178 Pa. 154 | Pa. | 1896
Opinion by
The plaintiff by his bill seeks to rescind a contract and repossess the evidence of his liability. It is admitted that there was no accident, and no concealment, imposition or other element of fraud. But the learned master found there was such a mistake by the plaintiff as to his liability on the bond as to
It is not necessary to follow the master in his detailed examination of our cases on mistake of law, as the court below was of opinion that that question did not arise and rested the decision exclusively on two grounds,- first that the bond was not continuing, and there was no liability upon it, and secondly, that there was no other consideration for the notes.
First, as to the bond. The condition is that whereas F. C. Fink has been appointed cashier, etc., if he shall well, truly and faithfully perform all the duties, etc. “ so long as he shall continue in that capacity ” then the obligation tobe void, etc. The master learnedly and ably traced the rule as to the liability of sureties on official bonds from its origin in Lord Arlington v.
It is conceded that this rule, even thus carefully stated, has never been expressly adopted in any Pennsylvania case. As a surety’s contract is usually for the benefit of others rather than directly for his own, it has always been held that he is entitled to have the conditions of his liability strictly fulfilled before it is enforced, and in the liberal application of this principle cases are probably not few in which courts have carried adherence to the letter in favor of sureties beyond any substantial equity. An illustration will be found in Shackamaxon Bank v. Yard, 143 Pa. 129, which will be referred to further on, and there is an instructive passage worth quoting, in the argument for appellant in that case, by one of the most learned lawyers that ever adorned the bar of tins court, the late Richard C. McMurtrie, “ there is no distinction between a surety and a principal so far as the construction or meaning or effect of a document is concerned. There is a broad distinction between the liability of the principal and of the surety. But not under the written contract. That may be varied by the principal but it is not the contract that is varied; it is another contract that arises by implication which varies the liability. Naturally the plea of
The contract of suretyship though only enforced according to its strict terms is nevertheless nothing more than a contract. No particular form of words is necessary to be observed, and in construing it there is no reason why courts should not be governed by the rule applicable to all other contracts that the actual intention of the parties must prevail. As to official bonds the presumption that they apply only to the existing term of the officer may be admitted, but the presumption is very far from conclusive, and if it is clear that the parties meant to create a continuing liability, the bond must be held to have done so. This was very explicitly and forcibly laid down as the rule in the well considered and leading case of Shackamaxon Bank v. Yard, 143 Pa. 129. The condition of the bond was for the faithful performance of the duties of cashier “ during the time of his employment by the said bank, whether under Ms present election or under any subsequent election to the said position.” The cashier held over, but without re-election, and the default occurred after the expiration of his first term. The court below, adhering to the strict letter of the bond, held the surety discharged by the absence of a formal re-election, but this court reversed the judgment, and put the decision explicitly on the intention of the parties. “ The purpose,” said our brother Williams, “ to make the bond impose a continuing liability and relieve against the necessity for annual renewals was a lawful one, and the words employed for that purpose are apt and sufficient.”
If the present case was of first impression we should have no hesitation in holding that the bond was continuing. The complainant himself in paragraph 3 of his amended bill, so states the belief and intention of the parties at the time of execution. How far deference to a line of cases in wMch the language was similar, but in none of them identical, might lead to a different conclusion, it is not now necessary to decide, as we are of opirnon that there was ample other consideration for the notes.
Other items of consideration were urged by appellant. 1. Agreement for forbearance, already discussed incidentally in the preceding paragraph. 2. That the notes were given and received as part payment of the brother’s debt, and were accordingly credited on his account in the bank’s books. The master finds this a voluntary act, there being no evidence of any express agreement that it should be done, but we cannot doubt
All or any of these matters would afford sufficient consideration for the notes, but it is not necessary to discuss them further.
Decree reversed and bill dismissed with costs.