source: Caselaw Access Project

author: Mr. Justice Story

license: Public Domain

text:
    Jeremiah Carpenter, Plaintiff in error v. The Providence Washington Insurance Company, Defendants in error.
    Action on a policy of insurance vn the “ Glenoo Cotton Factory,” against loss or damage by fire. The policy was dated the 27th day of September. 1838, and Was to endure for one year. -The policy contained-a clause by which it was stipulated by the assured, thajt if any other insurance on the property had been made, and had not been notified to the assurers, and mentioned in or endorsed on the policy, the insurance should be void; and if afterwards any insurance should be made on the property, and the assured should. not give notice of the same to the assurers, and have the same endorsed on the policy, or otherwise acknowledged by the assured in writing, the policy should cease; and in case any other insurance on the property, prior or subsequent to this policy should be made, the assured should not, in case of loss, be entitled to recover more than the portion of the loss should bear to the whole amount insured on the property; the interest of the assured in the property not to be assignable, unless by consent of the assurers, manifested in writing; and if any sale or transfer of the property without such consent is made, the policy to be void and of no effect. On all the policies of insurance made by the insurance company, there was a printed notice of the conditions on which the insurance was made. The declaration alleged that Carpenter was the owner of'the property insured, and was interested in the same to the whole amount insured by the policy ; and that the property had been destroyed by fire. The facts of the case showed that the property had been mortgaged for a part of the purchase-money, and the policy of insurance was held for the benefit of the mortgagor. Another insurance was made by another insurance company, but this was not communicated in writing to the Providence Washington In- . surance Company; nor was the same assented to by them, nor was a memorandum thereof made on the policy. By the Court:
    No doubt can exist that the mortgagor and the mortgagee may each separately insure his own distinct interest in property against loss by fire. But there is this important distinction between the cases; that where the mortgagee insures solely on his own account, it is but an insurance of his debt; and if his debt is afterwards paid or extinguished, the policy ceases from that time to have any operation; and even if the premises insured are subsequently destroyed by fire, he has no right to recover for the loss, for he sustains no damage thereby; neither can the mortgagor take advantage of the policy, for he has no interest whatsoever therein: on the other hand, if the premises are destroyed by fire before any payment or extinguishment of the mortgage, the underwriters are bound to pay the amount of the debt to the mortgagee, if it does not exceed the insurance. Upon such payment, the'underwriters are entitled to an assignment of the debt from the mortgagee, and may recover the same from the mortgagor. The payment of the insurance is not a discharge of the debt, but only changes the creditor.
    When the insurance is made by the mortgagor, he will, notwithstanding the mortgage or other encumbrance, be entitled to recover the full amount of his loss, not exceeding the insurance, since the whole loss is his own. The mortgagee can only insure to the amount of his debt; whereas the mortgagor can insure to the full value of the property, notwithstanding any encumbrances thereon.
    An assignment of a policy by the assured only covers such interest in the premises as he may have had at the time of the insurance, and at the time of the loss. If a loss takes place after the policy has been assigned, the assignee alone is- entitled to recover. The rights of the assignee under the policy cannot be more extensive than the rights of the assignor. Cited the Columbia Insurance Company v. Lawrence, 10 Peters, 507, 512; S Peters, 25, 49.
    Policies of insurance against fire are not deemed in their nature incidents to tne property insured, but they are mere special agreements with the person insuring against such loss or damage as they may sustain; and not the loss, or damage that any other person having an interest as ,g.antee, or mortgagee,'or creditor, or otherwise, may ' sustain by reason of the subsequent destruction by fire.
    The public have an interest in maintaining the validity of the clauses in a policy of insurance against fire. They have a tendency to keep premiums down to the lowest rates,' and to uphold institutions of this sort, so essential to the present state of the country for the protection of the vast interests embarked in manufactures, and on consignments of goods in warehouses.
    Questions on. a policy of insurance are of general commercial law, and depend upon the"construction of a contract of insurance, which is by no means local in’its character, or regulated by any local policy or customs.
    The Circuit Court charged the jury, that at law, whatever might be the case in equity, mere parol notice of another insurance on the same property was not a compliance with the terms of the policy; and that it was necessary in the case of such prior policy, that the same should not only be notified to the company, but should be mentioned in or endorsed on the policy; otherwise the insurance was to be void and of no effect. Held, that this instruction of the Circuit Court was correct. It never can be properly said that the stipulation in the policy is complied with, when there has been no such mention or endorsement as it positively requires; without which it declares, that the policy shall be void and of no effect.
    IN error to the Circuit Court of the United States for the district of Rhode Island.
    The case was argued by Mr. Whipple, for the plaintiff in error; and by Mr. Green and Mr.. Sergpant, for the defendants in error.
   Mr. Justice Story

delivered the opinion of the Court.

This is ’a writ of error to the Circuit Court for the district of Rhode Island.. The original action was brought by Carpenter, the plaintiff in error, against the Providence Washington Insurance Company, the defendants in error, upon a policy of insurance underwritten by the insurance company of fifteen thousand dollars, “on the Glenco Cotton Factory in the state of New York,” owned by Carpenter, against loss or-damage by fire'. The policy was dated on the 27th of September, 1838, and was to endure for one year. ■ Among other clauses m the policy are the following : “And provided further, that in case the insured shall have already any other insurance on the property hereby insured, not notified to this corporation, and mentioned in or endorsed upon this policy, then this insurance shall be void and of no effect.” “ And if the said insured or his assigns shall hereafter make ally other insurance on the same property, and shall not with all reasonable diligence give notice thereof to' this corporation, and have the same endorsed on this instrument, or otherwise acknowledged by them in writing, this policy shall cease and be of no further effect. And in case of any other insurance upon the property hereby insured, whether prior or subsequent to the date of this policy, the insured shall not in case of loss or damage be entitled to demand or recover on this policy any greater portion of the loss or damage sustained than the amount hereby insured shall bear to the whole amount insured on the said property.” “ The interest of the insured in this policy is not assignable', unless by consent of this corporation, manifested in writing; and in case of any transfer or termination of the interest of the insured, either by sale or otherwise, without such consent, this policy shall' henceforth be void and of no effect.” Annexed to the policy are the proposals and conditions on which the policy is asserted' to be made, and among them is the following: “ Notice of all previous insurances upon property insured by this company shall be given to them, and, endorsed on the policy, or otherwise acknowledged by the company in writing, at or before the time of their maxing insurance thereon, otherwise the policy made by this companv shall be -of ho effect.”

The declaration averred that during the continuance of the policy he; Carpenter, was the owner of the property by the policy insured, and was interested in said property to the whole amount so insured by the company; and that on the 9th of April, 1539, the factory was totally destroyed by fire, of which the company had due notice and proof. The cause came on for trial upon the general issue, and a verdict was found for the defendants. The plaintiff took a bill of exceptions to certain instructions refused, and other instructions given by the Court in certain matters of law arising out of the.facts in proof at the trial; and judgment having been given upon the verdict for the defendants, the present writ of error has been brought to ascertain the validity of these exceptions.

The facts which were in proof at the trial were very complicated; but those which are material to the present inquiry will .be, as briefly as -they'may be, here stated. The premises were originally owned in equal moieties by Egbert and Epenetus Reed., In June,, ÍS35, Epenetus Reed conveyed his moiety to- H. M. Wheeler, who gave a bond and mortgage on the premises to secure eight thousand dollars of the purchase-money to Epenetus Reed. On the 17th of October,- 1836, Egbert Reed sold his moiety of the premises to Samuel G. Wheeler, and the latter thereupon gave a bond and mortgage for the sum of ten thousand dollars (the purchase-money) to Epenetus Reed; and on the same day, he, Wheeler, made an-additional agreement under seal with Epenetus Reed, by which he covenanted that he would effect a policy of insurance upon the property in the name of himself, or of himself and Henry M. Wheeler, for the'sum of at least ten .thousand dollars, and assign the same to him, Reed, as collateral security to the said last bond and mortgage, and would annually renew the' policy, or effect a new one, and keep each assigned to Reed as security, in such way and manner as that the said property shall be insured for at least the sum of ten thousand dollars, and the policy held by him as collateral security as aforesaid; and if he neglected so to. insure and assign for the space of ten days, then, that. Reed might- do the same at the expense of Wheeler, and add the premium which he might be compelled to pay with interest thereon, to his said bond and mortgage, and to collect the same therewith, or that Wheeler would pay the -same to him in such other way as he might desire.

Prom the 17th of October, 1836, to the 6th of December, 1837, Henry M'. Wheeler, and Samuel G. Wheeler continued to own the factory in equal moieties, and transacted business. under the firm of Hénry M. Wheeler and Company. On that day Samuel G. Wheeler sold his moiety to Jeremiah Carpenter. On the 18th of April, 1838, Henry M. Wheeler sold and conveyed his moiety to Carpenter, who thus became the sole owner of the entire property. The last conveyance declared the property subject to a mortgage on the premises from Henry M. Wheeler and wife, dated in Juñe, 1835, to Epenetus Reed, on which there was then due six thousand dollars, which Carpenter assumed to pay. There had been a prior policy on -the premises in the Washington Insurance office, which, upon Carpenter’s becoming the sole owner, the company agreed to continue for account of Carpenter, and in case of loss, the amount to be paid to him. That policy expired on the 27th of September, 1838, the day on which the policy, upon which the present suit is brought, was effected.

