New Holland Turnpike Co. v. Lancaster County

The opinion of the court was delivered, by

Sharswood, J.

The first question presented by the case stated is whether the report of the inspectors of the bridge fixing the valuation of the materials used in it and the cost of erecting the same at $11,000 is binding upon the plaintiff below. The agreement recited in the bond sued upon is that the New Holland Turnpike Road Company would pay one-third part of all reasonable and proper costs of a bridge across Conestoga creek, &c., and the condition of the bond is to the same effect, to pay or cause to be paid “ all proper and reasonable expenses incurred in the building or erection of the said bridge.” The appointment and report of the inspectors was under the Act of Assembly for the protection of the county, and so far as that was concerned, at least in this action, was disposed of by the opinion and order of the court disapproving of the report, and making absolute the rule against it. The New Holland Turnpike Road Company were strangers to that proceeding ; as to them it was res inter alios acta. Had the county eventually been compelled to pay only $11,000, the company would have been liable for no more than one-third of that amount. Had the inspectors reported for the full amount, the company would not have been bound. It would still have been open to them to take defence on the ground that it was more than the reasonable and proper cost of a bridge, one-third of which was all they agreed to pay. As they would not be estopped in that case, neither can they take advantage of the report, unless in point of fact the effect of it had been to relieve the county from payment.

The second question is a more difficult and important one— whether the plaintiff below can recover an amount beyond the penalty of the bond. It is to be observed that this is not an action of debt to recover the penalty, but of covenant on the agreement of which the bond is evidence. It is not a mere bond in a penalty — on a condition to be void upon the doing or not doing a collateral act, .either by the obligor or a third party. Such is the usual case in official bonds with sureties, conditioned for the faithful performance of the duties of some office, or for accounting for money, or an ordinary private bond of indemnity by sureties. In such cases it may be conceded that the penalty of the bond is the limit of liability on the instrument itself: United States v. Arnold, 1 Gall. 358; s. c. 9 Cranch 104. The instrument before us commences with a recital, that “ at a stated meeting of the New Holland Turnpike Road Company, held on Friday, February 28th 1865, a resolution was passed agreeing to pay one-third part of all reasonable and proper costs of a bridge across Conestoga creek.” The weight of authority is very preponderating that upon such a bond with a penalty, covenant will lie to recover damages, and that whenever such is the case the amount of damages recovered may exceed the penalty. In Lowe v. Peers, 4 Burr. 2228, Lord Mansfield said: “ There is a difference between covenants in general and covenants secured by a penalty or forfeiture. In the latter case the obligee has his election. He may either bring an action of debt for the penalty and recover the penalty (after which recovery of the penalty he cannot resort to the covenant, because the penalty is to be a satisfaction of the whole), or if he does not choose to go for the penalty, he may proceed upon the covenant and recover more or less than the penalty toties quoties.” This is at law, and he adds what it is material to remember, that equity always relieves against a penalty upon compensation. The cases on this subject are cited in a note by the reporter to Cellen v. Ardley, 3 C. & P. 12; see also Winter v. Trimmer, 1 Blackst. 395; Bird v. Randall, Id. 373; Astley v. Weldon, 2 B. & P. 346; Lonsdale v. Church, 2 T. R. 388; Harrison v. Wright, 13 East 343. Our own decisions are in accord with this doctrine. In Perit v. Wallis, 2 Dallas 252, there was a bond in the penalty of ¿65000, conditioned that the obligor would within six months obtain certain patents from the land-office, a verdict for ¿65000 debt, and ¿61922 damages was returned. In Graham v. Bickham, 4 Dallas 149, there was an agreement and a penalty, and the court said : “ The substance of the agreement between the parties was to buy and sell stock. The penalty was merely superadded as a security for performance and not as a sum to be paid and received absolutely in lieu of performance. The plaintiff is entitled (notwithstanding the penalty) to recover damages commensurate with the injury suffered by a non-performance.” So in Dick v. Gas-kill, 2 Whart. 184, it was held that where there is a contract for the performance of certain things and the party binds himself in a penalty for the performance, the party complaining of the breach of such contract has his election either to bring debt for the penalty or case for the breach of the contract, and in the latter case may recover even beyond the amount of the penalty in damages. A sum greater than the penalty was allowed to be recovered in Martin v. Taylor, 1 Wash. C. C. Rep. 1; Shreve v. Brereton, 1 P. F. Smith 175; and Hughes v. Hughes, 4 P. F. Smith 240. It follows that the judgment of the learned court below on the case stated was right.

Judgment affirmed.