Lyon v. Clark

By the Court. Ingraham, First J. The question in this case is, whether interest can be charged against the defendants beyond the penalty of the bond. If the defendants could be regarded as sureties, then I think it is clear that they are not liable beyond the penalty, even upon a money bond. But the defendants in this case cannot receive the benefit of that rule. They appear to have received the money from the plaintiff, and for aught that appears upon the bond, to their own use. No disposition is directed to be made of the money, nor was it paid to any one else than the [252] defendants, and they must he treated as principals. The defendants, as principals, undertake, in consideration of receiving the money, to indemnify the plaintiff. The various and contradictory decisions upon the extent of liability of the principal beyond the penalty of the bond, render it very difficult to say what the true rule is according to the American decisions. Nor is it much easier to find out from the English cases the rule in their courts. Many of the cases on both sides will be found in 4 Day, 30, and 3 Cowen, 151. Without reviewing them separately, I think we can adopt the rule of the old supreme court with more propriety, than to reject that for the decision of other courts. In the case cited from 3 Cowen, the chief justice says, that the weight of authority is, that nothing more than the penalty, or at any rate, the penalty and interest from the time of forfeiture, can be recovered against the principals. Perhaps it is more consonant with the common rules for construing covenants, to hold that where the penalty is fixed, the recovery should not exceed the amount the parties agreed upon as the limit of the liability of the obligor. But the rule has long since been sanctioned in other cases, where a penalty is fixed as damages, that such amount is not to be the amount of damage .to be recovered in all cases, and the decision I have referred to seems to sanction a recovery of the penalty and interest from the time of forfeiture. (3 Cowen, 151 ; 6 Paige, 92.) An objection is taken to the amount, upon the ground that the statute 2 R. S. p. 378, directs the judgment to be entered for the penalty of the bond. Whether that would preclude a recovery by judgment of more than the penalty, it is not necessary now to inquire. That is a matter for the plaintiff to decide upon in entering his judgment, and does not affect the report of the referee. Upon that point we do not express any opinion. The. objection that the complaint only alleges payment to have been made in 1843, and that interest can only be claimed from that date, does not appear to have been taken before the referee. If it had been, we are not furnished with the [253] complaint so as to be able to say whether the prayer for relief would warrant the report or not. If the error is only in the allegation as to when the payment was made, that is a variance between pleading and proof which we are directed to disregard. Motion to set aside report of referee denied.