Case Name: Koenigsberg v. Lennig, Appellant
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1894-04-16
Citations: 161 Pa. 171
Docket Number: Appeal, No. 234
Parties: Koenigsberg v. Lennig, Appellant.
Judges: Before Green, Williams, McCollum, Mitchell and Fell, JJ.
Reporter: Pennsylvania State Reports
Volume: 161
Pages: 171–175

Head Matter:
Koenigsberg v. Lennig, Appellant.
Guaranty — Consideration—Release of Ken.
Where the consideration for a contract of guaranty was the release of a right to lien a building, it is immaterial that, at the time the contract was signed, a release of liens had already been executed. In such a case the guarantor received the consideration for which he gave the guaranty at the very moment he signed the contract.
Guaranty — Promissory note — Extension of time.
Where a contract of guaranty for the payment of promissory notes provides that no extension of the notes should in any way affect or release the liability of the guarantor, the fact that one note for thirty-two hundred dollars at two months was given in place of two notes for sixteen hundred dollars each, one at one month and the other at two months, as originally contemplated, will not release the guarantor. In such a case the enlargement of the time of payment of one of the sixteen hundred dollar notes for one month was nothing more than an extension of that note.
Argued March 27, 1894.
Appeal, No. 234, Jan. T... 1894, by defendant, Charles F. Lennig, from order of C. P. No. 2, Phila. Co., Sept. T., 1893, No. 112, making absolute rule for judgment for want of sufficient affidavit of defence.
Before Green, Williams, McCollum, Mitchell and Fell, JJ.
Affirmed.
Assumpsit on contract of guaranty.
The statement of claim averred that plaintiff had constructed for the Philadelphia Packing and Provision Co. a certain refrigerating plant, for which, on or about Nov. 10, 1892, said company was indebted to him in the sum of $21,000; that the buildings and lot of said company were subject to lien in favor of plaintiff for payment of said indebtedness; that defendant was at that time interested in the company’s affairs as a stockholder, and was desirous that plaintiff should release his right of lien; that defendant, with others likewise interested in the company, entered into an agreement in writing, summarized below; that afterwards, in accordance with the terms of said agreement, and at the request of defendant, plaintiff released his lien and did all the things agreed by him to be performed ; that about May 18, 1893, the refrigerating plant having been completed and a satisfactory test having been made, the company delivered to him its promissory notes; that at the request of the company and of defendant, he extended the time for the payment of the first and second of said notes by taking one note therefor of $3,200 at two months; that the company had become insolvent and that a receiver had been appointed; and that certain of the notes had fallen due and were unpaid.
The agreement referred to in the statement of claim recited an indebtedness of said company to plaintiff in consideration of the erection of said refrigerating plant in the sum of $21,000, and the duty, under the original agreement of construction, on the part of the company, to pay the same by notes to be given after the satisfactory completion of a thirty days’ trial, as follows : The first of said notes to be payable one month after date thereof for $1,600. Ten other notes of like amount, each one falling due one month later than the preceding note, and the twelfth falling due twelve months after date for $3,400.
The agreement further witnessed that: “ For and in consideration of Joseph Koenigsberg’s releasing all right of lien upon the building and the machinery so to be erected, under the said contract with the Philadelphia Packing and Provision Compa ny, we, the undersigned, directors and stockholders of the said Philadelphia Packing and Provision Company, do each of us severally guarantee a ratable part of the payment of the above-recited notes upon the dates upon which the same shall respectively become due; that is to -say, we do hereby severally covenant to protect and keep harmless the said Joseph Koenigsberg from the nonpayment of the said notes upon the times- and dates above specified; Provided, and it is hereby expressly understood, that each of us shall only be bound for the payment of a pro rata part of such of the said notes as remain unpaid by the said Philadelphia Packing and Provision Company. And it is further understood and agreed that no extension of' the said notes shall in any way affect or release the liability under this guarantee.”
The original agreement, recited in the guaranty agreement,, provided that the first note for $1,600 was to be payable one month after date, and the second for $1,600 two months after date. One note for $3,200, falling due two months after date,, was taken, instead of two notes, each for $1,600, one falling at one month and the other at two.
The suit was upon this $3,200 note, and upon two other-notes, each for $1,600, one at three and the other at four months.
