G. B. the sum of £400, on or before the thirteenth of August then next; breach, non-payment by the day. On the trial it appeared that the plaintiff had been notified that he would be held liable on the note; but the note was not paid, and the defendant insisted that the plaintiff was only entitled to nominal damages. The Lord Chief Baron Abinger overruled the objection; and the plaintiff had a verdict for the note and interest. On showing cause why there should not be a new trial, this was held right. Alderson, B., said, "To what extent has the plaintiff been injured by the defendant's default? Certainly to the amount of the money that the defendant ought to have paid according to his covenant;" and he likened it to an action of trover for title deeds. (t) But I am obliged to say that these decisions appear to me somewhat to conflict with the important and fundamental rule which has been already stated, that actual compensation will not be given for merely probable loss. (u) Nor is the argument that the party having bound himself to do a particular act, must therefore be held liable in the full amount, of greater weight. There is a multitude of contracts of the same character, to which no such doctrine is applied. If, instead of a contract to pay a certain sum of money, the agreement be to do any other [307] particular act, an inquiry is indispensable to ascertain how far the party plaintiff has been damnified by the nonfeasance. It is, perhaps, no great stretch of reasoning to say that the damages arising from the non-payment of money should be measured by the sum itself. Still, a doubt may often arise whether the party who holds the agreement has been injured to that extent; and this is well pointed out by a very accurate judge, in the case last cited. Parke, B., said, "The defendant may, perhaps, have an equity, that the money he may pay to the plaintiff shall be applied in discharge of his debt; but, at law, the plaintiff is entitled to be placed in the same situation, under this agreement, as if he had paid the money to the payees of the bill." This remark of a very acute judge, states the evil, but suggests no remedy. The law is thus carried into execution unattended by (t) Upon the analogy of these decisions the case is probably to be upheld which I have elsewhere cited, where it was decided that in an action brought on a covenant to discharge an existing incumbrance, the plaintiff was entitled to recover the full amount of the incumbrance, though nothing had been paid. Lethbridge v. Mytton, 2 B. & Ald., 772. Ante, 188. (u) Ante, 43 and 241. the equity which should temper it. It is only one of many instances illustrating the inconvenience and serious hardships that often flow from the separation of the jurisdictions. Either the plaintiff should only be allowed to recover for actual loss; or if the court proceed upon the idea of compelling the defendant specifically to perform his promise, it should carry the engagement into full execution, by applying the proceeds of the judgment where they belong. This a court of law possesses no power to do; and as it is incompetent to do complete justice, it should confine its remedies exclusively to those cases where actual injury appeals for redress. So long as the original division line between the common law and equity is preserved, any rule by which actual damages are given where no actual loss is sustained, has, in truth, no other effect than to engraft on the courts of law a species of specific performance, irregular and illegitimate; and which neither their forms of procedure, nor the general arrangement of their system, enable them to exercise without great danger of injustice and abuse. The rule should be considered cardinal and absolute, that actual compensation shall only be given for actual loss. (1) It appears, upon the whole, settled, that if the engagement be collateral, or more properly speaking indirect, whether only implied in law, or whether it be an undertaking to indemnify and save harmless against the consequences of the default, there (1) The plaintiff entered into a partnership with A. & B., on condition that they should furnish security as to the state of the firm. The defendant covenanted with the plaintiff that the amount due the old firm should not be less than a sum specified, and that the debts of the firm should not exceed a certain sum. It appearing that the debts exceeded the amount specified, but also that less than that amount had been paid on account of the liabilities of the old firm, it was held, that the defendant's covenant was a contract of indemnity only, but that the plaintiff was entitled to recover as damages the actual loss which he had sustained by reason of the defendant's breach of covenant; and that the amount of such damage was purely a question for the jury. Walker v. Broadhurst, 22 Eng. L. & E., 587; S. C., 8 Exch., 889. In a covenant between A. & B., it was stipulated that A should pay all costs and damages caused by neglect or default on his part in relation to the terms of the covenant. In an action brought by B. for breach of the covenant, no evidence being given of any actual damage sustained by him, but only evidence as to the value of the properties intended to be conveyed, it was held that he was entitled to damages equivalent to the benefit he might have lost, or to the loss he might have sustained by the non-performance of the covenant. Crommelin v. Donegall, 3 Irish Law R. (2d series), 434. damage to be recovered must be proved. And so it is held, whether the action be by the surety against the principal, or by the creditor against the surety. In a case at nisi [308] prius before Lord Ellenborough, on a bond conditioned to indemnify the plaintiff against a bond given by him to a third party, though it did not appear that he had paid it, his Lordship said that he did not see any measure of damages except the penalty of the bond; and the jury so found. (v) But this is not the result of the more recent authorities of the courts in this country. In an early case, the question "whether on an escape the bail to the liberties became liable for the whole penalty, or for the damages sustained by the sheriff by reason of the escape?" was raised in New York, but not decided. (w) But it was soon after said that neither the sheriff nor his assignee could recover without showing injury sustained, and that consequently, recapture after the escape, or a voluntary return, was an answer to a suit against the sureties for the liberties. (x) The subject has been involved in some doubt by various decisions, which have confounded the right of action with the measure of damages, and both these questions again with that of the evidence necessary to prove the claim. Thus it has been sometimes held that the record of judgment against the surety is conclusive evidence against his principal, and fixes the amount of recovery. So in an action by the sheriff against the sureties in a bond to the jail liberties, it was held that the sheriff, having