#### Thomas Shewell *v.*Ambrose Knox.

From Chowan.

Per Taylor and Henderson, Judges.— A general letter of credit addressed to no particular individual, is not a guarantee, but a proposal for one, and notice of an advance on the faith of it must be given to the guarantor.

Per Hade, Judge — Such a letter is an absolute guarantee, and notice of an advance is unnecessary to charge the guarantor.

What degree of diligence a creditor must use to bind a guarantor, Q,u? But loss from neglect on his part is a matter of defence for the guarantor, and if not shown by him in the trial, a new trial will not be granted simply because indulgence has been shown to the principal debtor.

The Plain!,iff declared in Assumpsit, and on the trial on the Fall Circuit of 1826, read the following letter:

“ *William G. Burgess*and *Josiah Jordan,*of Elizabeth City, being desirous of entering into the commercial business, and *W. G. Burgess,*for the purpose of purchasing goods for the said concern, is about goitjg to the North, the subscribers having been long acquainted witli (hem, and having full faith in their honesty and integrity, recommend them as entitled to the confidence of merchants in Philadelphia, and are willing to hold themselves responsible for the payment of purchases made at this time, not exceeding the amount of two thousand'dollars.

“ WILL. T. MUSE.

“ AMBROSE KNOX.

*" This the 30th September,*1822.”

*405He then ¡¡roved that in tire month of October, t822, in consequence, of this letter, he furnished *Burgess*with goods to the amount of 2,740 dollars, at. six months credit. The following letter was then ¡mí in and read by the Plaintiff:

“ *Elizabeth City, 18Ih September,*1828.

4< Mr. Thomas Sheweui,,

i£ Sir: — Your letter addressed to *William T. Muse*and myself, informs!.g us of the non-payment of the debt con-tráete.!! with you by *Burgess*and *Jordan*of this place, so far as we are bound on our letter of credit given them sometime in the fall of 1822, was received by *Mr.*Muse, who having since died, i am at this moment, without any correct information, a« to the amount of your claim against the said *fí.*and *J. Mr. Burgess*expects to be in Philadelphia in a very short time, and 1 understand the house has made a shipment of wheat to your place, which I calculate is intended for tho liquidation of the debt for which the hue *Mr. Muse*and myself are responsible — ■ The object of this letter is to request of you to use your best endeavors to obtain'a full payment from *Mr. B.*for your claim against *B.*and *J.*or in failure thereof immediately to transmit to some Attorney .here, the amount and voucher of your claim, with directions to proceed on tiie receipt thereof to the enforcing of payment. My becoming responsible from motives of friendship to *Mr. Jordan*of said firm, and hearing that a dissolution of partnership will take place, besides being very desirous of having their affairs, so far as I am responsible, settled, causes this request.

“ I have also understood that a shipment of wheat has been made by them to New-York ; the proceeds of which I doubt not are now ready for their disposal, and perhaps you may make an arrangement with, *Mr. B.*to obtain payment for your whole claim. Your immediate and particular attention will much oblige,-

*“*Yours respectfully,

“ AMBROSE KNOX.”

*406*Burgess*was examined by the Defendant, and proved, that in the Fall of 1823, he shipped a quantity of wheat to New-York and Philadelphia, nearly sufficient in amount to discharge the debt due the Plaintiff — that directly after the shipment he went to the North, and called upon the Plaintiff in Philadelphia, who informed him that his sureties had requested an action might be brought against him — that he stated to the Plaintiff the shipment of wheat, and the utter impossibility of his doing any thing until its arrival, or until it was lost, so as to enable him to call upon the underwriters — that he went on to New-York, where he was arrested at the suit of the Plaintiff, and was discharged upon delivering orders to the consignees of the wheat, to pay the nett proceeds of it to the Plaintiff — that no directions were asked for by the Plaintiff, or given by him, as to the application of those proceeds — that the wheat turned out to be damaged, and only netted 400 dollars, which was paid to the Plaintiff, and that in the ensuing fall or winter, the copartnership *of,Burgess*and *Jordan*became insolvent.

