permitted the escape of A, without a warrant, without alledging how A was arrested. [Mansel on Dem. 44-5.] But it is said not to be always sufficient to negative the words of the condition of a bond. Accordingly, where the undertaking was to secure certain lands, &c. “ free from all legal incumbrances, either by deed or mortgage, or otherwise now in existence, and binding upon the premises the breach alleged was, that the defendants “ did not free' the land from all legal incumbrances, either by deed, mortgage, or otherwise, then in existence, and binding upon the premises.” Tb,e Court held the declaration bad in substance, for the insufficiency of the assignment, which did not necessarily show a breach. [Julliand v. Burgott, 1 Johns. Rep. 6. See further, U. S. v. Spalding, 2 Mason’s Rep. 478; Craghill v. Page, 2 H. & M. Rep. 446; Winslow v. Commonwealth, Id. 459.]
-'Under the statute of 8 and 9 Wm. III. ch. 11, of which our statute is almost a literal copy, it is held to be compulsory on the plaintiff to assign breaches of all the covenants for the breach of which he claims damages. [2 Caine’s Rep. 329; 2 Johns. Cas. 406; 4 Johns. Rep. 213.] But the plaintiff has his election to declare for the penalty only, and set forth all such breaches in his replication to the defendant’s plea of performance, or to set *450them forth in his declaration. If, however, he sets out the condition in his declaration as his cause of action, or a part of it, he should show how it became absolute ; and this must be done, so that it may appear, that there has been a breach for which damages are recoverable. And if a good breach be not assigned,, the defendant may demur generally. [Mansell on Dem. 44.] In Gentry v. Barnett, 6 Monr. Rep. 114, it was held, that to a plea of conditions performed, the plaintiff may reply and assign breaches, but having assigned one or more specially in his declaration, and been defeated by the pleadings of the defendant, he cannot afterwards assign new breaches. This may suffice to show, that although the plaintiff might have' declared for the penalty of the bond, and set out a breach of the condition in a replication; or after judgment by default, or upon demurrer, have suggested breaches on the. roll, yet if he elects to do this in his declaration, the breach must be well assigned.
In Dickinson v. McCraw, 4 Rand. Rep. 158, the Court say, that in declaring on an attachment bond, it is not sufficient to al-ledge, that the defendant “ did not pay all such costs, &c. as accrued,” it must be expressly averred that costs and damages have been sustained. An averment of a breach of a bond only entitles the plaintiff to recover what he is legally entitled to by reason of the breach. [McDowell v. Burwell, Id. 317; Flanagan v. Gilchrist, at this term.
In the case before us, it is not alledged that Robertson, the complainant in Chancery was solvent when the injunction was granted, and this cannot be assumed or implied from any allegation in the pleadings. Now he may have been entirely unable to respond to the plaintiff when the judgment was recovered and execution issued, and yet have been entirely good when the proceedings at law were enjoined, and so have continued for a half dozen years and more thereafter. Or he may have been insolvent not only at the latter, but at the former period also. The declaration is at fault in omitting to alledge the condition of Robertson at the time the injunction was obtained. And this defect is a substantial one; for if he was then solvent, and so continued for a sufficient length of time as to enable the plaintiff to obtain a judgment and collect the amount according to the regular course of proceeding, had he not been enjoined, then the plaintiff would have sustained damages in consequent of the injunc*451tion, to the amount of the judgment and costs. But if he was then insolvent, and so continued up to the rendition of judgment, the only damages to which the plaintiff is liable is the costs to which he was subjected in Chancery — and for these, no breach is laid.
Having attained this conclusion, the only question upon the point is, should the demurrer to' the pleas have been visited upon the declaration. It is said to be a rule, that on demurrer the Court will consider the whole record, and give judgment for the party who appears to be entitled to it. This rule has its exceptions, but the case at bar is not one of them. [Step, on Plead. 144-5; 1 Mass. Rep. 495; 2 Id. 84; 6 Id. 389; 16 Id. 1; 11 Pick. Rep. 70, 75.
The plea of nil debit was certainly bad, but the Court (as we have seen,) should have looked at the entire record, and given judgment against the party who committed the first fault in pleading. Now although the proof upon - this point was (as it would appear) ample, and the instructions of the Court correct, yet this could ,not cure the defect in the declaration.
2 and 4. No objection has been pointed out to the admission of the records of the suits at law and in Chancery, and we think they were prima facie competent to show the dissolution of the injunction and the amount of the recovery at law. They should not have been rejected upon the ground that they were res inter alias. The liability of the defendant in the present suit, is acces-sorial to Robertson, who was one’of the parties to-those cases, and this it seems to us, is quite sufficient to have authorized the Courts to admit the transcripts.
3. In the Bank of U. S. v. Magill, et al. 1 Paine’s Rep. 669, Mr. Justice Thompson, said, where a bond with a penalty is given for the performance of covenants, the recovery must be -limited to the penalty, though damages may have been sustained to a greater extent. That becomes the debt due, upon which interest may be added, according to circumstances. Accordingly it has been held, that interest beyond the penalty of a bond may be recovered in the shape of damages, even against a surety. [Hands v. Clap, 1 Mass. Rep. 308.] And in Smedes v. Hooghtaling et al. 3 Caine’s Rep. 48, Kent, C. J. said, "On a review of all the decisions on this subject, the Court think this rule ought to be adopted: That interest is recoverable beyond the penalty *452of a bond. But, that the recovery depends on principles of law, and is not arbitrary at the discretion of a jury. See Paine v. McIntier, 1 Mass. Rep. 69; Carter v. Carter, 4 Day’s Rep. 30, and cases there cited; Maryland v. Wayman, 2 G. & Johns. Rep. 279; U. S. v. Arnold, 1 Gall. Rep. 348.
