Case ID: mass_63/html/0131-01.html
Source: Caselaw Access Project
Author: {"author": "Dewey, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Uriel Crocker & others, Trustees, vs. Lemuel Gilbert. Same vs. Same.
    Where a promissory note is made payable in three years from date, and, alter the expiration of that time, a party covenants that the note shall be paid “ according to its tenor,” the contract must be understood with reference to a note overdue, and the guaranty is equivalent to a stipulation for payment of a note payable on demand.
    The promisor, in a note, secured by mortgage of real estate, sold the equity of redemption, and, after the note became due, the purchaser guaranteed its payment under seal. The mortgagee subsequently took possession of the land for condition broken; and, in an action on the guaranty, it was held, that the guarantor might be called upon at once to pay the same, and the mortgagee was not bound to first apply the mortgage security.
    An objection that a declaration is defective should be taken either by a demurrer or a motion in arrest of judgment, and the point is not properly raised on the trial to the jury of the issues of fact.
    In an action on a guaranty indorsed on a promissory note, “ that the within note shall be paid,” the declaration alleged, that “the said A. (the guarantor) has not paid said note and interest, but wholly neglects and refuses,” &c., instead of averring that “ the note had not been paid.” This defect, was held to be cured by a verdict, and to be no ground for an arrest of judgment.
    An objection to the declaration, that it failed to allege notice to the defendant of the non-payment of the note, even if such notice was necessary, comes too late after verdict.
    
      These were actions of covenant. John H. Braynard, on the 1st day of January, 1844, executed two promissory notes, by each of which he promised to pay to William J. Walker or order, the sum of thirty-seven hundred dollars, in three years from date, with interest semiannually, at the rate of six per cent. On the 1st of July, 1847, the notes being overdue, and indorsed in blank by William J. Walker, the defendant indorsed them, under his hand and seal as follows: “ I hereby promise Uriel Crocker, Thomas Marshall, and John B. Walker, trustees, that the within note shall be paid, principal and interest, according to its tenor.” The actions were on this guaranty, and the assignments of breaches were as follows: —
    “ Yet the said Gilbert, though often requested, said note and said interest has not paid, but wholly neglects and refuses so to do. And so the said defendant, his said covenant hath not kept, but hath broken the same.”
    “ And the said Walker had indorsed the said note to the plaintiffs, long before said covenant; yet the said Gilbert, though often requested, hath not paid the said note, nor the interest thereof, but wholly neglects and refuses so to do. And so the said defendant, his said covenant hath not kept, but hath broken the same.”
    The trial was in this court before Bigelow, J., who reported the cases to the full court.
    At the trial, the plaintiffs offered in evidence the two promissory notes, with the writing indorsed thereon, signed and sealed by the defendant.
    The defendant objected to the sufficiency of the declarations, on the ground that a breach of the covenant relied on was not properly alleged, but the judge overruled the objection.
    It .was proved or admitted, that the two notes were, at their inception, secured by the promisor, by a conveyance in mortgage of certain real estate ; that the defendant purchased the right in equity to redeem the mortgaged real estate in December, 1845, after which he executed the agreement on the back of the notes; that the plaintiffs, after the execution of the agreement, and before the commencement of these actions, took possession of the mortgaged real estate for condition broken, and, since then, had been in possession of the rents and profits thereof; and that three years had not expired since possession was taken.
    The plaintiffs offered no other evidence, and thereupon the defendant moved for a nonsuit. This motion was not granted, the judge being of the opinion that the plaintiffs were entitled to recover the amount of the notes and interest, less the sums received for rents and profits of the mortgaged premises. It was, thereupon, agreed by the parties, that a verdict should be taken for the full amount of the notes and interest, subject to the opinion of the whole court.
    And if, on the foregoing facts, the whole court shall be of the opinion, that the plaintiffs are entitled to recover, they are to remit so much of the verdict as shall be equal to the sums received by them for the rents and profits of the mortgaged premises, up to the time of the rendition of judgment, and judgment is to be rendered for the balance. If the court shall be of the opinion that the plaintiffs are not entitled to recover, a nonsuit is to be entered, or such other disposition is to be made of the case as the court shall think proper.
    
