1. It is now the prevailing rule in this country that a party
may maintain assumpsit on a promise not under seal made to another
for his benefit.
2. In the absence of any evidence whatever to contradict or vary
the case made by the plaintiff, it is not error for the court, when
the legal effect of the plaintiff's evidence warrants a verdict for
him, to so charge the jury.
In March, 1871, one Ballantine recovered a judgment in the
Circuit Court of the United States for the Eastern District of
Michigan against the Albany Insurance Company for $3,425.34 and
costs. That company desiring to bring the case to this Court upon
writ of error, Hendrick, its vice-president, on the 8th of March,
1871, wrote to Lindsay, one of the defendants in error, as
follows:
"A. G. LINDSAY, Esq., Detroit:"
"DEAR SIR -- Will you be good enough to sign the needful bail
bond in the 'Park' case, and oblige"
"Yours truly, JAMES HENDRICK, V.P."
On the 10th of that month, Lindsay replied:
"I beg to say that I will sign the bail bond in the 'Park' case,
if you will first furnish me with sufficient security to indemnify
me in case of our defeat; the case may be delayed years at
Washington, and many changes may occur in that time."
On the next day, Hendrick wrote to Lindsay, acknowledging the
receipt of the letter of the 10th, and saying, "Whatever security
may be desired in the shape of a personal bond, I will give it to
you." After the receipt of this letter, the defendants in error
executed to Ballantine their
Page 93 U. S. 144
joint and several bond, which was accepted, approved, and filed
on the sixteenth day of March, 1871, whereupon the insurance
company sued out a writ of error by which, and in virtue of the
bond, said judgment was superseded.
On the 15th of March, 1871, Hendrick wrote to Lindsay, saying as
follows:
"I have just returned from Boston, and learn that you have not
yet advised us of having signed our bail bond in the 'Park' case.
As it should be done at once, I hope you will feel that we have, if
nothing more, a feeling of old friendship, that ought to make men
of us in an hour of need."
On the 17th, Lindsay replied:
"Upon receipt of your favor of the 11th inst., I signed your
bond in 'Park' case without loss of time, and supposed the fact
itself was answer to you in the premises until this A.M. I received
yours of the 15th inst., touching on the same subject, and now ask
your pardon for not stating to you at once, upon the receipt of
your 11th inst. favor, that the bond was executed."
On the 20th, Lindsay again wrote as follows:
"DEAR SIR -- Enclosed is bond of indemnity, which please have
executed and returned to me."
The bond was as follows:
"Know all men by these presents that we, James Hendrick, as
principal, and _____, as surety, of Albany, in the State of New
York, held and firmly bound unto Archibald G. Lindsay and James P.
Mansfield, of the City of Detroit, County of Wayne, and State of
Michigan, in the sum of $5,500, lawful money of the United States
of America, to be paid to the said Lindsay and Mansfield, or to
their certain attorneys, heirs, executors, administrators, or
assigns, to which payment, well and truly to be made, we jointly
and severally bind ourselves, our heirs, executors, and
administrators, and each and every of them, firmly by these
presents, sealed with our seals, dated the twentieth day of March,
1871."
"The condition of this obligation is such that whereas the said
Lindsay and Mansfield have lately, at the request of the said
Hendrick, signed two bonds -- one in the sum of $5,000, and one in
the sum of $200 -- in a case pending in the Circuit Court of the
United
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States for the Eastern District of Michigan, in which suit James
M. Ballantine was plaintiff, and the Albany City Insurance Company
was defendant, said bonds being filed for the purpose and intent of
taking said case to the Supreme Court of the United States."
"Now, therefore, if the said Hendrick shall save and keep the
said Lindsay and Mansfield fully indemnified and harmless against
all loss, damages, or expenses arising from their giving the said
bonds, then the above obligation to be void, and otherwise, in
force."
No dissent was expressed by Hendrick, nor was the bond executed
by him.
Ballantine's judgment having been affirmed by this court,
Lindsay and Mansfield paid it by their negotiable notes and
thereupon brought assumpsit against Hendrick for the amount so
paid.
The plaintiffs, after proving the foregoing facts, rested their
case. The defendant announced that he had no evidence to offer.
The court charged that the plaintiffs were entitled to recover,
and directed the jury to so find, to which charge and direction the
defendant excepted.
The jury found a verdict for the plaintiffs, and judgment having
been rendered thereon, the defendant sued out this writ of
error.
Page 93 U. S. 146
MR. JUSTICE DAVIS delivered the opinion of the Court.
There were no disputed facts in this case for the jury to pass
upon. After the plaintiffs had rested their case, the counsel for
the defendant announced that he had no evidence to offer, and
thereupon the court, considering that the legal effect of the
evidence warranted a verdict for the plaintiffs, told the jury in
an absolute form to find for them. This was correct practice where
there was no evidence at all to contradict or
Page 93 U. S. 147
vary the case made by the plaintiffs, and the only question for
review here is whether or not the court mistook the legal effect of
the evidence.
Bevans v. United
States, 13 Wall. 57;
Walbrun v.
Babbitt, 16 Wall. 577.
It is very clear that the transaction in question constituted a
good contract between some parties. The real inquiry is whether the
promise and undertaking of Hendrick were intended to inure to the
joint benefit of Lindsay and Mansfield, so as to entitle them to
bring an action. In construing letters like those on which this
suit is based, the language employed is one, but not the only,
element to be considered in arriving at the intention of the
writers. In determining the sense in which the words were used,
they should be considered in connection with the subject matter of
the correspondence, the situation of the parties, the thing to be
done, and the surrounding circumstances.
