Herrick v. Guarantors' Finance Co. — 58 A.D. 30

Majority

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Jacob Hobart Herrick, Respondent, v. The Guarantors' Finance Company of Philadelphia, Appellant.

Headnote

Oua/ranty—when presumed to relate to a partieula/r note — it is transferable in the-same way as the note, and is subject to the law merchant.

In an action brought upon a written guaranty, alleged to have been given to-assure the payment of a note, the fact that the note and guaranty are identical as to the names of the parties, the amount payable, the date, time and place of" payment, and that in every transaction which appeared in evidence the note- and guaranty accompanied each other, creates an inference that the guaranty was given to assure the payment of that particular note.

It seems, that a guaranty accompanying a negotiable note is transferable in the-same way as the note itself, and is governed by the law merchant.

Appeal by the defendant, The Guarantors’ Finance Company of Philadelphia, from a judgment of the Supreme Court in favor of” the plaintiff j entered in the office of the clerk of the county of New York on the 1st day of February, 1900, upon the verdict of a jury-rendered by direction of the court.

The action was brought to recover upon a written guaranty-

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alleged to have been given to 'assure the payment of a certain note for $5,000, dated September 14, 1897, made by George W. Gray and payable to Win. J. Hendrick at the Seventh National Bank, Philadelphia, Penn., four months after date. The note and guaranty were put in evidence and the guaranty, which is dated September 25, 1897, bears the defendant’s name and recited that “ This is to certify that there has been deposited with this company satisfactory collateral for five thousand dollars ($5,000), and that the payment of five thousand dollars ($5,000), without interest to the holder hereof, by William J. Hendrick, in four months from September fourteen, 1897, at the Seventh National Bank of Philadelphia, is hereby guaranteed by the Guarantors’ Finance Company of Philadelphia, Pa.”

Both note and guaranty, the complaint alleges, were delivered to William J. Hendrick for a valuable consideration, and both were, for a valuable consideration and before maturity, transferred and delivered to J. H. Herrick & Co., and upon maturity payment of the note, though it was duly presented, was refused and protest made and notice thereof given, and payment of the guaranty, though it was duly presented, was refused. Thereafter, the complaint alleges, a transfer of both was made for value to the plaintiff. The answer alleged that the plaintiff had come into possession of the instruments fraudulently, and denied that any consideration had been given or that the plaintiff had title thereto.

The plaintiff testified that he received the note and guaranty from his firm, J. H. Herrick & Co., who had purchased them from the J. Walter Thompson Company, and that he got possession of the note about twelve days before it became.due ; that he was a note broker and both bought and sold notes; that he knew the J. Walter Thompson Company to be a responsible company, but knew neither Mr. Gray nor Mr. Hendrick mentioned in the note and the guaranty - that he gave to the Thompson Company a check for $4,978.45 in payment and the next day received from Mr. Thompson his indi, vidual check for the same amount. Mr. Thompson testified that the note and guaranty had been in the possession of his company and was received from a Mr. Lewis in payment for advertising and thereafter transferred for value to the J. H. Herrick Company; that Mr, Herrick borrowed from him as añ individual money with which, he presumed, the note was purchased. Mr. Beach, who was

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employed by the Thompson Company, testified that the -note and guaranty in evidence were given to him by Mr. Lewis in payment for advertising. The note bears the indorsement: “ Wm. J. Hendrick for collection, J. H. Herrick & Co.” And a notary’s protest states that this note with guaranty attached was duly presented at the Seventh National Bank of Philadelphia and payment refused, notice whereof was given to indorsers and the Guarantors’ Finance Company of Philadelphia, “ the guarantors.”

A motion was then made to dismiss the complaint on the grounds that no cause of action was proved; that there was no evidence that the plaintiff had title to the guaranty, inasmuch as the chain of title from the guarantors to the plaintiff is not completely shown, and that the guaranty is not negotiable paper, which motion was denied. Both sides thereupon asked for the direction of a verdict, and a verdict was directed in favor. of the plaintiff. From the judgment so entered the defendant appeals.

Louis Marshall, for the appellant.

Duncam, Edwards, for the respondent.

It. will be seen that the note and the guaranty are identical as to the names of the parties, the amount payable, the date and duration of time and the place of payment. And the evidence shows that in every transaction herein appearing the note in evidence and the guaranty went together until they came into the possession of the J. Walter Thompson Company, when they were bought by J.. H. Herrick & Co., and were thereafter presénted at the bank for payment and protested. It is not denied that they were both given as alleged by the plaintiff, excepting that there is a denial that the guaranty was given to go with this identical note.

From the similarity in date and amount of the note and guaranty and the fact that they were always together, the inference is fairly to be drawn that the guaranty was given to assure the. payment of this particular note. It was shown that the note was not paid, and that thereafter the defendant refused to honor the guaranty. The making of the note is admitted, and it bears the indorse, ment of Wm. J. Hendrick and of J.

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complete chain is there to be found. The testimony that Mr. Lewis gave the note and guaranty to J. Walter Thompson with no explanation of how Mr. Lewis became possessed of them, and that Mr. Thompson loaned money to Mr. Herrick is not material. It is not disputed that Mr. Thompson obtained the note for value with the guaranty, and.Mr. Herrick, therefore, obtained a good title. A guaranty accompanying a negotiable, note would seemingly be transferable in the same way as the note and would come under the law merchant.

The only weakness in the plaintiff’s case on the question of title to the note is the fact that no sufficient proof was made that it was duly indorsed. If objection had been made that the indorsement on the note was not proven to have been made by the indorser, it would have raised a serious question. The note, however, being admitted and the point as to the indorsement not having been made but presumably waived, the learned trial judge was justified in concluding that the transfer of the note to plaintiff was established. The guaranty being in terms given to secure the holder of the note, there was sufficient evidence to support the verdict as directed, and the judgment and order accordingly should be affirmed, with costs.

Yah Bbuht, P. J., Rumsey, McLaughlin and Hatch, JJ., concurred.

Judgment and order affirmed, with costs.