Fishburn v. Jones.

FISHBURN V. JONES.

INDEMNIFYING BOND.-Fraudulent Representation.—Guarantee.—In an action upon a bond given with surety by one partner to another to indemnify the latter against the partnership liabilities, false and fraudulent representations as to the amount of these liabilities, made to the surety for the purpose of inducing him to execute the bond, by the partner to whom the bond was given, it was held, would constitute a good defence to the action against such surety. Such representations, without an averment of fraud, will not be sufficient in pleading. Nor will an answer that the party receiving the bond guaranteed that the firm liabilities should not exceed a certain sum be sufficient, no guarantee being contained in the bond.

APPEAL from the Lake Common Pleas.

PETTIT, J.-The appellant sued Jones, the appellee, and one Childs, on a bond given by Childs as principal, and Jones as surety, to appellant, to indemnify him against certain liabilities contracted by appellant and said Childs, under the firm name of Childs & Fishburn. The penalty of the bond is fifteen hundred dollars, and conditioned that Childs shall well and faithfully pay off and discharge, and otherwise save the appellant harmless from all liabilities on account of said firm's indebtedness; and pay off and hold appellant safe and harmless as the surety of Childs on a note given to Stevens & Son. The breaches assigned are the payment by the plaintiff of a large amount of the firm indebtedness, and the note given to Stevens & Son. Jones answered in three paragraphs. The first admits the execution of the bond, and affirms that he signed it as surety for the defendant, Childs; that the appellant fraudulently and designedly, and with intent to procure the appellee to sign said bond as Childs' surety, misrepresented the amount of liabilities of the firm of Childs & Fishburn, in this: that said firm, at the date of the signing of said bond, had on hand three hundred dollars; that the firm liabilities, including the note to A. Stevens & Son, did not exceed five hundred dollars; that the firm would immediately apply the three hundred dollars on hand to the payment of the debts; that the residue of said indebtedness could and

Fishburn v. Jones.

would be easily paid in the regular business to be carried on by said Childs as successor of the firm of Childs & Fishburn; that appellee, relying on the representations and believing them to be true, signed the bond; that the same were false, etc., in this: that said firm did have on hand three hundred dollars, and did apply it in payment of the debts; and Childs did apply all moneys he could raise out of the business to the payment of the indebtedness, yet they were insufficient to discharge the same by one thousand dollars; that said firm indebtedness did exceed five hundred dollars, by at least five hundred dollars, "all of which the plaintiff well knew."

The second paragraph of the answer is exactly the same as the first paragraph, except that it leaves out and omits any charge of fraud as stated in the first paragraph, and instead thereof asserts that Fishburn, the appellant, at and before the time of executing the bond by Jones, guaranteed that the firm indebtedness of the firm of Childs & Fishburn did not exceed six hundred dollars; that the appellee relied on the guarantee, and believing it to be true, signed the bond. The paragraph then concludes like the first, except it does not charge fraud.

The third answer sets up the same facts as the first and second, with the exception that it simply avers that Fishburn "represented and stated" said facts to be true; that Jones relied on them and signed the bond, whereas in truth and in fact they were untrue. This answer omits all allegations of fraud as charged in the first paragraph and of guarantee as charged in the second.

To these several answers the plaintiff, Fishburn, filed separate demurrers, assigning for cause that the answers did not state facts sufficient to constitute a defence.

The demurrers were overruled by the court, and this ruling excepted to by the appellant.

The overruling of the demurrers to the answer is assigned for error.

The first paragraph, directly charging fraud and fraudulent intent, with all of the facts and circumstances attending the

Fishburn v. Jones.

execution of the bond by Jones, is so palpably good that we shall cite no authorities, but will only remind counsel and parties "that fraud renders void all contracts."

The second and third paragraphs of the answer are, in our opinion, clearly bad, and the demurrer ought to have been sustained to them. The second paragraph says that plaintiff guaranteed, etc. This is not in the bond, and cannot be injected into it to vary its conditions by answer or verbal evidence. The principle or rule is, that when parties, after whatever conversation or preparation, at last reduce their contract to writing, this must be looked on as the final consummation of their negotiation, and the exact expression of their purpose. And all earlier agreements, which are not incorporated into the written contract, must be considered as intentionally rejected. 2 Pars. Con. 548; Willard Eq. 75.

