Shreffler v. Nadelhoffer

Mr. Justice Bailey delivered the opinion of the Court: Certain questions arising upon the pleadings are presented by counsel which we will notice first. It is said that the defendants’ eighth plea presented a complete defense to the action, and as that plea was unanswered, judgment should have been rendered thereon for the defendants. It appears that the defendants went to trial without objection that said plea was unanswered, and without moving for any judgment thereon for want of a replication. They thereby waived the necessity of a formal issue. As we said in Strohm v. Hayes, 70 Ill. 41, it is the settled doctrine of this court, that, proceeding to trial where an issue is not made up on one of the pleas, such issue is considered as waived, or the irregularity is cured by verdict. Furthermore, said eighth plea purports to answer only the third count of the declaration, and as that count was dismissed by the plaintiff prior to the trial, such dismissal carried the eighth plea with it, and that plea, was no longer in the case, and there was no occasion for answering it. Again, it is insisted that each of the several counts in the declaration is insufficient to show a cause of action, and that the defendants’ motion in arrest of judgment should therefore have been sustained. The alleged defect in the first, second and fourth counts is, that, except as to the first breach assigned in the first count, there is no averment that the decree recited in the appeal bond has ever been affirmed by the Appellate Court. It is difficult to see how, as the record now stands, the defendants can avail themselves of this defect in the second count, or in the second breach assigned in the first count. Said second breach in the first count and said second count were both demurred to by the defendants, and their demurrer being overruled, they abandoned it, and filed various pleas in bar. The only assignment of error by which the alleged defect in the first and second counts is presented for consideration here, is the one which calls in question the decision of the trial court overruling the defendants’ motion in arrest of judgment, and the settled doctrine of this court is, that where a defendant demurs to a declaration, and, after his demurrer is overruled, pleads over, he will be precluded from insisting upon a motion in arrest of judgment for insufficiency in the declaration. Quincy Coal Co. v. Hood, 77 Ill. 68; American Express Co. v. Pinckney, 29 id. 392; Independent Order of Mutual Aid v. Paine, 122 id. 625; Rouse v. County of Peoria, 2 Gilm. 99; 2 Tidd’s Practice, 918. But we think the fifth count, especially after verdict, is ■ sufficient to sustain the judgment, and that being so, the court properly overruled the motion in arrest of judgment, even though all the other counts may have been defective. Section 57 of the Practice Act provides that: “Whenever an entire verdict shall be given on several counts, the same shall not be set aside or reversed on the ground of any defective count, if one or more of the counts of the declaration be sufficient to sustain the verdict.” See also Gebbie v. Mooney, 121 Ill. 255, and authorities cited. The objection urged to the other counts does not exist in the fifth count, as that count contains a sufficient averment of the affirmance by the Appellate Court of the decree appealed from. But it is claimed that said count is defective in failing to state the names of the parties who had agreed to or were about to purchase said note, and the sale to whom was defeated by the continuance of the injunction. The allegation of damages in said count is, in substance, that at the time the order continuing the inj unction was made, the note, the sale and transfer of which was restrained, had a market value of $10,000, the makers and guarantors of said note then being men of great wealth and financial standing; that but for the injunction, the note could have been negotiated and sold for that sum, and that the plaintiff was offered that sum for it by divers responsible parties, and would have disposed of and sold it, without recourse, for that sum, if the injuuction had not been continued in force; that by reason of the continuance of the injunction, the plaintiff was delayed and hindered in making such disposition of the note for the period of ten months, and that during that period the makers and guarantors of the note became financially irresponsible, whereby the note became worthless. Without pausing to determine whether, in this case, the rules of good pleading required the plaintiff to state the names of the parties who had offered to purchase said note, or to whom he would have sold it if he had not been prevented from doing so by the continuance of the injunction, the case is one merely of a defective statement of a cause of action, and not one where no cause of action is stated, and the defect is therefore one which is cured by verdict. The rule on this subject, as laid down by Mr. Gould in his Treatise on Pleading, is as follows: “Where the statement of the plaintiff’s cause of action, and that only, is defective or inaccurate, the defect is cured by a general verdict in his favor; because, to entitle him to recover, all circumstances necessary, in form or substance, to complete a title so imperfectly stated, must be proved at the trial; and it is therefore a fair presumption that they are proved. But where no cause of action is stated, the omission is not cured by verdict. For, as no right of recovery was necessary to be proved, or could have been legally proved, under such a declaration, there can be no ground for presuming that it was proved at the trial.” Gould on Plead. 