19 Haw. 398 | Haw. | 1909
Lead Opinion
OPINION OP THE COURT BY
This is a bill of exceptions to review a judgment against the defendants, as executors of the will of Henry Waterhouse, upon a return bond in a replevin action executed by Henry Water-house as surety.
The replevin action was brought by the plaintiff against Clinton J. Hutchins, trustee, on July 20, 1903, and was for the recovery of certain railway material which had been used by
Circuit Court, Third Circuit.
Territory oe Hawaii.
William W. Bierce, Limited, a Corporation, Plaintiff, v. Clinton J. Hutchins, Trustee. ($1.00 stamp)
Replevin.
Return Bond.
Know all men by these presents:
That we Clinton J. Hutchins, Trustee, as principal and Henry Waterhouse and Arthur B. Wood as sureties are held and firmly bond unto William Bierce Company, Limited, its successor or successors and assigns in the sum of Thirty Thousand (30,000) Dollars for the payment of which well and truly to be made, we bind ourselves, our successors herein and administrators jointly and severally firmly by these presents.
The condition of the foregoing obligation is as follows:
That whereas the said William W. Bierce, Limited, has begun in the Circuit Court of the Third Circuit of the Territory of Hawaii, a replevin suit against Clinton J. Hutchins, Trustee, to recover from him certain property specifically set forth in the bill of complaint filed in said suit, and of the value of $15,000
Now therefore if the said property and all thereof shall be well and truly delivered to said plaintiff, if such delivery be adjudged, and payment to said plaintiff be well and truly made of such sum as may, for any cause be recovered against the' defendant, then this obligation to be null and void, otherwise to be and remain in full force and effect.
In Witness Whereof we have hereunto set our hands and seals this 21st day of July, A. D. 1903.
Clinton J. Hutchins,
Trustee.
Henry Waterhouse,
Surety.
Arthur B. Wood,
Surety.
The foregoing bond is approved as to its sufficiency of sureties.
Dated July 21, 1903.
A. M. Brown, High Sheriff.
(Endorsed:) Piled, August 1st, 1903, Y o’clock A. M. J. P. Curts, Clerk.
Before going to trial plaintiff amended his declaration by increasing the allegation of the actual value of the property from $15,000 to $20,000, which amendment-was allowed by the court March Y, 1904, and at the close of his case by again increasing the value to $22,000, which amendment was allowed March 19, 1904. The case was tried jury waived, and plaintiff recovered judgment for the return of the property with $1045 damages and $50.50 costs, with an alternative judgment in case of failure to return for $22,000, the adjudged value of the property, with the same damages and costs. Certain exceptions brought by the defendant Hutchins were sustained by this court, the decision being rendered January 28, 1905. Bierce v. IHutchins, 16 Haw. 418. At that time this was the court of final ap
Meanwhile Henry Waterhouse had died February 20, 1904, and the present defendants qualified as his executors. After the trial of the replevin action the plaintiff caused execution to be issued April 15, 1904. notwithstanding the pendency of the defendant’s exceptions. The statute allowing this procedure upon good cause shown (R.- L. Sec. 1861) had been passed April 22, 1903, before the execution of the bond now sued upon, but went into effect August 1, 1903, the day the bond was filed and a few days after its execution. The execution having been returned unsatisfied, the present action, joining Hutchins, Wood and the executors of Henry Waterhouse as defendants, was filed on October 11, 1904, at which time the exceptions in the replevin action wero pending in the Supreme Court of the Territory. A demurrer was overruled and the defendants answered. Before the case was brought to trial the Supreme Court of the Territory sustained the exceptions in the replevin action where
The bill of exceptions brings up 127 exceptions, most of which were argued and relied upon. Many of these, however, relate to the same points, the principal defenses of the sureties being that they were discharged by the amendment to the local statute allowing execution to issue in certain cases pending exceptions; that they were discharged by the amendment to the Organic Act allowing an appeal to-the Supreme Court of the United States in cases involving over $5000; that they were discharged by plaintiff’s successive amendments to its declaration whereby the alleged value of'the property was increased from $15,000 to $22,000; that the suit was prematurely brought against these executors; and that the law laid down by the trial court as the obligor’s duty to return the property after judgment was inapplicable and misleading in view of certain correspondence in which Hutchins purported to deliver the property with certain conditions, which delivery was accepted by the plaintiff upon other conditions.