It is proper farther to state, that other policies on the same tactory had been effected and renewed from time to time, from December 12th, 1836, for the benefit of the successive owners thereof, by another insurance company in Providence called the American Insurance Company; and among these was a policy effected by way of renewal, on the 14th of December, 1837,.,in the name of Henry M. Wheeler and Company, for six thousand dollars; for the benefit of Henry M; Wheeler and Carpenter, (who' were then the joint owners thereof) payable in case of loss to Epenetus Reed. The sale by Henry M. Wheeler to Carpenter, on the 18th of April, 1838, of his moiety having been notified, to the American Insurance Company, the latter agreed to the assignment; and the policy thenceforth became a policy for Carpenter, payable in case of loss to Epenetus Reed. And on the 23d of May, 1838, Carpenter transferred all his interest in the policy to Epenetus Reed. The policy thus effected on the 14th of December, 1837, was (as the Washington Insurance'Company assert) not notified to them at the time of effecting the policy made on the 27th of September following, and declared upon in the préseñt suit; nor was the same ever mentioned in, or endorsed upon the same policy; and upon this account, the company insist that, the present policy is, pursuant to the stipulations contained therein, .utterly void..

Subsequently, viz., on the 11th of December, 1888, the American Insurance Company renewed the policy of 14th of December, 1837, for Carpenter; and at his request, for one year. This renewed policy was never notified to the Washington Insurance Company, nor acknowledged by them in ■ writing; nor does it appear ever to have been actually assigned to Epenetus Reed, down to the period of the loss of the factory by fire. On this account also the Washington Insurance Company insist that tbieir policy of the previous 27th of September, 1838, is, according to the stipulations therein contained, utterly void.

It seems to have been admitted, although not directly proved, that a suit was brought upon the policy of the 14th of December, 1837, at the American Insurance office, after the loss, by Carpenter, as trustee of or for the benefit of Reed, for the amount of the six thousand dollars insured thereby; and that at the November term, 1839, of the Circuit Court, the company sét up as a defence, that there was a material misrepresentation of the cost and value of the property in the factory insured made to them at thé time of the original insurance; and it being intimated by the Court, that if such was the ■ fact it would avoid the policy; the plaintiff acquiesced in that decision, and discontinued or withdrew the action before verdict.

The instructions prayed and refused,-and also the instructions actually given by the Court, are fully set forth in the record. It does hot seem important to the opinion, which we are to pro-no ¿mee, to recite them at large, in totidem verbis; since the points on which they turn admit of a simple and exact exposition.

The first instruction asked the Court, in effect, to say that the original policy of the American Insurance Company, made in December, 1836, and the several renewals thereof, although made in the name of the- Wheelers, (the mortgagors,) being in fact for the use and benefit of Epenetus Reed, the mortgagee, were for all substantial purposes the policy of Reed, and could never inure to the benefit of the Wheelers, or of Carpenter; and that neither the Wheelers nor Carpenter had any such.interest therein as rendered it incumbent on them to give any notice of .its existence to the Washington Insurance Company; and that it was to all intents and purposes as if Reed had effected the said policy in his own name upon his specific interest as mortgagee.- • This instruction the Court refused to give; and on the contrary, instructed the jury, that as by the memorandum made on that policy oh the 14th of December, 1837, the policy was by the consent of all the parties interested therein, and of Carpenter, to be for the benefit of Carpenter, he, Carpenter, became interested therein legally or equitably; and’that notwithstanding the assignment thereof by the Wheelers to Carpenter, and of Carpenter to Reed, the policy and the renqwals thereof ought to have been notified to the Washington Insurance Company, at the time when the policy declared on was underwritten, if the policy was then a subsisting policy, and was so treated by Carpenter and the American Insurance Company; and Carpenter had a legal or equitable interest therein, and was entitled to the benefit thereof.

The question then is here broadly presented, whether the policy of the American Insurance Company is, under all the circumstances, to be treated as a policy exclusively for Reed, the mortgagee, or whether it is to be treated as a policy on the property of, and for the benefit of, the mortgagors. No doubt can exist, that the mortgagor and the mortgagee may each separately insure his own distinct interest in the property. But there is this important distinction between the cases, that where the mortgagee insures solely on his own account, it is but an insurance, of his debt; and if his debt is afterwards paid or extinguished, the policy ceases from that time to have any operation ; and even if the premises insured are subsequently destroyed., by fire, he has no right to recover for the loss, for he sustains no damage thereby ; neither can the mortgagor take advantage of the policy, for he has no interest whatsoever therein. On the other hand, if the premises are destroyed by fire before any payn ent or extinguishment -of the mortgage, the underwriters are' bound to pay the amount of the .debt to the mortgagee, if-it does not exceed the insurance. But, then, upon such payment, the underwriters are entitled to an assignment of the debt from the mortgagee, apd may recover the same amount from the mortgagor, either at law or in equity, according to circumstances; for the payment of the insurance by the underwriters does not, in such a casé, discharge the mortgagor from the debt but only changes the creditor.

Far different is the case where an insurance is made by the mortgagor on the premises on his own account; for, notwithstanding any mortgage or other encumbrance upon the premises, he vvill-be entitled to recover the full amount of ,his loss, not exceeding the insurance; since the whole loss is his own, and he remains personally liable to the mortgagee or other encumbrancer, for the full amount of the debt or encumbrance.

These principles we take to be unquestionable, and the necessary result of the doctrines of law applicable to insurances by the mortgagor and the mortgagee. • If, then, a mortgagor procures a policy on the property against fire, and he afterwards assigns the policy to the mortgagee with the consent of. the underwriters, (if that is required by the contract to give it validity,) as collateral security, that assignment operates solely as an equitable transfer of the policy so as to enable the mortgagee to recover the amount due in case of loss'; but it ddes not displace the- interest of the mortgagor in the premises insured. On the contrary, the insurance is still his insurance, and on his property, and for his account. And so essential is this, that if the mortgagor should transfer the property to a third person, without the consent of the underwriters, so as to divest all his interest therein; and.then a loss should occur, no recovery can be had therefore against the underwriters, because the assured has.ceased to have any interest therein, and the purchaser has no right or interest in the policy. Another essential difference between the case, of a mortgagor and that of a mortgagee. (which has been already hinted at) is,> that the lattef can insure for himself at most only to the extent of his debt, whereas the mortgagor can insure to the, full value of the property, notwithstanding any encumbrances thereon for the reasons already stated.

Some of these principles are completely illustrated by the terms of this very policy of the American Insurance Company; and the like' clauses' are to be found in the policies of the Washington Insurance Company, now under consideration. Thus, although .it is expressly provided, “that the assured may assign this policy to Epenetus Reed;” yet it is at the same time provided, that “ the interest of the assured in this policy is not. assignable unléss by the consent of this corporation, manifested its writing; and in case of any transfer or termination of the interest of the insured, either by sale or otherwise, without such consent, this policy shall from thenceforth be. void and of no effect.” ■ Now, the interest herd last spoken of, manifestly, is the interest of the owner in the premises insured, and not merely his interest in the policy.

But independently of: any special clauses' of this sort, it is clear, both- upon principle a'; authority, that an assignment of a policy by the insured only covers such interest in the premises as he. may have at the time of the insurance, and at the time of the loss. It is the'property of the insured, and his alone that is designed to be covered; and when he parts with.his title to. the property, he can sustain no future loss or damage by .fire, but the loss, if any, must be that of his grantee. The rights of the assignee cannot be more extensive under t£[e policy than the rights of. the assignor; and as to the ' grantee of the property, he can take nothing by the grant in the policy, since it is not in any just or legal sense attached to the property, or an incident thereto. This doctrine was laid down in very expressive terms by Lord Chancellor King, so long ago as in the'case of Lynch v. Danzell, 4 Bro. Parl. Rep. 432, edit. Turb. 2 Marsh. Insur. b. 4, ch. 4, 803, which was an insurance against fire. “ These policies,” said he, “ are not insurances of the specific things mentioned to be insured, nor do such insurances attach on the realty, or in any manner go with the same as incident thereto by any conveyance or assignment, but they are only special agreements with the persons insuring against such loss or damage as they may sustain: The party insured must have a property at the time of the loss or he can sustain no loss, and consequently can be entitled to no satisfaction.” “ These policies are not in their nature assignable, nor is the interest in them ever intended to be transferrable from one to another, without the express consent of the office.” Now, this case is the stronger because it was a case where not only the policy but the premises had been assigned to the very parties who sought the benefit of the insurance. The same .doctrine, was asserted by Lord Hardwicke, in the case of The Sadlers’ Company v. Badcock, 2 Atk. 554, where there had been an assignment of the policy, after the -insured ceased to have any interest in the premises; upon that occasion Lord Hardwicke said, “ I am of opinion [that] the insured should have an interest or property at the time of the insuring and at the time the fire happens.” “The society are to make satisfaction in case of any loss by fire. To whom or for w;hat loss are they to make satisfaction ? Why, to the person insured, and for the loss he may have sustained ; for it cannot properly be called insuring the thing, for there is no possibility of doing it, and therefore must taean insuring the person from damageand he cited with approbation the very language of Lord King, already stated in Lynch v. Danzell. The authority of these cases was fully recognised and acted upon by this Court in the case of The Columbia Insurance Company of Alexandria v. Lawrence, 10 Peters, 507, 512, where the Court said, “ We know of no principle of law or of equity, by which a mortgagee has a right to claim the benefit of a policy underwritten for the mortgagor, on the mortgaged premises, in case of' a loss by fire. It is not attached or an incident to his mortgage. ,It,is strictly a personal contract for the benefit of the mortgagor, to which the mortgagee has no more title than any other creditor.” .

For these reasons it is apparent that Epenetus Reed, as mortgagee, and merely in that character, can have no interest in or right to the policy in the American office, now under consideration. The insurance is not made by him, or in his name, or upon his account. The policy was originally made in December, 1836, for Henry M. Wheeler and Company who were then the owners of the factory; and by its very terms it is an insurance for them against loss or damage by fire. When the policy was renewed in December, 1837, it was so renewed for the benefit of Henry M. Wheeler and Jeremiah Carpenter, who had then become the joint owners thereof. When subsequently, in April, 183S, Carpenter became the sole owner of the premises, the company agreed to the' transfer and assignment of the entirety to Carpenter, so that henceforth it became a policy upon his sole property, for his account and benefit; in the same manner and with the same legal effect as if the policy had been renewed in his own name.