463. The allegations of said fifth count were clearly sufficient to admit proof of the names of the parties with whom the plaintiff had negotiated the sale of said note, and to whom he was prevented from making such sale by the continuance of the injunction, and it will therefore be presumed, as was the fact, that such proof was made at the trial. But the question to which our attention has been chiefly directed, and the one which presents the greatest difficulty, is, whether any breach of the' condition of the bond sued on is shown. The decision of that question must turn wholly upon the construction to be placed upon the language of the condition. That language is as follows: “Now if the said Andrew Dillman and Edward B. Knowlton shall duly prosecute said appeal, and shall moreover pay all damages, and damages growing out of the continuance of the injunction herein, costs of suit rendered and to be rendered against them the said Andrew Dillman and Edward B. Knowlton by said court, in case the said decree shall be affirmed in said Appellate Court, then the obligation to be null and void, otherwise to remain in full force and virtue.” The judgment of the Appellate Court simply affirmed the decree appealed from, and awarded the appellee, the plaintiff, his costs in that court. No judgment for damages was rendered by the Appellate Court against Dillman and Knowlton or the survivor of them, and no such judgment could have been rendered, as that court had no jurisdiction or authority, on affirming the decree, to maké an award to the party entitled thereto, of his damages growing out of the continuance of the injunction. It is-not disputed that the costs adjudged to the appellee were paid prior to the commencement of the suit on the bond, and there was therefore no breach of the condition of the bond by reason of the non-payment of said costs. The defendants contend that, by a proper construction of said condition, the phrase, “rendered and to be rendered against them the said Andrew Dillman =and Edward B. Knowlton by said court, ” should be held to apply to and qualify the words, “all damages, and 'damages growing out of the continuance of the injunction herein, ” and therefore that no damages consequent upon the taking of the appeal, or growing out of the •continuance of the injunction are within the condition, except such as the Appellate Court should award in its judgment. As the Appellate Court had no power to award damages growing out of the continuance of the injunction, this construction manifestly renders that part of the condition wholly meaningless and nugatory. Two of the defendants being sureties, their liability must ■undoubtedly be determined in accordance with the rules of law applicable to that relation. It is a rule universally recognized by the courts that a surety has a right to stand upon the strict terms of his obligation, when such terms are ascertained. As said by Mr. Justice Story in Miller v. Stewart, 9 Wheat. 681: “Nothing can be clearer, both upon principle and authority, than the doctrine that the liability of a surety is not to be extended by implication beyond the terms of the 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 of 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 law, have been in the constant habit of scanning the contracts of sureties with considerable strictness.” The rule thus laid down by Mr. Justice Story has been repeated and adopted by this court in numerous decisions. Field v. Rawlings, 1 Gilm. 581; Waters v. Simpson, 2 id. 570; Reynolds v. Hall, 1 Scam. 35; People v. Moon, 3 id. 123; Governor v. Ridgway, 12 Ill. 14; Ryan v. Trustees of Shawneetown, 14 id. 20; C. & A. R. R. Co. v. Higgins, 58 id. 128; Stull v. Hance, 62 id. 52; People v. Tompkins, 74 id. 482; Cooper v. People, 85 id. 417; Mix v. Singleton, 86 id. 194; Phillips v. Singer Manufacturing Co. 88 id. 305; Dodgson v. Henderson, 113 id. 360; Trustees of Schools v. Sheik, 119 id. 579; Burlington Ins. Co. v. Johnson, 120 id. 622; Vinyard v. Barnes, 124 id. 346. In many of these eases we have said that the contract of a surety is to be - strictly construed, and that his liability is not to be extended by implication, and such has-long been the settled law in this State. It is not meant by this rule, however, that the courts, in endeavoring to ascertain the precise terms of the contract actually made by a surety, may not resort to the same aids, and invoke the same canons of interpretation which apply in case of other contracts. Thus, in Stull v. Hance, 62 Ill. 52, the rule that in construing contracts and written agreements, the whole context should be considered, and the intention of the parties ascertained from it, was applied to the interpretation of the contract of a surety; and in 'Mix v. Singleton, 86 id. 194, where a similar contract was under consideration, the rule that the words used should be construed as ordinarily understood was applied. Indeed, any other mode of interpretation would lead to the absurd result of giving to the same-set of words in a contract one force and meaning when the-principal is defendant, and a different force and meaning when, the suit happens to be brought against the surety or guarantor. The rule of strict construction, as applied to the contracts of sureties and guarantors, in no way interferes with the use of the ordinary tests by which the actual meaning and intention of contracting parties are ordinarily determined, but merely limits their liability strictly to the terms of their contract when those terms are ascertained, and forbids any extension of such-liability by implication beyond the strict letter of those terms. Various decisions in other States may be cited in support of this position. Thus, in Locke v. McVean, 33 Mich. 473, the court after reviewing many English and American decisions, says: “The view now generally received appears to be, that for the purpose of finding out what the contract is, the same-course is to be pursued that the law authorizes to ascertain: what the parties have agreed upon in the case of other mercantile contracts, but when an understanding is once reached of the true agreement, the rules and principles which pertain to the rights and duties of principal and surety apply.” In Kastner v. Winsterley, 20 Up. Can. C. P. 101, the court, after reviewing various English authorities, says: “The rule of construction, then, of a contract of this description, is, to construe it as all other contracts, not giving a strict meaning to the words used against the party using them, nor yet as against the party in whose favor they are used, but to collect the real intention of the parties from the terms used in the contract, taking them in their