Jemison v. Governor of Alabama

| Ala. | Jan 15, 1872

B. E. SAEEOLD, J.

The facts of this case pertinent to the issues to be decided are these: The Marengo Plank or Covered Boad Company, incorporated February 5,1850, applied for and received a proportion of the two-per-cent* fund, under an act passed February 9, 1850, disposing of the portion unappropriated at that time, subject to the conditions prescribed in an act passed January 23,1845, to loan the two-per-cent, fund to the Montgomery & West Point and Tennessee & Coosa Railroad Companies. In consideration of this loan, the said company executed two bonds, with the defendants as sureties, on the 13th of December, 1853. Both recite that they are made under the 1st and 10th sections of the act of January 23,1845. The first of these sections required a bond or bonds, with sufficient security, for the payment of the money at the end of ten years from the date of the bond, with five per cent, interest for the last five years of the time. The second authorized the governor to demand additional security at any time, if he deemed it necessary, and on the failure of the company to give the additional security within sixty days, the bond or bonds already given should be considered due, and the governor should institute suit for the recovery of the money.

The bonds, however, differed from each other in some important particulars. One of them, the foundation of this suit, was conditioned, that the said Plank Boad Company should complete their road within fifteen years from the date of their charter, make an annual report to the governor of the extent of the construction of -the road, ,and of its condition, and the amount of said fund expended, to whom paid,' and for what purpose applied; for the faithful application of the money, with due diligence, to the construction of the road; and the fulfillment of the conditions' expressed in the fourth, fifth, sixth and seventh sections of the act of 1845. The substance of the fourth section (the report to the governor) has already been stated. The fifth section, after enumerating the terms above stated, contains the additional provision, that if the money loaned should not be faithfully applied; with due and proper diligence, to the construction of the' road, the governor is required to institute suit upon the bond 'or bonds mentioned in sections two and three for the recovery of the money loaned. The said sections require bonds for the completion of the road within the time specified by the -charter. The sixth section authorizes the company to give bond for the ultimate payment of the money. The seventh section makes all the bonds given under the act a lien upon the road.

The other bond stipulated for the return of the money within ten years. In default for sixty days of additional security on demand of the governor, both bonds were to become due. The first was also, by its terms, to be considered due on a breach of any of its conditions.

The suit was commenced September 6, 1860, and was founded exclusively on the first bond. The only breach averred was the failure to report annually to the governor, .as required by the fourth section. At a term of the court held in October, 1860, the complaint was amended by inserting therein these words: “Eor that, whereas the plaintiff, by the governor of the State, heretofore, to-wit, on the 13th day of December, 1853, lent to the Marengo Plank or Covered Boad Company, a corporation, the sum of $9,470.47 of the fund hereinafter specified, under and by ■vfrtue of the acts of the legislature of the State and the bond of the defendant hereinafter specified.” Under this amendment the second bond was given in evidence.

• From the above statement, it is plain that the second bond was not due at' the time the suit was commenced, whether by the expiration of the time for which the money was lent, or the failure to give additional security, none having been required. If the amendment of the complaint was intended as an incorporation of this second bond into the foundation of the suit, it would present the case of a suit upon a cause of action accrued after its commencement, at least, without the averment of some Breach'' by which it became sooner due.

Both of the bonds might have been considered as one, because together they scarcely comply with the provisions of the act under which they were executed. They might have been included in the same complaint, with averments of proper breaches, if such existed. The only breach assigned is the failure to make annual reports to the governor. This was a breach of the first, but not of the second. The first contained no provision for the repayment of the money. It was a penal bond, falling due on its breach, and recoverable upon to the extent of the damage sustained.

The act of 1845 required the recovery of the money before the time for which it was loaned, in two instances only. One, when the governor became satisfied that the company was not faithfully and diligently applying it to the construction of the road. This was to be a condition of a bond to secure the completion of the road within the time required by the charter, as provided in section 2. The other, when default was made in giving additional security. The money being due on the commission of these breaches, the most evident course seems to be to include in the complaint the bond securing the payment of the money, and, regarding both as one, allege the reasons why it has become due. This may be done by amendment of the complaint, if the facts justify it.

Sedgwick says, that in the case of an agreement to do; or refrain from doing any particular act,, secured by a pen•alty, the amount of the penalty is in no sense the measure ■of compensation ; and the plaintiff must show the particular injury of which he complains, and have his damages assessed by a jury. It may, therefore, be laid, down as a settled rule, that no other sum can be recovered under a penalty than that which shall compensate the plaintiff for his actual loss. — Sedgwick on Damages, 396, 410. Section 2633, Revised Code, requires the assignment of such breaches as the plaintiff may deem proper, and authorizes a verdict and judgment for such as he may prove; and if judgment be rendered for the plaintiff on demurrer, or by default, a writ of inquiry of damages must be awarded. The court erred in charging the jury, that the failure of the company to make annual reports authorized the recovery of the money lent with interest from the date of the first default.

3. There is no error in the charge that the payment made by McDowell to Graham, as treasurer of the State, in Confederaté currency, in 1864, was not a proper credit. The fund loaned was one which the State held in trust, and it was against public policy to allow an insurrectionary government, - not recognized by the political department of the United States government as de facto, to dispose of the credits of the State.

4. The release of the estate of G. Breitling from further liability on the bonds, did not have the effect to discharge his co-sureties, any further than his liability to them under section 3072, par. 2, of the Bevised Code; but to that extent it did. They had a right, under that section, to regard him as a solvent co-surety, and to require of him his proportion of any excess over their respective shares of the common liability which they should pay. From this obligation the creditor could not release him against the other sureties, and, consequently, his demand must be credited, in favor of the co-sureties, with the full amount of Breitling’s share as ascertained by section 3072, Revised Code. Ex parte Gifford, 6 Vesey, 805; Klingensmith v. Klingensmith’s Ex’rs, 31 Penn. St. 460; Burge on Suretyship, 386; White v. Banks, 21 Ala. 705" court="Ala." date_filed="1852-06-15" href="https://app.midpage.ai/document/white-v-banks-6504952?utm_source=webapp" opinion_id="6504952">21 Ala. 705. The right of sureties to contribution from each other is the result, not of any-implied contract between the parties, but of justice, which divides in equal proportions a common burden yoluntarily assumed.

The plaintiff could not deprive the defendants of them interest in the assignment made by the plank-road company to McDowell, and we do not think the release given to Breitling extended so far, or was intended to do so. The discharge was of the liabilities on the bonds. The assignment was of debts due from Breitling to the company.

The judgment is reversed, and the cause remanded.