But it is said that there is a clause in the original policy, and it is equally applicable to the renewals, “ that the assured may assign this policy to Epenetus Reed.” And the argument is, that this liberty to assign, when the assignment to Reed was actually executed, transferred the whole interest in the property insured, as well as in the policy, to Reed, and made the policy to all intents and purposes a policy for the sole benefit of Reed as mortgagee, as much as if the insurance had been made in his own name.

To this suggestion several answers may be made, each of which is equally fatal to the construction contended for. In the first place, although an assignment to Reed was authorized by the policy, it was never disclosed to the American Insurance Company for what purposes or objects the assignment was to be made, whether to Reed as trustee, or agent of the insured, or for fugitive and temporary purposes, or as' a security -for debts, or whether it was designed to be absolute and uncoif- ional. .Neither was it disclosed to the company that Reed was in point of fact a mortgagee; nor were the company requested to insure his interest, as mortgagee, or to make the insurance exclusively upon his interest and for his account. Now, as has been already seen, an insurance for a mortgagor, and one. for a mortgagee, involve very different considerations, responsibilities, rights, and duties; and the company might well be willing to make an insurance upon the property on account of the mortgagors, when they might be unwilling to make any on account of the mortgagee; and it is clear, upon principle, that no policy can or ought to be deemed a policy exclusively upon the interest of the mortgagee, unless the company have notice that it is so designed, and they assent to it. A mortgage interest is without doubt'an insurable interest; but then it-is a special interest, and should be made known to the underwriters. Mr. Marshall, in his .Treatise on Insurance against Fire, says, “ It is not necessary, however, in all cases, in order to constitute an insurable interest, that the insured shall in every instance have the absolute and unqualified property of the effects insured. A trustee, a mortgagee, a reversioner, a factor, an agent, with the custody of goods to be sold upon commission, may insure; but with this caution, that the nature of the property be distinctly specified.” 2 Marsh. Insur. b. 4, ch. 2, p. 789. This language was quoted with approbation by this Court in the case of The Columbia Insurance Company v. Lawrence, 2 Peters, 25, 49, and the reason for it is there given by the Court. “ Generally speaking,” said the Court, “insurances against fire are made in the confidence that the assured will use all the precautions to avoid the calamity insured against, which would be suggested by his interest The extent of his interest must always influence the underwriter in taking or rejecting the risk, and in estimating the premium. So far as it may influence him in these respects it’ought to be communicated to him. Underwriters do not rely so much upon the principles, as on the interest of the assured; and it would seem, thérefore, to' be always material that they should know how- far this interest is engaged in guarding the property from loss.” Now, since there is no pretence to say, that the interest of Reed as mortgagee was disclosed to the company, or that the company agreed to insure his interest as mortgagee, and that only; it would seem to follow, thát the policy cannot be construed to operate in the manner propounded by the instruction prayed by the plaintiff.

In the next place the policy itself upon its very terms -admits of no such interpretation; and indeed requires a different interpretation to give due effect to those terms. The policy, as has been already stated, is in the name of the owners, and for their account, and on their property. If it was designed solely for Reed, why was he not named, and he alone named as the insured ? How can any Court be at liberty, without other explanatory words, to construe a policy made by A. in his own name, on his property, to be not a policy on his own interest, but on the interest of B. who is a stranger to the policy? The languc ge of Lord King, and Lord Hardwicke, and of this Court, in the cases already cited, show conclusively that policies of this sort are not deemed in their nature incidents to the property insured, but that they' are mere special agreements with the persons insuring against such loss or damage as they may sustain, and hot the loss oy :damage that any bther person having an interest, as grantée, or mortgagee, or creditor, or otherwise, may sustain, by reason of'a subsequent destruction thereof by fire. It would seem, then, repugnant to the terms of this policy to construe it to be not. what it purports to be, an insurance for the owner of the property, but an insurance for an undisclosed creditor or mortgagee. It would materially change the .language, the .objects, and the obligations of the parties thereto-

In the next place, it would, in our judgment, be inconsistent with the manifest intention, as well of the insured, as of Reed, to give it such an interpretation. The agreement between Samuel G. Wheeler and Reed, of the 17th of October, 1836, demonstrates, in the clearest manner, that the policy was to be effected by the Wheelers as owners,.and to be assigned after it was effected by them to Reed, as collateral security for his bond and mortgage; and it was only upon their neglect to procure such insurance and assign the policy, that Reed was to be at liberty to do the same at their expense. The language of the instrument is, “I do hereby agree with Epenetus Reed, &c;, that I will effect a policy of insurance upon the said property in the name of myself; or of myself and Henry M. Wheeler, for the sum of at least ten thousand dollars, and assign the same to him as collateral security to said bond and mortgage; and that I will annually renew the said policy, or effect a new one, and keep each assigned to, him as security, &c., and the policy held by him -as. collateral security; and if I neglect so to insure and assign for the space of ten days, then, that said Reed may do the same at my expense/’ &c.. Now, language more direct than this can scarcely be imagined to express the intentions of the parties, that the insurance was to be made in the name of the owners, upon their interest in the property, and for their account, and the policy to be assigned as collateral security to Reed. Not one word is said that the insurance was to be solely and exclusively for Reed, as mortgagee; for in such a case he would hold the policy as a principal, and not as a.collateral security. ' It is obvious from the language also that Reed was not to be the absolute owner of the policy, as he would' be if made for him exclusively as mortgagee, but ..he was to hold it as collateral security. If, then, the. debt of Reed should. be paid or extinguished in the whole or in part, would-not the right of the Owners correspondently attach to the policy? If-the whole debt was paid, would they not. be entitled to a re-assignment thereof? Yet, unless in such’a-case the -policy attached to the property for their own account and benefit, the re-assignment would be a mere nullity. To us it-seems beyond all reasonable doubt, that the policy under this agreement was designed by .the parties to be on account of the owners and tor their benefit, and that it. was to be only collateral security to Reed to the extent of any interest he might' have therein in case of loss by fire. In this view it operated as a security to the owners against the entire loss. In any other view, they would only change their creditors upon any loss, from Reed to the underwriters.

B'esides, in point of fact, the policy must have its effect and operation from the time .of its execution,'and not otherwise. • The language of the policy is, “that the assured may assign this policy to Epenetus Reed;” not that this policy shall now be for Epenetus Reed or on his interest. The owners, then, had an option, whether to assign or not. If they never had. assigned the policy to Reed at- all, and a loss had occurred, would not the loss have been payable to the .owners ? In point of fact, the policy, although made on the 12th of December, 1836, was not assigned to Reed until the 21st of January,. 1837. . In whom did the interest then originally, and in the intermediate time, vest, under the -policy ? Clearly in the owners; for they and they only had any interest in the property or the policy until the assignment'was made. The authorities all hold that the party insured must have an interest at the time of the making of the policy, as well as at the time of the loss; and if Reed had no interest upon which the policy would attach by its' terms when the insurance was made, but acquired it afterwards, and the policy had been made upon his sole account, it would 'have been a mere nullity. The subsequent renewals were to the same effect, and for the same purposes and parties as the original policy. Carpenter, after he become sole owner, did not assign the policy to Reed until the 23d of May, 1838, more than five months after the renewal, and more than one month after the conveyance of the whole property to himself. Now, the question may be here again asked, whether if the loss had occurred before these assignments, a recovery upon the policy might not have been had by Carpenter, in his own name, and for his -own account? We think that the question must be answered in the affirmative; and if so, then it demonstrates that the policy made in the name of the owners, was for their account and benefit; and - payment only was, in case of loss, to be made to Reed.

For these reasons we are of opinion that the first instruction asked of the Court was rightly refused; and that the instruction given was entirely correct.

The second instruction asked, proceeds upon the ground that although the policy of the American Insurance Company, of the 6th of December, 1836, was good upon its face, yet if, in point of fact, it was procured by a material misrepresentation by the owners of the cost and value of the premises insured, it was to be deemed utterly null and void,'and therefore as a mill and void policy, notice thereof need not have been given to the Washington Insurance Company at the time of underwriting the policy declared on. The Couft refused to give the instruction; and, on-.the contrary, instructed the jury that if the policy of the American Insurance Company was, at the time when that at the Washington Insurance office was made, treated by all the parties thereto as a subsisting and valid policy, and had never, in fact, been avoided; but was still held by the assured as valid; then that notice thereof ought to have been given to the Washington Insurance Company, and if it was not', the policy declared on was void.

We nre of opinion that the instruction, as asked, was properly refused; and that given was correct. It is not true, that because a policy is procured by misrepresentation of material facts, it is therefore to be treated, in the sense of the law, as utterly void ab initio. It is merely voidable, and may be avoided by the underwriters upon due proof of the facts; but until so avoided, it must be treated for all practical purposes as a subsisting policy. In this very case the policy has never, to this very day, been avoided, or surrendered to the company. It is still held by the assured; and he may, if he pleases, bring an action thereon to-morrow; and unless the undérwriters should at the trial prove the misrepresentation, he will be entitled to recover. But the question is not how the policy may now bé treated by the parties, but how was it treated by them at the time when the policy declared on was made. It was then a subsisting policy, treated by all parties as valid, and supposed by the underwriters to be so. . The misrepresentation does not then seem to have been known to the American Insurance Company. It was an extrinsic fact; and if known to the American Insurance Company, it certainly was not known to the Washington Insurance Company. How were the latter to arrive at any knowledge of the facts of misrepresentation ; and how were they to avail, themselves of the fact, if the American Insurance Company should not choose to insist upon it ? Nor is it immaterial in the present case, as was suggested at the bar, that th'e present plaintiff now seeks to avail himself of his own misrepresentation, or that of those under whom he claims, to protect himself against his own laches in not giving notice of the ■policy to the underwriters. And it may well be doubted'whether a party to a policy can be allowed to set up his own misrepresentations to avoid the obligations deducible from his own contract^ Be this as it may, it is in our judgment free from all reasonable doubt, that notice of a voidable policy must be given to the underwriters ; for such a case falls within the words and the meaning of the stipulations in the policy. It is a prior policy, and it Has a legal existence until avoided.