plain, ordinary, and popular sense, unless by the known usage of the trade they have acquired a peculiar sense, and from the surrounding circumstances.” . In Hamilton v. Van Rensselaer, 43 N. Y. 244, Mr. Chief Justice Church, in discussing the proper interpretation to be put upon a contract of guaranty, says: “In ascertaining the meaning of the language used, the same rules of construction are applicable to contracts of suretyship as to other contracts. When the true signification of the contract is ascertained, the” surety or guarantor has a right to insist that his liability shall not be extended beyond its precise terms.” In Belloni v. Freeborn, 63 N. Y. 383, the court, in discussing the same subject, say: “There is no rule exclusively applicable to instruments of suretyship and requiring them to be in all cases interpreted with stringency and critical acumen in favor of the surety and against the creditor, and all ambiguities to be resolved to the advantage of the promisor, and every liability excluded from the operation of the instrument that can, by a strained and refined construction, be deemed outside of the agreement. In guaranties, letters of credit, and other obligations of sureties, the terms used and the language employed are to have a reasonable interpretation, according to the intent of the parties as disclosed by the instrument, read in the light of the surrounding circumstances, and the purposes for which it was made. If the terms are ambiguous, the ambiguity may be ■explained by reference to the circumstances surrounding the parties, and by such aids as are allowable in other cases. * * * The surety is not liable on an implied engagement, and his •obligation can not be extended, by construction or implication, beyond the precise terms of the instrument by which he has become surety. But in such instruments the meaning of the written language is to be ascertained in the same manner and by the same rules as in other instruments; and when the meaning is ascertained, effect is to be given to it.” See also, Gates v. McKee, 1 3 N. Y. 232; Crist v. Burlingame, 62 Barb. 351; Brandt on Suretyship, 105, et seq. It must be conceded that the condition of the bond in question, when read by itself and without reference to surrounding circumstances, is of doubtful meaning.' The draftsman, in preparing the bond, instead of drawing two bonds, one to serve as an appeal bond and the other as an injunction bond,-took a blank appeal bond, and endeavored, by inserting a clause providing for the payment of the damages growing out of the continuance of the injunction, to make it serve the purposes of both an appeal and an injunction bond. The place in which the last named clause is inserted and its relation to the other words of the condition are such as to render it uncertain, if we consider merely what appears upon the face of the instrument, whether the undertaking is, to pay all damages growing out of the continuance of the injunction, in case the decree is affirmed by the Appellate Court, or merely to pay all such damages arising from that cause as should be awardéd against the obligors by the judgment of that court. Either reading may be adopted without doing violence to any of the language of the condition. But when we view the condition in the light of surrounding circumstances, there can be no reasonable doubt as to which of these meanings was within the purpose and intent of the parties. Of these circumstances we may notice, first, the fact that the Appellate Court had no jurisdiction, whatever might be the outcome of the appeal, to render judgment against the obligors for the damages resulting from the continuance of the injunction. We must attribute to the obligors the intention to enter into an obligation every provision of which would be valid, but if the condition is interpreted as importing an obligation to pay only such damages as should be adjudged by the Appellate Court, it becomes, so far as that part of it is ■concerned, merely senseless and nugatory. Then again, the circumstances under which the appeal was taken and the bond given point to the conclusion that it was the intention of the obligors to secure to the obligee the payment of the damages growing out of the continuance of the injunction, in case the decree should be affirmed. The Circuit Court had rendered its decree dismissing the bill for want of ■equity and dissolving the injunction. The complainants desired to remove the record to the Appellate Court for review, ■and to have the injunction continued in force until the final decision of that court. To obtain such continuance of an injunction a party is ordinarily required to execute to the opposite party a bond indemnifying him against all damages which may thereby result to him. This we think the obligors wished and intended and undertook to do, and if the bond is equally susceptible of two interpretations one of which is consistent with and accomplishes that intention, as we think it is, it is very clear that such interpretation must be deemed to be the true one. The undertaking to pay the appellee his damages upon the sole condition that the decree should be affirmed by the Appellate Court must be held to be within the strict terms of the bond as the obligors made it, and not an obligation imported into it by implication or construction. One of the assignments of error which we have not noticed until now, calls in question the decision of the Circuit Court in sustaining a demurrer to the defendants’ second, tenth, twelfth and eighteenth pleas. The second plea is based upon that interpretation of the bond in question which we have shown is not the true one, and the demurrer to it was therefore properly sustained. The facts alleged in the tenth and twelfth pleas, so far as they seem to be material, are substantially alleged in other pleas, and the defendants had the advantage of the defenses thereby presented. The eighteenth plea alleges facts which seem to us to be wholly immaterial, and it was properly held insufficient on demurrer. We are of the opinion that the judgment of the Appellate Court should be affirmed, and an order to that effect will accordingly be entered. Judgment affirmed.