Spencer v. Perry

• Citation: 18 Mich. 394
• Court: Supreme Court of Michigan
• Decision Date: 12 May 1869
• Parties: Thomas B. Spencer v. Ebenezer W. Perry

18 Mich. 394

Thomas B. Spencer v. Ebenezer W. Perry

Supreme Court of Michigan

May 12, 1869

Heard May 6, 1869 [Syllabus Material] [Syllabus Material]

Case made after judgment, from Saginaw circuit.

This was an action of debt upon a bond, with penalty of $ 6,000 conditioned to pay all the debts of a certain firm.

Judgment was rendered for plaintiff.

The facts are stated in the opinion.

Judgment of the circuit court reversed, with costs, and a new trial awarded.

Gage & James, for plaintiff:

This action is upon a bond in the penal sum of six thousand dollars, given by defendant to plaintiff, without sureties.

The condition of the bond recites that the defendant has purchased of plaintiff his right, title and interest in the business of Spencer & Newcombe, and in property described therein.

That part consideration was the payment by defendant of all debts, liabilities and claims of the firm of Spencer & Newcombe, and the condition of the bond is, that the defendant pay, or cause to be paid, such liabilities, whether notes, mortgages, contracts, book accounts or otherwise, as and when the same become due and payable, and also save and keep harmless said Spencer therefrom.

The plaintiff maintains his action by showing a debt of said firm unpaid by defendant, and paid by plaintiff.

The defendant sought to avoid the bond by claiming that plaintiff had misrepresented the amount of the debts of Spencer & Newcombe, and that they were much larger in amount than represented, and sought to recoup in damages by reason of such misrepresentation.

The defendant's counsel claimed upon the trial, that if the amount of the debts was misrepresented, the bond could be avoided, and that if defendant had paid debts to the amount of the penalty of the bond, he was thereby discharged from liability.

1. The question raised by the pleadings in this case, viz., that the defendant was entitled to recoup in damages the amount alleged to have been sustained by him by reason of the fraudulent misrepresentations of plaintiff of the amount of debts and liabilities of Spencer & Newcombe, was a question of fact decided adversely to the defendant by the court below.

2. Misrepresentations as to the liabilities of the firm of Spencer & Newcombe by Spencer, at time of sale, cannot be offered in evidence for the purpose of limiting or qualifying the condition of the bond: Dorr v. Munnell, 13 Johns. 430; Stevens v. Judson, 4 Wend. 471; Dale v. Roosevelt, 9 Cow. 309; Huston v. Williams, 3 Blackf. 170; Vrooman v. Phelps, 2 Johns. 177.

3. The bond in this case cannot be construed as a bond to pay debts and liabilities of the firm of Spencer & Newcombe, to the amount of six thousand dollars only.

4. A bond of this character, viz., to pay money, to wit, the debts of Spencer & Newcombe, and also, to indemnify Spencer against loss, cost and charges, by reason of the same, can only be satisfied by a full performance of the condition. A voluntary performance of part of the condition will not satisfy the bond: 2 T. R., 388 (Dunford and East); 1 Mass. 308; 6 Paige Chan'y 88; 3 Caines 48; Henniker v. Wigg, 45 English Com. Law, 4 Q. B., A. and E., new series; Hancock v. Clay, 3 English Com. Law, 334; 2 Starkie 68; Potter v. Titcombe, 7 Greenl. 302; Lowe v. Reers, 4 Burr. 2225.

John J. White, for defendant:

In this case there is but one point for the consideration of this court.

The defendant offered evidence tending to prove that he had voluntarily paid debts spoken of in the bond sued on in this cause, to the amount of the penalty, and claimed as a defense that if such was the fact, the plaintiff could not recover against him; that is, that in no event could the defendant be called upon to pay under the bond in question more than the amount of the penalty. This evidence was excluded by the court. The judge ruled that, no matter if he had paid such debts, unless he had paid all the debts spoken of in the condition of the bond, whether $ 5,000 or $ 50,000, the plaintiff could recover the amounts of all such debts paid by the plaintiff.

If the defendant had from the first refused to pay any of the debts, and had paid none, and the plaintiff, the day after giving the bond, had been obliged to commence the payment, and had then commenced suit, he would, under our statutes (Comp. L., pp. 1221, 1222, §§ 4509, 4517) have taken judgment in form for the penalty. For all subsequent breaches, he must have proceeded under the same statute; could have had no further judgment; and the sum of all recoveries against defendant could not have exceeded the penalty of the bond: Fraser v. Little, 13 Mich. 195; Lyon v. Clark, 8 N. Y., 154, and cases cited.

But the court say voluntary payments are very different. Although the contract is the same; although the amount of the penalty is the same; although you have in good faith paid twice or thrice the amount of the penalty without suit, yet you have not in a single particular performed any part of the condition of your bond, and we will compel you to pay the full amount of the penalty, if there are so many debts left to be paid.

If this is law, parties giving bonds will be pretty sure to refuse to perform such contracts, and thus by judgment of court in the first instance, ascertain and fix a limit to the extent of their liability, because after a suit on the bond for the penalty, there can be no other suit.

The court should have considered such evidence, and given judgment for defendant, if defendant had paid debts to the amount of the penalty.

The case of sheriff's bond has no similarity--because all persons can sue on it--but no one can recover more than the penalty. The statute gives...