Indeed, we are not prepared to say that the .Court might not have gone farther, and have held that a policy — existing and in the hands of the insured, and not utterly void upon-its very'face, without any reference whatever to any extrinsic-facts — should have been notified to the underwriters; even although by proofs, afforded by such extrinsic facts, it might be held in its vjery origin and concoctiop a nullity. And this leads us to say a few words upon the nature and importance and sound policy of the clauses in fire policies, respecting notice.of prior and subsequent policies. They are designed to enable the • underwriters, who are almost necessarily ignorant of many facts which might materially affect their rights and interests, to judge whether :they ought to insure •at all, or for what premium; and to ascertain whether there still remains any such substantial interest of. the insured in the pre.mises insured, as will guaranty on his part, vigilance, care, and strenuous exertions to preserve the property. To quote the. language of this- Court, in the passage already cited, the underwriters do not rely so much upon the principles as upon the. interest of. the assured. Besides, in these policies there is an express provision that in cases of any prior or subsequent insurances, the underwriters are to be liable only for a rateable proportion of the loss or damage as the amount insured by them bears to the whole amount insured thereon.. So that it constitutes a very important ingredient in ascertaining the amount which they are liable to contribute towards any loss; and whether there be any other insurance or not upon the property, is a fact perfectly known to the insured, and not easily or ordinarily within the meqns of knowledge of the underwriters. The public, toq, have an interest in maintaining .the validity of these clauses, and giving them, full effect and operation..- - They have a tendency to keep premiums down to the. lowest rates, and to uphold institutions of this- sort, so essential in the present state of our country for the protection of the vast interests embarked in manufactures, and on consignments of goods in warehouses. If these clauses are to be construed with á close and scrutinizing jealousy, when they may be complied with in all cases by ordinary good faith, and ordinary diligence on the part of the insured, the effect will be to discourage the establishment of fire insurance companies, or to restrict their operations to cases where the parties and 'the premises are within the personal observation and knowledge of the underwriters; Such a course would necessarily have a tendency to enhance premiums; and to make it difficult to obtain insurances where the parties live, or the property is situate, at a distance from the place where the insurance is sought.

But be these considerations as they may, wé see no reason why, as these clauses are a known part of the stipulations of the-policy, they ought not to.receive a fair and reasonable interpretation according to their terms and obvious import. The insured has no right, to complain, for he assents to comply with all the stipulations on his side, in order to entitle himself to the benefit of the contract, which upon reason or principle, he has no right to ask the Court to dispense with the performance of his own part of the agreement, and yet to bind the other party to obligations, which, but for those stipulations^ would not have been entered into. We are then of opinion that there is no error in the second instruction. On the contrary, there is strong ground to. contend that the stipulations in- the policy as to notice of any prior and subsequent policies, were designed to apply to all cases, of policies then existing in point of fact; without any inquiry into their original validity and effect, or whether they might be void or voidable.

We have not thought it necessary upon this occasion to go into an examination of the cases cited from the New York and Massachusetts Reports, either upon this last point, or upon the former point. The decisions in those cases are certainly open to some of the grave doubts and difficulties suggested at the bar, as to their true bearing and results. The circumstances, however, attending them, are distinguishable from those of the case now before us, and they certainly cannot be admitted to govern it. The questions under our consideration, are questions of general commercial law, and depend upon the construction of a contract of insurance, which is by no means, local in its character, or regulated by any local ■ policy or customs. Whatever respect, therefore, the decisions of state tribunals may have on such a subject, and they certainly are entitled to great respect, they cannot conclude the judgment of this Court. On the contrary, we áre bound to interpret this instrument according to our own opinion of its true intent and objects, aided by all the lights which can be obtained from all external sources whatsoever; and if the result to which we have arrived differs from that of these learned state Courts, we may regret it, but it cannot be permitted to alter our judgment.

The third instruction prayed the Court to instruct the jury that if the Washington Insurance Company had notice, in fact, of the existence of the policy in the American office, that was, in law, a compliance with the terms of the policy.” The' Court refused to give the instruction as prayed; but instructed the jury that,' at law, whatever might be the case in.equity, mere parol notice of such insurance was not, of itself, sufficient to comply with the requirements of the policy declared on; but that it was necessary, in case of any such prior policy, that the same should not only be notified to the company, but should be mentioned in or endorsed upon the policy; otherwise the insurance wa's to be void and of no effect. We think this instruction was perfectly correct. It merely expresses the very language and sense of the stipulation of the policy; and it can never be properly said that the stipulation in the policy is complied with, when there has been no such mention or endorsement as it positively requires; and without which it declares the policy shall henceforth be void and of no effect. .

The fourth and last instruction given by the Court, stands upon the same considerations, as those already mentioned; and it would be a useless task to repeat'-them. If the other instructions given, by the Court were correct, it is admitted that this cannot be deemed erroneous.

Upon the whole, our opinion is, that the judgment of the Circuit Court ought to be affirmed with costs.


author: Mr. Chief Justice Taney

text:
    Eleazer Carver, Plaintiff in error, v. Joseph A. Hyde and others, Defendants in error.
    Action for damages for a violation of a patent for an improvement on the cotton gin. The charge of the Circuit Court of Massachusetts upon the facts in the case, was in favour of the defendants; and the judgment in favour of the defendants on the ver diet of the jury was held to be correct.
    ON a writ of error to the Circuit Court of the United States, for the district of Massachusetts.
    The plaintiff in error instituted a suit for the recovery of damages for the infringement of his patent for an improvement in the use of cotton gins. The Circuit Court, on the verdict of the jury, gave a judgment for the defendants. A bill of exceptions-having been tendered by the plaintiff to the charge of the Court, on the facts, in favour of the defendant, given by the Court. The plaintiff prosecuted this writ of error.
    The case was submitted to the Court, on printed arguments, by •Dexter, for. the plaintiff in error; and by Messrs. Fletcher and Phillips, for .the defendants.
   Mr. Chief Justice Taney

delivered the opinion of the Court.

This case is brought here by writ of error, directed to the Circuit Court of the United States for the district of Massachusetts. It is an action by the plaintiff in error against the defendants, to recover damages for the infringement of a patent right, obtained by the plaintiff on the 16th of November, 1839. The patent'is in the usual form, and tjhe questions before ,■ us depend upon the construction of the specification, which is -in' the following words, v “ Be it known, that I, Eleazer Carver, of Bridgewater, in the county of Plymouth, and state of Massachusetts, have invented a certain improvement in the manner of forming the ribs of saw-gins, for the ginning of cottonand I do hereby' declare that the following is a full and exact description thereof.

“ In the cotton-gin, as heretofore known and used, the fibres of the cotton are drawn by the teeth of circular saws, through a grating formed of a number of parallél bars, or ribs, having spaces between them sufficient to allow the saws to pass, carrying the fibres of the cotton with them, (which are then brushed off by a revolving brush,) but not wide enough to let the seeds, and other foreign substancfes, pass through. Above the saws the ribs come in close contract, thus forming a shoulder at the top of the space between- them. Various forms have been given to the 'bars or ribs,- with a view to procure a free passage of the cotton; but the cotton-gin, as heretofore made, has been always subject to the inconvenience of. the grate becoming choked by hard masses of cotton and motes, or false seeds, collecting in the upper part of the spaces bétwéen the ribs, and impeding the action of the saws, and also preventing the mass of cotton which is drawn by, the saws up to the top of the spaces, but not drawn through them, from rolling back freely, so as to pass again over the saws, as it should do.

“ My improvement, which I am about to describe, is intended to obviate these difficulties; and it consists in giving a new'form to' the ribs composing the grate. Instead'of-making the ribs -of a bar of iron of equal thickness throughout, so that the upper and under surfaces shall be parallel, I so form the rib, that at the part where the saws pass through, carrying the cotton with them, the space, or depth between the upper and outer surface, and the lower, or inner surface, shall be greater than the thickness of the rib in other parts has heretofore been, or needs to be, and so great ais to be equal to the length of the fibre of the cotton to be ginned,'so that the fibre shall be kept extended between the ribs for about its full length, while it, is drawn through them by the saws. This mill, of course, requires, either that the rib should be as thick at that part as the length of the fibre, or that the rib should be forked, or divided, about that part, so. that the upper, or outer surface, and the under, or inner surface, shall diverge to that distance of .each other, instead of being parallel as formerly, when the rib was made of one bar of uniform thickness. This under, or inner surface, then takes a new direction upwards, and slopes towards the upper, or outer surface, until the two surfaces meet above the periphery of the saw; This last described part of the under surface is fastened against the framework of the gin. The operation of this improvement is, that those fibres of the cotton which are so firmly caught by the teeth of the saws as to be disengaged from the mass of the cotton to be ginned, are drawn out to their full length, and pass clear through the grate, and are then brushed off by the revolving brush, while the fibres that are drawn into the grate, but not caught by the teeth of the saws firmly enough to be carried quite through, are disengaged,- and pass up to where the under surface meets the upper surface,above the saws, and finding no obstruction there, pass back out. of the grate without cheking it, and roll down again with the mass of unginned cotton, and are caught below by the saws, and carried up again, and so on until all the fibres are drawn through.”

