Case ID: miss_18/html/0071-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice ThacheR", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James Dick et al. vs. Green Crowder, Administrator of James B. Crowder, deceased.
    An engagement, as surety for a particular person, relates exclusively to the acts of that person alone, and will not extend to another; and the terms of a guaranty must be strictly followed.
    Therefore, where J. B. C. guaranteed to D. the punctual payment of any drafts drawn by R. D. C. on D. ; and R. D. C. and J. J. C. jointly drew a draft on D., it was held, that this draft was not within the specific terms of J. B. C.’s guaranty ; and the latter it seems would not be bound for its payment.
    Yet a guaranty, given upon a settlement of accounts which had been disputed, contains a sufficient consideration ; where, therefore, J. B. C. guaranteed the payment of R. D. C.’s drafts on D.; and R. D. C. and J. J. C. jointly drew on D.; and R. D. C. also individually drew on D.; and upon a settlement of accounts between D. and J. B. C., the latter executed his individual note to D., for the balance due on his own account, and also on the joint draft of R. D. C. and J. J. C., and the individual draft of R. D. C. ; and subsequently J. B. C., by an agreement with D., arranged this note, by having the account of R. D. C. and J. J. C., deducted out of it for the amount of their joint draft, and of R. D. C.’s individual draft, after paying the residue of the note, executing his guaranty to pay the amount of R. D. C. and J. J. C.’s joint and separate drafts; it was held, that the latter guaranty had a sufficient consideration to uphold it, even though originally J. B. C. were not bound on his first guaranty for the joint draft of R. D. C. and J. J. C.
    Where J. B. C., having given D. a guaranty to pay the drafts of R. D. C. on him, took up the balance due by R. D. C. to D., for drafts thus drawn on D., by executing his individual note to D.; afterwards procured D. to take his (J. B. C.’s) guaranty of the payment by R. D. C. of the latter’s account to D., instead of the note ; it was held, that the liability of J. B. C. 'to D., having thus become secondary, where it was formerly primary, was a sufficient consideration to the second guaranty.
    
      James Dick, William J. McLean, and Harry R. W. Hill, surviving partners of Nathan Dick and James Bodker, who were in business under the firm of N. & J. Dick & Co., sued Green Crowder, administrator of James B. Crowder, upon two guaranties. The first Count was based upon the following guaranty — to wit:
    “ Pittsburg, February 2€>ih, 1836.
    “ Messrs. N. & J. Dick & Co., Sirs, • — I hereby guaranty to you the punctual payment of any draft or drafts that may hereafter be drawn on you by Ransom D. Crowder, and accepted, to the amount of twenty thousand dollars; and I further guaranty the payment of 2| per cent, commissions for accepting said drafts, and interest after due at the rate of ten per cent, per annum, if not punctually paid by the drawer.
    Yours respectfully,
    J. B. Crowder. [seal.]”
    The second and third counts were on the second guaranty, which is as follows :
    “ Messrs. N. & J. Dick & Co., — I wish' you to charge R. D. Crowder with the within amount of eight thousand eight hundred and three .dollars and take it out of my account. I hereby guaranty to you the payment of the amount, with ten per cent, interest. April 5, 1843. . $8803i|¡.
    J. B. CROWDER.”
    There were also the common money counts.
    The plea was the general issue.
    The case was submitted to a jury, who found for the defendant. From the bill of exceptions, the following facts appear: After reading the guaranties, the plaintiffs proved by the depositions of James L. McLean and Matthew R. May, that, on the 6th of April, 1841, Ransom D. Crowder owed N. & J. Dick & Co., $8,803.03; and J. B. Crowder executed his guaranty to pay it, and promised to remit the arpount of it to N. & J. Dick & Co., when he' arrived in Mississippi; this guaranty having been executed in New Orleans, in the counting-room of N. & J. Dick & Co.; and that this sum of $8,803.03, consisted of the balance due on the drafts of R. D. Crowder on N. & J. Dick & Co., with interest and commissions. These witnesses were both clerks in the commission house of plaintiffs, and filed with the depositions, the various accounts against the different parties, showing their respective dealings. From these it appears, that, on the 27th of February, 1836, R. D. Crowder and J. J. Crow-der jointly drew a draft on N. & J. Dick & Co., for ten thousand dollars, which the latter paid ; and on the 15th of February, 1837, R. D. Crowder drew a draft on them for five thousand'dollars, which they paid.. There were also other dealings between the parties, and on the 18th of May, 1839, James B. Crowder executed his note to N. & J. Dick & Co., for the sum of $16,095.93, maturing on-the 21st of January, 1840; this note embraced the individual account of James B. Crowder, and $12,421.31 of the account of R. D. Crowder, being the balance due on the joint draft for ten thousand dollars, and R. D. Crowder’s individual draft for five thousand dollars.
    James B. Crowder paid all of his own indebtedness to N. & J. Dick & Co., and the sum of 341.93 of the indebtedness of Ransom D. Crowder; the latter paid also a considerable sum on his indebtedness to N. & J. Dick & Co.; and, on the 5th of April, 1841, James B. Crowder, having gone to New Orleans for that purpose, had a settlement of accounts with N. & J. Dick & Co., and, on that day, executed his guaranty for the $8,803.03, being the balance due by Ransom D. Crowder; and which was previously included in his (James B. Crowder’s) note for $16,095.93; the accounts having been separated at J. B. Crow-der’s request. There was other testimony in the case, with reference to the condition of mind of James B. Crowder, at the time he gave the latter guaranty; it was not, however, passed upon by the court, and is not here further noticed. No demand on R. D. Crowder, of the amount of the account guaranteed, or notice of the non-payment to James B. Crowder, was proved.
    The plaintiff asked the court for these instructions, viz.:
    