      A. W. Austin, for the plaintiffs.
    
      E. F. Hodges, for the defendant,
    cited Platt on Covenants 569; Shep. Touch. 164; Dorsling v. Mill, 1 Maddock, 541; Buckmaster v. Grimdy, 1 Scammon, 310; Vcmderkemp v. Skel-ton, 11 Paige, 28; Grannis v. Miller, 1 Ala. 471; Tredwell v. Steele, 3 Caines, 169 ; Newton v. Wilmot, 8 Mee. & W. 711; McDonald v. Hobson, 7 How. 745; Newell v. Roberts, 13 Conn. 417; Frazer v. Skey, 2 Chit. 646; Mitchell v. Dali, 2 Har. & Gill, 159; Griffin v. Fairbrother, 1 Fairf. 91; Jackson v. Hanson, 8 Mee. & W. 477.
   Dewey, J.

1. It is objected to maintaining this action, that the covenant was one not possible to be performed, and so no action lies for the breach of it. But we think this view of the case is fundamentally erroneous. It is true that, talcing the promise of the defendants literally, the note was to be paid according to its tenor, and, the time specified in the note for payment having already past, when the covenant was entered into, the note could not be paid at the day stipulated in the note. But the contract is to be construed with reference to the state of things then known to the parties as existing, and, it being thus known to them, that the day of payment of the note had already passed, the parties must be understood to be contracting in reference to a note overdue, and the guaranty was equivalent to a stipulation for payment of a note payable on demand.

2. The contract being under seal, no further proof of consideration was required. Contracts under seal avail by their solemnity, and sufficient evidence of consideration is thereby shown. If any further consideration was requisite, we apprehend the relation of these parties, as to their interest in the premises held by the plaintiff as mortgagee, and by the guarantor as the owner of the equity of redemption, and thereby to be benefited by the delay in foreclosing the mortgage, might be held to raise a sufficient consideration for the promise of the defendant. Adams v. Bean, 12 Mass. 138.

3. This covenant is not one, the performance of which was to be postponed until the mortgage security had been made available, and the proceeds applied to the note, leaving the guarantor liable only for the deficiency. On the other hand, he might at once be called upon to pay the same, leaving him the full benefit of the security in the land, so far as the same was not enforced by the mortgagee.

4. It is then said that the breach of the covenant is not well alleged in the declaration. This point is not properly raised on the trial, to the jury, of the issues of fact. If the declaration is defective the defendant should take the objection either by a demurrer or a motion in arrest of judgment. The question being stated in the report, we have, however, considered it, and, treating it as a motion in arrest of judgment, are of opinion that it cannot prevail. It is true that the breach is not assigned in the most apt words, alleging, as it does, that “the said Gilbert has not paid said note and interest, but wholly neglects and refuses,” &c., instead of averring “ that the note had not been paid.” But, after verdict, this defect is cured, inasmuch as the plaintiff, to have maintained his action upon this covenant, would necessarily have been required to show the note unpaid. The first step would be to show the debt as still undischarged, and, if not paid, it would meet the broader issue, which should have been' presented on a proper assignment of the breach of the covenant.

.5. A further point was taken at the argument, though not raised in the report of the case, as to the want of an allegation of notice to the defendant of non-payment of the note. Whether such notice is necessary at all when the guaranty is for the payment of a certain sum, and absolute at all events, it is not necessary now to consider. After verdict the objection comes too late. If the declaration was defective, in not alleging notice to the defendant, the defect is cured by the verdict. Colt v. Root, 17 Mass. 229. In the present case, however, this objection is not properly before us in any form.

Judgment on the verdict for the plaintiffs.