Clark v. Bush, 3 Cow. 151

Clark v. Bush

3 Cow. 151 | N.Y. Sup. Ct. | 1824

Curia,

per Savage, Ch. J.

(After stating the facts.) It is contended by the counsel for the defendant Bush, 1. That the bond operated by way cf release ; 2. That its operation is not changed by the payment of the penalty; 3. That payment of the penalty was not a discharge of the liability of Barney.

If the condition of the bond was not discharged by payment of the penalty, then the bond must operate by way of release to prevent circuity of action ; for it would be useless for the plaintiffs to recover on the note, if the defendant Bush might turn round and recover the whole amount back on the bond. (2 John. Rep. 186. 8 id. 58, 59.)

On the question whether the obligor in a bond can be compelled to pay more than the penalty, the decisions have not been uniform. In Lowe v. Peers, (4 Burr. 2228,) the questions were, 1. Whether the £1000 mentioned were stipulated damages ; 2. Whether the contract was lawful. Lord Mansfield, in giving his opinion, says, ‘‘ There is a difference between covenants in general, and covenants secured by a penalty or forfeiture. In the latter case, the obligee has his election. He may either bring an action of debt for the penalty and recover the penalty; (after which recovery of the penalty he cannot resort to the covenant; because the penalty is to be a satisfaction for the whole ;) or if he does not choose to go for the penalty, he may proceed upon *156the covenant, and recover more or less than the penalty to* ties quo tie sM This dictum of Ld. Mansfield was not called for by the case, nor is any adjudged case cited. It is, however, considered good law by Epinasse in his law of nisiprius. (2 Esp. N. P. 279.) In Branguin v. Perrot in the C. P. (2 Bl. Rep. 1190,) the defendant moved to pay into Court the penalty of the bond, the condition being to indemnify a parish againstthe maintenance of a bastard child. This was opposed on the ground that the action was for a single breach; after which the penalty should remain to answer subsequent breaches, in infinitum. But De Greyj Ch. J. said, “ This is really so plain a case that one knowá not what to say to make it clearer. The bond ascertains the damage by consent of parties. If, therefore, the defendant pays the plaintiff the whole stated damages, what can he desire more ?” The other Judges, Gould, Blackstone & Nares, concurred. In White v. Sealy et al. (Doug. 49,) the defend, ants gave a bond in a penalty of £600, conditioned for thd payment of a yearly rent by another peréon of £5 70. Two5 judgments had been recovered on the bond; and to the third action the defendants pleaded the first judgment in bar. The question was, whether the bond was a standing security for the rent for the whole term of 22 years, or only to the amount of the penalty. Butter, J. at first, thought that the plaintiff might assign breaches under the statute and recover more than the penalty ; but finally concurred with Ld. Mansfield 8/ Ashhursl that the defendants were liable only for the penalty. Jlshhurst, J. thought that though a recovery beyond the penalty might be right as to the principal, it would be inequitable as against the sureties. Afterwards, in Lonsdale, v. Church, (2 T. R. 388,) the question arose on a bond executed by the defendant and others. The defendant, as receiver of the harbour dues of Whitehaven, entered into three bonds of £2,000 each, conditioned to account for* all sums received by him. He moved for a stay of proceedings on the payment of the penalty of two of the bonds. Butter,. J. declared that he was not satisfied with the decision in White v. Sealy ; and cited Elliot v. Davis, (Bunb. 23,) Col. lins v. Collins, (Burr. 820,) & Holdipp v. Otway, (2 Sound. 106) where the plaintiff had been allowed to recover morpf *157than the penalty by way of damages, being the interest due by the condition of the bond, or costs. And the Court refused a stay of proceedings. Another case (Knight v. Maclean, 3 Br. Ch. Rep. 596) came before Buller, J. sitting for the Lord Chancellor, and exceptions were taken to the report cf the master, because in calculating interest on a bond for the payment of money, he had only computed interest to the amount of the penalty ; and Buller allowed the exception, deciding that the master should have gone on with the interest, notwithstanding it might exceed the penalty ; and he said that White v. Sealy went upon the defendants’ being sureties. But Ld. Thurlow, the Chancellor, on a re-argument, overruled the exception, on the ground that the penalty was the extent of the obligor’s liability. He had just before decided the same thing in Tew v. The Earl of Winterton, (3 Br. Ch. Rep. 490.) The question came again before the K. B. in Wilde v. Clarkson, (6 T. R. 303,) on a bond to indemnify the parish against the maintainance of a bastard child. The motion was, that satisfaction should be entered on payment of the penalty ; and the case of Lonsdale v. Church was cited against it. But Ld. Kenyon said “ I cannot accede to the authority of that case. Ax-cording to that, an obligor 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. In actions on bonds, or any penal sums for perform™ anee of covenants, the act (8 & 9 W. 3. ch. 11, s. 8,) says there shall be judgment for the penalty ; and that the judgment shall stand for further breaches : but the obligor is not answerable in the whole beyond the amount of the penalty.” The authority of this last case, and the c orresponding class of cases was expressly recognized by the Court of K. B. in M’Clure v. Dunkin, (1 East, 436,) and by the C. B. in Hefford v. Alger, (l Taunt. 218.)

The few American decisions that are to be found are also at variance. In Tunison v. Cramer, (South. Rep. 498,) an intimation is given, that there are cases in which a recovery maybe had beyond the penalty; but it was held, in terms, that this could not be against a surety. In Graham v. Bick*158ham, (4 Dall. 149, 4 Yeates' Rep. 32, S. C.) it was decided that where the penally is not in the nature of stated and ascertained damages, the injured party may recover beyond the penalty. That case was on r< contract not under seal for the transfer of stock. In Harris v. Clap, (1 Mass. Rep. 308,); the same thing was holden of a bond, and against a surety, Sedgwick, J. dissenting. But in Payne v. Ellzey, (2 Wash. Rep. 143,) in debt on a prison bounds bond, against the surety, the Court of Appeals in Virginia decided that though the plaintiff may recover less, he can not recovei more than-the penalty; and they lay this down as a general rule, without distinguishing between a surely and principal. In United States v. Arnold, (1 Gall. Rep. 348, 360.) Story, J. remarks, “ Noticing some contrariety in the books, 1 think the-true principle supported by the better authorities is, that the Court cannot go beyond the penalty and interest thereon, from the time it becomes due by the breach.” On error, the judgment in that cause was affirmed by the Supreme Court. (9 Cranch, 104, 120, S. C.) But- the amount to be recovered was not drawn in question.

The weight of these authorities is, I think, in favour 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, admitting the doctrine to apply as laid dow by LdMansfield in Lowe v. Peers, and that an action of covenant would he on the bond in question, in which form Bush might recover the whole amount necessary to a complete indemnity, (see also Winter v. Trimmer, 1 Bl. Rep. 395, and Perkins v. Lyman, 11 Mass. Rep. 83 ;) still it is clear that this can hold only as to McCracken, the principal ; but not against Barney, who was a surety, and the extent of whose liability is the penalty of the bond. All the cases agree in this, with the single exception of Harris v. Clap ; and this was against the opinion of Sedgwick, J.

The plaintiffs are, therefore, entitled to judgment.

Judgment for the. plaintiffs.