The contract of a surety is to be construed strictly, and is not
to be extended beyond the fair scope of its terms.
Where a bond was given, conditioned for the faithful performance
of the duties of the office of deputy collector of direct taxes for
eight certain townships, and the instrument of the appointment,
referred to in the bond, was afterwards altered so as to extend to
another township without the consent of the sureties,
held
that the surety was discharged from his responsibility for moneys
subsequently collected by his principal.
This was an action of debt upon bond, and the material facts
disclosed in the pleadings were that the plaintiff, Ephraim Miner,
being collector of the direct taxes and internal duties for the
Fifth Collection District of New Jersey by an instrument of
appointment, under seal and pursuant to law, appointed Stephen C.
Ustick his deputy collector for eight townships within his
Page 22 U. S. 681
district. Upon that occasion, the defendant, Thomas Stewart, and
certain other persons as sureties executed a writing obligatory,
with Ustick, to Miller, in the penalty of $14,000 upon the
following condition,
viz.,
"The condition of the foregoing obligation is such, whereas
Ephraim Miller, Esquire, collector, as aforesaid, hath, by
authority vested in him by the laws of the United States, appointed
the said Stephen B. Ustick, deputy collector of direct taxes and
internal duties in the Fifth Collection District of New Jersey, for
the Townships of Nottingham, Chesterfield, Mansfield, Springfield,
New Hanover, Washington, Little Egg Harbor, and Burlington, in the
County of Burlington, now therefore if the said Stephen C. Ustick
has truly and faithfully discharged and shall continue truly and
faithfully to discharge the duties of the said appointment
according to law and shall particularly faithfully collect and pay
according to law all money assessed upon said townships, then the
above obligation to be void, and otherwise shall abide and remain
in full force and virtue."
After the execution of this bond, and before Ustick had in any
manner acted under this appointment or collected or received any
moneys under the same, Miller, with the assent of Ustick but
without the assent or knowledge of the defendant Stewart, altered
the same instrument of appointment by interlining in it another
township, called, "Willingborough," thereby making it an
appointment for nine instead of eight townships, and under the
appointment, so altered, Ustick received, within the original
Page 22 U. S. 682
eight townships, certain moneys as taxes which he omitted to
account for, and this omission was the breach stated in the
declaration. The question for the opinion of the court upon the
special pleadings and demurrer was whether the alteration so made,
without the consent of Stewart, discharged him from any
responsibility for the moneys so subsequently collected by
Ustick.
Page 22 U. S. 702
MR. JUSTICE STORY delivered the opinion of the Court, and after
stating the case proceeded as follows:
Nothing can be clearer both upon principle and
Page 22 U. S. 703
authority than the doctrine that the liability of a surety is
not to be extended, by implication beyond the terms of his
contract. To the extent and in the manner, and under the
circumstances pointed out in his obligation, he is bound, and no
further. It is not sufficient that he may sustain no injury by a
change in the contract or that it may even be for his benefit. He
has a right to stand upon the very terms of his contract, and if he
does not assent to any variation of it and a variation is made, it
is fatal. And courts of equity as well as of law have been in the
constant habit of scanning the contracts of sureties with
considerable strictness. The class of cases which have been cited
at the bar where persons have been bound for the good conduct of
clerks of merchants and other persons illustrate this position. The
whole series of them, from
Lord Arlington v. Merrick, 2
Saund. 412, down to that of
Pearsall v. Summersett, 4
Taunt. 593, proceed upon the ground, that the undertaking of the
surety is to receive a strict interpretation, and is not to be
extended beyond the fair scope of its terms. Therefore, where an
indemnity bond is given to partners, by name, it has constantly
been held that the undertaking stopped upon the admission of a new
partner. And the only case, that of
Barclay v. Lucas, 1
T.R. 291, note a, in which a more extensive construction is
supposed to have been given, confirms the general rule, for that
turned upon the circumstance that the security was given to the
house as a banking house, and thence an intention was inferred that
the
Page 22 U. S. 704
parties intended to cover all losses notwithstanding a change of
partners in the house.
