§ 792.

EARLY CASES ERRONEOUS.

523

occur and is within the scope of probability, would there be an expenditure or actual payment of money; and could it be pretended that in any one of them the overseers of the poor would be disabled, by that cause, from recovering a reasonable and just compensation for the maintenance of the child? The measure of damages might, in some of these cases, be attended with difficulties, which might sometimes be insuperable; but the right of the plaintiffs to compensation for the use of those who might have a claim upon them for the maintenance of the child, and thus enabling them to satisfy the charge, would be undeniable, and the difficulty of the remedy alone would obstruct it. In the present case, the overseers of the poor, to obviate all difficulties on that point, have had the precaution to obtain the further relief provided by the act, in an order of bastardy, by which the weekly contribution of the reputed father to the overseers for the support of the child is judicially and conclusively settled and determined. This adjudication was in evidence, and, in my judgment, it was conclusive upon both the father and his sureties, as the rule of damages in the action on the bond."1

It will be observed that here the covenant was merely to indemnify and save harmless, and did not reach to the extent of a promise to do the thing in the first place. It is to be noticed, also, that the whole scope of this reasoning is opposed to the general rule that actual compensation will only be given for actual loss, and cannot be supported but on the idea that a court of law is to assume the powers of a court of equity, and compel an imperfect kind of specific performance. If this doctrine were maintained, covenantors against incumbrances would be compelled to pay before the incumbrance was discharged; covenantors for quiet enjoyment would be obliged to pay before eviction; and all parties agreeing to do a specific

'The same point was again decided in the People v. Corbett, 8 Wend. 520. But in Churchill v. Hunt, 3 Denio 321, these decisions are said to rest entirely on the spirit and intent of the statute. "giving these bonds an effect which

they would not have at common law"; and it is there said to be for the same reason that in a claim against the sheriff on bonds for the jail liberties, it is unnecessary to prove damage. Kip v. Brigham, 7 Johns. 168.

thing would be mulcted in the sum equivalent to performance, without any proof whatever that the other party had been injured, or that his position was such that he could be.**

§ 793. Later cases follow the true rule.-* But this is not the result of the more recent authorities of the courts in this country. In an early case, the question “whether on an escape the bail to the liberties became liable for the whole penalty, or for the damages sustained by the sheriff by reason of the escape?" was raised in New York, but not decided.' But it was soon after said that neither the sheriff nor his assignee could recover without showing injury sustained, and that, consequently, recapture after the escape, or voluntary return, was an answer to a suit against the sureties for the liberties.*** In another case,

on an agreement to indemnify and save harmless against a certain demand, a judgment having been recovered on the claim in question against the plaintiff, but nothing having been paid thereon, the case of Rockfeller v. Donnelly was pronounced "a very questionable" one; and judgment was given for the defendant, the court saying: "This is not an agreement to indemnify against liability, but it is the common case of an agreement to indemnify against the claim or demand of a third person; and before the plaintiff can recover, he must show that he has been damnified; the mere fact that the demand has changed its form by having passed into a judgment is not enough." Again, on a bond " to save harmless," it was said, "Here is no absolute agreement to pay, and no agreement to keep the party clear from liability, but merely to indemnify "; and it was held, that, in order to recover, damage, and that involuntarily sustained,

1 Jansen v. Hilton, 10 Johns. 549.

3 Aberdeen v. Blackmar, 6 Hill 324

2

Barry v. Mandell, 10 Johns. 563.

LATER CASES FOLLOW THE TRUE RULE.

525

§ 793. must be shown. It was intimated, however, that " perhaps after a suit commenced, and notice given to the obligor, and neglect by him to defend, the obligee would be warranted in putting a stop to the costs."' In a later case in New York, the whole subject was considered in the Court of Appeals. The covenant was, that the plaintiff should not sustain any damage or molestation by reason of any liability incurred by his deputy. Judg. ment had been recovered against the plaintiff, but not paid; and it was held that he was not entitled to recover.'

