Beekman v. Hale — 17 Johns. 134

Majority

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*Beekman, survivor of Walsh, against E. Hale.

Headnote

The DUenda-D, on tile od oi‘ Och;l)<r. Id].;, wrote to tin? olaintiff, to w*om J. u. ¿¡'weremdeiu-1 show him'some You wiii get judgment against /. j as it is hard for J. to pay it from his lenity, as much as you think proper, for the collection of it from L. and 1 will, if you ⅞¾⅛⅛¾ ü¡eP°npayment ^¿Id'r. ma* agree* on.” "oíi Silme d»y. the plaintiff ¿01\⅛3¶; dated, and j. Sa(voe ¿s plaintiff for the ⅛⅞|⅞ est, on the 1st of commenced by ⅜ Pla'“tlir °‘‘ judgment re- her, isn, and Sued^íereon returned muá Íí™ap^aV'ihat any notice’ had ,⅞⅛⅛»? that he was coni afl\aha non-payment of the debt by J. II., until January, 1818. Held, that the defendant’s letter to the plaintiff, was not an absolute guaranty j but an offer or proposition to become guaranty, if the plaintiff Mould forbear, and give J. H. time for payment 5 and that the defendant ought, therefore, to have had notice from the plaintiff that he accepted the guaranty; and, no such notice being given, until more than two years after the defendant’s letter was written, and when J, II. and his partner nad become insolvent, it was held that the defendant was not liable.

THIS was an action of assumpsit, tried at the Albany circuit, in October, 1818, before Mr. Justice Spencer.

The first count in the declaration stated, that the plaintiff and Walsh were partners in trade, in October, 1815, under the firm of Dudley Walsh 8f Co., and that Joshua Lovejoy and James Hale were also partners in trade, under the firm of Lovejoy &f Hale, and were indebted to D. W, & Co., in the sum of 1,234 dollars and 8 cents ; that, in consideration of the premises, and that D. W. & Co., at the special instance and request of the defendant, would forbear, and give time to the said L. & J., for the payment of the said sum of money, as much as they, the said D. W. & Co., should agree with the said James Hale, he, the defendant, then and there, undertook, and faithfully promised the said D. W. & Co., to pay to them the said sum of money, &c.; and the plaintiffs averred that, confiding in the said promise, &c., they did agree with the said James Hale to forbear, and give time of payment to* the said L. & J., until the 1st day of October, 1816, and did actually forbear, and give time to the said L. & II., until the 1st of October, 1816, and of which the defendant had notice, <fcc., and thereby became liable. The second count stated, that the plaintiffs and D. W. being partners, (fee., and L. & H. being indebted to them, in the sum of, &c., in consideration that the said D. W. &f Co. would forbear, and give time to the said L. & II. until the 1st of October, 1816, the defendant undertook and promised to pay the said I). IV. & Co. the said sum of money, on the 1st day of October, 1816; and averred, that the plaintiff and his partner, confiding in the said promise, <fec., did forbear, and give time #to the said L. & H., until the 1st of October, 1816, of which the defendant had notice, and, according to the tenor and effect of his promise and undertak- mg, became liable to pay, <fcc. Ihe third counts was similar to the second, omitting only the name of Lovejoy, throughout. The declaration, also, contained counts for goods sold and delivered, and the usual money counts.

At the trial, the following letter was given in evidence: “ Albany, 3d of October, 1815.—Dear Sir, my brother wishing me to call on you, I am sorry I could not have seen you about the demand you have against James and Lovejoy. You will get judgment against James; as it is hard for James to pay it from his own pocket, I wish you to show him some lenity, as

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much as you think proper, for the collection of it from Mr. Lovejoy, and I will, if you please, stand responsible for the payment of it, at the time you and James may agree on. Yours, &c. /;. Hah.” “ To Dudley Walsh, Esq.” It was admitted, that Joshua Lovejoy and James Hale were partners at the time, and before, and since.

