Gloucester City v. Eschbach

• Decision Date: 22 January 1892
• Citation: 54 N.J.L 150,23 A. 360
• Parties: GLOUCESTER CITY v. ESCHBACH et al.
• Court: New Jersey Supreme Court

23 A. 360

54 N.J.L 150

GLOUCESTER CITY

v. ESCHBACH et al.

Supreme Court of New Jersey.

Jan. 22, 1892.

(Syllabus by the Court.)

Action in the Camden county circuit court, without jury, by the city of Gloucester against Eschbach and others to recover on a certain bond. Damages assessed in favor of plaintiff, who moves for judgment on the postea.

Argued at June term, 1891, before Scudder and Magie, JJ.

Thomas E. French, for plaintiff.

Mark R. Sooy, for defendants.

MAGIE, J. The question raised in this case relates to the amount for which judgment should be entered on the postea. The action is in contract, and the declaration is in the form of a declaration in debt. It is founded on a bond of defendants, acknowledging their indebtedness to plaintiff in the sum of $2,800, and binding them jointly and severally to pay the same to plaintiff. It sets out a condition annexed to the bond, and assigns a breach thereof. The pleas were the general issue, and picas tending to contest the alleged breach of the condition. The issues joined thereon were tried without a jury, and the postea shows the following findings: (1) That the bond is the deed of defendants; (2) that its condition was broken as charged; and (3) an assessment of the damages of plaintiff occasioned by the detention of the debt at $825, and an assessment of the damages of plaintiff occasioned by the breach of the condition at $3,625. The amount of 8825 assessed as damages for their detention of the debt equals the interest on the penalty of the bond for the period between the commencement of the action and the first day of the term at which the postea was returned. The damages assessed on the breach of the condition, therefore, equal the penalty of the bond, with interest since the suit began. Plaintiff moves for judgment on the postea for $3,625 and costs. Defendants insist that it can only be entered for $2,800 and costs. No question has been raised as to the propriety of disposing of the contention upon motion for judgment. The question raised by this motion is whether, in an action on a bond with a condition, judgment may be entered for a sum greater than the penalty of the bond, and, if so, under what circumstances and for how much. This question has received variant answers in the courts of this and other states, and it has been deemed to require careful consideration. The true construction of the obligatory portion of defendants' contract does not admit of doubt. Defendants thereby bound themselves to pay plaintiff a specific sum on demand. If no condition had been annexed thereto, plaintiff could recover thereon, in debt, the sum stated as upon a sealed or single bill, with interest on such sum from demand. Scudder v. Morris, 3N. J. Law, 419. Such interest is recoverable as damages for the detention of the debt, after it became due. In actions of debt, damages, while usually nominal, may, if essential to do justice, be substantial. Henry v. Earl, 8 Mees. & W. 228; Lowe v. Steele, 15 Mees. & W. 380; Ash v. Pouppeville, L. R. 3 Q. B. 86; Gainsford v. Griffith, 1 Saund. 58, note 1. For the detention of a debt due, substantial damages may be awarded, and interest at the legal rate is now considered to furnish the true measure of such damages.

The condition annexed to this obligation did not extend its terms. If such a condition is performed, the obligation ceases; but if not performed, it is the obligation which binds obligors. Originally, courts of law enforced such obligations, when condition was broken, as if no condition had been annexed. Obligors were then compelled to seek relief in a court of equity, if the penalty of the bond exceeded what in justice ought to be exacted under the actual contract. Later, the courts of law in many such cases gave equitable relief, and St. 8 & 9 Win. III., and 5 Anne, established in those courts a practice which insured to obligors such relief. The provisions of those statutes were adopted in this state in the" Act concerning obligations, and to enable mutual dealers to discount," passed November 1, 1797, (Pat. 254.) They are substantially contained in the "Act concerning obligations," approved March 27, 1874, (Revision, p. 741.) By those provisions, the sum really and in equity due, on any bond containing a penalty to secure and enforce the payment of money only, is declared to be the debt due; but in actions on such bonds, judgment is to be entered for the penalty, and may be discharged by the payment of the sum found to be really due, with costs; while, upon bonds with conditions other than for the payment of money, there may be assigned, on the record of any action, the breaches of condition charged, and damages shall be assessed by verdict or inquiry for such breaches as are established; whereupon judgment is to be entered for the penalty, and may be satisfied by the payment of such damages and costs. These provisions do not operate to extend the liability of obligors on such bonds beyond the limit of the obligatory part thereof. While they permit the discharge of the obligation by payment of the sum found really due or the damages actually suffered, such payment is to be enforced only by a judgment for the penalty....