Miller v. Stewart

THIS was a case certified from the Circuit Court for the District of New-Jersey, upon a certificate of a division of opinion of the Judges of that Court. It was an action of debt upon bond, and the material facts disclosed in the pleadings were, that the plaintiff, Ephraim Miner, being Collector of the direct taxes and internal duties for the fifth Collection District of New-Jersey, by an instrument of appointment, under seal, and pursuant to law, appointed Stephen C. Ustick his Deputy Collector, for eight townships within his district. Upon that occasion, the defendant, Thomas Stewart, and certain other persons, as sureties, executed a writing obligatory, with Ustick, to Miller, in the penalty of 14,000 dollars, upon the following condition, viz. 'The condition of the foregoing obligation is such, whereas Ephraim Miller, Esquire, Collector, as aforesaid, hath, by authority vested in him by the laws of the United States, appointed the said Stephen B. Ustick, Deputy Collector of direct taxes and internal duties, in the fifth Collection District of New-Jersey, for the townships of Nottingham, Chesterfleld, Mansfield, Springfield, New-Hanover, Washington, Little Egg Harbour, and Burlington, in the county of Burlington; now, therefore, if the said Stephen C. Ustick, has truly and faithfully discharged, and shall continue truly and faithfully to discharge, the duties of the said appointment, according to law, and shall particularly faithfully collect and pay, according to law, all money assessed upon said townships, then the above obligation to be void, and otherwise, shall abide and remain in full force and virtue.' After the execution of this bond, and before Ustick had, in any manner, acted under this appointment, or collected or received any moneys under the same, Miller, with the assent of Ustick, but without the assent or knowledge of the defendant, Stewart, altered the same instrument of appointment, by interlining in it another township, called, 'Willingborough,' thereby making it an appointment for nine instead of sight townships; and under the appointment, so altered, Ustick received, within the original eight townships, certain moneys, as taxes, which he omitted to account for, and this omission was the breach stated in the declaration. The question for the opinion of the Court, upon the special pleadings and demurrer, was, whether the alteration so made, without the consent of Stewart, discharged him from any responsibility for the moneys so subsequently collected by Ustick.

Mr. Wood, for the plaintiff, admitted the general doctrine, that where the contract is annulled without the assent of the surety, there is an end of the guaranty. So, if the contract is, in any material respect, changed by the contracting parties, (whether advantageously for the surety or not,) in respect to that part of it to which he guaranty extends, the surety is discharged for he may, then, well say, non haec in faedera veni. But, if a change is made in the original contract, by the contracting parties, in a part of the contract to which the guaranty does not extend, such change will not discharge the surety, unless it disadvantageously affected the other part of the contract to which the guaranty does extend. Thus, where the defendant was surety to the plaintiffs, for the performance of duties by a clerk in their banking house, a change of partners was held not to discharge the surety, because, though such change had an important bearing upon the establishment, it did not come within the scope of the guaranty. A mere diminution of that part of the contract to which the guaranty extends, as a release of part, would not discharge the surety from the part remaining, it being a part of the thing guarantied, though not the whole. Omne majus in se continet minus: the surety, in such a case, could not say that he might be prejudiced by the diminution, for it is settled law, that a part payment of the debt is for the benefit of the obligor, and prejudicial to the obligee, and, therefore, it cannot be pleaded as an accord and satisfaction.

1. There was no surrender by Ustick of his appointment as Deputy Collector, over the first eight townships. If there was a surrender, it must have been either in fact, or in law, that is, implied in the alteration of the instrument. There was no such surrender in fact; and the alteration of an instrument with consent of parties, does not, in law, imply such a surrender. There are no authorities to warrant the position, that such an alteration implies a surrender. On the contrary, they all say, an alteration of an instrument, with consent, does not vitiate it. In Pagot v. Pagot, when blanks in a deed were filled up after execution, the deed was held good, though not read again, nor re-executed. In Markham v. Gonaston, and Wooly v. Constant, the Court went on the ground not only that an altered deed or instrument was good, but that there was no surrender and redelivery implied in the alteration, to devest the property.