The affidavit of defence set up that plaintiff continued as a director of the company until Jan. 20, 1893, owning one tenth of the shares of its capital stock; that plaintiff was continuously a director up to the time of suit, and had also been continuously an owner of a large quantity of the company’s-capital stock; that when the guaranty agreement was entered into it was believed by defendant that the company was indebted to plaintiff in $21,000, for which the latter had a right to file a lien against the company’s property.. The affidavit denied any request or knowledge on part of defendant of the fact of delivery of one note at two months in place of two notes, one at one, and the other at two months. It denied any request, subsequent to the agreement by defendant to plaintiff, to release his lien. It claimed that defendant was never notified in any way, after signing of the guaranty agreement, that the latter had signed it, or had accepted it, or had released his lien. It denied all knowledge of any such acceptance or sub sequent release of lien. It denied, the averment in plaintiff’s statement of a request to release.
In a supplement to the affidavit it was set out that, after his execution of his guaranty agreement, defendant had learned that prior thereto there had been a release of lien executed and delivered by plaintiff, of which fact he was ignorant at the time of such execution. It was claimed further that by the original agreement, of whose terms he was ignorant, between plaintiff and the company, it was provided that defendant should “ Preserve the premises aforesaid free and clear of and from all liens and incumbrances arising out of claims for work done.”
The court made absolute a rule for judgment for plaintiff for want of a sufficient affidavit of defence.
Error assigned was above order.
John G. Johnson, for appellant,
cited: Kellogg v. Stockton, 29 Pa. 460 ; Baylies on Sureties and Guarantors, p. 194; Coe v. Buehler, 110 Pa. 366 ; Davis Sewing Machine Co. v. Richards, 115 U. S. 525; Page v. Krekey, 137 N. Y. 307.
E. O. Michener and Preston K. Erdman, for appellee,
cited : Ziegler v. McFarland, 147 Pa. 607 ; Reilly v. Daly, 160 Pa. 605; Wayne v. Bank, 52 Pa. 343; Beyerle v. Hain, 61 Pa. 226; Pardee v. Markle, 111 Pa. 548 ; Union B. & L. Assn. v. Hull, 135 Pa. 565; Burkholder’s Ex’r v. Plank, 69 Pa. 225; Buehler v. Coe, 1 Cent. R. 222 ; Nice v. Walker, 153 Pa. 123 ; Creswell Iron Works v. O’Brien, 156 Pa. 172 ; Lucas v. O’Brien, 159 Pa. 535; Davis Sewing’ Machine Co. v. Richards, 115 U. S. 525 ; Gardner v. Lloyd, 110 Pa. 284 ; 9 A. & E. Ency. L., p. 78; Wildes v. Savage, 1 Story, 22; Davis v. Wells, 104 U. S. 159; Langdell’s Cases on Contracts, 987 ; Fitzgerald v. Dressler, 7 C. B. (N. S.) 374; De Colyar on Guaranty, pp. 116, 178 ; Elkin v. Timlin, 151 Pa. 491; Nugent v. Wolfe, 111 Pa. 471; Roberts v. Riddle, 79 Pa. 468 ; McBeth v. Newlin, 15 W. N. 129 ; Smeidel v. Lewellyn, 3 Phila. 70 ; Bussier v. Chew, 5 Phila. 70 ; Shaw v. Church, 39 Pa. 226 ; Dickson v. Wolf, 5 W. N. 37.
April 16, 1894:

Opinion:
Per Curiam,
In his supplemental affidavit of defence the defendant admits and asserts that the plaintiff had already, to wit, on the 25th day of October, 1892, executed a full release of liens on the property in question, before the date of the contract of guaranty, which was Nov. 10, 1892. The consideration for the contract of guaranty was the releasing by the plaintiff of all right of lien upon the building and machinery of the Packing and Provision Company. At the very moment therefore when the defendant signed the guaranty he had received the consideration for which he gave the guaranty. We cannot see why he should not perform his contract. There was no occasion for any notice of acceptance. The circumstance that one note for §3,200 at two months was given in the place of two notes for §1,600 each, one at one month and the other at two months, is of no importance. The liability was precisely the same in amount, and an advantage of a month in the time of payment of one of the notes given by the Packing' and Provision Company was no disadvantage to the defendant as guarantor. The contract of guaranty distinctly provided that no extension of the notes should in any way affect or release the liability of the guarantors. The enlargement of the time of payment of one of the §1,600 notes for one month was nothing more than an extension of that note.
Judgment affirmed.