Now what is the purport of the terms of the present condition?
The recital stated a special appointment which had then been made
by Miller of his deputy for eight townships, particularly named. It
was not a case of several distinct appointments for each township,
but a single and entire appointment for all the townships, and the
condition is that Ustick has and "shall continue, truly and
faithfully to discharge the duties of said appointment, according
to law." Of what appointment? Plainly the appointment stated in the
recital to which the condition refers and to which it is tied up --
that is to say, the appointment already made and executed for the
eight townships. If this be the true construction of the condition,
and it seems impossible to doubt it, then the only inquiry that
remains is whether any money unaccounted for was received under
that appointment. To this the plea answers in the negative unless
the subsequent alteration of the instrument created no legal change
in the appointment. To the consideration of this point, therefore,
the attention of the Court will be addressed.
And in the first place, upon principle, how does the case stand?
Can it be affirmed that the alteration wrought no change in the
appointment? This will scarcely be pretended. In point of fact, the
first appointment was for eight townships only; the alteration made
it an appointment for nine townships. It is not like the case where
an appointment is made for eight townships and another
Page 22 U. S. 705
distinct appointment is made for the ninth, for then there are,
in legal contemplation, two distinct and separate appointments. But
here, the original appointment is extended; it was one and entire
when it included eight townships; it is one and entire when it
includes the nine. Can it then be legally affirmed to remain the
same appointment when it no longer has the same boundaries? An
appointment for A. is not the same as an appointment for A. and B.
In short, the very circumstance, that there is an alteration in the
appointment,
ex vi termini, imports that its identity is
gone. If an original appointment is altered by the consent of the
parties to the instrument, that very consent implies that something
is added to or taken from it. The parties agree that it shall no
longer remain as it was at first, but that the same instrument
shall be not what it was, but what the alteration makes it. It
shall not constitute two separate and distinct instruments, but one
consolidated instrument. A familiar case will explain this. A.
gives a note to B. for $500; the parties afterwards agree to alter
it to $600. In such case, the instrument remains single; it is not
a note for $500 and also for $600, involving separate and distinct
liabilities, but an entire contract for $600, and the obligation to
pay the $500 is merged and extinguished in the obligation to pay
the $600. To bring the case nearer to the present, suppose there
was a bond given as collateral security to pay the note of $500; it
will scarcely be pretended that the alteration would not
extinguish
Page 22 U. S. 706
the liability under the bond. The instrument would indeed
remain, but it would no longer possess its former obligation and
identity. Nothing can be better settled than the doctrine that if
an obligation be dependent on another obligation (and, by parity of
reasoning, upon the legal existence of another instrument) and the
latter be discharged or become void, the former is also discharged.
Sheppard, in his Touchstone, p. 394, puts the case and illustrates
it by adding
"as if the condition of an obligation be to perform the
covenants of an indenture, and afterwards the covenants be
discharged or become void; by this means, the obligation is
discharged and gone forever."
It is not denied at the bar that the same would be the legal
operation in the present case if there had been an actual
revocation of the first appointment or an extinguishment of the
instrument of appointment. But the stress of the argument is that
here there was an enlargement, and not an extinguishment, of the
appointment; that, the consent of the immediate parties being given
to the alteration, it remained in full force, with all its original
validity, as to the eight townships. We cannot accede to this view
of the case. After the alteration was made, it is, as between the
parties, to be considered by relation back either as an original
appointment for the nine townships or as a new appointment for the
nine townships from the time of the alteration. It is immaterial to
the present decision whether it be the one or the other, for in
either case it is not that appointment which the defendant Stewart
referred to in
Page 22 U. S. 707
the condition of the bond, and in respect to which he contracted
the obligation. It is no answer to say that it is not intended to
make him liable for any money except what was collected in the
eight townships. He has a right to stand upon the terms of his
bond, which confine his liability to money received under an
appointment for eight townships, and the pleadings admit that none
was received until the appointment was altered to nine. It will
scarcely be denied that if, upon the agreement to include the ninth
township, the original instrument had been destroyed and a new
instrument had been executed, the obligatory force of the bond
would, as to the surety, have been gone. And in reason or in law
there is no difference between that and the case at bar. The
alteration made the instrument as much a new appointment, as if it
had been written and sealed anew. It is not very material to decide
whether the alteration operated by way of surrender, or as a
revocation, or as a new appointment superseding the other. It was,
to all intents and purposes, an extinguishment of the separate
existence of the appointment for the eight townships.