The question thus raised is one of considerable difficulty, and one on which the decisions are conflicting. The contract of the surety may be with reference to another contract, usually called the principal contract, between the principal and a third party, as a bond to secure the performance of a building contract; or on the other hand it may be with reference merely to an undertaking of the principal, as a bond that he will appear in court or that he will pay a judgment which may be rendered against him. The rule that any “alteration in the contract” releases the surety is frequently stated, but it is not always clear whether the contract referred to is the principal contract or the bond of the surety, or whether in the case of a surety for an undertaking the word contract is not used to mean either existing circumstances cr the terms upon which performance may be demanded. In the case of a surety upon S' contract any alteration in the principal contract releases the surety, the commonest case being an agreement between the principal and the third party modifying the terms of the principal contract. United States v. Freel,
“It is true, the rights and liabilities of sureties on a recognizance are in many respects different from those of sureties on ordinary bonds or commercial contracts. The former can at any time discharge themselves from liability by surrendering their "principal, and they are discharged by his death. The latter can only be released by payment of the debt or performance of llie act stipulated. But in respect to the limitations of their liability to the precise tei’ms of their contract, and the effect upon such liabiliy of any change in those terms without their consent, their positions are similar. And the law upon these matters is perfectly well settled. Any change in the contract, on which they are sureties, made by the principal parties to it without their assent, discharges them, and for obvious reasons. When the change is made they are not bound by the contract in its original form, for that has ceased to exist. They are not bound bv the contract in its altered form, for to that they have never assented. Nor does it matter how trivial the change, or even*405 tliat it may be of advantage to the sureties. They have a rignt to stand upon the very terms of their undertaking.”
Here there was no alteration in the sureties’ contract, and there was no contract, in the ordinary sense of that word, between the defendant and the district attorney which was subsequently altered. There v*as a modification, by proper authority, of the terms of the principal’s undertaking to appear, which was held to be an entire discharge of the contract of the sureties. We dwell on this distinction because the use of the word contract in this connection appears to be the source of some confusion. In United States v. Backland, 33 Fed. 156, for example, the “contract” held to be changed had been fulfilled. A more accurate1 statement of the effect of the decisions of the Supreme Court is as follows:
“They have decided that the surety is discharged not merely by payment of the debt or a release of the principal, but by any material change in the relations between the principal and the party to whom he owes a debt or duty; and that the surety cannot be held in such case by showing that the change was not injurious to him. For he had a right to judge for himself of the circumstances under which he was willing to be liable, and to stand upon the very terms of his contract.” 2 Parsons Contracts *17.
