Case Name: HENDERSON ET AL. vs. REILLY ET AL.
Court: Supreme Court of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1873-04
Citations: 1 MacArth. 25
Docket Number: No. 8824
Parties: HENDERSON ET AL. vs. REILLY ET AL.
Judges: 
Reporter: Reports of cases argued and determined in the Supreme Court of the District of Columbia (District of Columbia - reported by Mackey)
Volume: 8
Pages: 25–27

Head Matter:
HENDERSON ET AL. vs. REILLY ET AL.
At Law.
No. 8824.
I. A letter of credit, drawn in favor of M., was addressed to a mercantile firm in Baltimore, stating that the parties who had signed it were willing to become sureties for M. in the sum of $1,200 for the faithful performance of his duties as their agent.
II. Held, that such letter was an offer for a future credit or act, and that notice was necessary to be given to the guarantors by the pierson giving the credit, within a reasonable time, that he had accepted the offer, and intended to act upon the faith of it.
III. Held, also, that if such person sold goods, or gave credit to M. on the faith of such guarantee, without giving notice, the guarantors were not liable.
STATEMENT OF THE CASE.
The plaintiffs brought suit against the defendants upon the following instrument, claiming it to be a guarantee :
Georgetown, D. C., January 14, 1871.
Gents : We, the undersigned, citizens of this town, being well acquainted with L. A. Mahoney, of this town, recommend him to your confidence and trust, and are willing to become bound as sureties for his faithful performance of his trust aud duties as your agent, and, also, that he will make due returns to you monthly, and every month, of all moneys belonging to you which may come into his hands, to the amount of twelve hundred dollars, or four hundred dollars each.
JAS. A. REILY.
JOHN J. COOK.
F. W. JONES.
To Messrs. R. Mason & Sons, Baltimore.”
The declaration also contained a count for goods sold and delivered.-
The defendants pleaded the general issue.
This letter was addressed to the plaintiffs, who are merchants doing business in the city of Baltimore. The said L, A. Malioney, mentioned in the letter, resides in the city of Georgetown, in this District, where he carries on. business, and the defendants are, also residents of the same place. The plaintiffs proved on the trial that there was due them a balance of $605.72 for goods they had furnished Mahoney on the faith of said letter, and that they had no acquaintance with Mahoney, and would not have furnished him the goods without said letter or offer to guarantee, and that Mahoney was insolvent.
There was a count for goods sold and delivered, which may 'be considered as out of the case, for the reason that plaintiffs do not insist upon it.
The court instructed the jury that, to entitle the plaintiffs to recover on said letter of guarantee, they must prove that notice had been given in a reasonable time after said letter of guarantee had been accepted by them, to the defendants, that the same had been accepted, and that there being no evidence showing, or tending to show, any notice by plaintiffs to the defendants of their acceptance of said offer to guarantee, and of their intention to act upon it, the jury must find for the defendants. The case comes up upon exceptions •to these instructions.
W. D. Cassin and J. J. Johnson for defendants.
Notice of acceptance of a guarantee not necessary to render the defendants liable, but that they became absolutely bound the moment the goods were delivered in compliance with the guarantee. Smith & Crittenden vs. Dann, 6 Hill, 543; Whitney & Schuyler vs. Groot, 24 Wend., 81; Charles Bent et al. vs. Rolun Hartshorn, 1 Met., 24; Union Bank vs. Cortes’ Executors, 3 Com., 204.
Hugh Caperton for defendants.
A guarantee cannot be enforced without notice of the intention to rely upon it. Clark vs. Russell, 7 Cranch, 69; Douglas vs. Reynolds, 7 Peters, 117.
A mere overture or offer to guarantee is not binding unless accepted. Chitty on Contracts, 437, note 2, (1;) Menard vs. Scudder, 7 La. Ann., 385; Beekman vs. Hale, 17 Johns. R., 134; Emmerson vs. Graff, 29 Pa. State R., 358; Caton vs. Shaw, 2 Harr. & Gill, 13; Stafford vs. Lowe, 16 Johns. R., 67; Lowry vs. Adams, 22 Vermont, 160.

Opinion:
The Court, in substance, held:
That the authorities on brief of appellees sustain most fully the charge of the court to the jury in this case. When a guarantee is prospective, and looks only to future transactions, in order to invest it with the obligation of a contract, the party to whom it is addressed must give notice of his intention to act upon it. The guarantor has a right to know whether it is accepted, in order that he may make such arrangements as will secure himself for his responsibility.
Although insolvency may sometimes relieve a party from giving notice, this is not such a case; for notice here is essential to the completion of the contract.
It follows from these views that the judgment must be affirmed.