His Honor Judge Paxton charged the Jury, that from the terms of the letter of guarantee, the Plaintiff ought to have given notice to the Defendant, that he held him responsible upon the guarantee. His honor left it to them to say whether such notice had been given, and told them that if they inferred it from the letter of the Defendant of September 18th, 1823, they ought to find for the Plaintiff, as the notice was in law reasonable.

A verdict was returned for the Plaintiff, and the Defendant appealed.

Gaston, for the Defendant,

I. The Judge erred in instructing the Jury, that if they could infer from the letter of *Knox,*that the Plaintiff had given notice to *Muse*and *Knox,*that he held them responsible as guarantees, they ought to find for the Plaintiff.

*407The letter of *Muse*and *Knox,*was a proposition to guaranty, not an actual guarantee, and until notice of its' acceptance was given, there was no contract subsisting between the parties. This notice ought to have been given at a much earlier time, especially in a .case of this kind, wtiere the letter was not addressed to any particular individual, but was open and addressed to the whole world. *(Mclver*v. *Richardson,*1 *M. &,S.*557 — 2 *Star-Me, 648*— Cremer v. *Higginson,*1 *Mason*323-— *Russell*v. *Perkins, Bo. Ss£#*— Stafford v. *Low,*16 *Johns. Rep.*67.)

In the present case there is a delay of twelve months. By the general usage of the mercantile world, to make one collaterally bound for the debt of another, notice must be given by the next mail, as in cases where an in-dorser is to be charged. It is admitted that the same degree of strictness is not required in this case, but it is submitted that the time above mentioned is too long.

The notice (allowing the letter to be one,) is not reasonable, because it does not specify the amount for which *Muse*and *Knox*were held responsible. The object of notice is to put the party on his guard, by'informing him of his danger. A general notice of liability is not as likely to put a person on the alert, as the statement of a certain amount for which he is held responsible.

If the letter is a notice, it is only notice of nonpayment, but the Plaintiff is bound to show a demand against the principal creditor, ás well as a notice of nonpayment. This follows from the same elementary principles which require it in bills of exchange. The same rigor of demand is not necessary, it is dispensed with in notorious insolvency, but some degree of it is required. *(Phillips v. Astling,*2 *Taun.*206, *210*— Warrington v. *Furbor,*8 *East.*242, *245*— Lanuse v. *Barker,*3 *Wheat.*101, 154 *note, approved by Spencer, C. J. in Stafford v. Low,*16 *Johns. Rep.*67.)

. II. Both *Knox*and *Muse,*were discharged from the guarantee by the arrangement made between the Plain*408tiff and the principal debtors. Upon this subject the rules of a Court of Law and a Court of Equity, are the , ,, „ ... same, whenever the forms ot law permit the same matter to be shown in defence, (4 *Starkie 1389*— Davey v. *Pendergrass, 5 B. <$f A. 187*— Rees v. *Berrington,*2 *Ves. jun.*540.) In this action if a Court of Equity would consider the surety as discharged by such conduct of the creditor, he is discharged at law.

The creditor is bound to active diligence at the demand of a surety, though he may forbear to sue without such demand, and his delay will not discharge the surety, yet if he is requested by the surety to sue, and he neglects to do so, he does it on his own responsibility. *{King*v. *Baldwin,*17 *Johns. Rep.*884.) In the present case a suit was brought at the request of the surety, and it became the creditor’s duty, behaving undertaken todo that which, according to all the authorities, a Court of Equity would compel him to do, to prosecute it with an honest view to the benefit, of the surety. Instead of doing this, without the consent of the surety, and to promote his own interest, by giving him security for the unguarántied part of his debt, he discontinues his action and discharges the principal debtor from arrest, it is immaterial what was the nature of the security given to the surety by the suit, whatever it might he, it was *his,*and the creditor has no right to interfere w ith it for his own benefit. *(Jfesbit*v. *Smith,*2 *Bro. Ch. Rep.*578— *Rees*v. *Berrington,*2 *Ves, jun. 540*— King v. *Baldwin,*2 *John. Ch. Rep. 554~Mayhew\.Crichet,Z Swansion,*185.