A clerk of I). W. & Co. testified, that on the 3d of October, 1815, a note was taken by D. W. &f Co. for the balance of account then due to them from L. & II., which note was as follows : “On the first day of October next, we promise to pay to the order of Dudley Walsh & Co., twelve hundred and thirty-four dollars and eight cents, with interest, value received. Albany, 3d of October, 1815, as witness my hand and seal, James Hale & Co. (L. S.) $ 1,234 Tf5. Witness, I). Whine.” That the time of payment was extended in consequence of the written assumption of some third person to see the debt paid, but who such person was the witness did not know.

The following letter from the defendant was given in evidence : “ Dear Sir, Mr. Elijah Bisley, of Fredonia, county of Chatauque, who is a partner of James Hale, wrote me that he would secure the demand in favor of D. Walsh ⅜- Co., against James Hale, to be paid in a reasonable time. If you can send the demand to some person in Fredonia, to settle, I have no doubt but good land security may be had from Mr. Risley, for the payment of this debt. Under all circumstances, probably, this would be the best arrangement #that could be made, and believe Mr. Beekman would have no objections to such an arrangement, as it appears to be a reasonable one, particularly as things are situated. Canandaigua, 10th of February, 1818. Yours, respectfully, E. Hale.” To “ Abraham Van Vechten, Esq., Albany.” It was proved that this letter was received by Mr. Van Vechten, in answrer to one written to the defendant on the 21st of January, 1818, as follows: “Sir, an execution has been issued to the sheriff of Niagara, upon a judgment obtained against your brother James, in favor of II. Beekman, survivor of D. Walsh & Co., for a demand which you have guarantied the payment of. The sheriff informs me that your brother has no property, and I have understood that he has conveyed property to you to cover the above amongst other debts. It is the wish of Mr. Beekman to close the business of D. Walsh & Co. without delay. With that view, I am directed to require payment on your guaranty. Will you write me when you can do it? Albany, January 26, 1818. Abraham Van Vechten.” “ To Mr. E. Hah, Canandaigua, Ontario county.” A witness for the plaintiff testified, that in September, 1818, he had a conversation with the defendant, in relation to the above suit, in which the defendant stated, that he supposed Dudley Walsh, deceased, had indulged his, the defendant’s, brother, James Hale, in the payment of a debt he owed to D. Walsh & Co., in consequence of a letter which he, the

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defendant, had written to the said D. W., in the beginning of October, 1815; and the defendant said, that he was sorry that Mr. Beckman had not called on his, the defendant’s, brother sooner, or notified him, the defendant, that the debt was not paid, or words to that effect; and that now he, the defendant, would have to lose it, if the plaintiff recovered against him, as his brother was considered as worth nothing. The plaintiff gave in evidence the record of a judgment, filed the 23d of October, 1817, in favor of the plaintiff, against James Hale, for 1411 dollars and 56 cents damages, and 67 dollars and I cent costs, from which it appeared, that the suit was brought and judgment recovered upon the sealed note, above mentioned, and the capias was returned in Map, 1817. A fieri facias, tested the 24th of October, 1817, was #issued on the said judgment, directed to the sheriff of Niagara, and which was returned in January following, nulla bona.

A verdict was taken, by consent, for the plaintiff, for 1,565 dollars and 4 cents, the amount of the debt with the interest and costs of the judgment against James Hale, subject to the opinion of the court, on a case containing the facts above stated.

Loucks, for the plaintiff,

contended, that the defendant’s letter of the 3d of October, 1815, was an actual and valid agreement in writing, to be responsible for his brother’s debt. The consideration of forbearance was expressed in the letter. The defendant, moreover, has admitted his guaranty, and the forbearance shown to his brother, and acknowledged his liability for the debt. The case of Leonard v. Giddings, ( 9 Johns, Rep. 355 .) and The People v. Berner and others, ( 13 Johns. Rep. 383 .) show the principles on which this action is maintainable. The case of Kip v. Brigham, ( 7 Johns Rep. 168 .) shows that the plaintiff’ was entitled to recover the costs of the judgment against James Hale, in addition to the original debt and interest.

