Eliot Nat. Bank v. Beal
| Decision Date | 07 May 1886 |
| Citation | 6 N.E. 742,141 Mass. 566 |
| Parties | ELIOT NAT. BANK v. BEAL and another, Adm'rs. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
This was an action of contract founded upon a bond given by one Royal B. Conant as principal, and Moses C. Beal as surety, to secure the faithful performance by Conant of his duties as cashier of the Eliot National Bank. The concluding condition of said bond was as follows:
"And this obligation is upon the further condition that no suit at law shall be brought or founded upon it unless the same be commenced within the period of twelve months after the connection of the said Royal B. Conant with said bank, or his employment with said bank, shall have closed and been terminated."
At the hearing in the supreme court, before HOLMES, J., it appeared that Royal B. Conant was appointed cashier of said bank, and gave a bond as stated; that he continued to act as cashier under said appointment, until July 31, 1878, when he was first discovered to be a defaulter, and was asked to and did resign. His resignation was accepted, and at that time his connection with and his employment by the bank was closed and terminated. A suit was brought at once upon said bond on December 23, 1878, in the superior court for the county of Suffolk, the same being against both principal and surety and while said suit was pending in court, and being heard before an auditor, on October 29, 1881, the said Moses C. Beal, the surety, died testate, the other defendant still surviving. The estate of said Beal had not been represented insolvent. His will was contested, but finally probated, and the defendants to the present suit were appointed and qualified as administrators with the will annexed, May 24, 1882. The present suit was instituted on August 1, 1883; the original suit going on as against the surviving defendant. It was objected that the suit could not be maintained because of the last condition of said bond. The court, being of that opinion, so ruled, directed and took a verdict for the defendants, reserving the question for the full court.
Ranney & Clark, for plaintiff.
Gaston & Whitney and J.V. Beal, for defendants.
The defendants rely upon a concluding condition of the bond, "that no suit at law shall be brought upon it unless the same be commenced within the period of 12 months after the connection of the said Royal B. Conant with said bank, or his employment with said bank shall have closed and been terminated," as presenting an insuperable bar to the maintenance of the present action. But we do not think such is the just conclusion. In the first place, a distinction has sometimes been made between the effect of a condition and of a contract, and it is said that, if a condition which was possible at the time of entering into it becomes impossible by the act of God, the necessity of performing it is excused. Shep.Touch. 382; Bac.Abr. "Conditions," Q; Sparrow v. Sowgate, W. Jones, 29. Upon this technical ground it might perhaps be held that, since the parties have chosen to put their undertaking in this form, the defense fails. But it is better to look at the case more broadly. Treating this as a mere contract, the parties agree that no suit shall be brought or founded upon it unless the same be commenced within 12 months. We have no doubt that such a provision is valid. Amesbury v. Bowditch Ins. Co., 6 Gray, 596; Fullam v. New York Ins. Co., 7 Gray, 61; Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386.
But the question is what it means. It is not a question whether the plaintiffs could be excused from the terms of a contract, but what is a true construction of the contract. The letter of the bond, if that alone is looked at, says that no suit shall be brought upon it within 12 months; but, as was said in Mill-dam Foundry v. Hovey, 21 Pick. 441, "it would not always conform to the intent of the parties to construe every stipulation literally when implied qualifications and exceptions are absolutely necessary to carry into effect the intention of the parties;" and, again: "Where a stipulation is made in general terms, it is to be construed with such implied exceptions and qualifications as necessarily grow out of the subject-matter." Page 442.
In the present case it cannot be supposed that the parties intended to cut off entirely all remedy upon the bond if, upon breach, the bank should use all possible means to enforce its rights. "The object was not to foreclose and prevent a resort to the proper tribunal, but to compel a speedy resort." Cray v. Hartford Ins. Co., 1 Blatchf. 280. The obligors sought to insure themselves against injurious delay on the part of the obligee. It is as if they had said: "We will be bound provided you sue us within twelve months, and not otherwise." In other words, it is assumed as an implied element of the contract that a suit shall not be rendered impossible by reason of the death of the obligors. If such death were the result of the voluntary act of an obligor, by suicide, it would hardly be contended that the right of the obligee could be defeated in that way. One cannot himself put it out of the power of the other party to comply with a stipulation, and then avail himself of the non-compliance. Frazier v. Cushman, 12 Mass. 279; Clapp v. Thomas, 7 Allen, 188; U.S. v. Peck, 102 U.S. 64; Beswick v. Swindells, 3 Adol. & E. 868, 883; 2 Chit.Const. (11th Amer.Ed.) 1079. Certainly in such cases a literal construction should not be put upon the stipulation; but an implied exception should be incorporated into it. So, where a stipulation or duty in favor of another party can only be performed in his presence, it is an implied element of the obligation that he shall be present, when he can be found, to receive the performance; and if he is absent, the obligation does not exist. See Williams v. Bank of U.S., 2 Pet. 102.
In the present case a suit against both obligors was seasonably begun; but, as to the surety, it was defeated by his death so that, in...
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