Case Name: Elie Weill et al., Plaintiffs, v. Henrietta Hecht, Defendant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1895-10
Citations: 14 Misc. 230
Docket Number: 
Parties: Elie Weill et al., Plaintiffs, v. Henrietta Hecht, Defendant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 14
Pages: 230–233

Head Matter:
Elie Weill et al., Plaintiffs, v. Henrietta Hecht, Defendant.
(New York Superior Court
Trial Term,
October, 1895.)
A guaranty, in consideration of the extension of further credit accommo- .' -dations to a'third person, of prompt payment for purchases by such per-- - son to a specified amount which-'should be- ordered after a’ ¡certain date,, which contains a provision that it should.not extend to purchases in excess of said amount in the aggregate, is a continuing one which is not-avoided by the giving of credit to the principal in excess of the : specified sum.' ■ .
The provision in the- guaranty has no reference to the amount of dealing . between the guarantee and the principal, but solely limits the liability '. "of the guarantor. , ' . ■ ■
A guarantor who had knowledge of a precedent indebtedness of his principal to the guarantee cannot claim that payments credited on such." indebtedness should have been applied upon the account guaranteed,, where no direction for such application, was made.
Tbial by the court without a jury.
. 0 handler. <& Kr enter, for plaintiffs.
Hoctdly, Lcmterbach ds Johnson, for defendant.

Opinion:
Me Adam, J.
The action is on an instrument in these words:
" Hew Yoke, Jan. 29th, 1894,
"In consideration of Elie Weill & "Co., of Paris,. France, extending further credit accommodations to the S. J. Held Company of Hew Fork, ! hereby guarantee .to the said Elie Weill & Co. the prompt payment at maturity, by the said S. J. Held Company, of all moneys to become due to said Elie Weill & Co. for goods which they may buy and ship for the said S. J. Held Co., to the amount of twenty-five thousand francs, or the equivalent in United States gold coin. A.nd it is understood that the purchases and shipments above mentioned and hereby guaranteed shall be only such as the said S. J. Held. Co. may have ordered or will order from Hew York, from and after January 1st, 1894. And it is further understood that this guaranty shall not extend to the purchase of goods in excess of twenty-five thousand francs in the aggregate. "Hbubietta Heoht. [seal.] "
The guaranty is not confined to one instance, and, therefore, applies to debts successively renewed. By such an instrument as this a continuing suretyship is created to the specified, amount. Merle v. Wells, 2 Camp. 413; Gates v. McKee, 13 N. Y. 232; Rindge v. Judson, 24 id. 64; City Nat. Bank v. Phelps, 16 Hun, 158; Pratt v. Matthews, 24 id. 386; Sickle v. Marsh, 44 How. Pr. 91; Lanier v. Wyman, 5 Robt. 147; Tootle v. Elgutter, 45 Am. Rep. 103; Beakes v. Da Cunha, 126 N. Y. 293; McShane Co. v. Padian, 142 id. 207. The writing is known as a continuing guaranty. Id.
The defendant claims that in the latter part of the document a limitation was expressly made the condition of the obligation, as in Farmers & Mechanics' Bank v. Evans, 4 Barb. 487, and that it was avoided because credit was given to the principal for an amount exceeding 25,000 francs. •While it was competent for the defendant to. have imposed, such a condition, an intention to do so cannot be imputed to' the instrument sued upon. .'
.The S. J. Held Company owed the plaintiffs considerably moré than 25,000 francs, at the .time the guaranty was given, and the company continued to owe a sum exceeding that amount during the continuance of the account. The guaranty was; not intended to reduce the indebtedness, or to limit it, as in Bank v. Evans, supra, but to enable the S. J. Held Company to extend cmd mlcurge the accoxmt. ' Indeed^ the guaranty , commences by .avowing as its purpose "the extension of further credit accommodations" to the company.
The guaranty must be construed in its entirety in furtherance- of the presumed intention of the parties, and in harmony with the rule of construction that where -the language of a promisor may Be understood in more senses than one, it •is to be interpreted in the, sense in which he had reason to suppose it was understood by .the promisee. White v. Hoyt, 73 N. Y. 505. That rule has been frequently applied With all' its force to contracts of suretyship. Pratt v. Matthews, supra.
In Lawrence v. McCalmont, 2 How. (U. S.) 426, Judge . Stobt said: " If the language used be ambiguous and admits of t-wo fair interpretations, and the guarantee -has, advanced -his money upon the faith of the interpretation most favorable to his' rights, that interpretation will prevail in his favor, for it does not lie in the month of the guarantor, to say that he may, without peril, scatter ambiguous words by which the other -party is misled to his injury." See, also, Gates v. McKee, 13 N. Y. 235, 236.
While the authorities agree that contracts • of -suretyship must be read strictissimi juris, the rule has this extent only — that when the true meaning of the obligation is ascertained, the guarantor has the right to insist that his liability shall not be extended beyond its precise terms.
N The provision in the guaranty (construed with what precedes ' it) being in the nature, of a proviso limiting the liability of tBe . promisor, and not á limitation, made the condition- of the obliga tion, as in Farmers & Mechanics' Bank v. Evans, supra, the clause .as. to 25,000 francs has reference to the guarantor's liability, not to the amount of dealing between the purchasers and the one who gives credit. Gates v. McKee and other cases, vide supra. Any other interpretation would defeat the very object of the guaranty under consideration.
In construing guaranties, which are generally drawn by unprofessional hands, it iJ next to impossible to find two instruments worded exactly alike, a circumstance making the application of authorities difficult and causing Judge Earl to remark, in Schwartz v. Hyman, 107 N. Y. 565 : " Yery little, if any, aid for the construction of this guaranty can be derived from reported cases." This controversy, like that, must, therefore, be determined on its own peculiarities, in view of the relations of the parties, their presumed intention, and upon general legal principles.
-This brings the contention down to the question of application of'payments. The guarantor knew there was a precedent debt owing by the S. J. Held Company, and that the debtors would have to discharge the prior obligation, and cannot now claim that payments credited thereon should have gone on the account guaranteed, there being no direction to make such an application of them. Bank of California v. Webb, 94 N. Y. 467.
It follows that the plaintiffs are entitled to judgment for. $4,854.37, with $383,49 interest, aggregating $5,237.-86'.
Judgment for plaintiffs. -