Parker,contra,

insisted, 1. That the evidence did not support any of the counts in the declaration. Where a promise is executory, the whole consideration must be stated, and with great precision and certainty. (1 Chitty PL 297. 2 Bos. & Pull. 116. 120. Gro. Eliz. 79. 6 East Rep. 568. Buller’s N. P. 147.) Where there is a collateral undertaking for another, subsequent to the original debt, some further consideration • must be shown. (Leonard v. Vredenburgh, 8 Johns. Rep. 29 . 39.) Here the forbearance w7as to J. H., not to L. &/• H. It was not a concurrent promise ; where one promise is the consideration of another, they must be concurrent as to time. ( 12 Johns. Rep. 190 . 391.)

Again; the promise was not absolute, but conditional. It was a proposition to the plaintiff.

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2. If the plaintiff accepted the promise, he ought to show ^las use(b due diligence to obtain the money from *J. 11, He ought, also, to have given seasonable notice to the defendant, of the non-payment by J. II (2 Johns. Cases, 410. 3 Johns. Rep. 230 . 234. 7 Johns. Rep. 340 . 10 Johns. Rep. 587 . 4 Fesey, jun. 833.)

Van Vechten, in reply,

said, that the declaration was in conformity to the defendant’s undertaking. The third count omitted the name of Lovejoy. One or other of the counts must be sufficient. No notice of the non-payment of the debt was necessary; (1 Sound. 116.) but if it was, a sufficient notice has been shown.

delivered the opinion of the court. I do not perceive how this case can be distinguished from that of Stafford 'and others v. Low, ( 16 Johns. Rep. 67 .) The, alleged guaranty here is, “ I wish you to show him (James Hale) some lenity, as much as you think proper, for the collection of it from Mr. Lovejoy, and I will, if you please, stand responsible for the payment, at the time you and James may agree on.” The letter from which this extract is taken bears date the 3d of October, 1815, at which time J. II, &f J. L. were partners in trade. The letter is directed to Dudley Walsh, then a partner with the plaintiff The declaration states that, when this letter was written by the defendant, L. &f II. were then indebted to the firm of 13. & W. 1,234 dollars and 8 cents, the sum sought to be recovered ; and the consideration of the defendant’s promise is a forbearance, and giving time to L. & H., for the payment of their debt, at the defendant’s instance and request, until the 1st of October, 1816, and it, avers that the defendant had notice thereof. It appears, that on the 3d of October, 1815, the date of the defendant’s letter, a sealed note was given by Hale or Lovejoy for the balance due the plaintiffs, payable the first of October thereafter, in consequence, I admit, of the defendant’s letter. It appears, that in September preceding the trial, the defendant said, he supposed Mr. Walsh had indulged his brother James, in the payment of a debt he owed W. ⅜ B. in consequence of a letter he had written Walsh in the beginning of October, 1815 ; that he was sorry that Mr. Beekman had not called on his brother sooner, or ^notified him that the debt was not paid; and that now he would have to lose it, if the plaintiff recovered, as his brother was considered worth nothing. There is no proof in the cause, that the defendant was ever informed, until January, 1818, that the plaintiff, or his deceased partner, considered him a guaranty, or that he had notice, that the payment of the debt due from L. & II. to the plaintiff, had been extended, in consequence of the letter he had written. The question is, whether the defendant’s letter is an absolute guaranty, or an overture and