      
      “ Though James B. Crowder might not have been, liable, as guarantor, under the first guaranty, on the ten thousand dollar draft, drawn by R. D. & J. J. Crowder, jointly, yet if the said draft was accepted and paid on the faith of said first guaranty, and said James B. Crowder afterwards acknowledged his liability on said draft, by an express promise to pay it, then said first guaranty, and the accepting and paying said drafts, are a sufficient consideration for the second guaranty, if the jury believe that the debt guaranteed is a balance due by R. D. Crow-der on the indebtedness incurred by him on the $10,000 and the $5,000 drafts.” This instruction was refused.
    Other instructions were given, both for plaintiffs and defendant. The plaintiffs below prosecute this writ of error.
    
      George /S'. Yerger, for plaintiffs in error.
    1. No demand or notice was necessary. The guaranty was to pay an existing debt; in such case the power is absolute, and if the principal has not paid the debt, the guarantor may be sued, without demand of principal. 4 S. & M. 98 ; 10 Peters, 496 : 2 S. & M. 147; Breed v. Hillhouse, 7 Conn. R. 523; Allen v. Rightmere, 20 Johns., R. 365; Upham v. Prince, 12 Mass. R. 14; 14 Johns. R. 350; 7 Greenl. 186, 192 ; 4 lb. 42; Taylor v. Ross, 3 Yerg. 335; 2 Johns. Cases, 409; 11 Wend. 100.
    2. The execution of the note by James B. Crowder, for the amount due by Ransom D. Crowder, was an express promise to pay, which waived all necessity of demand and notice; and was a sufficient consideration to uphold the second guaranty, even if the $10,000 draft were not included in the first guaranty. 7 Peters, 113; 12 East, 227; 2 Gill & Johns. 23; Robbins v. Pinkard, 5 S. & M. 51; Breed v. Hillhouse, 7 Conn. R. 523. These cases are in point, and the last is recognized as law in the first.
    3. The draft of $10,000, though joint, was yet covered by first letter of guaranty. 5 Yerg. 109; Chitty on Bills, 568, 569.
    
      James K. Lea, on the same side.
    1. The changing the liability of the guarantor from principal to surety is a good consideration; the plaintiffs sustain an. injury, and the defendant receives a benefit by the change of the character of the liability. In this case defendant’s promissory note was given up on consideration of the guaranty. It has been held in analogous cases, that the giving up an uncertain claim is a good consideration to support a promise. See Flagg v. TJpham, 10 Pick. 147; 3 Burrows, 1665; Chitty on Con. 411, 423; Comyn on Con. 262 ; 2 Ld. Ray. 759.
    2.That when the original contract and the guaranty are cotemporaneous, parol proof is admissible to show what the consideration was. Story on Prom. Notes, 459, and note 1; and the record shows a full consideration.
    
      W. Brooke, on the same side,
    relied on the same points.
    
      Acee, for defendant in error,
    insisted,
    1. That James B. Crowder was not liable for the $10,000 draft. He cited 2 Term R. 370; 2 Taunt. 206 ; Com. on Con. 268; Story on Prom. Notes, 559; 2 Kent’s Com. 121; Fell on Guaranty, 1; Chitty on Con. 415; Russel v. Perkins, 1 Mason’s C. C. R. 36S.
    2. James B. Crowder is not liable for the $5000; the plaintiffs sue as survivors; the draft was drawn on the plaintiffs, as the witness swears; the guaranty was to the whole firm ; the death of one of the partners suspended its operative effect. Cremer v. Uigginson, 1 Mason C. C. 323; Weston v. Barton, 4 Taunt. 673; Com. on Con. 256; Penoyer v. Watson, 16 Johns. R. 100; Myers v. Edge, 7 Term R. 254; Walsh and Beek-man v. Baillie, 10 Johns. R. 180.
    3. The terms of a guaranty must be strictly pursued, or the guarantor will not be bound; if he proposes a credit, that particular credit must be given, or he will not be liable. Walrath v. Thompson, 6 Hill’s R. 540 ; Smith and Crittenden v. Dann, lb. 543 ; Wright v. Johnston, 8 Wend. 513.
    4. The payments made by Ransom D. Crowder, discharged the guarantor. Webb v. Dickinson, 11 Wend. 62; Baker v. Stack-poole, 9 Cow. R. 420.
    
