White v. Case — 13 Wend. 543

Majority

p. 543

White vs. Case.

NEW YORK,

May, 1835.

Headnote

. « Where a party guarantees the collection of a note, and the maker, before it falls due, removes from the state, the holder is not bound to pursue the maker, but may resort to his action on the warranty; in such case, however, the holder must show that he has availed himself of the remedies afforded by the laws of the state, to recover the money of the maker—such as the suing out of an attachment under the absent debtor act.

Error from the Oswego common pleas. W. and J. White sued Case before a justice, on a note for $10, made by Case payable to bearer, and on a guaranty given by Case on a note for $30 drawn by one Hanford, bearing date 1st March, 1831, payable to bearer six months afterdate. 'The guaranty was in these words: “ Value received ; I hereby guarantee the collection of the within note;” which was endorsed on the $30 note, and signed by Case. A witness for the plaintiffs testified that Hanford removed out of the state about the time the note given by him became due ; the precise time of his removal he could not state, but he had the impression it was sometime in the month of Avgust. The justice rendered judgment for $46,damages, and for ^0-costs. The defendant ant sued out a certiorari, and upon the above facts being returned by the justice, the common pleas of Ostoego affirmed the justice’s judgment for $12,A”., the amount of the first note with the interest thereof, and reversed the residue of the judgment; and in pursuance of the statute, 2 JR. 8>. 257, § 257, allowing the court of common pleas to award costs as to them shall seem just, where a judgment is affirmed in part, the common pleas of Oswego awarded $18,75 (being three-fourths of $25) costs in favor of Case, the party suing out the certiorari. The plaintiffs below sued out a writ of error.

W. F. Allen,

for the plaintiffs in error, insisted that the removal from the state of the maker of the note authorized a suit upon the guaranty, without a previous attempt to collect the money from the maker; insisting that upon a second con-

p. 544

of the contract of guaranty, it cannot be intended that it was within the contemplation of the parties that the holders should pursue the maker wheresoever he might go.

D. H. Marsh,

for defendant in error, insisted that the departure of the maker from the state did not excuse the holders from attempting to collect the money of the maker by due course of law. The guarantor undertook the money should be collectable; not that the maker should remain within the state; it was therefore the duty of the holders of the note to pursue the maker, and on failure to collect the money of him by due course of law, but not before, they might call upon the guarantor. For aught appearing in this case, the maker is amply able to pay. The duty to collect the money, by the very terms of the contract, appertains to the holders of the note ; and why should it be cast upon the guarantor by the removal of the maker, against which he had not warranted.

By the Court,

The question presented by this case is, what is the true construction of the guaranty ? It is, clear, if, according to the true construction of the terms of the guaranty, legal proceedings against the maker must be had before the holder cancall upon the guarantor, thatnothing can dispense with such proceedings but the act of the guarantor himself. The liability does not arise until the precedent condition is performed. The act of God, or of the law, cannot vary the terms upon which the guarantor agreed to become liable. It is a part of the consideration which cannot and should not be dispensed witb,byeither of these acts. Comyn’s Digest, tit. Condition, D. 1. Ibid. Action, Assumpsit, G.Bacon’s Abr. tit. Condition, M. Co. Litt. 206. Ughtreds’s case,7 Co. 1. Fonblanque, 400. 2 Vern. 340. Powell on Contr. 265. 19 Johns. R. 71. 6 Cowen, 624. The question then arises whether legal proceedings against the maker are indispensable as a condition precedent, according to the true meaning of the contract. The term collection may undoubtedly imply such proceedings; but might not circumstances exist to excuse their omision, independently of anyinterfereneeof the de

p. 545

ant" himself, within the meaning of the contract 1 The intent of the guaranty was to secure the payment of the note, and a suit at law is only a means of accomplishing it. If the means are expressly prescribed in the contract, as in Moakley v. Riggs, 19 Johns. R. 69, and Thomas v. Wood 4 Cowen, 173, they must be complied with, being a part of the contract, provided the party is within the jurisdiction of the state. If it is impracticable to use the ordinary means of coercing payment, in consequence of the defendant being gone to parts unknown, or beyond the reach of legal proceedings in the state, a reasonable construction of the terms of the contract and of the intent of the parties would control the implied obligation which,upon the face of the guaranty, was prima facie imposed. The term collection alone is equivocal,and should receive an interpretation in reference to the subject matter of the contract, and the situation or-condition of the maker. It would be, I think, too much to say, from the terms used, that the parties understood that the only test of liability of the guarantor was a suit at law against the principal. A more reasonable and probable construction would seem to be, that the guarantor intended to warrant that the note could be collected in that way—that is, by suit—and which must imply not only ability on the part of the maker to pay, but that he would be in a situation to be sued within the jurisdiction of the state in which the contract was made. So in the common case, where by the guaranty the party is obligated to pay after due course of law, the contract reasonably and fairly implies an undertaking, on the part of the guarantor, that the principal will be in a situation to be sued, or, in other words, within the jurisdiction of the state, so that he maybe sued when the demand becomes, due.

It does not, however, appear in this case but that the. note could have been collected by proceedings at law. The only evidence of the departure of the .maker from the state was hearsay; but if he in fact departed from the state, for aught that appears, a resort to legal proceedings, such as an attachment under the absent and absconding debtor act, might have insured the collection of the money. The plaintiffs therefore

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failed in laying a proper foundation for their action against the defendant, and the judgment of the common pleas must be affirmed,

Judgment affirmed.