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proposition leading to a guaranty. If it be the latter, then he was entitled to notice from the plaintiff, that it was accepted and regarded as a guaranty, and that the payment of the debt had been prolonged in consequence of it. In the case of Stafford and others v. Low, the letter from the defendant, stated “ and if, in addition to the foregoing explanation, yon shall require my individual guaranty, I shall have no objection to give you that pledge.” We held, that the defendant’s engagement was conditional, dependent on the plaintiffs being dissatisfied with the security they then had ; and as they never manifested to the defendant their dissatisfaction with that security, the inference was, that they were satisfied, and did not mean to avail themselves of the defendant’s conditional offer. We refer to and adopt the principles of the case of M’Iver v. Richardson, (1 Maule Selw. 557.) that such a conditional offer of guaranty was a proposition only, leading to a guaranty, and that the defendant ought to have had notice that it was so regarded, and was meant to be so accepted, or there should have been a subsequent consent to convert it into a conclusive guaranty. It cannot be pretended, it seems to me, that the defendant’s proposition amounted to an absolute, unconditional guaranty ; for it was contingent, whether the plaintiffs would show7 the defendant’s brother lenity, by extending the payment; and the debt being then already contracted and due, there would have been no consideration for the defendant’s engagement, unless there had been a forbearance. It was a matter of uncertainty, also, whether the plaintiffs required additional security. The defendant was entitled to know, and that, too, from the plaintiffs, that they not only had given L. &f II. an extension of credit., but that *it had been done on the faith of his offer, and that they regarded him as guaranty. If it once be admitted, that the defendant’s offer was conditional, and dependent on the plaintiffs willingness to give L. & II further time, and to accept the defendant, as guaranty, and his letter as the cause of the extension of the credit, the consequence irresistibly follows, that he was entitled to be informed, within a reasonable period, of these occurrences. Were the contrary doctrine to prevail, the most unjust results would follow ; the individual offering to become a guaranty would have a right to believe that his offer had not been accepted ; he would be completely thrown off his guard, and at a distant period, when an insolvency of the principal debtor had intervened, and all hopes of indemnity were gone, he would find himself unexpectedly called on to pay a debt which he never knew that he was liable for. Good faith., and the very nature of the negotiation, alike require it of the party acting on and accepting a proffered guaranty, to apprise the other party of what is done, and what his liabilities may be. In the case of Russell v. Clark’s Executors, (7 Crunch, 91.) Chief justice Marshall, in delivering the opinion of the court, after

Dissent

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deciding, that certain letters, written by Clark &/■ Nightingale, did not constitute a contract by which they undertook to render themselves liable for the engagement of Murray &f Co. to J^wsse^j observes—“ had it been such a contract, it would certainly have been the duty of the plaintiff to have given immediate notice to the defendant of the extent of his engagements.”

It would be vain to say, that James Hah was the defendant’s agent, and that he was bound to give the requisite notice. There was no evidence of the fact, that he was such agent. It certainly does not result from the defendant’s consent to become a guaranty, and there is nothing else to found the suggestion upon. After the insolvency of Lovejoy and Hale, and after the lapse of nearly three years, in all which time, for aught that appears, the defendant remained in ignorance, whether his proposition had been acceded to by the plaintiffs, it is impossible to consider him liable.

(dissenting.) 1 incline to the opinion that, so far as regards the debt and interest, the plaintiff is entitled to recover.

The letter of the defendant contains a promise to “ stand responsible” for the payment of the debt, at such time as his brother James and Mr. Walsh should agree on. Mr. Walsh did agree with his brother James to extend the credit for about a year; and James Hale gave the note accordingly. This extension of credit appears to have been given in consequence of, and in reliance upon, the letter of the defendant. The forbearance to sue is a valid consideration ; and that consideration is expressed in the letter.

The words “ if you please,” before the words “ I will stand responsible,” are mere expletives, and do not vary the legal import of the letter.

The contract of guaranty was consummated as soon as Mr. Walsh was pleased to accept the offer, and to act upon the faith of it; as the evidence clearly shows that he did.

It was like a letter of credit; and as if he had written, “ let my brother have goods, as you and he shall agree, and I will stand responsible, if you please.”

In neither case is it incumbent on the party receiving such guaranty to give notice that he has complied with the request. The law implies a privity and confidence between the surety and his principal; and the surety is bound to inquire, at his peril, whether the principal has contracted upon his credit, and to What extent.

In regard to the costs of the suits against James Hale, the plaintiff is not entitled to recover. That proceeding was altogether voluntary on the part of the plaintiff; he was not bound to sue the principal, in order to charge the surety. The guaranty was for the debt and interest only.

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I am, therefore, of opinion, that the plaintiff is entitled to judgment for the amount of the sealed note and interest,^[1]

Judgment for the defendant.

(a) (a) Ante, page 114, note. 16 Johns. Rep. 69 , 70, notes.