Upon the precise question of the effect of an increase of the ad damnum upon a bond previously executed there is a conflict of authority. The majority of the cases hold the sureties are not discharged. Thus in New Haven Bank v. Miles, 5 Conn. 587, where the. defendant had been arrested in a civil action and the bail bond was conditioned only for his appearance in court, an increase from $600 to $1200 was held not to.discharge the sureties, the court holding that they assumed the risk of all amendments allowed by statute. In Carr & Hobson v. Sterling, 114 N. Y. 558, another case of arrest on civil process, the undertaking provided that the defendant’“shall at all times render himself amenable to any mandate which may be issued to enforce final judgment against him in the action.” The ad dam-
In Hare v. Marsh, 61 Wis. 435, an amendment of the ad damnum in the justice’s court on an action of tort to an amount in the circuit court beyond the justice’s jurisdiction was held not to release the surety on the bond given to stay execution pending the appeal, the undertaking of the bond being to pay any judgment remaining unsatisfied. The court says: “The undertaking presupposes the exercise of such authorized judicial powers as should be called into action in the case. The contract was impliedly, if not expressly, with reference to such exercise of judicial power.” Exactly the opposite result was reached in Evers v. Sager, 28 Mich. 47, although there is a dictum to the effect that the sureties would have been bound had the amendment-been within the power of the court irrespective of stipulation. In Massachusetts a statute (Pub. Sts. c. 167, sec. 42) is construed as binding sureties in the event of amendments, provided it appears that the amended cause of action is the same as that relied on by the plaintiff when the action was commenced, however the same may be misdescribed. If the sureties are notified of the proposed amendment they are bound by its allowance, subject to exception or appeal, if not notified they are still liable if it appears that the adjudication was correct, and the court may go outside the record and receive oral testimony as to what was the cause' of action intended to be relied on when the suit was commenced. Driscoll v. Holt, 170 Mass. 262. The issue under this statute is therefore merely whether a new cause of action has been introduced, and decisions upon one side or the other (Prince v. Clark, 127 Mass. 599; Townsend Bank v. Jones, 151 Mass. 454) are not helpful. In Maine an increase
The only principle that can be deduced from the cases holding the sureties liable is that sureties on judicial bonds, as distinguished from sureties on private contracts or undertakings, contract with knowledge of the power of the court, under statute or otherwise, to make amendments, and must be presumed to take the risk of such amendments oven if their liability is thereby increased. If this principle is sound it would be of much wider application than cases of the increase of ad damnum, yet outside that held it is seldom recognized and the distinction generally denied. Brandt, Suretyship, Sec. 511; Reese v. United States, quoted above. One of the most common amendments under statutes is the substitution of new parties, and yet this is generally held to discharge the sureties. Richards v. Storer, 114 Hass. 101; Tucker v. White, 5 Allen 322: Contra, Jamieson v. Capron, 95 Pa. St. 15. The correction of an error in the description of the property replevied as the substitution of “north-cast” for “south-east” in the quarter section from which logs were cut is well within the power of amendment, but discharges the sureties. Bolton v. Nitz, 88 Mich. 354. The surety on a judgment for alimony or on a temporary injunction knows that it may be modified by the court, yet he is discharged by such modification. Sage v. Strong, 40 Wis. 575; Tyler Mining Co. v. Last Chance Mining Co., 90 Fed. 15. Sometimes, of course, the language of the bond, by fair construction, shows that subsequent increase of risk has been assumed as where the condition that a distiller “shall in all respects faithfully comply with all the provisions of law,” etc., has been held to signify an intention to stipulate that the principal should comply with duties subsequently imposed by law. United States v. Powell, 14 Wall. 493.
The exception to the overruling of defendants’ motion for judgment non obstante veredicto, in so far as it is based upon
Dissenting Opinion
DISSENTING OPINION OF
The surety in this case agreed to pay “such sum as may, for any cause, be recovered against” Hutchins. The limit of that obligation was stated in the bond to be $30,000. Plaintiff having recovered against Hutchins the sum of $22,000, the surety is bound by his obligation to pay that sum. The conclusion of the majority of the court that the surety is discharged is based on the assumption that the surety’s risk was increased by the amendments in the replevin action raising the value of the property from $15,000 to $22,000. That assumption very properly requires that the risk or obligation of the surety should be stated differently from what it is in the bond under the statute. If the obligation of the surety was as stated by the majority, then the conclusion they reach logically follows. If, on the other hand, it was as stated in the bond and in the statute, that conclusion does not and cannot logically follow. To be sure the obligation and the limit of that obligation are different things. The obligation is to pay such sum as may be recovered, while the limit provides that in no event can that sum, so far as the surety is concerned, be more than $30,000.
From the cases referred to by the majority it appears that the courts in Massachusetts, Connecticut, New York, Wisconsin, Pennsylvania and, possibly Michigan, to which should be added Ohio, Indiana and Vermont, (Jaynes v. Platt, 47 Oh. St. 262; Sherry v. Bank, 6 Ind. 397; Wright v. Brownell, 3 Vt. 436,) would hold that in this case the surety Avas not discharged, while in Maine it Avould be held the other Avay. The two cases
The majority opinion being in my opinion contrary to both principle and the great weight of the decided cases, I am compelled to dissent therefrom.