Case ID: ad_122/html/0548-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ida M. Murphy, Respondent, v. Frieda Hart, Appellant.
    First Department,
    December 6, 1907.
    Guaranty — pleading — action against one guaranteeing performance by vendee — contract construed.,
    A complaint in an action against one who guarantees performance by a vendee which alleges that to induce the plaintiff to execute the contract of sale the defendant executed and delivered an instrument whereby he guaranteed that the purchaser named in the contract “will be prepared and willing to carry out the within contract on the specified date or on such adjourned date as they may mutually set or agree upon,” etc.; that the plaintiff was ready/ willing and' able to perform on the contract day, but that the vendee failed and refused to ' carry out the contract, and that the plaintiff has duly performed each and. every one of the terms of the agreement on her part required to be performed, is not subject to demurrer.
    The allegation that the plaintiff “ duly performed each and every one of the terms of the agreement on her part required to be performed ” is a sufficient allegation of a tender of the deed, for by virtue of section 533 of the Code of Civil Procedure one pleading performance of a condition precedent in a contract need not state the facts constituting performance but may state generally that he has duly performed all the conditions on his part.
    In construing a guaranty words are to be given their ordinary significance in arriving at the intention of the parties, and effect must be given to such intention. Ambiguous expressions are to be construed against the surety.
    A guaranty that the vendee of lands will be “prepared and willing to carry out ” the contract must be construed to be a guaranty of performance by him . and not a contract of indemnity only, and upon his failure to perform the vendor has an action against the surety for the damages sustained.
    
      As such guaranty was an original contract by the defendant that his principal would perform on the “specified” or adjourned date, the complaint need not allege notice of the principal’s default, if it shows that the default was on the specified date.
    •Appeal by the defendant, Frieda Hart, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 15th day of Hovember, 1906, upon the decision of the court rendered after a trial at the Hew York Special Term, overruling defendant’s demurrer to the amended complaint.
    
      William Victor Goldberg, for the appellant.
    
      William M. Seabury and Max D. Steuer, for the respondent.
   Ingraham, J. :

This complaint alleges that the plaintiff, on the 21st of April, 1904, entered into an agreement with one Max Hart, a copy of which is annexed to the complaint. , By this agreement the plaintiff agreed to sell and convey and Max Hart agreed to purchase, a certain piece of real property located in the city of Hew York for the sum of $21,000, $5,000 in cash and the balance by taking said property subject to a mortgage of $22,000, the plaintiff to deliver to Max Hart a proper deed containing the full covenants and warranty, said deed to be delivered on the 30th of December, 1904. On the same day to induce the plaintiff to execute this contract, the defendant executed and delivered to the plaintiff an instrument whereby she guaranteed that “ Max Hart, the purchaser mentioned in this contract, will be prepared and, willing to carry out the within contract on the specified date, or on such adjourned date as they may mutually set or agree upon, provided that the said property shall, so far as the title is concerned, remain unchanged.” It is further alleged that at the .time and place fixed for performance by the terms of the- said contract, to wit, on the 30th day of December, 1904, the plaintiff was ready, able and willing to carry out each and every one of the terms of the said agreement, but that the said Max Hart was not prepared or willing and failed and refused to carry out the said contract and did not carry out the same ; that on the said 30th of December, 1904, the said property, so far as the title ^hereto was concerned, remained unchanged, and that the said plaintiff has duly performed each and every one of the terms of the agreement on her part required to be performed; that the property mentioned did not exceed in value $300 over and above the encumbrances thereon subject to which the said Max Hart was to take the property; therefore the plaintiff was damaged in the sum of $4,700, for which amount judgment was demanded. The defendant demurred to this complaint on the ground that it did not state facts sufficient to constitute a cause of action, and this demurrer was overruled at Special Term.