The specification then proceeds to describe the invention more particularly, by referring to and explaining the drawings annexed to it, showing the advantages of his'improvement, the manner of arranging the ribs in the gin, and the mode of inserting and fastening them in the framework.- This description could not be comprehended without an exact drawing; nor is it necessary, 'in order to understand the questions of law in dispute between the parties. It is therefore omitted. After giving this description, the specification states the improvement, of which the patentee claims to be the inventor, as follows.

Having thus described my improved rib and its advantages, I now claim, as my invention, and desire to secure,' by letters patent, the increasing the depth, or space, between the upper, or outer surface of the rib, and the lower, or inner surface of it, at the part where the cotton is drawn through the grate, so that it shall be equal to the length of the fibre of the cotton to be ginned, (whether this be done by making the ribs thicker at that part, or by. a fork, or division of the rib, or by any other variation' of the particular form;) and I also claim,' as part of the said improvement, the sloping up of the lower, or inner surface of the rib, so as to meet the upper, or outer surface above the saws, leaving, When the rib is inserted into the frame, no break or shoulder between the two surfaces, but a smooth and Uninterrupted passage upwards between the ribs, as'above described.”

At the trial in the Circuit Court, the plaintiff in error, after .having produced his patent with the schedule annexed to it, offered ip evidence, by the testimony of witnesses skilled in the art, that the rib described in the plaintiff’s specification was a new and useful improvement; that the fastening of the rib to the framework in the manner therein stated had nothing to do with the ginning, but was only necessary to keep the rib firm; that the rib of the defendants was substantially in principle like that of the plaintiff, and operated in the same manner, and produced the same effect; and that, in their opinion, it- differed from the plaintiff’s rib only by taking away a part which was wholly immaterial in the operation of ginning.

The defendants then produced'witnesses skilled in the art, who testified that the ribs of the defendants did not substantially operate in the same manner with the plaintiff’s, but were different in form and principle, and proceeded to state the particulars in which they differed; and testified that the defendants’ ribs were entirely detached from the breast band,-and stood out in front of it, like the bar of the “ Edenton grate,” which was known and in use long before the plaintiff’s; and that the front and back surfaces of the defendants’ ribs did not slope and meet at the upper end above the saws as the plaintiff described his to do, and was not shaped as the plaintiff’s was exhibited and described in his drawings, specification, and claim.

“ Whereupon the defendants’ counsel insisted that the ribs of the defendant,were, according tq the whole evidence, substantially different from those described and claimed -by the plaintiff, not only because, as the counsel alleged, it appeared by the whole of said evidence, that in the defendants’ said ribs, no part of the under surface sloped upwards, and met the upper' surface above the periphery of the saw, and was there fastened against the framework of the gin; but, also, in the other particulars above described.

“ But the plaintiff’s counsel insisted that said ribs were substantially alike, in all respects; and that in the rib of the defendants’ the 'under surface did, according to said evidence, in fact, slope upwards, and meet the upper surface above the periphery of the saw, but that it was not necessary to the plaintiff’s invention, as described and claimed in his said specification; nor was it essential to the said invention, in fact, that the under surface of the rib should be fastened against the framework of the gin, where the two surfaces meet, above the periphery of the saw.

' "And the presiding judge who sat at the trial, aforesaid, did théh and there declare and deliver his opinion to the jury aforesaid, as follows, ,viz., That to entitle the plaintiff to maintain the action and'issue aforesaid, on his part, it was necessary, for the jury to be satisfied that the defendants had substantially violated and infringed the patent right of the plaintiff, ,as set forth and described in his patent. ' That if the defendants Used only such part of the said patented improvement as was known and used before his supposed invention, it was no violation or infringement thereof; that the improvement of the plaintiff, as specified and summed by him, was in the following .terms, viz.:

"I now cláim as my invention, and desire to secure, by letters patent, the increasing the depth or space between the upper or outer surface of the rib, and the lower or inner surface of it, at the part where the cotton is drawn through the grate, so that it shall be equal to the length of the.fibre of the cotton to be ginned,, (whether this be done by making the ribs thicker at that part, or by a fork or division of the rib, or by any other varia-. cion of the particular form;) and I also claim as part of the. same improvement, the sloping up of the lower or inner surface of the rib, so as to meet the upper or outer surface above the saws, leaving, when the rib is inserted into the- frame, no break or shoulder between the two surfaces, but a smooth and uninterrupted passage upwards between the ribs, as above described.”

That the true construction and interpretation of the specification and summing is, that it claims and states, as a substantial part of the -improvement, not only the increasing the depth or space 'between the upper or outer surface of the rib, and the lower or inner surface thereof, at the part where the cotton is drawn through the grate, so that it shall be equal to the length of the fibre of the, cotton to be ginned- in thé manner above stated, but it also claims and states as a substantial part of the same improvement, the sloping up of the lower and-inner surface-of the rib, so as to meet the upper or outer surface above the saws, leaving when the rib is inserted in the framework, no break or shoulder between the two surfaces, but a smooth and uninterrupted passage upwards between the. ribs, as described in the same specification; and that thereby the fixing or fastening of the ribs against the framework in the manner stated in the specification,, is made, by the- patentee a substantial. part of the said improvement; so that if the defendants do not fix or fasten the ribs.of their machine against the framework in the manner stated in the specification, either at all or substantially in the same manner as. the patentee, or fix or fasten it only in a manner known and., used before the plaintiff ’s supposed invention, the defendáis are not guilty of any violation or infringement of the plaintiff’s patent, as stated in the declaration; and with this declaration, the said presiding judge left the said cause to the jury, who thereupon then and there returned a verdict for-the' defendants.

It will be seen by this statement that the question, of law pre-, sented by- the exception is a very narrow one, and depends altogether on the construction of the specification. And it is difficult to make it understood, without the aid of the drawing or model. ,

The plaintiff considers the invention secured by the patent to consist of the rib only — and of that part of .the rib which by its form increases the depth between its upper or outer surface, and the lower or inner one, at the place where the cotton is drawn through the grate. He insists that the sloping up of the rib, so as to meet the upper or outer surface of the saw as well as the manner of fastening it against the. framework of the gin, as mentioned.in his .specification, are not substantial or essential parts of his invention.

The question is, whether the", are claimed as such by his patent. The Circuit Court held hat they were, so claimed; and we think the opinion, was clearly right. They are expressly-stated by the patentee to be a part of the improverrent for which he asks a patent, and he describes particularly the smooth and uninterrupted passage up ward between the ribs, leaving no break or shoulder between the two surfaces, when the ribs were inserted in the framej as one of the advantages resulting from his improvement. And this smooth and. uninterrupted surface must necessarily depend not merely on the form of the rib, but also in the manher in which it is. connected with the framework.

The rib in question is not an invention to be used by itself, but an improvement upon that portion, of the cotton gin; and is to be used in connection with other parts of a machine which has been publicly known and used a long time. There must, therefore, be some mode of fastening and connecting it with the other machinery; and the effect produced by the rib necessarily depends in a great degree upon the mode in which it is arranged and connected with the saw, and the other parts of the machine. He specifies the mode and claims it as part of his invention. According to his statement his improvement consisted in the form of the rib which increased the depth between the upper and lower surface, at the part where the cotton is drawn through the grate, in the sloping up so as .to meet the upper or outer surface .above the saws, and in the smooth and uninterrupted passage produced by the manner in which it was connected with -the frame. These three things he represents as constituting his improvement, and they are all combined together in his specification and claim, making together one invention to be used in connection with the other and old machinery of the cotton gin. And the drawing which accompanies his patent shows the manner in which the rib is sloped and arranged with the saw and annexed to the framework, in order to attain the object of the invention.

■ Now the end to be accomplished' is not the subject of a patent. The invention consists in the new and useful means of obtaining it. And if the defendant had by a rib of a substantially different form, or differently arranged with the saw, or not fastened at all to the frame, made an improvement which more effectually secured the object intended to be accomplished by the plaintiff’s patent, it would be difficult to maintain that it could not be lawfully used, because it produced the same result with the plaintiff’s invention.

The usefulness of the rib depends altogether, as described in the specification, upon the manner of its connection with the periphery of the saw, and with the framework. And if, therefore, as was said by the Circuit Court, the rib made by the defendant was not fastened at all to the framework, or in a manner substantially different from the plaintiff’s, or in a manner ¿nown and used before the plaintiff’s invention, it was no infringement- of his patent. And whether the manner was the same in substance or not, was a question, of fact for the jury, and as they found for the defendant, we must assume that it was substantially different.

