Ridgell v. Dale , 16 Ala. 36 ( 1849 )

DARGAN, J.

This was ap action of debt .on a bond, executed by the defendant below and others to the plaintiff, in the sum of six thousand dollars? bearing date the 14th day of May 1844, which was subject to a condition in the following words: Whereas, the said Robert O. Dale has executed to us his three .several promissory notes, amounting in all to five thousand dollars, one for sixteen hundred and sixty-six dollars and sixty-six cents, due six months after date, the others for the same amount, due at nine and twelve months, together with a mortgage of real estate with power of sale to secure their prompt payment: Now if we forever indemnify and hold harmless the said Dale from all loss and liability as a stockholder or officer of the Irwinton Bridge Company, this obligation to be void, but not else. The declaration contains five assignments of the breach of the condition of the bond, or rather the same breach is assigned five times in language slightly different, but in legal effect the same. The substance of the breach is that there was a suit pending in Randolph County, in the State of Georgia, against the Company, and the plaintiff, who was the President of the Company, together with the Secretary, were authorized to conduct and manage the suit. It became necessary to employ David Kiddoo as an attorney to take an appeal from the judgment of the Superior Court of Randolph, but he refused to be employed on the credit of the Company. The plaintiff and the Secretary had to become individually liable to pay his fee, and they executed to him their note for two hundred and fifty dollars, of which the Company was informed and they ratified the act. The plaintiff also avers that he has been compelled to pay the note, that the Company is insolvent and has not repaid him the sum paid the attorney— of all which the defendant had notice, &c. The defendant craved oyer of the bond and demurred to all the assignments; •which was overruled by the court.. The overruling of the demurrer is here assigned for error.

The only question raised by the demurrer is, whether the facts alleged constitute a breach of the condition of the bond. The intention of the obligors, as gathered from the language of the condition, is to indemnify and save the plaintiff harmless from all liability as a stock-holder and officer of the company; and consequently, extends to protect him from all liability, incurred in the performance of the duties required of him as president of the company, as well as all liability imposed on him by law as such stock-holder, or that it was his legal duty to assume. Was it his duty to become individually liable for the expenses or any' part of them, incident to the defending of suits brought against the company? We are not informed that it Was, and we cannot infer in the absence of express allegations, that it is required of the President, as a part of his duty to become personally liable for the debts of the company, or to pay with his own funds, the necessary expenses of litigation. Indeed, we should be led to the opposite conclusion by the declaration. It alleges that the plaintiff was authorized to conduct the defence of the suit, and to pledge the property of the company, if it became necessary for that purpose; it then avers that counsel could not. be employed on the credit of the company, and the plaintiff and the secretary, had to become individually liable for his fees, of which the company af-terwards approved. This would rather incline us to believe that the plaintiff voluntarily assumed this liability for the benefit of the company, but not that he was bound to do it as president, or that it came within the range of his duties as president or stock-holder to pay from his own funds, the expenses of counsel fees.

A declaration in covenant musfi Nearly show that the covenant is broken. 1 Hawks, 151; 3 Bibb, 330; 9 Wendell, 416. If the declaration is so uncertain that the court cannot pronounce that the covenant is broken, the plaintiff does not show that he is entitled to recover, and a demurrer should be sustained. Tested by these rules, the demurrer should have been sustained, for we are not able to pronounce that the condition of the bond is broken. Before it can be broken, the plaintiff must suffer loss in the performance of the duties required of him as President, or by the assumption of liabilities, that he Avas bound to assume. We are not informed that he was bound to assume this personal liability, and if he was not, the bond does not protect him, for it only extends to such acts as the President of the company, by virtue of his office, was bound to perform, and to such liabilities as it was his legal duty to assume.

The court erred in overruling the demurrer, and the judgment must be reversed, and the cause remanded.