Walrath v. Thompson — 4 Hill & Den. 200

Majority

p. 200

Walrath vs. Thompson.

Headnote

A written guaranty is to be construed by the same rules and may be explained by the same evidence as other contracts. Per Cowen, J.

Where the guaranty was in the form of a letter from the defendant to the plaintiff, thus: “ As there was no time set for the payment of your account, and Mr. J thought it would be an accommodation to him to have you wait until &c.; if that will answer your purpose, I will be surety for the payment” &c.: Held, that the words your account were ambiguous, and that parol evidence was admissible for the purpose of applying them to an account of J. not existing when the letter was written, but contracted afterwards on the faith of it.

Had the guaranty related to a precedent account of J. with the plaintiff, it would have been within the statute of frauds, and void for not expressing a consideration. Per Cowen, J.

Independently of oral explanation, the words of a guaranty must be construed most strongly against the guarantor. Per Cowen, J.

Assumpsit, tried at the Madison circuit in September, 1841, before Gridley, C. Judge. The case proved at the trial was this: One Johnson, desiring a credit of the plaintiff for some iron castings, applied to him for that purpose in the spring of 1839. A conversation .ensued, in which Johnson stated that he would get the defendant’s order for them. The plaintiff told him he would enquire as to the defendant’s responsibility j and shortly afterwards Johnson came again and brought a letter from the defendant, directed to the plaintiff, in these words :

“ May 21st, 1839.

Mr. D. Walrath,

Sir—Yours of the 17th, to Mr. Johnson, was shewn me this morning, and as there was no time set for the payment of your account and Mr. Johnson thought it would be an accommodation to him to have you wait until the first of January next, if that will answer your purpose I will be surety for the payment of the money to be paid at that time. Amount, $48,50.

Yours with respect,

" D. Thompson.”

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The plaintiff, on the receipt of this letter, delivered castings to Johnson to the amount of about $48,50, and took his note for the same at seven months. Intermediate the date of the letter and the first of January following, Johnson became insolvent ; and the plaintiff, having waited the time mentioned in the letter, brought this action to enforce the defendant’s undertaking. The circuit judge was of opinion that the words your account, in the letter, imported a precedent account, and that the defendant’s undertaking was therefore void for not expressing a sufficient consideration. He accordingly directed a non-suit ; whereupon the plaintiff excepted, and now moved for a new trial on a bill of exceptions.

JD. Brown, for the plaintiff.

J. Watson, for the defendant.

By the Court,

No consideration being directly mentioned in the letter, which (as it is contended) meant a precedent account, the question is whether it can be sustained, under the circumstances, as a valid guaranty consistently with the statute of frauds. It cannot, if the words your account necessarily mean a precedent account. If they should be understood to mean your account yet to be made, then the letter was in effect a common order for the prospective delivery of goods; and the defendant is clearly liable. I am of opinion that the words are ambiguous, and therefore open to explanation by parol. The words your account may mean either your past or future account; and from the conduct of the parties and other extrinsic facts, no doubt is left which was really-intended. In Haigh v. Brooks, (10 Adolph. & Ellis, 309,) the words addressed to the plaintiffs were, “ In consideration of your being in advance to L. in the sum of £10,000, for the purchase of cotton, I do hereby give you my guaranty for that amount on their behalf.” It was held, by the exchequer chamber, that the guaranty did not necessarily imply a past ad

p. 202

vanee; and that the plaintiffs might show on the trial that future advances were contemplated.

The case is in point, and I think sustained by the principle of many other decisions. Guaranties must, as we have lately held in several cases, be construed by the same rules and may be explained by the same evidence as other contracts. There is no reason for any distinction. But independently of oral explanation, the words being those of the guarantor, must be taken most strongly against him.

I am of opinion that the nonsuit should he set aside, and a new trial granted ; costs to abide the event.

New trial granted.