Ford v. Garner

Worden, J. Suit by the appellee against Ford and Morris upon the following bond, viz: [299] “Know all men, by these presents, That we, John B. Ford and William D. Morris, of the city of New Albany, State of Indiana, are held and firmly bound unto Ruth Garner, in the penal sum of twenty-five hundred dollars; for the payment of which, well and truly to be made and done, we hereby bind ourselves, our heirs, executors, and administrators. Sealed with our seals, and dated this 12th day of April, 1858.” “The foregoing bond is subject to. the following conditions, and is made for the purposes following, to wit: Whereas, said Ruth Garner is justly indebted in the amount of two notes of one thousand dollars each, with interest, held by the Ohio Insurance Company, upon which said Ford and Morris are indorsers, which notes were originally given for a part of the Steamer Pelican; and whereas, the Steamer Pelican was insured, in several insurance companies, for the use and benefit of the owners of said boat; and whereas, said boat was afterward destroyed by fire, and a part of the insurance money is coming to said Ruth Garner as one of the owners of said boat; and whereas, said Ruth Garner has agreed that enough of her interest in the money arising from the said insurance of said boat shall be applied, (if there is enough), to pay both of said notes and the interest thereon, if not, whatever there may be; on condition that said John B. Ford shall and will effect an insurance, for the term of seven years, upon the life of William II. Garner, for the sum of two thousand dollars, for the use and benefit of said Ruth Garner, and pay all calls and premiums, for said period, on account of said insurance; said insurance to be in a good and solvent insurance company. And whereas, said William U. Garner is not now at home, but down the river, and no medical examination can be made of him for the purpose of effecting said insurance; therefore the said Ford agrees and binds himself to pay to said Ruth Garner the sum of two thousand dollars in case the said William H. Garner shall depart this life before ail insurance shall be effected upon his life as aforesaid. Now, therefore, if the said Ford shall, in all things, comply with the stipulations in the foregoing instrument, to be by him performed, then the fore [300] going bond to be void, otherwise to be and remain in full force and virtue in law. ' “In witness whereof, &c., (Signed,) “J.B.Ford, [l.s.] “ W. D. Morris, Security, [t.s.]” The complaint alleges the death of said William II. Garner, no insurance having been effected upon his life, as provided for in the bond. A demurrer was filed to the complaint, which was overruled, and the defendants excepted. The principal objection urged to the complaint is that the bond was executed without a sufficient consideration. We need not decide whether any consideration would be presumed, other than that stated in the condition of the bond, as one of the paragraphs of the answer alleges, that it was executed “ in consideration that the plaintiff had agreed that enough of her interest in certain money mentioned in said bond, should be applied to pay a certain debt of the plaintiff, then due and owing from her to the Ohio Insurance Company, and the interest thereon, as specified in said bond, and for no other consideration whatever.” To this paragraph of the answer a demurrer was sustained, and exception taken. Issues of fact were formed, and the cause tried by the Court; finding and judgment for the plaintiff. The defendants appeal and assign several errors ; but we deem it necessary to notice only one point, as that, in our opinion, is decisive of the case. It appears by the record, that the only consideration for the execution of the bond was the agreement by the plaintiff to apply the money to be received by her from the underwriters, on the policy of insurance on the steamboat, to the payment, as specified-in the condition of the bond, of her notes, on which the obligors of the bond were indorsers. The question arises, whether this was a sufficient consideration to support the agreement of the defendants. I The case is, briefly, this. The plaintiff owed a certain debt, for which the defendants were liable, as her indorsers. She [301] had money due her from some insurance companies. She agreed to apply that money, when received, to the payment of the debt; in consideration whereof, the defendants agreed to effect, for her benefit, an insurance on the life of William H. Garner, or pay her two thousand dollars. What benefit did the defendants receive, or what injury did the plaintiff sustain, by her promise to apply her money to the payment of her debt ? The debt to which she agreed to apply the money was her own; and her promise to pay it and save the indorsers harmless, imposed no greater obligation upon her than she was legally under without such promise. This promise, on the part of the plaintiff, being for the per-' formance of nothing more than she was already bound to perform, seems to us to be insufficient to support the agreement on the part of the defendants. _ / The consideration, to support the agreement of the defendants, should have been some benefit to them, or some loss, trouble, inconvenience, or charge, imposed upon the plaintiff. Now, it was her duty to pay the debt, and her promise to pay it out of a particular fund, imposed no additional obligation upon her to pay it. The promise to pay the debt out of the fund named conferred no benefit upon the defendants, as it did not operate as an assignment to them of the fund, or give them the control of it. Had her agreement operated as an assignment of the fund, a different question would have been presented. Such, however, is not the case. “ In order to constitute an assignment, either in law or equity, there should be such an actual or constructive appropriation of the subject matter assigned, as to confer a complete and present right on the assignee, even where the circumstances do not admit of its immediate exercise. A covenant, on the part of the debtor, to apply a particular fund in payment of the debt, as soon as he receives it, will not operate as an assignment; for it does not give the covenantee a right to the fund, save through the medium of the covenantor, and loots to a future act, on his part, as the means of rendering it effectual; while the characteristics of an assignment are, the relinquishment of all legal or equitable interest by the assignor, and the creation of a new and independent right in the assignee.” [302] Lead. Ca. Eq., vol. 2, pt. 2, p. 233, and authorities there cited. W. T. Otto^s,nd G. V. Powfc, for appellants. T. L. Smith and M. 0. Ken\ for appellee. The promise of the plaintiff to apply the money to the payment of the notes, not only did not give the defendants any right to, or control over, the money, but it gave them no right of action against her in addition to what they already had. They could not sue her upon this promise until they paid the notes or some part thereof; because until then they suffered no damage; and when they had so paid, their right of action became as perfect, without, as with, the promise in question. For these reasons, we are of opinion that the bond sued upon, was given upon an insufficient consideration and, therefore, that the judgment can not be sustained. Per Curiam. The judgment is reversed, with costs.