In Clark v. Bush, 3 Cow. Rep. 151, the question whether -the obligee could recover damages beyond the penalty was considered, and many authorities critically examined. The Court there said, “ The weight of the authorities is, I think in favor of the doctrine, that in debt on bond nothing more than the penalty can be recovered, at any rate, nothing beyond that and interest, after a forfeiture, even against the principal obligor.” But if the principal may be charged with interest thereon, still it is clear, the extent of the surety’s liability “ is the penalty of the bond.”
In Branguin v. Perrot, 2 Bla. Rep. 1190, Ch. J. DeGrey considered that the penalty by consent of parties, ascertained the maximum of the plaintiff’s damages, and if that is paid him, he can desire no more. Such was also the decision in White v. Sealy, et al. Doug. Rep. 49; but afterwards, in Lansdale v. Church, 2 T. Rep. 388, Buller, Justice, declared he was not satisfied with the decision in White v. Sealy; and cited Elliott v. Davis, Bunb. Rep. 23; Collins v. Collins, 2 Burr. Rep. 820, and Holdipp v. Otway, 7 T. Rep. 447, in which the plaintiff had been allowed to recover damages exceeding the penalty. Lord Thurlow, in Tew v. The Earl of Winterton, 3 Bro. Ch. R. 490, and Knight v. Maclean, Id. 596, held, that the obligor could not be charged beyond the penalty of the bond ; and the King’s Bench and Common Pleas have subsequently so laid down the law. See Wilde v. Clarkson, 6 T. Rep. 303; McClure v. Dunldn, 1 East’s Rep. 436; Hefford v. Alger, 1 Taunt. Rep. 218.
Many of the American decisions maintain that the obligee may recover interest upon the penalty from the time of the first breach of the condition, if the damages amount to so much. Yet these adjudications are contradictory upon this point, even as it respects the principal obligor, and the learned Judge who delivered the opinion of the Court in Clark v. Bush, supra, says Harris v. Clap, in adjudging that the surety may be charged beyond the penalty, stands “ solitary and alone.” [See Payne v. Ellzey, 2 Wash. Rep. 143; Hardy v. Martin, 1 Cox’s Rep. 26; Hal-*453ler v. Ardley, 3 C. & P. Rep. 12; Lloyd v. Hatchett, 2 Aust. Rep. 525; Mackworth v. Thomas, 5 Ves. jr. Rep. 529.]
• We might add to these many other citations, but we deem this wholly unnecessary, as they may be found referred to in the cases cited. Upon principle, we are entirely satisfied that the penalty must limit the responsibility of the surety. The obligors stipulate to perform a duty should the event provided for by the condition, happen, or if they fail to do so, then to pay the penalty. Although such is the undertaking, the penalty is not regarded as an absolute debt, to which the obligee is entitled upon the obli-gor’s default, but the recovery-is to be admeasured by the damages actually sustained. If these damages exceed the penalty, the surety is not liable for the excess ; for he has by his contract, provided for his discharge, upon the payment of the sum stipulated. If the law were otherwise, says Lord Kenyon, “ an ob-ligor who became bound in a penalty of £1000, conditioned to indemnify the obligee, may be called upon to pay £10,000, or any larger sum, however enormous.” True, a Court of Equity has sometimes rendered a decree in favor of the obligee for a sum greater than the penalty. Thus, in Grant v. Grant, [3 Russ. R. 598,] where proceedings were restrained for many years by injunction, without misconduct on the part of the creditor, Lord Eldon said, «In his opinion, the plaintiff’s demand was not to be limited to the amount of the penalty of the bond ; for he had always considered, on the authority of Duval v. Terry, (Show. P. C. 15,) that a party who had been restrained from proceeding at law, while the debt was under the penalty, had a right in a Court of Equity to principal and interest beyond the penalty of the bond.” Again, “ With respect to the general jurisdiction, I entertain no doubt whatever, that if a person indebted in a sum of money by the bond, files his bill for an injunction, stating that he is entitled by reason of equitable circumstances, to be relieved from the obligation which presses on him at law, and there is no ' neglect or default on the parfiof the defendant, this Court has a right to consider the bond creditor as submitting to do equity when he asks equity; and whatever abstruse and delicate reasoning there may be, as to whether the excess of the debt beyond the penalty, is a specialty debt or a simple contract debt, this Court will find a way to give execution for the difference. On the other hand, if it were the creditor’s own fault that he had *454not enforced payment of his debt sooner, it would not be competent for him to take the benefit of the same rule.” (See also, Clarke v. Seton, 6 Vesey, jr. Rep, 411; Clarke v. Lord Abingdon, 17 Id. 106.) But if it were allowable to apply this equitable rule in a suit at law, it might perhaps be questioned whether the record discloses such a case of protracted and vexatious litigation on the part of the complainant in equity, as to authorise a judgment for interest upon the penalty against the surety in his bond.
Without stopping to inquire whether a recovery might be had against the principal obligor, in an action upon the bond for a larger sum than the penalty, we are satisfied that such a judgment cannot be rendered against the surety. It remains but to add, that the judgment is reversed, and the cause remanded.