There is nothing in principle to warrant the idea, that an alteration of an instrument implies a surrender and redelivery. A surrender is an executed contract. To constitute a surrender of an instrument by a vendee or obligee, to a vendor or obligor, two things are necessary: 1. An actual delivery of possession to the latter; and, 2. An understanding or agreement to part with the property in the instrument. The act and the intent must concur. A mere delivery of possession by the vendee of the deed, for a special purpose, to the vendor, or any other person, as to keep for him, or to do any other particular act in relation to it, is not a surrender. The vendee still has the property in the deed himself. The vendor, in such case, is only his bailee. Admit, for the sake of argument, that the alteration of a deed required a new delivery, in respect to the part altered, the vendee might then deliver possession of the deed to the vendor, for that particular purpose, viz. to enable the vendee to deliver it anew, to give effect to the altered part; but not surrender his property in the deed in respect to the parts not altered. Such an absolute surrender of the whole deed, is not essential; and if not essential, it should not, by a fiction of law, be required. Suppose the vendee should hand the deed to the vendor, to subjoin on a blank under it a new and distinct deed for another tract of land, which is done, does such a delivery of the deed, for such a purpose, amount to a surrender of the old deed? If not, is there any difference, in reason and common sense, whether the conveyance of the second tract is contained in a distinct and separate deed subjoined on the same paper, or whether it is effected by an interlineation, with consent of parties, in the old deed? Fictions and subtilties should never be introduced into the law, which is a practical science, unless to subserve the purposes of justice. In fictione juris semper subsistit equitas. This fiction of a surrender is unnecessary; it may be injurious. A., pursuant to contract, conveys a tract of land to B.; they afterwards discover, that by mistake, a lot was omitted, and, by consent, it is interlined. Upon this doctrine of surrender, the deed and property, upon the interlineation, reverted to the vendor, and continued in him until the new delivery; and, of course, it is subjected to the intermediate judgments of other liens of the vendor. The rule of law may, and ought to correspond, in such cases, with the real fact; considering the lands originally contained in the deed us passing at the date, and the land inserted by interlineation, as passing at the time of the interlining.

2. There was no cancellation of the original instrument of appointment. An Alteration affects an instrument in part; a cancellation destroys it altogether. When cancelled, a deed must be resealed and redelivered, to revive it. It is nowhere said, that a redelivery is necessary, in case of an alteration by consent.

3. The alterations did not cause a revocation of the old appointment. It is admitted, that the appointment to, and acceptance of, a new office, incompatible with the old, is a revocation of the latter, as, if a Coroner accepts the office of a Sheriff. So, if there had been an intermediate office, between the Collector and his Deputy, incompatible with the latter, its acceptance, by Ustick, might have been a revocation of his office of Deputy. In the present case, the alteration created no office. It continued the same office, only extended over an additional territory. Ustick had the same office and same power over the first eight townships after, as before the alteration. It is said, his sphere of action was enlarged. Be it so: it was enlarged only in respect to territory; his sphere of action over the first eight townships continued the same. It is said, that after the alteration, the nine townships constituted but one offi e, and that there was a new appointment consequently. The interlineation, as before shown, did not destroy or cause a surrender of the first appointment, with respect to the eight original townships. If, then, there was a new appointment of an office, it extended only to the ninth township, and that is a distinct office from the other eight. If there were not a new appointment, but simply an enlargement of the old office, and still constituting one office, it is an office consisting of different parts in respect to territory, which parts are easily distinguished, and were created at different times; the former part, composing the first eight townships, being in no wise impaired by the latter, and of course, the guaranty is in no wise impaired by it. It is said, that it is impossible to distinguish the moneys paid in from the ninth township, from those collected in the other eight. The same objection might have been raised, and to the same effect, if the appointments had been by distinct instruments. The jury will distinguish; it is a question for them. It is said, that the responsibility of Ustick was increased; and so is the responsibility of every debtor increased, who contracts new debts; but that does not discharge a surety.

