Bancroft v. Winspear

By the Court, Daniels, J.

The right of the plaintiff to recover in this action depends in a great degree upon the proper construction of the bond executed by the defendants. In order to arrive at that, it is necessary in the first instance to ascertain the intention of the parties, so far as it may be done by the terms which they have employed; and for that purpose those terms may properly be considered in view of the circumstances under which they were used; for it is a general rule of construction that the writing to be construed, “ may be read by the light of surrounding circumstances, in order more perfectly to understand the intent and meaning of the parties.” (1 Greenl. on Ev. § 277, Blossom v. Griffin, 3 Kern. 569.)

The plaintiff in this case was an officer about endeavoring to collect an execution in favor of one of the obligors in the bond, and at the instance of the other who was acting as agent for the principal, by the levy and sale of property not indisputably belonging to the judgment debtor. His obligations were limited to the discharge of his duties as an officer, with no prospect of gain beyond the fees allowed by statute for the service he was to perform. To carry. on a litigation for the purpose of settling the title to the property- and advance the moneys which, from time to time, might and probably would be required in the course of it, were no part of those duties. On the contrary, those burthens would ordinarily and justly be expected to be borne by the plaintiff in the execution, who alone could be benefited by the result of the litigation. For the purpose of fully protecting the officer, therefore, the obligation given to him should. impose those duties upon the pei’sola for whom he was about to act. But still, if the language used by the parties indicates a different intention it should be carried into effect, even though the officer would be required by it to sustain in the first instance all the consequences of the litigation. When that intention is ascertained the court is to be governed by it, even though it may produce hardships in the case, which, in reality, appear to be. unjust. The responsibility of them is not upon the court, nor upon the law, for they result exclusively from the imperfect manner in which the parties selected the terms to express their intention. When that selection is once made, and the terms are embodied in the contract, they are alike conclusive upon the parties and the court. The only duty devolving upon the latter is that of declaring the legal import of the terms used.

By the condition of the bond in controversy the obligors, bound themselves to keep the plaintiff harmless and indemnified of, from and against all damages, costs, charges, trouble and expense, that he might be put to, sustain or suffer by reason of the levy and sale, or either of them. And under the facts of this case the question arises whether a liability incurred by the officer in consequence of the levy and sale is sufficient to constitute a breach of this condition. It can only be maintained that it is by force of the word “ charges.” Under the other terms used, the obligors were liable to compensate the officer for trouble actually had, or moneys paid out; and they furnished him full and complete protection, so far as it might be required by him, if the intention was to limit the indemnity to damages actually sustained, exclusive of mere liabilities. Some further object may therefore reasonably be presumed to have been within the intention of the parties in the use of this word “charges.” And if it will not fairly include liabilities, it is difficult to imagine what that object could have been or what office it can perform that would ordinarily be the effect of it as the word is used in common parlance. And the supposition of the law is, that the parties made use of it in the same sense.

The legal import of this term, when used in a contract like the present one, first came before this court for construction in the case of Donely v. Rockfeller, (4 Cowen, 253.) The bond in that case was given to protect the plaintiffs as overseers of the poor, and the town which they represented, from costs, charges, rates, assessments, damages and expenses by reason of the birth, &c. of an illegitimate child. The objection was taken that they could not recover without proof of actual damages by the payment of money, or otherwise.' That a liability to pay was not sufficient. And such was the determination of this court. From this conclusion, Woodworth, justice, dissented, and in the course of his opinion says: “ The construction to be given to a bond of indemnity to a public officer is not that he shall first advance his own money, or that of the town, and then seek remuneration, but that the party covenanting, shall, in the first instance, make advances so as to relieve the officer from the burthen.” (Id. 258.) This doctrine was fully sanctioned by the court of errors, when the case was afterwards before it. For that court reversed the judgment of the supreme court, and a prominent ground of that reversal rested upon the construction of the word “charges.” The.chancellor, in the course of his opinion in that court, remarks: “ The indemnity consists in securing the town against charges and expenses, and against taxes, rates and assessments by reason of the birth and maintenance of the child, and this could only be fully and effectually done by keeping the infant when born from, becoming chargeable, or by providing means to defray the charges in which its birth and maintenance should involve the town.” (8 Cowen, 628.) Senator Spencer, who delivered the other opinion for reversal, arrives at the same conclusion upon the construction of the condition contained in the bond. Speaking of the terms of the bond he says : “ They (the obligors) are to indemnify against all charges, &c., or expenses, by reason of its birth, education or maintenance. Technically, this condition was broken the moment the child was born, for then it became a charge on the town, and that is the thing against which the defendant covenanted.” (Id. 653.) The point, it will be observed, was directly involved in the decision of that case, and the highest court of law and equity in the state held the word “charges,” when used in an instrument like the present one, to be the equivalent for liability. And however this court may at times disregard or nullify its own adjudications, it is not at liberty to do so with those of that tribunal. They must stand as declaratory of the law, until they are set aside by a court of equal authority to that which pronounced them. The doctrine of this case has since been followed by this court in the case of Chace v. Hinman, (8 Wend. 452.) And it has been directly sanctioned in Webb v. Pond, (19 id. 423,) and by the court of appeals in Gilbert v. Wiman, (1 Comst. 550.) And by the superior court court of New York in McGee v. Roen, (4 Abbott, 8.)

