Case ID: mass_27/html/0148-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Elisha Flagg versus Daniel Upham.
    Where a note, given by a partner for his individual debt in the name of the firm, was delivered by the payee to the defendant, the other partner, to secure it by an attachment in the name of the payee, upon the defendant’s guarantying the payment of it, it was held, that there was a sufficient consideration for the guaranty ; and that as the defendant, at the time of signing the guaranty, knew for what consideration the note was given, he could not avoid the guaranty on the ground that he erroneously supposed himself to be liable on the note.
    Assumpsit on a written promise of the defendant to guaranty the "payment of a note of hand, purporting to be made by E. Valentine & Co., of which firm the defendant was a partner.
    A witness testified, that the plaintiff and the defendant being together on the day of the date of the guaranty, it was stated that the plaintiff was to let the defendant have the note to send to Maine, where Valentine was gone, in order to secure it by an attachment in the name of the plaintiff. The plaintiff said he was unwilling to do this, unless he could be indemnified from the costs, and unless the defendant would promise to pay the note. The defendant agreed to this, and the witness drew up the paper of guaranty, which was signed by the defendant; and the defendant took the note and delivered it to the witness, who, at bis request, sent it to an attorney in Maine, where an action was brought upon it, which ended in Valentine’s being committed to jail and being released upon taking the poor debt- or’s oath ; so that nothing was obtained from the note.
    It appeared that the consideration for the note was the boarding of Valentine and his wife ; for which Valentine gave the note in the name of the firm, without the knowledge of the defendant. When the defendant made the guaranty, he knew of the consideration for the note, but he supposed he was liable upon it, being a partner of Valentine ; afterwards, having taken advice, he refused to comply with the guaranty, on the ground that it was without consideration, he not being liable on the note.
    A nonsuit or default was to be entered, according as the Court should determine on the question of the validity of the above defence.
    
      
      Davis and Allen, for the defendant.
    The defendant’s promise was without consideration. His undertaking to collect the note was beneficial to the plaintiff and disadvantageous to himself. Tenney v. Prince, 4 Pick. 385 ; Tenney v. Prince, 7 Pick. 243.
    
      Oct. 9th.
    
    The promise is not binding, as it was made by the defendant under a mistake of his rights. The contract being executory, the case is stronger than if he were endeavouring to recover back money paid under such mistake. Garland v. Salem Bank, 9 Mass. R. 408 ; Warder v. Tucker, 7 Mass. R. 449 ; Freeman v. Boynton, ibid. 483 ; May v. Coffin, 4 Mass. R. 341.
    
      Newton and Lincoln, contrà,
    
    as to the sufficiency of the consideration, cited Hicks v. Burhans, 10 Johns. R. 243 ; Pillans v. Mierop, 3 Burr. 1663; Wilson v. Clements, 3 Mass. R. 1 ; Meredith v. Chute, 2 Ld. Raym. 759.
    As to a promise made under a mistake of law, they cited Hill v. Green, 4 Pick. 114; Lowry v. Bourdieu, 2 Doug. 467 ; Stevens v. Lynch, 12 East, 38 ; Battle v. Griffin, 4 Pick. 6.
    
      Oct. 13th
    
   Per Curiam.

The Court are of opinion that the defendant is liable upon this contract of guaranty. The defendant contends, that the original note was not a partnership transaction, and therefore that there was no consideration for the guaranty. Whether the note was given for a partnership debt, does not distinctly appear. Generally a note given by one partner, for the subsistence of himself and family, would not be a partnership debt, nor binding upon the other partner without his consent; but this would depend upon the terms of the copartnership. If the decision of the cause depended upon this question of fact, it would deserve further examination, but we trunk it does not.

The note was made in the partnership name, purported to bind both partners, and was binding upon the partners, if made with their consent. Supposing it to be made by Valentine for his several debt, without the consent of the defendant, it would not indeed be binding on him, but no one else could make the objection, and it depended on himself, to insist on, or to waive the objection. Under these circumstances, knowing the terms of partnership between V alen tine and himself, and knowing the consideration for which the note was given, we are of opinion that his acknowledgment of his own liability, and his express obligation to guaranty the payment, were a waiver of any objection which he might have made to the note, and therefore that this guaranty was given upon a good consideration, and that he is bound by it.

Besides, the note was a good and available security against Valentine, and we are of opinion that the surrender of the note by the plaintiff to the defendant, with authority to collect the account, and to pursue the remedy upon it in his own way, whereby the power and control of the plaintiff over it were suspended, was of itself a sufficient consideration to support an express and deliberate contract of guaranty.

Defendant defaulted. 
      
       See Chitty on Contr. (4th Am. ed) 203a, note 2, and cases cited; Cha. zournes v. Edwards, 3 Pick. (2d ed.) 9, note 1; Whitaker v. Brown, 11 Wendell, 75 ; Munroe v. Cooper 5 Pick. 412.
     
      
       See Chitty on Contr. (4th Am. ed.) 203 a; Foster v. Andrews, 2 Pennsylv. R. 160.
     
      
       As to the consideration to support a guaranty, see Chitty on Contr. (4th Am. ed:) 397a, and cases cited in notes.
     
      
      
         See Stebbins v. Smith, 4 Pick. 99,100.