      5. The second guaranty was subsequent to the creation of the debt, and requires some consideration, aliunde from ■ the original consideration. Story Prom. Notes, 560. A different consideration from that expressed in the guaranty cannot be shown. Schemerhorn v. Vanderheyden, 1 Johns. R. 139; Winchell v. Latham, 6 Cow. 690. It is incumbent on plaintiffs to show the consideration. Manrow v. Durham, 3 Hill’s R. 584; Miller v. Gaston, 2 Hill’s R. 188.
    6. The new trial should not be granted unless the verdict is greatly against the weight of testimony. Jenkins v. Whitehead, 1 S. & M. 157; Dickson v. Parker. 3 How. (Mi.) R. 219; Baynton v. Finnall, 4 S. & M. 193; Leflore v. Justice, 1 lb. 381.
   Mr. Justice ThacheR

delivered the opinion of the court.

This is an action upon the following guaranties : one, dated February 26th, 1836, in these words“ Messrs. N. & J. Dick & Co. I hereby guaranty to you the punctual payment of any draft or drafts that may be hereafter drawn on you by Ransom D. Crowder, and accepted to the extent of $20,000. And I further guaranty the payment of 2| per cent, commission for accepting said drafts, and interest after due, at the rate of 10 per cent, per annum, if not punctually paid by the drawer. J. B. Crowder.” The other, dated April 5th, 1841, in these words .- Messrs. N. & J. Dick & Co. I wish you to charge R. Crowder with the within account of $8,803 and take it out of my account. I hereby guaranty to you the payment of the account with 10 per cent, interest. J. B. Crowder.” After the first guaranty was given, R. D. Crowder, jointly with J. J. Crowder, drew upon N. & J. Dick & Co. for $10,000, and R. D. Crowder alone drew upon them for $5,000. In May, 1839, J. B. Crowder gave J. & N. Dick & Co. his note for $16,095.98, which amount included his own account to the house, and also that of R. D. Crowder, which embraced the amounts unpaid of the two drafts of $10,000 and $5,000. Soon after this note matured, J. B. Crowder settled his indebtedness to the house by paying his individual account, by paying the sum of $341.93 on account of R. D. Crowder, and by inducing the house to separate their charge against R. D. Crowder from his own account. In consideration of this, he gave the second guaranty for the sum of $8,803.03, which was the balance due by R. D. Crowder upon liis two drafts, after deducting payments made by him, and is the sum sought to be recovered in this action.

A question made in the case, is whether the draft of $10,000, drawn jointly by R. D. and J. J. Crowder, was protected by the guaranty first executed. This draft was not within the specific terms of the guaranty, which was limited to drafts drawn "by R. D. Crowder only. The general rule is laid down to be that an engagement as surety for a particular person has exclusive relation to his acts alone, and will not extend to the acts of another; and that the terms of a guaranty must be strictly followed. Com. on Con. 268 ; 1 Mason’s C. C. R. 368. .

Under the circumstances of this case, however, more consideration is given to this question than it warrants. The draft of $10,000 was obviously accepted on the faith of the first guaranty. Admitting that the liability of J. B. Crowder, under the first guaranty, was doubtful and disputed, he recognized it by giving his note for $16,095.98; and a guaranty given upon a settlement which had been disputed contains a sufficient consideration. Again, J. B. Crowder was acquainted with the nature and extent of the first guaranty, and he was also informed of the mode in which the draft for $10,000 had been drawn, as he was shown the account current of R. D. Crowder with the house. With a view of .all these things, he acknowledged his own liability for R. D. Crowder, by giving a note including his liability, and subsequently he made an express obligation to guarantee its payment, by which he waived any objections he had to the draft of $10,000, and constituted a good consideration for the second guaranty. This guaranty, having also been given in consequence of an agreement to separate the amount of R. D. Crowder’s account from the account of J. B. Crowder’s account, was so much a payment of the note of $16,095.98. Thus J. B. Crowder’s liability pro tanto was placed secondary to the house where he had been before bound in the first instance. This likewise created a good consideration. Flagg v. Upham, 10 Pick. 147.

The first instruction, asked by the plaintiffs in the court below, embodied the foregoing principles, and was erroneously refused by the court.

Judgment reversed, and new trial awarded.