4. Though where, in a bond, a previous instrument is recited, the contents thus recited are a part of the bond; yet the instrument recited is no part of the bond. Suppose A. conveys a tract of land to B., and in order to explain the boundaries, a deed from A. to C. for a tract of land adjacent is recited, does the latter deed become a part of the former; and if destroyed, does it destroy the other? The dependency, or connexion between the instruments recited, and the obligation in which it is recited, must always depend upon the nature and object of the instruments, and the intent of the parties.

Again; if this alteration, as contended on the other side, amounted to a surrender of the instrument of appointment, it was necessarily a revocation of the appointment. Such a revocation cannot be made under the act of Congress, without public notice being given in the district. No such notice was given in this case. If this alteration amounts to a revocation of the instrument, in law, and as such revocation cannot be made without public notice, the alteration must be void, and the original instrument stand good.

Mr. Coxe, contra, argued, (1.) That the alteration in the original instrument of appointment, by the interlineation in a material part, destroyed the bond as against such of the obligors as were not parties to the act. The appointment, being recited in the bond, became incorporated into it, and they, together, form quasi one instrument. The condition of a bond or defeasance, need not be contained in the same paper, but, though written on a distinct and separate piece, they together constitute but one instrument.

If the condition of a bond, thus engrossed on a separate piece of paper, becomes invalidated by any act having that legal operation, the whole instrument, though disconnected, becomes void. As in the case put by Sheppard, if the obligation depend upon, or be necessary to, some other deed, and that deed become void, the obligation is become void also: as, if the condition of the obligation be to perform the covenants of an indenture, and, afterwards, the covenants be discharged, or become void, by this means the obligation is discharged and gone for ever. The common case of arbitration bonds will illustrate this position; if the award made be void in itself, or become void, or be performed, the obligee cannot recover upon the bond, but that becomes void. Had the plaintiff made such an interlineation in the body of the obligation itself, inserting the name of another township, the legal effect cannot be disputed. The whole bond would have been invalidated.

The consequence, then, appears to be irresistible, that such must be the effect here. The appointment, originally made, became a nullity, and could only be revived by a new execution and delivery, and take effect only from that time. As to the original instrument to which the sureties of Ustick made themselves parties, by inserting it in their bond, it was wholly nullified.

It may, indeed, be said, that, the alteration in the appointment having been made with the consent and acquiescence of Miller and Ustick, who alone were parties to it, it remains a valid instrument of deputation.

But the appointment is to be regarded in two entirely distinct aspects: (1.) As the instrument of deputation solely. (2.) As made a part of the bond, by being incorporated into it.

1. As a simple instrument of deputation, like any other deed, it could operate only between the parties to it, and could affect no others. The alteration, made and concurred in by all those interested in it, would not avoid it, perhaps, according to the current of modern authorities, though even as between them the law was formerly held otherwise.

2. As being made a part of the bond by being incorporated into it. By this circumstance, the sureties of Ustick became parties to the act of appointment, and to the instrument of deputation. It became a part of their bond. By no act of the appointor and appointee could the interests of third persons be even incidentally affected. A. makes a bargain and sale to B., which cannot operate, because no pecuniary consideration is inserted. C. acquires, by a judgment, or in any other manner, a lien upon the property as belonging to A. The deed cannot be altered by the parties so as to devest any intervening right. As an original instrument, carrying its original date, it can have no operation. As a deed bearing the original date, it is void; its future validity can be only upon the idea of a surrender of the instrument, and a new delivery and execution.

We contend, then, that by the alteration made in this instrument of deputation, it ceased to have any validity by virtue of its original execution and delivery; as such, it was annulled.