This point is susceptible of still further illustration from
considerations of a more technical nature. The Act of Congress of
22 July, 1813, ch. 16. sec. 20, under which this appointment was
made, provides "that each Collector shall be authorized to appoint,
by an instrument of writing under his hand and seal, as many
deputies as he may think proper," &c. The appointment must
therefore be by deed, and the
Page 22 U. S. 708
effect of an alteration or interlineation of a deed is to be
decided by the principles of the common law. Now by the common law,
the alteration or interlineation of a deed, in a material part, at
least, by the holder, without the consent of the other party
ipso facto avoids the deed. It is the consent, therefore,
that upholds the deed after such alteration or interlineation. The
reason is that the deed is no longer the same. The alteration makes
it a different deed; it speaks a different language; it infers a
different obligation. It must, then, take effect as a new deed, and
that can only be by the consent of the party bound by it. Whether
by such consent, the deed takes effect by relation back to the time
of original execution, or only from the time of the alteration,
need not be matter of inquiry, because such relation is never
permitted to affect the rights or interests of third persons, and
cannot change the posture of the present case. If the deed, after
the alteration, is permitted to have relation back, it is not the
same deed of appointment recited in the condition and to which the
obligation is limited, for that is an appointment for eight
townships. If it has no such relation, then it is a deed of
appointment made subsequent to the bond, and of course not included
in its obligation. It cannot be at one and the same time a deed for
eight and also a deed for nine townships, and the very circumstance
that it is the one excludes the possibility of assuming it as the
other. In truth, the assent of the parties to the alteration
carries with it the necessary implication that it shall no longer
be deemed an appointment
Page 22 U. S. 709
for eight townships only, and the same consent of parties which
created is equally potent in dissolving the deed and changing its
original obligation. It is no objection that to constitute a new
deed, a redelivery is necessary, for if it be so, the consent to
the alteration is in law equivalent to a redelivery. Nor is it
necessary that a surrender or revocation should be by an instrument
to that effect. It may be by matter
in pais or by
operation of law. Every erasure and interlineation in the deed by
the obligee or appointee without consent is a surrender, and a
revocation may be implied by law. The passage cited at the bar from
Co.Lit. 232(a) establishes that if the feoffee, by deed of land,
grants his deed by parol to the feoffor, it is a surrender of the
property as well as of the deed. And if in this case the deed of
appointment had been delivered up to the collector, it would at
once have operated as a surrender by the deputy, and a revocation
by the collector.
An objection has been urged at the bar against this doctrine
that the act of Congress giving the authority to the collector to
appoint deputies also authorizes him "to revoke the powers of any
deputy, giving public notice thereof in that portion of the
district assigned to such deputy." Hence it is argued that no
revocation can be unless by public notice. But this is certainly
not the true interpretation of the act. The very terms suppose that
the revocation is already made as between the parties, and the
notice is to be given of the fact. The object of the legislature
was
Page 22 U. S. 710
to protect the public from the mischief of payments to the
deputy after his powers are revoked. It requires public notice to
be given of the revocation so that no future imposition shall be
practiced, and if the collector should make a private revocation
without any public notice, the legal conclusion would be that all
payments made to his deputy in ignorance of the revocation ought to
be held valid, for no man is entitled to make his own wrongful
omission of duty a foundation of right. But as between the parties,
a revocation or surrender, if actually made, would be, to all
intents and purposes, binding between them and release the sureties
to the bond from all future responsibility.
