Case ID: njl_94/html/0191-01.html
Source: Caselaw Access Project
Author: {"author": "Bergen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

EDWARD R. WEISS, EXECUTOR, RESPONDENT, v. ADRIAN D. SULLIVAN ET AL., APPELLANTS.
    Submitted July 7, 1919
    Decided March 1, 1920.
    In consideration of the purchase of twenty shares of the preferred stock of a corporation by the plaintiff’s testatrix, certain other stockholders of the corporation executed and delivered to her a written guarantee of the payment of the principal and semi-annual dividends for the term of three years, and also that the principal would be paid at the end of said period. The stock was subject to redemption by the company before the maturity date for payment under the guaranty, but was not redeemed by the company nor the principal paid by th,e guarantors, but the stock was held by the purchaser and dividends paid by the company until her death about three years after maturity of the guaranty, and her executors sued for the principal. Held, that the guaranty was not conditional but absolute; that neglect to demand payment, or to give notice of default, was not a waiver of the guaranty, and that the right to enforce payment having accrued to the purchaser in her lifetime such right passed to her executor.
    Oil appeal from the Supreme Court.
    For the responden!, Iiunziker & RCindall.
    
    Fo-r the appellants, Michael J. Murphy.
    
   The opinion of the court was delivered by

Bergen, J.

This cause was tried before the court, a jury being waived, and the record contains no facts other than those found by the court, which are that Katherine Sprat,tier, plaintiffs testatrix, on September 29th, 1911, bought twenty shares of the preferred stock of a corporation in which the defendants were interested, and to induce such purchase they executed and delivered the following written agreement: “In consideration of the sum of two thousand dollars paid by Katherine Spraitler for twenty shares of the preferred stock of the James A. Morrisse, Incorporated, being certificate number 9 of said preferred stock, we, the undersigned, being stockholders of the James A. Morrisee, Incorporated, do hereby individually guarantee the payment of the principal and the semi-annual dividends on said twenty shares of stock for the term of three jnars, and we do hereby guarantee that the principal will be paid at the end of said period.”

The' trial court found for the plaintiff and directed the entry of a judgment for plaintiff from which defendant appeals. The appellants first urge that the guaranty was conditional and not absolute. We think that it was absolute. It first guarantees the payment of the principal, and the semiannual interest 'for three years, the guarantee of the payment of.the principal being absolute^ and that of the interest limited for three years, and then, apparently to avoid ambiguity, guarantees that the principal will be paid at the expiration of three years. This question was fully considered by Chief Justice Beasley in Hoey v. Jarman, 39 N. J. L. 523, and by Mr. Justice Parker in Pfeiffer v. Crossley, 91 Id. 433. This guarantee is absolute añd not conditional.

The appellants’ next point is, that the failure of Katherine Sprattler to demand the principal of the stock from either the corporation or the defendant at the expiration of the three years released the guarantors. Where the guaranty is absolute no demand is necessary, for it is the duty of the debtor to seek his creditor and offer payment on the due date. In this cae.e it was the duty of the guarantors to make good their obligation on the day'of its maturity by tendering the principal required by their written agreement, unless there had been,an express extension of the date of payment. There was no obligation of the company to redeem at the end of three years. It had that option, but did not exercise it, and, manifestly, notice to the company was not required.

The last point argued by the appellants is, that the guaranty was personal and therefore the executor of Katherine Sprat-tier cannot recover. The appellants very earnestly argued that Rotch et al. v. French, 56 N. E. Rep. 893, supports their contention. But clearly it doe.s hot. There the guarantee was for the payment of a dividend, as a consideration for stock purchase. No time was fixed and the court, held that in such case it must he held to he for a reasonable time only, and that the lifetime of the guarantors was a reasonable limit. Tn this ease the limit was fixed, and when that expired and there was a default: an immediate right of action arose which passed to the executor of the person vested with that right.

Tn order to avoid anv misapprehension of the intended effect of this opinion we deem it wise to say that while it has not escaped our observation that the record seems to show the plaintiff still retains the slock and all the dividends paid on it, not having surrendered or tendered a surrender thereof before suit was brought, no such defence was set up in the answer filed by the defendants, raised in the court below, assigned as a cause for reversal in this court, or presented to this court on the argument before it, and’ these matters not relating to any question of jurisdiction or public policy, this court will not consider them. State v. Heyer, 89 N. J. L. 187; McMichael v. Horay, 90 Id. 142. Therefore, the questions whether this suit was prematurely brought if instituted before tender of surrender of the stock, or whether the judgment should have been for the guaranteed value of the stock and interest from tine date of the default, less the amount of dividends received, are not intended to he determined, for the reason that they are not raised'in any such way as to require this court to consider them.

'The only questions raised by the pleadings and argued by Ihe appellants, being determined against their contention, an affirmance of the judgment is required.

The judgment will he affirmed, with costs.

For affirmance—The Chancellor, Citief Justice, Rwayzh, Tre.yckard, Parker, Bergen, Mummy, TCaltsctt, Black, ITeppentietaikk, Williams, Taylor, -TJ. 12.

For reversal—White, Gardner^, Aokerson, J,T. 3.