*Hogg*& *Badger,*for the Plaintiff,

1. The letter of *Muse*and *Knox,*is a *guarantee of itself,*and not a mere proposal for a guarantee. The parties so understood it, it was given to a man who is stated in tlw letter to go on *there*to purchase goods — alleges the confidence of the writers in the firm h.e belonged to, and says “we are willing to hold ourselves responsible” for a sum specified, and to be brought at that time. .

*409It is entirely different from *Mclver*v. *'Richardson,*cited on the other side, in which the expression is . 1 44 *indeed*I ¡¡ave rto *objection*to *guaranty*you against any loss,”'which expressions look to some further act or thing to be done, to complete the engagement.— But 44 I am willing to hold myself responsible,” is nearly equivalent to “I will hold myself responsible,” and *may*mean a present engagement, especially when considered with the context, that he was going to Philadelphia to buy goods — if it may mean it, it *does*mean it, for 44 the words are to be taken as strongly against the party making the guarantee as (he sense of them will admit.” *(Mason*v. *Prichard,*.2 *East.*227.)

In *Rogers*v. Warner, the words were, 44 our sons wish to take up goods of you on credit, we are willing to lend our names as security for any amount they wish,” and these were held to make a guarantee, and the only question was the extent of their operation. (8 *Johns. R.*119.) v Our case is stronger — 44 to *lend*our *names*as security” may look to a further act to be done, 44 to hold ourselves responsible,” imports an immediate undertaking, and the governing word in'both is 44 willing.”

Again, if any doubt could arise upon the words of the paper itself, it is removed by the Defendant’s letter of September 18, 1823, which does expressly, recognize it as an absolute engagement.

Being then a guarantee in itself, no notice was necessary, for in *Mclver*v. *Richardson,*the sole enquiry was if the letter was a guarantee, or only a proposal, and if the for met*, it was conceded that no notice is required.

2. But if it be a proposal or offer to guaranty only, we are entitled to recover. This is established by the case of *Mclver*v. *Richardson.*

The rule there laid down is, that when there is a mere overture to guaranty, the Defendant ought to have notice that it was meant 1o be accepted, or *there nhould be a subsequent consent on the Defendant’s*part, to convert it *410into an *absolute guarantee,*per *Lord Ellenborough, at page*563, and in that case, there being no notice until more than a year, and then no consent of Defendants so to regard it, the Plaintiff was nonsuited. But wherever notice is given by the Plaintiff, or any act done by the Defendant, evincing that lie so considered it, then it is made an absolute guarantee, and no notice is necessary. The purpose of the notice or the consent is to complele the contract, by converting the *offer*into an engagement, when that is done by either, the Plaintiff’s right is perfect. The letter of Defendant (18th September, 1823,) is full to this purpose, being apprized of the sale to *Burgess,*upon the faith of his letter of credit — he distinctly admits his liability to the amount of two thousand dollars, (the sum mentioned in the letter,) for goods sold at the *time*mentioned, and insists that he will not he liable *beyond*that amount, or for goods bought at another time. His words are “holding myself responsible only for the sum, &c.” than which none other can be imagined more expressive of his consent to its being considered an absolute engagement, or his understanding that it was so — ¡not a word said of its being a *mere offer.*The letter when examined, will appear to be stronger than any required to render even an indorser liable who has been discharged by neglect of the holder to give notice. Had the Defendant in the case of *Melver*v. *Richardson,*when payment was demanded, written a letter acknowledging his liability, on the letter as a guarantee, the case would have been decided otherwise, without hesitation.

It is conceived therefore, that the Plaintiff is entitled either, 1st, because it was originally an absolute guarantee, or 2d, if only an offer because the Defendant has *consented,*(after notice given him of the goods sold, and of his liability) that it should so be considered.

As to the objection that we should have given notice of *theamount*also. I answer first, it is an inference *411drawn without, authority, and supported by no decision, and secondly., if even required, it can only be when the *amount is indefinite,*not when as here, the amount and extent of liability is fixed by the guarantee. Thirdly, if notice of acceptance be not necessary in this, case, (as show'» above) notice of the amount of course is not.

Ham., Judge.