Upon the whole, the opinion of the Court is that the fourth plea
in bar is good and that the demurrer thereto ought to be overruled,
and this opinion is to be certified to the circuit court.
MR. JUSTICE JOHNSON.
My brother TODD and myself are of opinion that the merits of
this cause have been misconceived, the points on which it turns
misapprehended, and the law of razures, if correctly laid down
according to the law of the present day, erroneously applied to
this cause.
The condition of Stewart's bond to the plaintiff recites no
particular deed of appointment under which Ustick was constituted
deputy collector, nor is there an iota in the bond or in the
declaration that can identify the deed set forth in the plea with
the deed under which Ustick held his deputation. The condition of
the bond simply
Page 22 U. S. 711
states, "Whereas E. M., collector, as aforesaid, hath, by virtue
of authority vested in him by the laws of the United States,
appointed U. deputy collector," &c. It is the plea that
specifies a deed of a particular date and then proceeds to set
forth a razure in avoidance of that deed, but it contains no
averment that the deed so set forth is the same under which U. held
the deputation under the plaintiff referred to in the condition.
That the plea is faulty and, even with the averment, might have
been the subject of a special demurrer cannot now be doubted, for
it amounts to the general issue, and the general issue was the
legitimate plea in this case.
Pigot's Case and
passim. But we also hold it bad in its present form upon a
general demurrer, for unless the deed so pleaded was duly
identified by the pleadings with that under which Ustick was
constituted deputy, the plaintiff was not bound to answer it. We
cannot conceive how the defendant can have judgment in the present
state of the pleadings unless under the idea that the demurrer
cures the failure to identify the deeds. This, however, cannot be
sustained, since the want of identification is, in itself, a
sufficient ground of demurrer.
Indeed we see no sufficient ground for admitting that the
condition of the bond implies a deputation by deed at all. It is
true that the 20th section of the act under which this collector
was appointed authorizes him to appoint deputies under his hand and
seal, and as far as was necessary to enable the deputy to act
against individuals, unquestionably the solemnities of a deed
Page 22 U. S. 712
were requisite to constitute him a deputy collector. But the
demand in this action is for money received by him and not paid
over, and surely a deputation of a less formal kind would have
enabled him to bind his principal as to the actual receipt of
money, so that the words of the condition do not necessarily imply
a deputation by deed. He is expressly authorized in this 20th
section to act for himself in collecting the revenue, and he could
therefore act by his servant or deputy, constituted in a less
solemn way than by deed, so far as to involve himself with the
government.
But if a deed is to be implied from the condition, surely not
this particular deed, and though a deed of a date antecedent to the
bond is to be implied, it may have preceded it by a month, and yet
the act and the condition of the bond both be complied with. But
what form shall be presumed or implied to the deed? Why may it not
have been several as to each county, or have comprised two or
more?, and why may not a dozen deeds of the very date and form of
this, have been in existence at the same time? A defendant who,
like the present, places his defense upon the very highest stretch
of legal "rigor" cannot complain if he has the same measure meted
out to himself.
But if this ground is to be got over and we are to consider the
bearing of the facts pleaded upon the law of the case, we then say
that they imply no revocation of the deputation to Ustick against
which this defendant entered into the contract of
Page 22 U. S. 713
indemnity. It is the intent that gives effect to the acts of
parties; nothing was further from the minds of the parties here
than the distinction of the power of Ustick as to the eight
counties at the time of this interlineation. The plea avers no such
intent, and as well might a delivery of a deed for perusal be
tortured into a surrender and extinction of it, and its return into
a revocation, as the acts of these parties respecting this
interlineation be construed into a revocation and redelivery.
