Court Opinion

ID: 4927892
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:59:22.27395+00
Date Added: 2024-06-11T08:13:29.583403
License: Public Domain

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 *62have 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*63after 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 *64which, 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.