Case Name: J. E. Bernard & Co., Inc., Appellant, v. United Hardware and Tool Corporation, Defendant, Impleaded with Ellis R. Wilner and Another, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1937-05-28
Citations: 251 A.D. 539
Docket Number: 
Parties: J. E. Bernard & Co., Inc., Appellant, v. United Hardware and Tool Corporation, Defendant, Impleaded with Ellis R. Wilner and Another, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 251
Pages: 539–543

Head Matter:
J. E. Bernard & Co., Inc., Appellant, v. United Hardware and Tool Corporation, Defendant, Impleaded with Ellis R. Wilner and Another, Respondents.
First Department,
May 28, 1937.
Philip Zierler, for the appellant.
Avel B. Silverman, for the respondents.

Opinion:
Callahan, J.
Plaintiff appeals from a judgment dismissing its complaint as to the individual defendants. It seeks to recover on a guarantee which is in the form of a letter addressed to plaintiff, reading as follows:
" J. E. Bernard & Co., Inc., 31 Bridge Street, N. Y. C.
" Gentlemen: Our Hamburg representative the Impex Trading Company, Fritz Hesse —Barkhoff 1, asked us for permission to draw on us for all shipments at 60 days sight in order to unify his financing, etc., and request us at the same time to communicate with you stating that we guarantee that all the drafts accepted by us and drawn by him will be honored when due.
" It is needless to say that any and all drafts accepted by us and drawn on us by Mr. Hesse will be honored on due date. The owners and members of this firm agree also to be personally responsible for such acceptances.
" Yours very truly,
" UNITED HARDWARE & TOOL CORE.,
" E. R. Wilner, Pres.
" AB •— EG " A. Bollerman, Treas."
Plaintiff's complaint, after describing certain drafts, sets forth that, in consideration of the guaranty, and in reliance thereon, plaintiff and a German corporation, known as J. E. Bernard & Co., G. m. b. H., advanced moneys for the account of the defendants and the Impex Trading Company in excess of the amount of the drafts.
These allegations are denied in the answer.
Plaintiff's proof at Trial Term consisted solely of the documents (drafts and the guaranty) and an examination before trial of the corporate defendant. Assuming that the contents of this examination were binding on the individual defendants, it merely established the terms of the drafts, their presentation and non-payment. No proof was introduced to show the circumstances under which the guaranty was given. Plaintiff did not show that it had advanced any moneys or suffered any detriment on the faith of the guaranty. There is nothing to show the relationship of the plaintiff to the German corporation or any of the prior holders of the instruments, nor is there any proof that plaintiff had any interest in the transaction in connection with which the drafts were given. Plaintiff is not a holder in due course of the drafts, but merely an assignee after maturity.
Accordingly, there was no proof to disclose the purpose for which the drafts were given. It was said in construing a similar document, in First National Bank v. Story (163 App. Div. 279), that the provisions of the guaranty must be interpreted in the light of the purpose of the parties as therein expressed and, therefore, limited to include only such obligations as were obtained in furtherance of or within the natural fulfillment of that purpose.
Here the guaranty was addressed to the plaintiff. It was, therefore, special in nature. (Evansville National Bank v. Kaufmann, 93 N. Y. 273.) Plaintiff was entitled to enforce it, but it could only be enforced as to debts which it was intended to cover. Here plaintiff is seeldng to apply it to drafts with respect to which, in so far as the proof discloses, it was not intended to have any relation. Though its language is broad, in that it states it is to apply to all drafts drawn by Hesse and accepted by the principal debtor, its general tenor indicates that it was given to establish credit as to transactions that plaintiff had some interest in. Plaintiff is seeking, in effect, to extend to others the benefits afforded him by the defendant's promise. This it may not do. As was said in Evansville National Bank v. Kaufmann (supra): " While the letter will be seen to be couched in broad and indefinite terms with respect to the number, amount and character of the drafts referred to, Bingham Bros, alone are addressed. However general may be the description of the subjects guaranteed, the number of persons authorized to accept its terms is not thereby enlarged."
The construction we have placed on the guaranty renders it unnecessary to consider the questions raised as to whether specific drafts complied with the terms of the guaranty.
The judgment so far as appealed from should be affirmed, with costs.
Townley and Dore, JJ., concur; Martin, P. J., and Cohn, J., dissent.