Non constat, from anything that appears in the plea, that
the paper ever passed from the hands of the party legally holding
it. It was unnecessary upon the facts stated that it should so
pass; in fact, no redelivery is averred in the plea, nor any one of
the formalities necessary to reexecution. It cannot be denied that
this part of the defense savors too much of a perversion of the
solemnities and rules of the law. It is a catch upon the unwary, an
effort to attach to men's acts consequences which are directly
negatived by their intentions.
As to the idea of the identity of this instrument being
destroyed by the interlineation, we consider it as springing out of
an incorrect view of the nature of the instrument and of the
circumstances that fix its identity. It is not one entire thing,
but a several deed for each county. A deputation as to the county
of A. is not a deputation as to the county of B., although written
on the same paper and comprised within the same words; it is as
much a several deed as to each county as if written
Page 22 U. S. 714
on several sheets of paper; as much as a policy of insurance is
the several contract of each underwriter, or as a bond would be the
several deed of as many individuals as executed it, if it be so
expressed, making them, if such be the letter of it, severally
liable, and for various sums, no one for another. Interlining
another county, then, left it still the original deed as to each
county taken severally, and only operated as the creation of a new
power as to another county if in fact, as there is no averment of a
subsequent delivery, it was anything more than a mere nugatory act.
Such is certainly the good sense of the law upon the subject, and
it is supported, we conceive, by respectable opinions and by
adjudged cases. Chief Baron Gilbert, in treating on this topic,
observes,
"but if any immaterial part of the contract be added after
sealing and delivery, as if A., with a blank left after his name,
be bound to B., and after C. is added as a joint obligor, this does
not avoid the bond, because this does not alter the contract of A.,
for he was bound to pay the whole money without such addition."
And the case of
Zouch v. Clay, which he quotes, as
reported in Ventris, undoubtedly sustains his doctrine, for there
the court overruled the plea of
non est factum on the
interlineation on the ground that the bond remained the same as to
him.
In this case, the bond emphatically remained
Page 22 U. S. 715
the same as to this defendant, for he was still liable only as
to the eight counties, and no more, and was so guarded as to make
it impossible that the interlineation of a thousand other counties
could alter or increase his liability, since the names of the
counties are inserted in the condition specifically. As to his
liability, and as to its influence upon the power conferred in the
eight counties, this interlineation was altogether insignificant,
no more than a dash of the pen, and could have done him no more
injury.
There is nothing in the argument which would attach importance
to it, on the ground of producing difficulty and confusion -- it
has been said even impracticability -- in rendering the accounts of
this deputy. It is begging the question and urging the very thing
as a difficulty which the plaintiff proffers to execute. He claims
a sum collected in the eight counties specified, and no more, and
unless he can prove so much collected in the eight original
counties, it is very clear that he cannot have a verdict. But is he
to be prejudged? -- is he not to be permitted to make out the case
which he offers to prove?
Nor is there any more weight in the argument that "although the
defendant may have been willing to indemnify against eight
counties, it does not follow, that he would undertake to indemnify
against nine." No one pretends to charge him with nine counties.
Surely there was nothing in the contract to preclude the plaintiff
from extending his deputation to this individual over his whole
Page 22 U. S. 716
district had he thought proper. Could a separate deed, as to the
ninth county, have been pleaded as a defense?
There is no charge of positive injury in this plea, it will be
observed; nor do the facts admit a suspicion of fraudulent
intention. The sole effect of the interlineation, was to confide in
U. to collect in another county without giving security. The
defense rests upon certain inferences from, or consequences imputed
to, the naked act of interlining the word "Willingborough," without
even averring the acts necessary to make the instrument a deed as
to that county, or the intent to revoke or reexecute the deed as to
the residue
To us it appears that it ought no more to affect the rights of
the parties than interlining the name of a region beyond the
Atlantic, or a mere dash of the pen.
On the subject of razures, we would remark it is to be regretted
that this plea had not been specially demurred to, that the
question might have been taken from the court and sent to the jury.