given notice to the defendants of the escape suit against himself, and they having thereupon assumed its defense, this was conclusive evidence that the plaintiff had been damnified to the extent of the judgment. (y) So again, in an action by overseers of the poor on an order of bastardy to recover against the putative father the weekly sum directed to be paid for the maintenance of the child, the order was held to be prima-facie evidence of the demand, and that it rested with the defendant to show himself exonerated from the payment, in order to avoid the recovery. (2) (v) Wood v. Wade, 2 Starkie, 166. (2) Wallsworth v. Mead, 9 J. R., 367. A judgment against the person to be indemnified, if fairly obtained, especially if obtained on notice to the warrantor, is admissible in a suit against him on his contract of indemnity." Clark v. Car- [309] On this subject a few observations may be permitted. A judgment against the surety may, upon the ground of privity, be proper evidence against the principal, and vice versa ; but it is manifest that the record can only be evidence of the facts which it declares, and that payment is not one of these. The judgment, though perhaps conclusive evidence of the debt being incurred, is no proof whatever that that debt has been paid or that it ever will be. In a case in New York, this erroneous view of the subject was carried to a great length; and it is desirable carefully to notice the decision, and those by which it has been since overruled; for unless we adhere strictly to the principle that actual compensation shall only be awarded for actual loss, we are without any guide whatever in this branch of the law. Suit was brought (a) by the overseers of the poor against the sureties in a bond given by the father of an illegitimate child, before its birth, to save harmless and indemnify the town against all expenses by reason of the child. After the birth, an order was made by two justices, according to the statute, fixing the amount of the defendant's liability. It was insisted that this order was competent evidence against the defendant, and that the town was not bound to show the actual expenditure of the sum claimed; and it was so held by the Court of Errors. Jones, C., said, "It was urged as the general rule, applicable to contracts of indemnity, that the party who is to be indemnified cannot maintain an action on the contract against the indemnifier until he has been damnified. But that rule does not necessarily, and in all cases, require the actual payment of the damages or expenses incurred to enable the party to sue for and recover the indemnity. When the obligation is to indemnify against damages or expenses, and the obligee has become absolutely bound and liable to pay the expense or damage incurred by the charge, and his demand against his obligor upon the bond of indemnity, by reason of the charge against himself, is reduced to a certainty, it would surely be just and reasonable, and would violate no principle of [310] law, to permit him to enforce his own demand against his obligor in the first instance, and before he satisfies the charge against himself. It is an operation which avoids circuity, and essentially subserves the purposes of justice and equity, by enabling him who is entitled to the indemnity to obtain of Lowell v. Parker, 10 Met., 809. See, also, Heard v. Lodge, 20 Pick., 53. Train v. Gould, 5 Pick., 380. Foxcroft v. Nev ens, 4 Greenl., 72. (a) Rockfeller v. Hayes v. Seaver, 7 Donnelly, 8 Cowen, the means to satisfy the charge he has incurred from the party who ought to bear it, and thereby save himself the necessity of an advance and payment out of his own funds and estate, which might be inconvenient and perhaps involve him in serious embarrassments." (b) * * * * * "If there had been no adjudication against the father, assessing the amount he should pay for the indemnification of the plaintiffs, and there had been no admission in pleading of the amount demanded, other evidence might have been necessary to enable the jury to assess the damages; but the plaintiffs might in such case have shown that the father had, with the consent and concurrence of his sureties, agreed to pay a weekly or monthly sum for the maintenance of the child, and on the principle of the case of Hays v. Bryant, (c) have recovered that sum for their indemnity against the charge; or, as I apprehend, it would have been sufficient for them to show what sum was reasonably necessary for the support of the child during the time it had been chargeable to them; and for that sum, if the child was shown to have been provided for by their procurement, the jury would have been warranted in giving their verdict. Other cases might be put: the town, for example, may have an establishment upheld by a common fund, or supplied by the contributions of the inhabitants in money or provisions, for the maintenance and support of those who are chargeable to it, and where provision is made for illegitimate children as well as paupers; or the infant may be left with the mother by the overseers of the poor, under some arrangement with her for a reasonable allowance for its support; or expenses may be incurred for its maintenance, which, from want of means, or from forbearance or other causes, remain unpaid. In none of these supposed cases, each of which may occur and is within the scope of probability, would there be an expenditure or actual payment of money; and could it be pretended that in any one of them the overseers of the poor would be disabled, by that cause, from recovering a reasonable and just compensation for the maintenance of the child? The measure of damages might, in some of these cases, be attended with difficulties, which might sometimes be insuperable; but the right of the plaintiffs to compensation for the use of those who might have a claim upon them for the maintenance of the child, and thus enabling them to satisfy the charge, would be undeniable, and the difficulty of the remedy alone would obstruct it. In the present case the overseers of the poor, to obviate all difficulties on that point, have had the precaution to obtain the further relief provided by the act, in an order of bastardy, by which the weekly contribution of the reputed father, to the overseers for the support of the child, is judicially and conclusively settled and determined. This adjudication was in evidence, and, in my judgment, it was conclusive upon both the father and his sureties, as the rule of damages in the action on the bond." (d) (b) P. 648. (c) 1 H. Bl., 253. (d) The same point was again decided in the People v. Corbett, 8 Wend., 520. But in Churchill v. Hunt, 3 Denio, 321, these decisions are said to rest entirely on the spirit and intent of the statute, "giving these bonds an effect which they would not have at common law;" and it is there said to be for the same reason that in a claim against the sheriff on bonds for the jail liberties, it is unneces sary to prove damage. Kip v. Brigham, 7 J. R., 168. |