Case ID: wend_17/html/0103-01.html
Source: Caselaw Access Project
Author: {"author": "Cowen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hunt vs. Smith.
    Where a party draws an order on a merchant directing him to furnish goods out of his store to a third person to the amount of seventy dollars, engaging to be accountable for such sum, and requesting the amount of the bill to be sent to him; and the merchant furnishes the goods to such third person to the amount of $102-81, and takes his note at thirty days, no right of action accrues under the guaranty ; by the giving of credit, the guarantor'is discharged from liability, 
    
    This was an action of assumpsit, tried at the Oneida circuit in April, 1834, before the Hon. Essex Cowe.v, then one of the circuit judges.
    This suit was on a guaranty signed by the defendant and addressed to the plaintiff in these words: “ You may let the bearer, Mr. Horace Putnam, have, in such articles as he may want out of your store, to the amount of seventy dollars, if he wishes to get that amount, and 1 will be accountable to you for that sum. Have the goodness to send the amount of his bill by him to me. July 2, 1833.” On the day succeeding the date of the guaranty, Putnam obtained goods at the store of the plaintiff to the amount of §102-81, for which he gave his note payable in thirty days. The counsel for the defendant insisted that the plaintiff was not entitled to recover, because the sale was not in pursuance of the terms of the guaranty, and that being on credit, and thus the right of immediate subrogation postponed, the guarantor was discharged. The judge reserved the question, and directed a verdict for $73-67, subject to the opinion of this court. The cause was submitted on written arguments, by
    J. H. Ostrom & T. R. Walker, for the plaintiff.
    
      W. C. Noyes, for the defendant.
    
      
       See Gates v. McKee, 3 Kernan, 232.
    
   By the Court,

Cowen, J.

It appears to me that here was in the outset a fatal departure from the terms of the guaranty. The defendant undertakes to be accountable for goods to §70, and directs a bills to [180] be sent. The delivery is of goods to $102-81, on a note of the vendee at thirty days. I can not understand the engagement otherwise than as an undertaking to pay presently, or at least as reserving the right to pay presently the bill of $70. That would give a remedy over against the principal instantly, either for money paid, or, if any better, a right to insist on a direct and immediate suit against Putnam for the money. These remedies are both suspended by the act of the plaintiff. It is perfectly well settled that such an extension, given to the principal for a precedent debt, discharges the guarantor (Combe v. Woolf, 8 Bing. 156). The principles on which such a consequence follows are there fully explained. The only difference between the two cases is that in Combe v. Woolf, the guaranty was at first followed and afterwards violated by extending a credit on the note of the principal; whereas here it was departed from in the first instance, or in other words, never followed at all. If a credit of thirty days could be given, why not one of thirty years, within the same principle? The terms of these guaranties must be exactly pursued or the guarantor is never liable at all (Wright v. Johnston, 8 Wendell, 512; Id. 526, per Nelson, J., Miller v. Stewart, 4 Wash. C. C. R. 26, 28; 9 Wheat. 680, 702, et seq). All these cases agree that it can make no difference whether the surety be ultimately benefited or injured by the departure. It is enough that he may be injured. This is no more than giving him the right of every other man, to fix the terms on which he will contract originally, and to insist throughout that his rights shall not be varied without his own consent. The principle on which the cases proceed, both at law and in equity, for the rule is the same in both, are very ably expounded by Lord Eldon, in Samuel v. Howarth (3 Meriv. 272, 277 to 279, Lond. ed).

Judgment for the defendant.