The same term was employed in the bond in the case of Campbell v. Jones, (4 Wend. 306.) And in that case this court came to a conclusion adverse to that of Rockfeller v. Donely, but without any reference whatever to that decision, or the doctrine maintained by it. Bronson, J. also refers to it as of questionable authority in the course of his opinion in Aberdeen v. Blackmar. (6 Hill, 324.) The case of Churchill v. Hunt, (3 Denio, 321,) does not consider it in the view of it presented here. That case regards it as having been properly decided under the provisions of the statute in conformity to which the bond was given. But the case itself was not decided in the manner in which it was, because there was any thing in the statute requiring it to be disposed of in that way. There was nothing in the statute imposing upon the words used in the bond, any different legal effect from that which they would ordinarily be entitled to have when used -in other bonds. But the court referred to the statute, and the objects intended to be'secured by its enactment, as indicating the propriety of the construction given to the bond. If it does not sustain it certainly it is not in conflict with the view here taken of Donely v. Rockfeller.

The cases of Thomas v. Allen, (1 Hill, 145,) and Matter of Negus, (7 Wend. 501,) have no application to the present controversy. They were ujion unconditional covenants to pay. But the case of Scott v. Tyler, (14 Barb. 202,) seems ■ to be directly at variaBce with the doctrine of Donely v. Rockfeller. If that stood as "the only authority upon the point, the duty of so construing and applying legal principles as to render them uniform as far as possible would require it to be followed in this case. The interests of the public require that all unnecessary conflict in the exposition of legal princi.ples should be avoided. But, as has been seen, the case of Scott v. Tyler, seems to be an exceptional case, in conflict with the determination of the highest court in the state since sanctioned by a decision of equal authority, and in one instance by the explicit rulings of this court, which would seem to constitute a sufficient reaáon for disregarding its authority. This conclusion has been reached reluctantly, on account of the high character and learning of the tribunal which pronounced that decision. But the paramount authority is against it, and that authority it is the duty of this court to follow.

Under the construction of the bond maintained by the authorities referred to, the demand which is made the immediate-subject of the present suit could have been legally recovered in the previous suit upon the bond. It. was error in the referee to reject it, and. consequently the judgment in that action is a bar to the one now before the court. For the law will not permit a party who has recovered in one action a portion of an entire demand, to - make the residue of it the subject of another suit. (2 Parsons on Contracts, 463,4. Guernsey v. Carver, 8 Wend. 492. Bendernagle v. Cocks, 19 id. 207. Fish v. Folley, 6 Hill, 54. Beach v. Crain, 2 Comst. 86, 96.)

But it is difficult to see how the result would be changed, even though the bond were construed to be one of indemnity merely against damages actually sustained by the obligee. For the breach of the condition was entire, as far as it extended, although not amounting to a breach.of the entire condition. If another action should be brought against the plaintiff by some other person on account of the levy and sale, resulting in further damages to him, there can be little doubt but he would be entitled, to resort to'the bond for reimbursement; for so long as he maybe farther molested on that account the bond is a continuing security. The obligors are not discharged unless at all times and forever thereafter, they keep the plaintiff harmless and indemnified. But that construction of it does not aid the plaintiff in sustaining this action. The demand for the recovery of which it was brought, as well as that recovered in the previous suit, both originated in and arose out of, one act; which was the prosecution of an action against the plaintiff which proved to be destitute of merit. The judgment recovered in it was entire, and included the claim now insisted upon, as well as that already satisfied. If. they can be regarded as different demands they are still both created by the same indivisible cause, and are more properly distinguished as different items of the same demand. Such in reality they are. If a separate action can be maintained for each, there is no reason why the subdivision could not be further extended, depending upon amounts and manner of the payments made to extinguish them. The principle is the same. That which will protect two suits is equally as capable of protecting any number, depending only on the number of payments made.

The violation of the condition of the bond consisted in the defendant’s failure to indemnify and keep the plaintiff harmless from the consequences of the suit brought against him. And the different items of the plaintiff’s demand growing out of that failure contributed to form the damages he sustained by reason of it. Those items, taken together, constitute an entire demand, created by one and only one, breach of the condition of the bond. The case of Wright v. Butler, (6 Wend. 284,) is entirely different from this. There the plaintiff was indorsee of a note held by another person. The plaintiff had been charged as indorser, and made payments upon the note at different times to the holder. As he made the payments he sued a previous indorser to recover them back. And the court held that a previous recovery was no bar to a future action for a subsequent payment. The action was not brought upon the note, but upon the implied request growing out of the relations between the indorser and indorsee to pay the money. The chancellor, who delivered the only opinion in the case, says “ If the plaintiff had been the legal owner of the note at the time this suit was commenced, so as to have been in a situation to strike out the subsequent endorsements, and recover against the prior indorser in the usual manner, by a special count on the note itself, I think this suit for money paid for the use of the defendant and at his request, could not have been sustained.” (Id. 291.) And the case of Halsey v. Reed, (9 Paige, 446,) which is much the same in principle, was decided upon the authority of Wright v. Butler. There is no obvious conflict between these cases and those which declare the salutary doctrine that an entire demand can not be so divided as to make it the successful subject of two different actions. If the law permitted it to be done, the maintenance of this action would be the subject of special gratification. For it is manifest that great injustice has been done to the plaintiff. His claim for indemnity is meritorious and ought to bave been fairly and honorably responded to by the obligors in the bond. But this injustice results from the -erroneous view taken by the referee of the condition in the bond, which according to well settled principles of law, this court has no power to correct in this action.

[Erie General Term, September 5, 1865.

The judgment of the county court should be reversed.

Judgment reversed.

Grover, Marvin and Daniels, Justices.]