People's Sav. Bank v. Campau

• Decision Date: 15 May 1900
• Parties: PEOPLE'S SAV. BANK v. CAMPAU et al.
• Court: Michigan Supreme Court

82 N.W. 803

124 Mich. 106

PEOPLE'S SAV. BANK v. CAMPAU et al.

Supreme Court of Michigan

May 15, 1900

Error to circuit court, Wayne county; Byron S. Waite, Judge.

Action by the People's Savings Bank against Daniel J. Campau and others, impleaded with W. L. Churchill and another, to recover on a penal bond. From a judgment in favor of plaintiff, defendants bring error. Modified.

Moore &amp Moore, for appellants.

Keena &amp Lightner, for appellee.

MOORE J.

The plaintiff commenced suit against defendants by summons in a plea of trespass on the case upon promises. It set up in its declaration a bond reading as follows: 'Know all men by these presents, that we, Fred T. Moran, F. F. Palms, Daniel J. Campau, George M. Vail, all of the city of Detroit, and W L. Churchill, of Alpena, Michigan, are held and firmly bound unto the People's Savings Bank, a body corporate under the laws of the state of Michigan, in the sum of thirty thousand dollars ($30,000) lawful money of the United States to be paid the said People's Savings Bank, its successors or assigns, for which payment well and truly to be made we bind ourselves, our and each of our heirs, executors, and administrators, firmly by these presents. Sealed with our seal, and dated this 29th day of November, 1895. Whereas, the Detroit Driving Club, a body corporate, duly organized and being under and by virtue of the laws of the state of Michigan, in which we are stockholders, is desirous of procuring a line of credit with the said bank in an amount not to exceed at any one time the sum of thirty thousand dollars, and for that purpose has delivered, and will from time to time make and deliver to and negotiate with said bank, its promissory notes in such amounts, payable at such times and on such terms and conditions as may be suitable to said bank: Now, therefore, the condition of this obligation is such that if said bank will give to said company a line of credit not to exceed the sum of thirty thousand dollars at any one time on such notes now held by said bank, or hereafter discounted, transferred, or negotiated with said bank, and that said company, the Detroit Driving Club, shall well and truly pay or cause to be paid unto the above named, the People's Savings Bank, its successors or assigns, all sums of money now or hereafter advanced upon such promissory notes made, indorsed, or negotiated with said bank by said company, then this obligation will be void and of no effect; otherwise, to remain in full force and virtue. This is a continuing guaranty, to be enforced or terminated by said bank or by any of the signers hereof by written notice to said bank.' In answer to a demand for a bill of particulars, plaintiff answered its claim was solely upon the bond. After the suit was brought, defendants paid to plaintiff $18,000, and a receipt was given them, in which it was recited the payment was made to apply upon the liability on said bond. Upon the trial one note for $15,000, dated October 21, 1897, and another for a like amount, dated November 11, 1897, were introduced in evidence. The interest on these notes to the day of judgment amounted to $2,286.50, after deducting the interest upon the payment, leaving due upon the notes $14,286.50, for which amount the circuit judge directed the jury to return a verdict in favor of plaintiff.

It is the claim of the counsel for the plaintiff 'that at law in an action upon a penal bond interest may be recovered in the form of damages to an amount exceeding the penalty of the bond; that the plaintiff in an action upon a penal bond with the condition for the payment of money only is entitled to recover the full amount of the penalty as a debt, and the excess of interest beyond the penalty in the shape of damages for the detention of the debt.' They make the further claim that it is clear from the whole instrument that the sum nominated was not intended as a penalty, but as a limit of the credit to be given the driving club, of which the obligors guaranty payment; and, on either view of the case, treating the instrument as a contract or as a bond, the judgment of the court below should be affirmed. The defendants contend for the following propositions:...