Harvey v. Daniel

"Warner, C. J. At the trial of this case, the Court nonsuited the plaintiff, and that is the error assigned here to the judgment of the Court. This suit was brought upon an indemnity bond given by the defendant to indemnify the plaintiff against the outstanding debts of the firm of Harvey & Brown. The breach alleged is that the defendant has not paid a certain note made by the partners,- to one Mathews. It is insisted for the plaintiff, that this bond is more than a bond for indemnity, that it contemplates the payment of the debts of the firm by the defendant, and the fact that he has not paid the debt of Mathews, is a breach, of the condition thereof. The general rule of law applicable to this class of cases we understand to be, that in order to recover upon a mere bond of indemnity, actual damage must be shown. If the indemnity be against the payment of money, the plaintiff must prove actual payment, or that which the law considers equivalent to actual payment; a mere legal liability to pay the money is not sufficient. Chase vs. Hinman, 8th Wendell’s Rep., 456 ; Franks vs. Hamilton, 29th Ga. Rep., 139. ■ Did the defendant bind himself to pay the outstanding debts of the firm of Harvey & Brown at or before any specified period of time. Has Harvey paid any of the debts of the firm ? Has he sustained any loss or damage on account of the non-payment of the firm debts ? The record does not show that he has, and he may never pay any of them, or sustain any loss or damage on account of the non-payment thereof. What was the intention of the parties to this contract ? Was it their intention that Harvey should be indemnified against any loss or damage that he might sustain from having to pay the firm debts, or was it their intention that the condition of the bond should be broken, in the event Daniel did not pay the firm debts within a reasonable time ? [565] Let the contract speak for itself, and be its own interpreter. The bond recites that “ "Whereas the above bound William A. Daniel has purchased of the said T. W. Harvey his entire interest in a stock of goods, and whereas, according to the conditions of said purchase, said Daniel was to indemnify said Harvey against the payment of any of the debts of the late firm of Harvey & Brown.” The obvious intention of the parties was that Harvey should be indemnified against loss or damage in case he should have to pay any of the outstanding debts of the firm, and until he can show that he has paid debts of the firm, or sustained some loss or damage arising from the non-payment thereof by Daniel, there is no breach of the indemnity bond; a mere legal liability on his part to pay the firm debts, without more, does not constitute a breach of the bond. If, after the lapse of a reasonable time, Daniel had failed to pay the firm debts, and Harvey had in good faith paid off the same, we do not say that under such a state of facts, an action upon the bond could not have been maintained. But here there has been no payment of any firm debt by the plaintiff, nor loss or damage shown to have been sustained by.him in consequence of the non-payment thereof by the defendant. Let the judgment of the Court below be affirmed.