The third paragraph charges neither fraud nor guarantee, but simply that appellant represented and stated, that the debts of the firm would not exceed five hundred dollars. We do not decide that false representations, though honestly and innocently made, may not operate as a fraud and vitiate a contract made on or under them; but we do decide that in such a case the answer must contain a charge of fraud, or it will be bad.

The demurrers to the second and third paragraphs of the answer should have been sustained, and because they were not, the judgment must be reversed.

There are a number of errors assigned in reference to the action of the court after disposing of the demurrers to the answer, which we are not fully agreed upon, and as the issues have to be re-made, we think it unimportant to decide them. The judgment is reversed, at the costs of the appellee, and remanded for further proceedings.*

A. L. Jones, W. H. Calkins, and A. D. Bartholomew, for appellant.

S. I. Anthony and T. F. Merrifield, for appellee.

*Petition for a rehearing overruled.

Shoemaker, Auditor of State, et al. v. Smith et ai.

WINTERROWD ET AL. v. MESSICK.

JUDGE.-Special Appointment.—Appeal.-Although the record shows that three different judges successively sat, during the making of the issues and trial of a cause, without any evidence in the record of their appointment, the question as to their qualification cannot be raised for the first time on appeal.

APPEAL from the Shelby Common Pleas.

DOWNEY, J.-There is no question in this case, except that the record shows that three different judges sat, successively, during the making of the issues and trial of the cause, without any evidence in the record of their appointment.

No objection was made, or question reserved, in the court below with reference to the appointment or qualifications of the gentlemen who held the court.

Under the later rulings of this court, the question cannot be presented now for the first time. Feaster v. Woodfill, 23 Ind. 493; Hyatt v. Hyatt, 33 Ind. 309; Watts v. The State, 33 Ind. 237.

The judgment is affirmed, with five per cent. damages and

costs.

B. F. Love, B. F. Davis, and M. M. Ray, for appellants.
E. H. Davis and C. Wright, for appellee.

SHOEMAKER, AUDITOR OF STATE, ET AL. v. SMITH ET AL.

SINKING FUND.-Constitution.-Construction.-The word "invest," as used in section 4 of article 8 of the constitution, in order to harmonize with section 6 of the same article, must be construed as broad enough to cover loans made by the counties, and that the fund may be intrusted to them for that purpose; and yet, while covering the loan of money, it does not restrict to that mode of investment.

SAME.-Statute.-Constitutionality.-The amendatory act of February 24th, 1871, in regard to the sinking fund, is not in conflict with section 4 of article 8 of the constitution.

SAME.-Recital.-Certainty.-The act of 1871 is sufficiently certain in its reci

Shoemaker, Auditor of State, et al. v. Smith et al.

tal of the act amended; and the date of the approval of that act is not necessary to be stated in the act amending it; and the court will take judicial notice that there is no other act with the title which is recited. SAME.-Title. The title of the amendatory act adds nothing to the title of the original act, and the title of the original act is valid, because it has a single subject sufficiently indicated or expressed; and it embraces the amendments as though they had been, at first, a part of the original act. SAME.-Mistake.-Intention.-The use of the terms, "board of commissioners

of the sinking fund,” and “board of sinking fund commissioners,” in the act, does not vitiate the statute, as it is plain what party was intended. SAME.-Sixth Section.-Fourth Section.-The original sixth section of the act amended, and the entire amendment of 1871, are valid, with the exception of the fourth section of the amendment, on which no conclusion was reached, as it was not involved in the decision.

APPEAL from the Marion Circuit Court.

WORDEN, C. J.-This was an action by the appellees against the appellants to restrain the latter from distributing to the several counties of the State the school funds in the hands of the auditor, amounting, as is alleged, to four hundred thousand dollars or more, in accordance with the provisions of an act of the legislature, approved February 24th, 1871 (Acts 1871, p. 6), amendatory of an act on the subject of those funds, approved March 11th, 1867. Acts 1867, p. 21.

Judgment for the plaintiffs below.

There was no question made in the court below, nor is there in this court, except those arising upon the controverted validity of the act of 1871, above cited. A number of objections to the act in question have been urged, which will be considered in such order as is convenient and seems to be appropriate. The questions thus arising are not entirely free from difficulty, and we have given them the attention and consideration which their importance and magnitude demand. We desire to say here that we have been greatly aided, in the consideration of the questions presented, by the able and exhaustive arguments, both oral and written, of the learned counsel for the respective parties.

In order to an understanding of the questions presented, it will be proper to set out the title of the act of 1867, and