There is no absolute proof of the relation sustained by Hendrick
to the insurance company other than that he was its vice-president;
but from the tenor of the letters it is quite clear that he managed
its business in Michigan, and had general authority over it in that
state. It is equally clear that Lindsay was only a local agent of
the company at Detroit, with the usual powers and duties belonging
to such an appointment. Such was the relative position of these
persons when it became necessary to take action on Ballantine's
judgment against the company in the Circuit Court of the United
States at Detroit. Lindsay had no concern with it. The officers of
the corporation in Albany were to determine whether to let the
judgment remain in force, or to sue out a writ of error from this
court. To stay the execution required a bond of considerable
amount. It was not necessary that the company should sign it, but
it was absolutely essential that the offered security should be
satisfactory to the judge whose duty it was to approve the bond. In
this state of the case, Hendrick wrote to Lindsay, "Will you be
good enough to sign the needful bail bond?" This request, construed
literally, would limit the application to Lindsay alone. But this
is a narrow construction, and evidently the words could not in this
sense have been used by Hendrick or adopted by Lindsay. The request
was coextensive
Page 93 U. S. 148
with the object to be attained -- that of superseding the
judgment and securing a hearing in a higher court -- and Hendrick
asked Lindsay to see that whatever was required for this purpose
should be done. To suppose anything else is to suppose that,
wishing a certain thing effected, he restricted his agent in the
use of the necessary means to accomplish it, for it might turn out
that the judge would require two securities instead of one, or that
Lindsay would not be accepted at all. Besides, it was immaterial to
Hendrick whether the bond was signed by one or more persons, as he
promised to give indemnity in the shape of a personal bond. It is
true that this promise, in terms, was to Lindsay; but there is no
reason why it, any more than the request, should be limited. If the
request applied, as we think it did, to the procurement of a
sufficient bond, the promise has a like extent. That Lindsay and
Mansfield (to whom the correspondence was communicated) understood
them to have this effect is clear enough from their signing the
bond and staying the collection of the judgment. It is also equally
clear from the same fact that Lindsay requested Mansfield to become
one of the sureties, and that they both executed the bond relying
upon the undertaking of Hendrick to furnish the promised
indemnity.
This was not done, although prompt application was made to him
by letter from Lindsay, enclosing a draft of the indemnity bond. He
neither signed nor returned it, nor did he afterwards correspond
with anyone on the subject. The draft recites that the
supersedeas bond was executed by Lindsay and Mansfield, at
the request of Hendrick. He was therefore informed of the
interpretation which they put upon his request and promise, and if
it was wrong, he would at least, as an excuse for doing nothing,
have availed himself of the occasion to repudiate the whole
proceeding. As he did not do this, but retained, without objection,
the draft, he in effect adopted that interpretation.
It is argued that Hendrick had no personal interest in the
matter and that therefore there was no consideration for his
promise. But damage to the promisee constitutes as good a
consideration as benefit to the promisor. In
Pillan v. Van
Mierop, 3 Burr. 1663, the court said,
"Any damage or suspension
Page 93 U. S. 149
of a right or possibility of a loss occasioned to the plaintiff
by the promise of another is a sufficient consideration for such
promise, and will make it binding although no actual benefit
accrues to the party promising."
This rule is sustained by a long series of adjudged cases.
It is also argued, as Mansfield's name does not appear in the
letters of Hendrick, that he could not join in this action. This
would be true if the promise were under seal, requiring an action
of debt or covenant, but the right of a party to maintain assumpsit
on a promise not under seal, made to another for his benefit,
although much controverted, is now the prevailing rule in this
country. 1 Pars.Contr. (6th ed.) 467, and cases cited. If Hendrick
engaged with Lindsay to indemnify the sureties furnished by him,
and on the faith of this promise Lindsay and Mansfield executed the
supersedeas bond, as we hold was the case here, then if
they suffered loss by reason of the breach of this contract, they
are entitled to maintain this suit. That they did suffer loss, to
the extent of Ballantine's judgment against the company, which was
affirmed in this Court, is the legal effect of the evidence of the
only witness on the point. He states directly that he and his
co-plaintiff paid on the bond to Ballantine a certain amount of
money, meaning evidently on the judgment to secure which the bond
was given. It is true he says, "We did not pay cash," "we paid it
in our notes," but negotiable promissory notes are equivalent to
the payment of money if received by the creditor in satisfaction of
the judgment, though such satisfaction be not entered on the
record. The witness, through all his testimony, speaks of what he
did as payment, and the true inference from the whole of it is that
Ballantine treated these notes as so much money paid him. There was
no reason why he should not, for the bond was his only reliance,
and the enforced collection of it would have occasioned expense and
required time. It was far better for him, if the obligors were good
(and this is the presumption) but unable to pay at once, to take
time notes in liquidation of the demand than to bring suit on the
bond. Besides, this is not an unusual way of closing up such a
transaction where the circumstances surrounding it appeal so
strongly to the indulgence of the creditor.
Page 93 U. S. 150
On the whole, we are of the opinion that the court below did not
mistake the legal effect of the uncontradicted testimony in the
case, and that there was no error in instructing the jury to find
for the plaintiffs.
Judgment affirmed.