Max Hart agreed to' pay $5,000 in cash on the delivery of the deed which should contain the. usual full covenants and warranty and sufficient for conveying the fee simple of the premises free from all encumbrances except the mortgage for $22,000. There can be no question but that upon the tender of a deed by the plaintiff which insured such a title, Max Hart would 'be liable to the plaintiff for that sum of $5,000, and the plaintiff could have maintained an action' at law to recover that amount. The defendant guaranteed that Max Hart “ will be prepared and willing to carry out the within contract on the specified date.” By the demurrer the defendant admits that the plaintiff was ready, able and' willing to carry out the said agreement, .but that the said Max Hart was not prepared or willing and failed and refused to carry out the said contract and did not carry out the same. The allegation, that the plaintiff .has “ duly performed each and every one of the terms of" the agreement on her part required to be performed ” is a sufficient allegation of a tender by the plaintiff of the deed.',' Section 533 of the Code of Civil Procedure, pro vides : “In pleading the performance of a condition precedent in a contract if is no.t necessary to state the facts constituting performance, but the party may state generally that he or the person whom he represents duly performed all the conditions on his part.” Here the condition on the part of the plaintiff to entitle her to recover from Max Hart was that she should tender him a deed of the premises ; that was the condition precedent of any liability of Max Hart to the plaintiff, and if the Obligation of defendant was a guarantee of performance I do not see that there is any distinction between the performance of a contract necessary to hold a contracting party and that necessary to hold a guarantor.

In construing a guaranty, like the construction of any other written instrument, the words used are to be given their ordinary significance to arrive at the intention of the parties, and the effect •must be given to such intention. As a general rule, in the construction of such agreements, if the instrument contains any ambiguous words or expressions, it is to be construed against the surety, and not against the plaintiff. (Jackson v. Swart, 182 N. Y. 373 ; Smith v. Molleson, 148 id. 241.) The question here is what did the parties mean when the defendant guaranteed that her principal would be “ prepared and willing to carry out ” the contract. The defendant certainly intended' to guarantee something, and to give any effect to such an instrument it must, I think, be held that the intention was to guarantee performance. If a person is ready and Mdlling to carry out a contract the presumption certainly is that he will perform. In Maloney v. Nelson (144 N. Y. 182) the obligation of a surety is examinedcwith cáre and the authorities collated. The obligation, of the court in considering an instrument of this kind to get at what the parties intended irrespective óf the express form of the instrument is recognized. The court there said: “ In this respect the case differs from those cases where an individual agrees to do a particular thing, such as to pay money to a third party in exoneration and discharge of the original liability of his principal to such third party. ,In such case it may be conceded that the right of action becomes complete on the defendant’s failure to do the particular thing he agreed to do.” If, therefore, this agreement was, as I construe it, a guaranty that Hart would perform the contract, upon his failure^ to perform there arose a cause of action in plaintiff’s favor against- the . defendant for the damages sustained by reason of his failure to perform, which was itself an original contract of the defendant, and for the' damages which flowed from Max Hart’s failure to perform the defendant was hable. The contract cannot be construed as one of indemnity only. There is no reason why the defendant should not guarantee that' Max Hart would perform, and having guaranteed-such performance, his failure to carry out the contract at once imposed an obligation upon the defendant to respond to the damages caused by the nonperformance against which the defendant had guaranties. No' notice of default,, therefore, was necessary, but an independent, obligation, arose upon the failure of Max Hart to perform the contract.

The option that defendant reserved to avail herself of Max Hart’s, control if he failed to. perform so that she could acquire the property for lierself, confirms the construction that there was an obligation on her to perform if Max Hart did not. By performing she could release herself from the obligation to réspond from the damages that flowed from'his default.

This guaranty related to the contract with Max.Hart. "It. guar.-'anteed performance on the specified date ” or the adjourned date: The complaint alleges that at the specified date Max Iiartwas not prepared or willing and failed and refused to carry out the said contract.” Defendant had notice of the day Max Hart was to perform. She was not entitled to notice of the specified date,” and if she wished to exercise her option to- acquire the property she was bound to be there ready to perform. I think, therefore, that a good cause of action was' alleged, and that judgment should be affirmed, with costs, with leave to defendant to answer within thirty days on payment of costs in this court and in the court below.

Patterson, P. J., Laughlin, Clarke and Soott, JJ., concurred.

Judgment affirmed, with costs, with leave to defendant to withdraw demurrer and to answer on payment of costs.