Comstock v. Breed

Baldwin, J., delivered the opinion of the Court—Field, J., concurring. This suit was brought on a bond of indemnity, on which bond Frothingham and West were sureties, not connected, except as hereinafter stated, with the consideration. The bond recites and acknowledges the general consideration of value received and surrendered, and is conditioned to pay to Comstock, who was a Receiver in a certain pending suit in one of the Courts of San Francisco, between Breed and Dennis, such moneys advanced by Comstock to Breed, as the Court might, by judgment, order to be paid by Comstock. The defense set up by these sureties is, that these moneys had, some five months before the execution of the bond, been advanced by Comstock, without the instance or any participation in the transaction, by these sureties ; and they say that this being the only consideration for their covenant, it is nudum pactum. This raises the question: 1st. Whether, at law, the consideration of a sealed instrument—it expressing a consideration — may be impeached by an obligor ? and, 2d. If so, was the fact asserted competent proof of a want of consideration ? The first question is answered by the statute, (C. L., p. 165) which expressly gives this right to the obligor. The old, unmeaning distinction between sealed and unsealed instruments, is destroyed by the statute, and it was the design of the Legislature to place bonds and notes on the same footing in respect to defenses. It is well settled, that though a consideration be recited in a note, the defendant may show that in fact there was no consideration; and the same rule holds as to bonds. In order to constitute a consideration, it is necessary that some advantage to promisor, or injury to promisee—the degree not material—should occur. A past and executed consideration is not sufficient. If the debt of A already has been created, the mere promise to pay it by B—no term being introduced into the contract—as delay, or the like, is not binding. It is a mere undertaking to pay another’s debt, and it is within the Statute of Frauds, and, without the statute, [289] would be void, as without consideration. Chaffee v. Thomas, 7 Cow. 858 ; Story on Cont., sec. 855. If, therefore, solely in consideration that Comstock had advanced this money to' Breed, these sureties promised to repay it, evidently they had received no consideration for the promise, from the past fact. If, having advanced the money, the .sureties promised, in consideration of Comstock’s not calling for it, until judgment should be rendered against him for it, the case might be different. We do not see that the mere fact of a Receiver holding moneys in trust for parties, paying a portion as an advance to a party whom he believes or supposes will be entitled to it, is such an illegal consideration as to vitiate a bond for its repayment. The Receiver may hold money which it is apparent or very probable must ultimately go, on final settlement, to a particular person, whose convenience may be greatly promoted by receiving it in advance of his strict right to it, as in cases of administrators or other trustees; and we do not see, if he chooses to take the risk of making a premature payment, that there is anything opposed to public policy, or to the law, in the act, which would infect a bond of indemnity with a fatal taint of illegality. Such an advance would rather be without law, than against law. But it is unnecessary, perhaps, to lay down any definitive rule in this case on that subject. The record does not show any consideration beyond the recitals in the bond, and the facts alleged in the defense. There is nothing in the point that Dennis. stands in any better position than Comstock, to whose rights and place on the calendar he seems to have succeeded. The instructions of the District Court oppose these views. The error of the Judge below has already been sufficiently indicated for the purposes of a new trial, when the issues can be determined upon the principles here announced. Judgment reversed and cause remanded.