There is no doubt that they might have found this deed several in
its nature as to each county, and therefore unaffected by the
addition of another. The tendency of the decisions has been to
carry such questions to that tribunal, and notwithstanding some
contrariety of
dicta, it is now clearly settled that a
razure must make a deed void or it is immaterial, and therefore
non est factum is held to be the proper plea. Chief
Justice Holt has declared any other form of taking advantage of a
razure impertinent, 6 Mod. 215,
Page 22 U. S. 717
and the rule is not now to be doubted. But as to the principle
upon which a razure avoids a deed, it is not too much to say that
the law of the subject appears to have got into some confusion.
Modern decisions, particularly of our own courts, lean against the
excessive "rigor" with which some writers and some cases disfigure
it. In the case of the
United States v. Cutts, 1 Gall. 69,
a bond that had been cancelled and mutilated, the seal torn away by
the joint act of the defendant and the plaintiff's bailee, was
still held, and rightly held, to be sustainable as the deed of the
party. In the case of
Speak v. United
States, 9 Cranch 28, a bond was sustained
notwithstanding the striking out of one joint and several
co-obligor, in the absence of the others, and the insertion of
another. And so, as to revenue bonds, there is not a court of the
United States which has not sustained them against the plea of
non est factum notwithstanding that both sum and parties
have been inserted after the execution by one of the obligors, and
this in his absence, because the contract was not altered, and the
good sense of the law prevailed against its technicalities.
There is a great paucity of decisions in modern times on the
subject of razures and interlineations. If we mount to its origin,
we find it in the Year Books and in Perkins, who cites them, given
as the ground of suspicion and inquiry. And so unquestionably it
ought to be, and frauds or mutilations, to which the parties having
the custody of deeds are privy, cannot be taken too strongly
Page 22 U. S. 718
against them. But when we encounter the doctrine, as laid down
in
Pigot's Case,
"that when a deed is altered in a point material by a stranger,
without the privity of the obligee, even by drawing a pen through
the midst of a material word, that it shall be void,"
without reference to the fraud, privity, or gross negligence of
the obligor, it certainly is time to pause, and I highly approve of
the hesitation of my brother STORY in
Cutts' Case, as to
the authority of
Pigot's Case. As an adjudication, the
value of that case should be limited to the single point "that an
immaterial interlineation, without the privity or command of the
obligee, does not avoid the bond." The case does not call for the
decision of another point, for it is upon a special verdict, and
that the only question submitted. Yet the reporter, who seldom lets
an opportunity escape him that furnishes an apology for
exemplifying his indefatigable research, makes it authority for a
score of positive decisions and the introduction to a mass of law
upon questions totally distinct. But it should be noted of this
learned judge that his reports, like the text of Littleton, are
only to be considered as the occasion or excuse for displaying his
acquirements in the law learning of his day and expressing his
opinions upon juridical topics.
It is certainly true that some of the decisions in the books
have carried this doctrine a great way. As, for instance, the case
of the lease of the Dean of Paul's, in which the counterpart
expressed a rent of 27 pounds, and the tenant altered his deed from
26 to 27 pounds, to make it accord with the counterpart and the
true contract. Yet it was held to avoid his lease. 1
Page 22 U. S. 719
Roll. 27. Cro.Eliz. 627. But the utmost that can be made of
these cases is that they apply to those instances in which the deed
is necessarily an entire thing, and the reason assigned is that the
witness can no longer testify to the deed, as the deed which he saw
delivered. Surely this reason is not applicable to the present
case, for, let the witness be examined upon this instrument, as to
the county of A., as introductory to the proof of the money
collected in A., and so on as to the counties B., C., and D., and
what is to prevent his proving the execution of this deed? That
which may just as well have been executed in as many detached
sheets of paper as there are counties certainly has nothing of
necessary entirety or indivisibility in its nature. Any other rule,
as applied to this case would, we conceive, be permitting frauds to
be covered by a principle which was intended to prevent frauds.
Certificate for the defendant.