Case Name: STEIN v. WHITMAN et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-05-29
Citations: 142 N.Y.S. 4
Docket Number: 
Parties: STEIN v. WHITMAN et al.
Judges: 
Reporter: West's New York Supplement
Volume: 142
Pages: 4–6

Head Matter:
(156 App. Div. 861.)
STEIN v. WHITMAN et al.
(Supreme Court, Appellate Division, First Department.
May 29, 1913.)
1. Bonds (§ 88 )—Bights on Assignment.
The liability of a.n obligee in a bond under seal providing for the payment of money becoming due at the option of the obligee on default of
. interest, arising from his assigning the bond and guaranteeing payment thereof according to its tenor, is that of surety, and he is primarily liable for the original debt; the liability of a surety being to pay if the principal does not, but that of a guarantor being to pay if the principal cannot. . .
[Ed. Note.—For other cases, see Bonds, Cent. Dig. §§ 88-91; Dec. Dig. § 88.*]
2. Bonds (§ 122*)—Actions—Parties.
Under Code Civ. Proc. § 454, providing that two or more persons severally liable on the same written instrument may be. included as defendants, an assignee of a bond under seal for the payment of money may proceed in one action against the obligor and the obligee liable as surety.
[Ed. Note.—For other cases, see Bonds, Cent. Dig. §§ 97, 99 148, 156; Dec. Dig. § 122.*]
Laughlin and Dowling, JJ., dissenting.
Appeal from Special Term, New York County.
Action by Isidor Stein against Clarence P. Whitman and another. From an order overruling a demurrer to the complaint, and granting plaintiff judgment thereon, defendants appeal. Affirmed.
. Argued before INGRAHAM, P. J., and McLAUGHLIN, LAUGH-LIN, DOWLING, and HOTCHKISS, JJ.
Edwin P. Kilroe, of New York City, for appellants.
' Ludwig M. Wilson, of New York City, for respondent.
For other cases see same ttipic & § number in Dec. & Am. Digs. 1907 to date, & Rep‘r Iúdexes

Opinion:
HOTCHKISS, J.
The complaint alleges that the defendant Whitman made his bond under seal payable to defendant Faunce, which bond provided that the whole amount should, at Faunce'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 semiannual 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, and as such he became primarily liable for the original debt (Loos v. McCor mack, 107 App. Div. 8, 93 N. Y. Supp. 1088, 95 N. Y. Supp. 1141), 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. Code Civil Proc. 454. In Roehr v. Liebman, 9 App. Div. 247, 41 N. Y. Supp. 489, 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 McDAUGHDIN, J., concur.