Case ID: misc_94/html/0309-01.html
Source: Caselaw Access Project
Author: {"author": "Blackmar, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Julius Leyenson and Max Arison, Appellants, v. “ William ” Lindenbaum, First Name, “ William,” Being Fictitious; True First Name of Said Defendant Being Unknown to Plaintiff; Party Intended Being in the Grocery Business at No. 686 DeKalb Avenue, Brooklyn, N. Y., Respondent.
    (Supreme Court, Appellate Term, Second Department,
    March, 1916.)
    Guaranty — continuing — contracts.
    A contract of guaranty is governed by the same rules as any other contract.
    The words of a guaranty of payment by a debtor of goods thereafter to be bought must be given the same meaning which the creditor would naturally attach to them.
    
      A contract reading: “I guarantee Mr. E. Herman’s account to the amount of $25.00 and am liable for it if he does nut pay for any merchandise taken on credit,” is a continuing guaranty, and a judgment dismissing the complaint in an action to enforce the same will be reversed and judgment directed for plaintiff for twenty-two dollars and eighty-eight cents, the last balance due, with interest and costs.
    Appeal by plaintiffs from a judgment rendered in the Municipal Court of the city of New York, borough of Brooklyn, second district, on the 27th day of December, 1915, in favor of the defendant and against the plaintiffs, dismissing the complaint on the merits; and from an order, dated January 7, 1916, denying a motion to vacate and set aside said judgment.
    Nathan D. Shapiro, for appellants.
    Feldman & Streicher, for respondent.
   Blackmar, J.

This is an action, to enforce a contract of guaranty which resulted in a dismissal of the complaint, and the plaintiffs appeal.

The construction of a contract of guaranty is governed by the same rules as any other contract. If it be a contract to guarantee the payment by the debtor of goods thereafter to be bought, then, the guarantor having invited the seller to act and part with his property on the credit of the guaranty, the words of the guaranty must, be given the meaning which the creditor would naturally attach to them. Rindge v. Judson, 24 N. Y. 64.

The contract of guaranty, omitting the addresses of the parties and its formal beginning, is as follows:

“I guarantee Mr. E. Herman’s account to the amount of $25.00 and am liable for it if he does not pay for any merchandise taken on credit from Leyenson & Arison. M. Listdekbaum. ’ ’

The meaning of a paper like this may depend on circumstances within the knowledge of the parties when it was given and accepted. All we learn from the meagre statement of facts is that after November 7,1910, which was the date the guaranty was given, Mr. E. Herman and Leyenson & Arison started in and continued to do business for about four years; and that during such time Leyenson & Arison sold to Herman goods aggregating hundreds of dollars worth; that more than twenty-five dollars was paid thereon by Herman and that the sum claimed, i. e., twenty-two dollars and eighty-eight cents, is the last balance that is due. We learn from the statement that the business relations between Herman and Leyenson & Arison began after the guaranty was given. This we get from the words of the stipulation of facts that they ‘ ‘ started in ” after November seventh. The Herman account was not, therefore, in existence at the date of the guaranty, and the guaranty was, therefore, of an “ account ” for any merchandise taken on credit. And this must mean taken thereafter on credit. In view of the fact, ascertained by reading the words, of the guaranty in the light of the circumstances stated in the stipulation, that the guaranty was for the future, I think the natural meaning is that it is a continuing guaranty. The word “ account ” imports that. That would be a word used for the result of a continuous course of dealings. So, one would say an account at the grocer’s, the butcher’s or the baker’s and the word would convey the meaning of a continuous course of dealings. The fact that twenty-five dollars is the limit of the guarantor’s liability and not of Herman’s credit is also shown by the words of the instrument. The guaranty reads: I guarantee Mr. E. Herman’s account to the amount of $25.00 and am liable for it (i e., for $25.00) if he does not pay for any merchandise taken on credit.”

The guaranty, being for future dealing, being continuous, and the twenty-five dollars being the limit of the guarantor’s liability and not of the credit to be given to Herman, it follows that the judgment should have been for the plaintiffs.

Callaghan and Kapper, JJ., concur.

Judgment reversed, with thirty dollars costs, and judgment directed for plaintiffs for twenty-two dollars and eighty-eight cents, with interest from October 22, 1914, with appropriate costs below.