Spencer v. Perry

18 Mich. 394 | Mich. | 1869

Christiancy J.

This was an action of debt upon a bond, with a penalty of six thousand dollars, conditioned for the payment, by defendant, of all the debts of the late firm of Spencer & Newcombe, and to indemnify the plaintiff, one of said firm, against such debts. The declaration was in the usual form, demanding the penalty of the bond. The plaintiff’s right of action, and the defendant’s obligation to pay, rested wholly upon the bond.

After the execution of the bond,- and before the bringing of the action, the defendant had paid debts of the firm to an amount exceeding the six thousand dollars — the penalty in the bond.

It is admitted that if the defendant had paid nothing upon the debts of the firm, and suit had been brought upon the bond, the amount of recovery would- had been limited to the amount of the penalty. See Comp. Laws, §§ 4509-4517.

But it is insisted that a voluntary payment, without suit, of any amount of the debts mentioned in the condition, though Exceeding the penalty, is no satisfaction of the bond. If this be so, it will certainly be for the interest of all obligors in such bonds, to pay nothing until compelled by suit. But we see no intelligible ground for any distinction in such cases between a voluntary and a compulsory payment.

If a party choose voluntarily to perform his obligation to the full extent that the law could enforce it, we are at a loss to perceive, why the payment should not be recognized as equally meritorious and effectual, as if made at the end of a law suit. See Clark v. Bush, 3 Cow. 151; Lyon v. Clark, 8 N. Y. 154, and cases there cited. The law is not so tenacious of its prerogatives as to prevent parties from performing their obligations of their own accord, without the compulsion of legal process.

We need express no opinion here upon official bonds, or those of executors, administrators, guardians, &c., which are regulated by special provisions of statute. But it is easy to see that these all stand upon grounds very different from the bond in this case, or ordinary bonds inter partes. The obligation of officers, executors, &o., to pay over and account for money coming into their hands by virtue of their office, is not created by the bond, but imposed by the law. and the bond is but a collateral security for the performance of a legal obligation not dependent upon the bond. In paying over and accounting for moneys, therefore, as required by law, the officer, executor, &c., is only performing a duty imposed upon him by the law, independent of the bond. No amount of payments, therefore, will prevent a recovery to the full extent of the penalty in case of a default to that amount. In other words the bond applies only to the sum or sums for which the party is in default, and not to sums which may have been paid over in the performance of official or legal obligation, not created by the bond.

The present bond was a contract between private parties, and one chief object of putting it in the form of a bond with a penalty, must, according to the general understanding in such cases, be supposed to have been to fix the limit beyond' which the liability of the defendant should not extend. Another object may have been to enable the obligee to enforce it, by action of debt, instead of covenant. The legal effect of the bond, as to the extent of liability, does not differ from that of a covenant, without a penalty, to pay the deb.ts of the firm to an amount not exceeding six thousand dollars. If the parties had intended to provide for a liability to an indefinite extent, to be limited only by the amount of the debts of the firm, whatever they might be; the obvious mode of creating such a liability was by a covenant to that effect without a penalty, or by making the penalty of the bond so large as, in any event, to exceed the debts, as the parties probably supposed they had done here.

We express no opinion whethér bonds conditioned for the performance of continuous acts or duties, such as for the support of another for life, or a certain number of years, or bonds for the performance of other acts than the payment of money, or indemnity against its payment, would fall within the rule here laid down. These and perhaps other particular species of bonds may be found to stand upon a different principle.

The judgment' of the Circuit Court must be reversed, with costs, and a new trial awarded.

The other Justices concurred.