In Valentine v. Wheeler, (*) where the contract (condition of bond) was to pay all demands, acceptances for which the plaintiff should be in any way responsible on account of the obligee, and to hold the plaintiff harmless and free from loss or inconvenience on account of any debts and claims of the obligee, the court construed this to be merely a contract of indemnity, and allowed the plaintiff to recover only what he had actually paid. (b) So in an action on a promissory note or other instrument given as an indemnity by a principal to his surety the measure of damages is the amount paid by the surety at any time before trial, and unless he has made an actual payment he can recover nominal damages only.(*) So in Truckie Lodge v. Wood, (d) where the defendant had put up a building for the plaintiff and had allowed liens to attach contrary to his agreements that it should not be "accountable" for any of the materials of construction,

1 Crippen v. Thompson, 6 Barb. 532, 536. Gilbert v. Wiman, I N. Y. 550;

(*) 122 Mass. 566.

acc. Jeffers v. Johnson, 21 N. J. L. 73. In Ohio, see Ohio Life Ins. and Trust Co. v. Reeder, 18 Ohio 35.

() Acc. Martindale v. Brock, 41 Md. 571; Kraft v. Fancher, 44 Md. 204. (©) Cushing v. Gore, 15 Mass. 69; Little v. Little, 13 Pick. 426; Osgood v. Osgood, 39 N. H. 209; Child v. Eureka Powder Works, 44 N. H. 354.

(d) 14 Nev. 293.

it was held that evidence of their amount was properly excluded, as the plaintiff had not paid them, although they were then in process of foreclosure. And later American decisions establish the rule that if the contract is one of indemnity merely, there can be no recovery without actual loss. (*)

* These decisions replace this branch of the law on its proper basis, and declare the salutary principle, that actual compensation can only be given for positive loss unless it is evident that the parties have stipulated for a more extensive remuneration.**

§794. Actual loss always recoverable.-But the actual loss is always recoverable upon a contract of indemnity. So where the defendant guaranteed the payment of a note which provided for interest after maturity at the rate of 20 per cent. per annum, he must pay interest at that rate.(") Upon a contract of indemnity given to a mortgagee upon selling timber from the mortgaged land, the measure of damages is the amount the land was depreciated in value by the removal of the timber. Where the land itself was not injured, and the sale was a fair one, the measure of damages is the amount realized from the sale. (©)

$795. Contracts to save from liability, etc.-* Liability is a very different thing from damage; and the literal object of the covenant is not attained unless the plaintiff may rest on showing mere proof of liability, and is relieved from the obligation of proving damage. The only way to relieve the plaintiff from being liable to be made

(*) Baetjer v. Bors, 7 Ben. 280; Lott v. Mitchell, 32 Cal. 23; Redfield v. Haight, 27 Conn. 31; Hussey v. Collins, 30 Me. 190; Gillespie v. Creswell, 12 G. & J. 36; Conner v. Bean, 43 N. H. 202; Scott v. Tyler, 14 Barb. 202; Selover v. Harpending, 54 N. Y. Super. Ct. 251.

() Gridley v. Capen, 72 Ill. 11.

(c) Curtis v. Baugh, 79 III. 242.

§ 795.

CONTRACTS TO SAVE FROM LIABILITY, ETC.

527

to pay the debt, is for the law to see to its extinguishment.' 1** Thus, on a bond "to save harmless and indemnify against all damages, costs and charges to which the plaintiff's intestate might be subjected, or become liable for," it was said by the Supreme Court of New York:

"There is no doubt as to the general proposition 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, in general, prove actual payment, or that which the law considers equivalent to actual payment; but if the indemnity be not only against actual damage or expense, but also against any liability for damages or expenses, then the party need not wait until he has actually paid such damages, but his right of action is complete when he becomes legally liable for them."

And on the ground that the bond before the court was against liability, the plaintiff was allowed to recover. (*) In the case of Spark v. Heslop,() the defendant, in a letter to the plaintiff requesting him to pay to a banking company for his account a bill of exchange for £400, drawn by one Henderson on and accepted by one Hutchinson, and indorsed by the defendant, and also requesting him to bring an action against Hutchinson for the recovery of the amount and interest, added the following engagement:

"And I hereby agree to be answerable to you for the due payment of the amount of the said bill and interest which you may pay to the said banking company, and for all

1 See, in Virginia, a suit by a sheriff on an indemnity bond against damages on levying an execution upon certain specified property. Dabney v. Catlett, 12 Leigh, 383. See, in the same State, a suit on an indemnity against injury

to a mill-dam. Chapman v. Ross, 12 Leigh 565.

2 Chace v. Hinman, 8 Wend. 452, 456; In re Negus, 7 Wend. 499; and Webb v. Pond, 19 Wend. 423.

(a) So in McGee v. Roen, 4 Abb. Pr. 8; Martin v. Bolenbaugh, 42 Oh. St. 508.

() 1 E. & E. 563.