Case Name: Isidor Stein, Respondent, v. Clarence P. Whitman and John B. Faunce, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-05-29
Citations: 156 A.D. 861
Docket Number: 
Parties: Isidor Stein, Respondent, v. Clarence P. Whitman and John B. Faunce, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 156
Pages: 861–864

Head Matter:
Isidor Stein, Respondent, v. Clarence P. Whitman and John B. Faunce, Appellants.
First Department,
May 29, 1913.
Bond—assignment by obligee with guaranty of payment — suit by assignee —parties defendant — Code' Civil Procedure, section 464.
Where a bond under seal providing that the obligee may declare the whole amount due on default in payment of interest is assigned by the obligee who guarantees the payment thereof according to its tenor, the assignee on default of the obligor may join the obligor and the assignor as parties defendant in an action upon the instrument. This, because under the circumstances the defendants are liable upon the same instrument within the meaning of section 454 of the Code of Civil Procedure.
Laughlin and Dowling, JJ., dissented, with opinion.
Appeal by the defendants, Clarence P. Whitman and another, from an order of the Supreme Court, made at, the Yew York Special Term and entered in the office of the clerk of the county of Yew York on the 6th day of March, 1913, overruling the defendants’ demurrer to the complaint and granting the plaintiff’s motion for judgment on the pleadings.
Edwin P. Kilroe, for the appellants.
Ludwig M. Wilson, for the respondent.

Opinion:
Hotchkiss, J.:
The complaint alleges that the defendant Whitman made his bond under seal payable to defendant Fauncé, which bond provided that the whole amount should, at Faunae's option, become due on default of any installment of interest; "that FaunCe assigned the bond to plaintiff, guaranteeing payment thereof according to its tenor;' that default had been made' in a semi-annual installment of interest, and plaintiff elected to have the whole amount due, wherefore, he demands judgment against both defendants.
The demurrer is upon the ground that the defendants are not severally liable upon the same instrument.
The allegation is that appellant guaranteed payment of the debt expressed by the bond. Strictly, appellant's obligation was in the nature of that of a surety rather than that of a guarantor. As such he became primarily liable for the original debt (Loos v. McCormack, 107 App. Div. 8), and respondent at his election could proceed against Whitman and appellant simultaneously.
If, therefore, appellant'became, as to respondent, a principal debtor under the bond, he and Whitman were liable upon the same instrument and could be joined as defendants. (Oode Civ. Proc. § 454.)
In Roehr v. Liebmann (9 App. Div. 247) and kindred cases it was held that the contract of the principal debtor and that of the. guarantor arose out of distinct and independent contracts and not upon the same instrument!
I apprehend that a sound distinction between the above cases and the present lies in the essential difference between the. liability of a surety and that of a guarantor, the liability of the former being original and that of the latter being collateral or, as it is sometimes expressed, the liability of a surety is to pay if the principal does not, while that of a guarantor is to pay if the principal cannot. In other words, the distinction goes to the root of "the difference between an obligation to pay and one for collection.
The order should be affirmed, with costs.
Ingraham, P. J., and McLaughlin, J., concurred; Laughlin and Dowling, JJ., dissented.