■ The judgment of the Circuit Court is therefore affirmed.


text:
    James Todd, Thomas Warren, Tristram G Mitchell, William C. Mitchell, and Woodbury Storer, Administrator of Israel Waterhouse, Deceased, v. Charles Daniel, Complainant and Appellee.
    Motion to dismiss an appeal. The appellants were the original defendants. After the decree of the Circuit Court, an appeal was claimed by all the defendants, and allowed by the Court. A part of the defendants, who had . originally claimed the- appeal, before any further proceedings abandoned it; and the residue of them, excepting Todd, have, since, the appeal was filed, abandoned it, and Todd only has entered his appearance in the Supreme Court. The record stood in the names of all the appellants. A motion was made to dismiss'the appeal, for irregularity and want of jurisdiction ; on the ground that jt cannot-be maintained in behalf of Todd alone. The Court refused to dismiss the appeal.
    The proper rule in cases of this • sort, where there are various defendants, seems to be that all the defendants affected by a joint decree, (although it may be -otherwise, where the defendants have separate and distinct interests, and the decree is several, add does not' jointly affect all,) should be joined in the appeal; and if any of them refuse or decline upon notice and process, (in the nature of a summons, and severance in a writ of error,) to pe issued in the Court below, to become parties to the appeal, then that the other defendants should be at liberty to prosecute the appeal for. themselves -nd upon their own account; and the appeal as to the others be pronounced to be deserted, and the decree of the Court below as to them be proceeded in and executed.
    APPEAL from the Circuit Court of the United States for the district of Maine.
    Mr. Davies, for the appellée, moved to dismiss the appeal. He stated that the appeal had been actually entered in the Circuit Court, in the names of the appellants mentioned on the record; but that there were other defendants in the .Circuit Court, against whom the decree had been rendered^ who had not joined in the appeal, not having had any regular notice of such appeal. They were Hayes, Gouch, and Westcott.
    Of the above-named appellants, James Todd, alone, enters his appearance here, by his counsel, Francis O. J. Smith) Esq.-., who now brings up the record, and proposes to prosecute the" appeal on behalf of Todd in this Court, singly, without any of the rest; whose namfes, however, (appearing in the record as appellants,) are extended on the docket by the clerk.
    The counsel for-Todd, by writing filed in the case here, February 16th, disclaims and disavows any and all appearance for either of the other defendants, named as appellants.
    The other defendants .who joined in the appeal have subsequently abandoned any further prosecution of it; and have given notice to the complainant’s counsel to that effect, submitting to the decree, and some of them offering to pay their respective amounts, according to' the decree of the Circuit Court; the last notice by the Mitchells being dated January 28th-, 1842, at which time the appeal here, had not been entered, nor the record filed.
    Mr. Smith, for the appellant,
    James Todd, opposed the motion. The only party here actually interested in the appeal is Mr. Todd. Although he had been only an agent in the transaction, out of which the controversy involved in this suit arose, the decree of the Circuit Court affected him as principal, and subjected him to the payment of a considerable sum of money. It was to controvert this claim that the appeal had been prosecuted. If others who had been appellants had withdrawn their appeal, or if some of them did not- enter an appeal, the party who now asks to maintain it should not be injured by this condition of the case. '
   Mr. Justice Story

delivered the opinion of the Court.

This is an appeal from the decree of the Circuit Court for the district of Maine, in a suit in equity, in which the appellants were the original defendants. After the decree was. made, an appeal was claimed by all the defendants, and allowed by the Court. A part of the defendants who originally claimed the appeal before any further proceedings, abandoned their appeal; and thfe’residue of them, excepting Todd, have, since the session of this Court, abandoned their appeal, and Todd only has entered his appearance. But the record stands' in the names of all the defendants as parties appellant. Under these circumstances, the counsel for the appellee has moved the Court to dismiss the appeal for irregularity and want of jurisdiction, upon the ground that it cannot be maintained on behalf of Todd alone.

There is no doubt that the appeal having been deserted by all the original defendants except Todd, it must be dismissed with costs as to them. But as to Todd, very different considerations .must arise. He seeks to reverse the decree in the Court below, as erroneous in regard to himself; and the question is, whether' he is not entitled to maintain the appeal separately, for his own interest, although it is deserted by all the other defendants. We think that he is, otherwise an irreparable injury might be inflicted upon him by an erroneous decree, for which the law would not afford him any redress, The decree in this case is in fact against him as principal, and against the other defendants in aid of him, for distinct portions of the purchase-money received by them under the contract of sale made by Todd, and stated in the bill and answer. The decree may be entirely right in regard to the other defendants, and yet it may be erroneous as to Todd. He has, or at least may have, á distinct and independent interest in the controversy.in respect to which he is entitled to be heard in this Court.

The proper rule in cases of this sort,- where there are various defendants, seems to be that all the defendants affected by a joint decree, (although it may be otherwise, where the defendants have separate and distinct interests, and the decree is several, and does not jointly affect all,) should be joined in the appeal; and if any of them refuse or decline upon notice and process (in the hature of a summons, and severance in a writ of error) to' be issued in the Court below, to become parties to the appeal, then that the other defendants should be at liberty to prosecute the appeal for themselves and upon their own account; and the appeal as to the others be pronounced to be deserted, and the decree of the Court below as to them be proceeded in and executed. In the present case, what has occurred is equivalent to such proceedings. All the defendants originally claimed an appeal; some of them have declined to pursue it at all; others 'have deserted it since it was pending in this Court; and therefore, there is no pretence to say that any practical inconvenience can occur from- Todd’s now prosecuting it alone, and since the other defendants have all had notice and declined to interfere, and are content- to abide by the original decree.

In the case of Coxe and Dick v. The United States, 6 Peters, 172, no doubt was entertained" by- this Court, that a writ of error might be entertained by the defendants severally, where the judgment operated under the laws of Louisiana as a several as well as joint judgment, although thev might have united in the writ of error-; and if any one. choose not to prosecute it, the others might, upon a summons and severance, proceed'alone.

The case of Owings v. Kincannon, 7 Peters, 399, seems to have been misunderstood at the- bar.-' The objection in that case was not that one or more of the defendants might not pursue an appeal for their own interest, if the others refused to join-in it upon due notice, and process for that purpose from the Circuit Court; but that it did hot appear that all the defendants were not ready and willing to join in the appeal, and that the appéal was brought by some of the appellants without giving the others an opportunity of joining in it, for the protection of their own interests; not only against the appellee, but against the appellants, as their own interests might be distinct from, or even adverse to that of .the appellants; and it was right and proper that all the parties should have an opportunity of appearing before the Court, so that one final decree, binding upon all the parties having a. common interest, might be'pronouncedt

' Upon the whole, therefore, our opmion is, that the appeal must be.dismissed with costs against all the cieiendants except Todd, and as to him it is torbe retained for a hearing upon the merits.


text:
    Adam S. Mills and others, Plaintiffs in error, v. William G. Brown and others, and the County of St. Clair, Defendants in error.
    The Supreme Court has not' jurisdiction on a writ of error to the Supreme Court of a-state, in which the judgment of the Court was not, necessarily, given on a point which was presented in the case involving the constitutionality of art act of the législature of the state of Illinois asserted to violate a contract.
    The Supreme Court will not when requested by the counsel for plaintiffs and defendants in error, in'a case in which it has not jurisdiction to affirm or reverse the judgment of the Court from which the saíne has been brought by a .writ' of error to a State Court, examine into the questions in-the case and decide upon' them. Consent will not give jurisdiction. When the act of Congress has so carefully and cautiously restricted the jurisdiction conferred upon this Court, over the judgments and decrees of the state tribunals, the Court will not exercise jurisdiction in a different, spirit.
    IN error to the Supreme Court of the state-of Illinois.
    The plaintiffs in error instituted a suit in the Circuit .Court of the state of Illinois, claiming, by a bill filed in that Court to hold under an act of the legislature of Illinois, an exclusive right to erect a ferry on the Mississippi river, from lapd owned by them, to the city of St. Louis, Missouri. The defendants in the suit denied the right thus set up, and claimed the right to set up another' ferry, from Illinois to St. Louis, under other acts of the legislature of Illinois. The case was, after a decree of the Circuit Court in favour' of the defendants, carried by the plaintiff by, appeal to the Supreme .Court of the- state, where the judgment in favour of the defendants was affirmed. The plaintiffs prosecuted this writ of error, on the ground that the aet of the legislature of Illinois, passed subsequent.to the act which had authorized the .plaintiffs' to erect their ferry, was a violation of the contract, made with the plaintiffs by the act of assembly.
    The decision of the Supreme Court of Illinois, which was in favour of thé defendants, was given upon other questions presented in the case, besides the questions on tne contract made by the first act of the assembly of Illinois.
    The counsel for the plaintiffs in error 'proposed to the Court that a decision upon the whole merits of the case should be made, although it might be considered that the Court had jurisdiction of the case on the writ of error; the questions in the- case' being of great importance, and the parties being willing and desirous to have them decided by this Court.
    The case- was argued by Mr. Bogy and Mr. Jones, for the plaintiffs in error; and by Mr. Key and Mr. Reynolds, for the defendants.
   Mr. Chief Justice Taney

delivered the opinion of the Court.

This case is brought here by writ of error to the Supreme Court of Illinois under the twenty-fifth section of the act of 1789.

It appears that the legislature of Illinois,, by' a law passed March 2, 1819, granted to a certain S. Wiggins, his heirs and assigns, the right to establish a ferry, upon his own lands, across the Mississippi, near the town of Illinois.

By a subsequent act of March 2, 1839, the legislature of lilinois granted to the county of St. Clair, in that.state, and to certain commissioners in behalf of the county, the right to locate a road and ferry landing between Cahokie creek and the Mississippi river, opposite to St. . Louis. And the commissioners appointed by this law proceeded to lay out the road and establish the landing on certain lands which belonged to the plaintiffs in error; and to which, by sundry conveyances, thev derived title from the said Wiggins.

The plaintiffs in error thereupon' filed their bill in the Circuit Court of the state, praying that the county of St. Clair and the said commissioners should be enjoined from further proceedings under the act of assembly last above mentioned.. The respondents, the present defendants in error, appeared- and demurred generally to the bill; and upon final hearing of the cause, the demurrer was sustained by the Circuit Court, and the bill dismissed. From this decision the complainants appealed to the Supreme Court of the state where the decree of the Circuit Court was affirmed. The ¿points proposed to be raised here, are, 1st, Whether the act of assembly of 1819, was not a contract with the said Wiggins, his heirs and assigns; and, 2d, Whether the act of 1839 does not impair the contract.

These points are not directly stated in the pleadings, nor are they noticed in the decree of the Circuit or Supreme Court of the state. Yet if it appeared from the bill, that the Court could not have sustained the demurrer without considering and deciding these points; if they were necessarily involved .in the decision of the' case, as presented by the bill and demurrer, this Court would nave jurisdiction upon the writ of error, although they are not expressly stated in the decrees to have been raised and decided.