But, whether annulled or not by this act of interlineation; whether it continued to operate as from the time of its original delivery, or from the period of its second delivery, after the alteration was made; if it have any validity, even between the parties, it cannot operate as the appointment recited in the bond. It is another and distinct appointment from that to which the bond referred, and these sureties are not responsible for any deficiencies existing under it. By the 20th section of the act of Congress, 'Each Collector shall be authorized to appoint, by an instrument of writing under his hand and seal, as many deputies as he may think proper, assigning to each such deputy, by that instrument of writing, such portion of his collection district as he may think proper; and, also, to revoke the powers of any deputy, giving public notice thereof in that portion of the district assigned to such deputy.' The power of appointment thus given, was exercised by the original instrument of deputation for the eight townships. It is recited in the bond, and, therefore, each party is estopped from denying it. This instrument must have been made prior to the execution of the bond, because it is recited as already executed, and one of the conditions is, that he hath performed the duties of it. It must have been an appointment, bearing the date, and specially embracing the townships therein enumerated, and nothing more; otherwise it would be an appointment differing from that for the faithful performance of which this defendant became responsible. Supposing, then, it should now be made to appear that the original appointment included the township of Willingborough, and that it was accidentally omitted in the recital of the bond, could a recovery be had in this action? The answer of the surety is non haec in faedera veni. The language of the Court, in Clifton v. Walmesley, (5 T. R. 564. 567.) would be conclusive against the plaintiff. This was the doctrine also in Ludlow v. Simond, (2 Caines' Err. 33. 42. 57.) The plea avers, and the demurrer admits, that the deficiency sought to be recovered, arose under an appointment including the township of Willingborough. The surety became responsible for the faithful performance of the duties of no such appointment; he, consequently, cannot be called on to respond them. But there is no pretence that any omission was made by fraud or mistake. Under the appointment thus made, Ustick did hold his office at the time the bond was executed. This office was as extensive as the eight townships enumerated in the appointment, but restricted within them. This limitation was of the very essence of the appointment, by the express terms of the statute.

The act of the 22d of July, 1813, ch. 16. s. 20. requires that the assignment of the portion of the collection district within which the deputy is to act, should be contained in the instrument of appointment. Such an appointment, then, being made, it could only lawfully cease, (1.) by the death of Ustick, the deputy; (2.) by surrender of the appointment; (3.) by a revocation without his consent; (4.) by a new appointment; (5.) by cancellation.

The act which did take place, was, in substance, a surrender of the original appointment, and the acceptance of a new one. The appointment, being altered by the appointor, by inserting another assignment of a portion of the collection district; and after this alteration, being accepted and acted under by the appointee, became, from the date of such alteration and acceptance, a new and distinct instrument. A new and distinct office was created, the duties and responsibilities of which differed essentially from the former; the instrument of appointment included the entire portion of the collection district assigned to the deputy, as required by the statute. The legal inference is clear: the first appointment merged in the subsequent and more extensive one. If it operated as a new appointment, it operated also as a complete revocation of the former one. Here was, then, an appointment perfectly valid, complying with all the requisitions of the law under which the officer acted, under which his duties were performed, under which his responsibilities attached. This, however, was a totally distinct appointment from that which the bond in question was given to cover. The appointment recited in, and covered by the bond, was for eight townships; the appointment under which the delinquency occurred, was for nine. The defendant and his co-sureities never did undertake to become responsible for one cent under any other appointment than that set forth in their bond. The recital restricts the operation of the bond to that identical instrument of deputation therein specified.

It can scarcely be necessary to cite the various cases which go to fix and limit the responsibilities of sureties, but a few of the most prominent may be referred to. Lord Arlington v. Merrick, (2 Saund. 411.) is a leading case, and establishes the principles, that a surety cannot be bound beyond the scope of his engagement; that the generality of the language is restrained by the recital; and that when a particular appointment is recited in the condition of the bond, the obligation covers only that appointment. So, where a bond was given to secure the faithful performance of the duties of collector of the society of musicians, and afterwards the society was incorporated, the obligor was held not liable for any default after the incorporation. 'The old obligation does not, in point of law, extend to the new corporation, and a surety has a right to avail himself of the objection.' 'A surety can only be held liable according to the plain and clear force of his contract.'

The condition of a bond recited, that A. was, on such a day, appointed Collector, &c., and bound the sureties for bis duly accounting, &c.: held, that the sureties were only answerable for that single appointment, and not for his appointment in the ensuing year. Other cases go to the establishment of the same principles.

