Gowen v. Gerrish , 15 Me. 273 ( 1839 )

The case was continued for advisement, and the opinion of the Court was subsequently drawn up by

Weston C. J.

The language of the instrument, upon which this action is brought, is peculiar; but we think it is not difficult to understand what the parties intended. The defendant had obtained from the plaintiff a long credit, upon a contract for the purchase of real estate. His ability to pay might be greatly impaired, by his becoming surety for others. To relieve the plaintiff from the hazard thence arising, the defendant obligated himself, that if he did become surety for any one, while the ¡Durábase money remained unpaid, the term of credit given to him should cease, and the plaintiff might enforce immediate payment, by means of the bond. This it appears to us, is what the parties must have designed. The sum secured by the bond, exceeded by one sixth part the price agreed to be given for the estate; but this must have been intended to secure the accruing interest. Upon this view of the case, the parties have afforded a measure of damages, susceptible of exact calculation, from which neither the Court nor the jury are at liberty to depart. The bond when enforced, is a substitute for the other security, given upon the extended credit. And it is to be limited to the original price, with the interest, which may have accrued. The obligation of the other security will no longer remain in force; and it should be given up to be cancelled.

If the subsequent renewal of a liability, existing at the date of the bond, might not be a breach of its condition, the amount for which the defendant became surety, in January, 1836, was for a greater sum, than that which he had before assumed, by which the defendant became liable to an action on the bond, by its express terms.

The lawful intention of the parties, in a case free from fraud, where it can be ascertained, must have a decisive influence in determining, whether the sum stated is to be regarded as a penalty, or as stipulated damages. We had occasion to consider the cases upon this question in Gammon v. Howe, 14 Maine Rep. 250.

In our opinion the jury were not properly instructed by the presiding Judge, as to the rule of damages. The exceptions are accordingly sustained, the verdict set aside, and a new trial granted.