In this case, it is objected to the Plaintiff’s recovery, that he did not give to the guarantors early notice, that he looked to them for payment; and the case, of *McIver*v. *Richardson,*( 1 *Maule*& *Selwyn, 557)*is relied upon. In that rase, *Lord Ellenhorough*says there was only an offer to guaranty, not a complete guarantee, and on that ground the case was decided. But in this case the guarantee is complete, and the parties so contemplated it, for it, was their understanding of it, that *Bnrgess*should procure the goods upon it before he returned, and in fact he did. so.

But the Defendant and *Muse,*had notice that their guarantee was relied upon for payment; and this is evidenced from *Knox’s*letter. At what time the notice was received, does not appear. But if’the Defendant thought it important, .he had it in his power to show' it, by producing tl^c letter. This he has not thought proper to do. Besides *Burgess*and *Jordan*resided in Elizabetli City, where, or near to which, it may be inferred that the Defendant and *Muse*also lived. For *Knox’s*letter bears date at that place, and it appears from that letter, that *Knox*had a knowledge of their situation, when he informed the Plaintiff of the shipment of wheat, as a mean of payment. It may therefore be taken for granted, that they had notice, and had it in their power to secure themselves against loss, in case it was practicable.

It appears that the Plaintiff made an effort to procure payment from *Burgess*in the fall of 1823, but failed in effecting it; that in that fall, or the winter following, *Burgess*and *Jordan*became insolvent.

*412No objection was made on the trial, or evidence offered 'Kh<>w’ that an injury was sustained, either for the want of <‘ariy notice to (he guarantors, that they were looked c01, payrocnt, or that the Plaintiff had been guilty of neglect or laches in not endeavoring to procure payment from *Burgess*and *Jordan.*

This case is not to be tested by principles which govern negotiable instruments, but by principles of fair dealing and common sense. If no loss was sustained for want of early notice, such notice need not be proved. If no loss was sustained by not suing *Burgess*as d *Jordan,*it was unnecessary to bring suit. This is established by the case of *Warrington v. Furbor,*(8 *East 246*—Williams v. *Collins,*2 *Mur.*47—1 *Law Repos. 580*—Oxley v. *Young,*2 *Hen. Bl. 613*—Peel v. *Tatlock,*1 *Bos.*&. *Pul.*419).

Tayeor, Chief-Justice.

This cannot be taken as a guarantee, but as a proposition for one, inasmuch as the address was general to the mercantile world, and not specific (o any one individual *;*it was therefore incumbent upon the person, who delivered goods upon the faitii of the letter, to give within reasonable time, notice to the persons making the engagement. The guarantee became liable in point of law to make, reasonable efforts to recover tlie money, and the guarantors became fjound that those exertions should prove successful. That a notice was given at some time, appears manifestly from the answer written to the Plaintiff, in relation to the letter to *Muse,*by the production of which, the Defendant might have shown when it was given, and the non-production of which furnishes a presumption, that in point of fact, the notice was given in due time.

.The question whether due. exertion would have procured satisfaction from the debtor, was not discussed in the Court belosv, as may be inferred from the record ; the propriety therefore of granting a new trial, or of refusing it, depends on whose duty it was to bring that subject before the Court, and we think it was the duty of *413the Defendant, for clearly it was a ground of defence, that due exertion had not been made, and not the ground of a charge, that it had been made.

If the Defendant can show that the debt has been lost through the. Plaintiff’s neglect, it is an answer to this action, because the. Defendant undertook fur no more.

As to the. Plaintiff’s discharging one of the principal debtors, when arrested in New York, .it must be taken for granted, that no loss was sushiined by the Defendant, for he has shown none j the law does not in this case, as in negotiable instruments, require any specific, acts of diligence,but pnts the question on broad and iiheralground of reasonable exertions, and loss through the want of them. If we could collect from the case, that, these grounds of defence were offered to tiie Court, and overlooked by it, we. should be disposed for that reason, to award a new trial, but this does not appear, and we must refuse it. t

Henderson, Judge, concurred with the Chief-Justice.

Per Curiam. — Judgment affirmed.