3. It is no answer to the objections that have now been considered, that the surety is not damnified. He says, this is not the contract into which I entered, and it is immaterial whether it be a more favourable one than that to which I became a party or not. I have no wish to speculate upon the subject of the relative duties and responsibilities. The question is simply what I have become responsible for. And, when you designate the deficiency sought to be recovered, and the office in which it occurred, my answer is, it is not in the bond. But the ground of increasing the duties and responsibilities, is another equally conclusive both in point of fact and law. If the original appointment be considered as still subsisting, if the words of the obligation would cover this deficiency, the surety is entitled to judgment in his favour, on the single ground that the duties and responsibilities are increased without his concurrence. Every enlargement of the duties of the Deputy Collector, by enlarging the sphere of his authority, increases his responsibility, and adds to the danger of the surety. The amount of moneys received is increased, and the conseduent danger of defalcation augmented.

Can it be contended that, in point of fact, the defalcation would not have been less, if the deputy's authority had not been extended to the township of Willingborough, and, consequently, if none of the moneys arising from that township had been received by him? Did the deficiencies now sought to be recovered occur, in whole or in part, in reference to the money received from Willingborough? Can we, in any manner, be called upon to meddle with the accounts of that township, by an act to which we never assented? If the accounts are intermingled, as they necessarily must be, and in fact are, we cannot be called on to disentangle them. In point of fact, then, the responsibility and duties of the principal have been increased, without the assent of the surety, and, in point of law, that operates to discharge him from any responsibility.

Mr. Sergeant, on the same side, stated, that the question presented upon the pleadings was, whether the defendant, Stewart, who was a surety for Ustick, had become liable for any default or neglect of Ustick, as a deputy of Miller, the Collector?

The bond recited an appointment, previously made, and the defendant was bound for the fidelity of Ustick, under the said appointment. By the terms of the contract, therefore, the appointment, antecedently made, was a part of the contract, as between Miller and Stewart, as completely as if it had been contained in the bond. The appointment, thus made, was by deed, and so required to be by law. If it had been made under colour of law, and not according to law, it would have been void. The appointment, moreover, was entire, not divided, or in parts; nor, as respected the bond, was it susceptible of division. The obligation of the bond, therefore, was, that as long as Ustick should continue to act under that identical appointment, under the very deed which had been sealed and delivered by Miller to Ustick, so long, and no longer, Stewart would be responsible for Ustick's conduct.

What is the legal import and meaning of the contract thus entered into?

1. As the appointment was by deed, and was required by law to be by deed, and as it is recited to have been already made, it follows, that it had already all the requisites of a perfect legal deed; that it had been signed, sealed, and delivered, and all was executed and done. This is not denied to be as true in fact, as it is in law.

2. That nothing remained to be done. The whole terminated in the execution of the bond; the state of the appointment was irrevocably fixed by it. If blanks had been left, to be afterwards filled, it might be deemed evidence of authority to fill them, from all concerned, and, therefore, prove consent, and relate back.

3. That, the reference in the bond being to the identical deed, thus perfected, Stewart became a party to the deed, as much as if he had signed it; had an interest in it and it was a part of his-contract, that it should not be altered, because it was his contract.

These, then, are the rights of the parties, and their obligations towards each other, as established by themselves.

The plea avers, that after all this, and before Ustick had acted under the deed of appointment, Miller, with the assent of Ustick, altered the appointment, in a material part, and that Ustick acted under such altered or new appointment; all which is confessed by the demurrer.

1. We contend, that Miller was discharged, by the alteration of the deed being made without his consent. A deed is avoided by rasure, interlineation, or alteration, in a material part, unless a memorandum thereof be made at the time of execution and attestation. This is unquestionably the rule; and it is for those who claim the benefit of an exception, to show that it is an excepted case. Now, it is clear that the deed in question was altered, after the execution, in a material part; and it follows, of course, that it is avoided. If the deed is avoided, the obligation is at an end. It may be supposed, that the alteration here is not material; a suggestion, the value of which, as regards a surety, will be considered hereafter. But the inquiry, in such cases, is not whether the alteration is material, but whether it is in a material part. The inquiry never can be, whether the alteration is material; for no alteration can be said to be material, if you can perceive that it has been made, and how. An interlineation can never be material, for it may always ''Johns. Rep.'' 54. 58, 59. 4 never incumbent upon the party, therefore, to show that he has been injured, or might have been injured; or that, in the particular case, the alteration is material. The principle in question is founded in policy, and intended to preserve the solemn evidences of transactions among men, by denouncing every alteration, as unhallowed and forbidden.