It is unnecessary for the purposes of this opinion to state the contents of the bill. Indeed, as concerns the question before us, it could not well be understood without giving the whole bill in its own "words. It is. sufficient to say that we have carefully examined it, and are satisfied that the points proposed to be raised here, were hot necessarily involved in the judgment given by the State Court. On the contrary, we think it may have come to the conclusion that the demurrer ought to be sustained on other grounds, and that the bill was not so framed as to require a decision upon these questions.

It is true that the plaintiffs and defendants in error have both waived all objections to, jurisdiction, and have pressed the Court for a decision on the principal points. But consent will not give jurisdiction. And we have heretofore, on several occasions, said, that when the act of Congress has so carefully ana cautiously restricted the jurisdiction conferred upon this Court, over the judgments and decrees óf the state tribunals, it would ill become the Court to exercise it in á different spirit. And it certainly could not be justified in .expressing an opinion favourable or unfavourable as to the correctness of this decree, when it has not the power to affirm or reverse it.

The writ of error must therefore be dismissed.


author: Mr. Justice M‘Lean

text:
    Joshua Mauran, Plaintiff in error, v. Edward Bullus, Defendant in error.
    Construction of a letter of guarantee.
    In the construction of all written instruments, to ascertain the intention of the parties is the great object of the Court, anc^ this is especially the case in acting upon guarantees.
    Generally, all instruments of suretiship are construed strictly as mere matters of legal right. The rule is otherwise where they are founded on a valuable consideration.-
    IN error to the Circuit Court of the United States for the district of Rhode Island.
    The case, as stated in the opinion of the Court, is as follows:

      “ The defendant in error and Joshua Mauran, Jr., of the city of New York, on thé 8th of September, 1S36, entered into articles of copartnership in the trade and business-, .of general shipping merchants, and of buying and selling merchandise on their own account, and also on commission for the account of others; which was to continue three years. Mauran agreed to pay into the firm as capital stock, such sums as" he should be able to realize on closing the business of merchandising, in which he had been engaged. Bullus agreed to pay a sum of from twenty-eight thousand to thirty thousand dollars in cash.
    And it was stipulated that Mauran should not withdraw from the concern more than two thousand dollars per annum, nor Bullus more than three thousand, unless by consent of the co- • partners in writing. Mauran covenanted that -within a reasonable time he would pay the debts owing by him, out of his private funds; and that on or before the 8th of September instant, he would give to Bullus satisfactory security for the performance of this covenant.
    On the 9th of September, 1836, the defendant below wrote to Bullus the following letter: ‘ Mr. Edward Bullus, — Dear Sir,— As you are about to form a connection in the. mercantile business in the city of New York, with my son, Joshua Mauran, Jr., under the .firm of Mauran and Bullus. And, as the'said J. Mauran, Jr., having been, and is at this time prosecuting mercantile business in that city, on his own account: now, therefore, in consideration of the same and at the request of Joshua Mauran, Jr., I hereby agree to bear you harmless in regard to the closing up and settlement of the said Joshua Mauran, Jr.’s former business, and I hereby guaranty you against any loss or liability you may sustain from the former business of said Joshua Mauran, Jr,, &c. Signed, Joshua Mauran/
    The action was brought by Bullus on this guarantee. On the trial an account against the old concern of Joshua Mauran, Jr., with the firm of Mauran and Bullus, was given in evidence, from which it appeared that the old concern was indebted to the new, the sum of five thousand four hundred and three dollars and seventy-five Cents: And it was proved by Joshua Mauran, Jr., that the partnership continued until August, 1839, when the firm failed. That Bullus paid into the partnership stock twenty-nine thousand six hundred and ninety-five dollars and eighty-six'cents, ■and that the witness was unable to pay anything. That at the timé of forming the copartnership, his father, the defendant, was in New York, with whom he conversed relative to the terms of the partnership. That he showed his father the articles, or the minutes from which they were drawn, and is satisfied that the conditions were fully known to him. But the witness stated that he did not know of his father’s having any knowledge that the firm were to settle and pay the debts owing by the witness.
    The witness stated that certain loans were made by the firm to .him, in anticipation of the receipts from the old concern, which were charged. After the completion of the articles of copartnership, the witness delivered to his father a paper drawn by the attorney who drew the articles, for his father’s signature, and that his father did not sign the paper, blit after his return to Providence sent the letter of guarantee. Many of the debts of his old concern, the witness stated, became due before sufficient funds could be collected from the same to meet them, and tiiese debts were paid by the firm. That this was a mode of settlement of the accounts of the old concern, not originally contemplated. His father often inquired what the deficiency of the old concern would amount to, but he did not know, to the knowledge of the witness, that the old concern was indebted to the firm.

      That the firm, on their failure, assigned all their property and estate to William D. Robinson, including the debts of the old concern, which amounted to the sum of twelve thousand four hundred and eighteen dollars and ninety-five cents. These debts were credited to the stock of Joshua Mauran, Jr., and at the time they were all, except one of George Bucklin, of about eighteen hundred dollars, considered bad; and that one had been released, though the witness considered him bound in honour to pay it. Various accounts between, the firm and Joshua Mauran, junior and senior, and other persons, were given in evidence.
    ■The defendant introduced his son Suchet Mauran as a witness who stated that his father brought with him on his return irom New York, about the 8th of September, 1836, a bond, binding him to pay the; debts of Joshua Mauran, Jr. It was under seal, and the witness read it; and it was, as he believes, in the handwriting of Mr. Bonpey, of the city of New York, who wrote the articles of copartnership. That his father would not sign the bond, but sent the letter of guarantee. The bond' remained among the loose papers of his father for some time, buc after a diligent search' could not be found. That the bond, by its terms, required his father to pay all the outstanding debts of Joshua Mauran, Jr., to his creditors, or to whoever might pay them.
    The evidence being closed, the defendant below moved the Court to .give the following instructions:
    1. That said letter of guarantee of the defendant, dated the 9th of September, contained no authority to the said Mauran and Bullus to pay any part of the debts of the said Joshua Mauran, Jr.’s old concern; that if it authorized any payment of said debts by any person, it was by the said Edward Bullus alone; and that the said Edward Bullus could not recover said sum of five thousand four hundred and 'three dollars and seventy-five cents, or any part thereof; inasmuch as he had paid no part thereof, the whole having been paid by the said Mauran and Bullus.
    Which instruction the Court refused to give, as prayed for; on the contrary, they instructed the jury that if, from the evidence submitted to them, they were of opinion that at the time of signing said letter of guarantee, it was understood both by the plaintiff and the defendant, that the plaintiff was to be at liberty to pay the said debts of the said Josjhua Mauran, Jr., either out of his own private funds or out of the partnership funds of the firm of Mauran and Bullus; and, in either case, the plaintiff was to be entitled to indemnity therefor, under and in virtue of the said letter of guarantee; and ifithey were of opinion from the facts in said case, that no funds whatsoever had been paid into the'partnership by the said Mauran, Jr., as a part of the capital stock thereof and that all the capital stock had been paid by the said Bullus; and that he was-and still remained a creditor of the firm to the full amount of such capital stock; then the plaintiff was entitled to recover in the present suit, such sums of money as he had paid in discharge of the said debts of Mauran,. Jr., either out of his own private funds or out of the fund§ of the said firm of Mauran and Bullus, for which he had not otherwise'received any indemnity.

      2. And the defendant’s counsel prayed the Court further to instruct the-jury that, even if said letter had imposed upon said defendant any obligation to pay said debts to the said Edward Bullus, or to the said Mauran and Bullus; that the said Mauran and Bullus by assigning the uncollected debts due to the said Joshua Mauran, Jr., to the said Robinson, their assignee, and placing them entirely beyond the control, or agency and management of the defendant; had discharged the defendant from any liability -'hich might originally have arisen from said letter of guarantee.
    Which instruction the Court refused to give; but instructed the jury that, if they should find a verdict fo'r the plaintiff, they ought to deduct from the amount of the plaintiff’s claim in the writ, the full value of the debts of the, said Mauran, Jr., so assigned, and cjaarge it against, the claim of the plaintiff, and render a verdict in his favour for the balance only; after such deduction. ”
    ' To the instructions refused and those given the defendants excepted.”
    The jury, under the instructions of the Court, found a .verdict in favour of the- plaintiff for three thousand seven hundred and sixty-four dollars and twenty-five cents, on which a judgment was entered. The defendant prosecuted this writ of error..
    The case was argued by Mr. Whipple, for the plaintiff in error; and by Mr. Z. Collins. Lee and Mr. Southard, for the defendant..
    Mr. Whipple contended that the obligation of "Joshua Mauran as contained in his letter of guarantee.of 9th September, 1836, to Edward Bullus, was confined to an agreement to bear him harmless in regard to the closing up and settlement- of the former'business.of Joshua Mauran, Jr., and against any loss or liability he might- sustain from the former business of Joshua Mauran, Jr. It did not contemplate the interference of Joshua Mauran, Jr., in the closing up of that business, nor that any money of the firm of Máuran and Bullus should' be ’ taken to pay the former debts of Joshua Mauran, Jr. If, contrary to this understanding of his responsibility, Mr. Bullus had acted otherwise, he had no claim under the letter of guarantee.
    That the said letter of guarantee of the 9th of September, contained no authority to Mauran and Bullus, or to Edward Bullus to pay any part of the debts of Joshua Maúran, Jr.; but that it was a simple indemnity against any damage which the said Edward Bullus might unavoidably sustain from th° closing up of the former business of Joshua Mauran, Jr.
    The construction given to the letter by the Court below, imposed upon the defendant a present liability for the. whole amount of the’ debts of Joshua Maúran, Jr., whatever the amount might be. Whereas, the case shows that such a liability was. proposed to the defendant by Edward Bullus, and rejected by the defendant ; this simple indemnity ágainst unavoidable injury being substituted in its stead.
    The letter being addressed to Edward Bullus before the co-partnership of Mauran and Bullus, and in contemplation thereof, cannot be considered as a contract with any other person than Edward Bullus. That the plaintiff so considers it by bringing the action ni the name of Bullus; and that in order to support the áction, it is necessary to prove a payment and advance of money by said Bullus individually. Consequently, that a payment from the funds of Mauran and Bullus, by the authority of Mauran and Bullus, will not support said action in the name of Edward Bullus. Story on Partnership, p. 350 to 355; and authorities there cited.

      Under the second exception, Mr. Whipple contended, that Mauran and Bullus, by taking the whole property of Joshua Mauran, Jr., into their possession, and upon their failure assigning the uncollected debts and other property to their assignees, instead of placing it under the management of the defendant, have assumed the ownership of the debts and other property, and discharged the defendant from any liability, if any liability ever existed.
    Mr. Z. Collins Lee, and Mr. Southard, for the defendants in error, contended,
    1. That the letter of guarantee in question was an absolute and unequivocal indemnity to Edward Bullus, against all loss and damage in settling up the old concern of Joshua Mauran, Jr.; and could be construed in no other way, and must be liberally interpreted according to the fair intentions of the parties to it.
    2. That being a guarantee to Edward Bullus, ihdividually, and he alone being the party to the contract, he was alone injured, and therefore the suit was properly brought in his own name, and not that of the. firm — and it made no difference in principle, whether he paid the advances out of the partnership fund or not. As in point.of fact he. had furnished all the capital to the new firm, and it was therefore his own fund.
    The following cases as to the first- point, (Construction of letters of guarantee) were cited. Mason v. Pritchard, 12 East, 227; Flagg v. Upham, 10 Pick. 147; Drummond v. Prestman, 12 Wheat. 519; Douglass v. Reynolds, 7 Peters, 117; and Lee v. Dick, 10 Peters, 490.
    On the 2d point: cited Collyer on Partnership, 446, 447; Gow on Partnership, 123; Story on Partnership, 354. Also the cases of Alexander v. Barker, 2 Cromp. & Jervis, 133, 138 ; Robson v. Drummond, 2 Barn. & Adol. 83, and the counsel referred generally to the cases named in the note to Story on Partnership, 354.
   Mr. Justice M‘Lean

delivered the opinion of the Court.

Mr. Justice MlLcan after stating the facts, said,

The questions in this case arise on the instructions of the Court; and they, very properly,, as we think, refer the jury to the facts and circumstances under which the guarantee was’ given- It is only: by such reference that that instrument can be correctly understood and construed. In the construction of all instruments, to ascertain the intention of the parties is the great objectof the Court; and this is especially the case in acting upon guarantees.

The guarantee under consideration, in the first place, refers to the fact that Bullus, to whom it was addressed, was about to form a connection in the mercantile business in the city of New York,, with the son of guarantor. And from the evidence-, it appears that he was well acquainted with the nature, and extent of that •partnership, for'he had read the articles of copartnership, or the memoranda from which they were drawn. As it appears from the statement of Bonney, that the articles were drawn in August, and placed in the. hands of Bullus, who returned them with the blanks filled and some alterations, there can be little doubt that the'defendant below read- them while at New York. That he was well-acquainted with the conditions of the partnership-his son testifies.

-With this knowledge we come to the next sentence in the guarantee, which is, “ And as the said Joshua Mauran, Jr., having been, and-is at this time" prosecuting mercantile business in-that city, on his own account.”

It will be recollected, that in the-articles of copartnership, Joshua Máuran, Jr., covenanted that he would give to his partner satisfactory security that he would pay all the debts which he then owed, and all the responsibilities incurred by him, in carrying on his former business, without drawing upon the partnership fund. Of this covenant, the defendant below not only had full notice, but it was proved that pn his return from New York to Providence, he took with him a bond drawn by the person who drew the articles of copartnership, binding him to pay the debts of his son. This bond he did not execute, but wrote to Bullus the letter of guarantee.

With these facts in view, after stating the fact that his son had been in business in New York as above, and that Bullus was about commencing a partnership with him, the defendant says, Now, therefore, in consideration of the same, and at the request of Joshua Mauran, Jr.,-I hereby agree to .bear you harmle'ss, in regard to the closing up and settlement of the said Joshua Mauran, Jr.’s former business.. And I hereby guaranty you against any loss you may sustain from the .former business of said Joshua Mauran, Jr.” .

~ Now looking at.the facts connected with the guarantee,-and the circumstances under which it was given, there would seem to be no doubt of the understanding and intention of the parties. Bullus having a capital of nearly thirty thousand dollars, he was unwilling to advance it as the stock of the new firm unless he should be indemnified against the debts which had grown out of the -former business of his partner. And Joshua Mauran, Sen., with, the view of securing so considerable a capital, and so advantageous a connection in business for his son, was willing to indemnify Bullus against these debts. And he preferred the guarantee to the bond which was prepared. The latter would have imposed an unconditional obligation to pay these debts, whilst,the former only required him to pay Bullus the sum advanced by him in dis-. charge of them.

But it is earnestly contended that as these debts were paid by the firm, and not. by Bullus only, he cannot maintain an action in his own name on the guarantee. It is very clear that the firm could not maintain ant action on this instrument. The indemnity was personal and limited to Bullus.

But the best answer to this argument is the finding of the jury, under the instruction of the Court. .They were instructed that if, from the evidence, they should find that at the time of signing the letter of guarantee, it was understood both by the plaintiff and the defendant, that the plaintiff was to be at liberty to pay the dqbts of Joshua Mauran, Jr., either out of his . own private funds, or-out-of the partnership funds; ^and .in either case the plaintiff was. to be entitled to indemnify therefor, under the letter of guarantee,” &e, they should find for the plaintiff. They did so -find,-and consequently the facts hypothetically stated in the instruction are established. And the only question that can arise on this part of the instruction is, whether the facts found •were properly submitted to the jury.

Now, out of what fund these debts were to be paid could not be a matter of any importance, it would seem, to the guarantor. The objection that Bullus cannot recover, because the debts were paid with thé partnership funds, under the circumstances, it purely technical. Every dollar of the money thus paid, though used in the partnership name, was in fact the money of Bullus; To meet this technical objection, and carry out the intention of the parties, we think the instruction was proper. The facts on which it was founded did not contradict the written agreement, nor, in any degree, affect the liability of. the party beyond the clear import of the guarantee.

By the articles of copartnership either partner, with the consent in writing of the other, .mighttwithdraw from the firm any amount .of mo'néy. This was known to the guarantor. And also the fact that the whole capital of Bullus was paid into the firm. If this be admitted, it followed that any payments made by Bullus in discharge of the debts, could only be paid out of the firm.

The jury also found in pursuance of the latter part of the same instruction, that Bullus was a creditor of the firm to the full amount of its capital stock.

These facts, found by the jury, disembarrass the case from the technicalities thrown around it by the counsel of the guarantor. They- show that it was the understanding of the guarantor 'that Bullus should be indemnified against the previous debts of his partner, whether he paid them out of the partnership fund or otherwise.

The construction that the guarantor is only bound to indemnify, in case payment of these debts had been enforced against Bullus by legal 'measures, is not sustained by the words of the instrument.

In the first place, he was not and cóuld not be made legally responsible for these debts. The guarantor then must have contemplated a. voluntary payment, or at least not a payment by legal compulsion. The guarantor agrees to bear Búllus harmless in regard to the closing up and settlement of the said Joshua Mauran, Jr.’s former business.” Here is a strong recognition of an agency by Bullus in the settlement of these debts. To sustain the credit of the firm it was necessary to pay the debts in question; and we find that in a very short time after the firm commenced business, the payments of these debts were commenced, and such- payments were made from time to time by the firm until near the time of its failure. The moneys received from the debts due to the previous concern were credited on the books of the firm, and the payments made by it on the same account were charged. But the mode of keeping the account by the firm can have no bearing in the case, as the facts found by the jury obviate'all objections on this ground.

Suppose Bullus had been charged on the books of the firm, with the moneys paid in discharge of the debts; the objection as to the partnership interest could not in that case be made. But the ¡noney thus applied would have been no more the money of Bullus than that which was paid by the firm. . The facts found' by the jury present the case in its true character, and give a strong equity to the plaintiff below. Generally, all instruments of suretiship are construed strictly, as mere matters of legal right. The rule is otherwise where they are founded on a valuable consideration. But in the present case the relationship of Mauran the partner and the guarantor, connected with- the other, circumstances, constitute as clear a case for indemnity as could well be imagined. That the debts of Mauran, Jr., were paid by Bullus or with his assent, in virtue of the guarantee, there is no reason to doubt. Indeed this fact is substantially found by the jury.

The assignment by the firm of the uncollected debts of Joshua Mauran, Jr., to Robinson, does not release the guarantor. In this respect the instruction of the Court was correct. The jury ■were directed if they should find for the plaintiff, to deduct from the amount, thus found the full value of the debts of Joshua Mauran, Jr., which had been assigned by the firm, and render a verdict for the balance.

The debts of Mauran, Jr., assigned by the firm were proved to be bad, with but one exception; and that appears to' have been deducted by the jury from the sum paid by the firm, in discharge of those debts.

Upon the whole we are satisfied that substantial justice has been "done between the parties, by the judgment of the Circuit Court; and we think there is no principle of law arising out of the instructions which require a reversal of the judgment. It is, therefore, affirmed.