But it is contended, that an alteration, by consent of the parties, does not vitiate.

Suppose the position, for the present, to be correct; then, as it is consent which neutralizes the poison of the alteration, the effect will only be co-extensive with the cause. It is not vitiated as to him who consents; but how stands it as to others? It produces its ordinary legal consequence. It is, indeed, conceded, that if the contract is put an end to, or altered, the surety is discharged. It is conceded, too, that if the guaranty extends to part only, and that part is altered, the surety is discharged. But, it is contended, that if the guaranty be for part only, and other parts be altered, that does not discharge the surety. For this, no authority is cited, but the case in 1 T. R. 391. (note,) which has no analogy. That was simply a question of intention, or of the true interpretation of the surety's undertaking.

We answer, then, (1.) That the proposition is a very questionable one. If there be one contract, consisting of parts, and, the whole contract being recited in the engagement of the surety, as the ground and consideration of his undertaking, he engages for a part, the whole is to stand, or he cannot be charged. Else the Court must, in every case, undertake to decide, not only upon the dependence and connexion of the parts, but how far they entered into the views of the surety. (2.) It is not the case here. The undertaking was for the whole deed, as it originally stood, and an addition is afterwards made to it. If the appointment had been for nine townships, and the bond for eight of them, it would have been somewhat such a case. But could the deed, in that case, have been altered by striking out the ninth? The only question, then, is, whether this alteration was in a material part of the deed; for it is admitted, that it was done without the consent or knowledge of Stewart. It was evidently a material part, and, indeed, the most material part, of the appointment. It was, therefore, avoided as against all but those who consented.

2. Admitting the consent of Miller and of Ustick to be good, and binding between themselves, what is the legal operation of their conduct? We contend, that it put an end to the deed which previously existed, and created a new deed. Was the deed, after the alteration, the same deed as before the alteration, or was it a different deed? If it was a different deed, then, what took place was equivalent to a surrender, a new acknowledgment, and a new delivery. That it was a different deed, is manifest, because it comprehended more than the first. Yet it was an entire deed, and the whole was one single appointment, undivided and indivisible. The first was also an entire deed, and, as we have seen from the pleadings, was consummated by delivery, and was in the possession of Ustick. What was the date of the deed after the alteration? Suppose it had been done on two different days, which would have been the date? It cannot have two dates, because it is one deed. A return for alteration, and an acceptance after alteration, is a surrender, for there must be a surrender, to enable a second execution. It may be admitted, that the deed might be put in his hands for a special purpose, and then it would not be a surrender; as, to read it, or to take a copy, or the like. And this may be done by parol. A re-acknowledged deed dates from re-acknowledgment. It cannot be divided, because it is an entire deed. The latest act, therefore, will give date to the whole. The appointment after the alteration, then, is not the appointment for which the defendant was bound.

3. This is the case of a surety.

It is no answer to a surety, to say that the alteration is not material. He has a right to determine for himself whether he will or will not consent to the alteration; whether HE thinks it material or immaterial. Suppose he had been consulted, and refused his consent, no matter from what motive. Not consulting him, is, at least, equivalent to refusal. Who can tell what considerations might have justly influenced him? But the great objection to any latitude is this, that if the narrow limits, defined by numerous and uniform decisions, be not adhered to, there will be no limit at all. The limit is this: no power of man, or circumstances, can alter your engagement. You know exactly the extent of the engagement you enter into. There will be no equity against you, no intendment or legal construction. A surety cannot be held beyond the precise terms of his agreement. It is upon the basis thus established, that suretyship stands, and it would not stand without it. It is a needful, but it is always a perilous undertaking; and its perils most frequently overwhelm those whom one could wish to see saved, the generous and the humane. It cannot be necessary or politic to increase its dangers. March 10th.

Mr. Justice STORY delivered the opinion of the Court, and, after stating the case, proceeded as follows: