Court Opinion

ID: 6314917
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:24:21.932695+00
Date Added: 2024-06-11T08:59:13.399206
License: Public Domain

The opinion of the court was delivered by
Rogers,J.
If an obligor on assigning a bond, enter into a covenant with the assignee, to stand surety for its payment, this is an engagement to pay the money, on the insolvency of the obligor, provided the assignee use due diligence to obtain payment from the obligor. There is no distinction between the case referred to, Rudy v. Wolf, 16 Serg. & Rawle, 79, and the present, except in the phraseology of the agreeement, and this can make no essential difference. The legal import of the term “ guarantee” is a promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another person, who in the first instance is liable. 3 Kent’s Com. 85. In Rudy v. Wolf the same rule was applied to an express covenant, as had been adopted in Virginia, on the covenant implied from, the assignment.
In 2 Wash. 266 ; 2 Hen. & Mun. 119, and in Rudy v. Wolf, 16 Serg. & Rawle, 79, it was settled, that due diligence to recover the money from the obligor must be used, and that what is due diligence, is a fact for the decision of the jury, on the whole evidence *20submitted to them. In a cause like the present, two things are indispensable to the maintenance of the suit. The plaintiff must prove, first, the insolvency of the obligor, and, secondly, that he used due diligence to obtain payment from him. Was there evidence either that Yctrnell was insolvent, or that the necessary diligence had been used to collect the .debt ? I have looked through the testimony in vain for proof of these essential pre-requisites to the maintenance of the plaintiff’s action. A demand of payment, alone, is not sufficient. It must-be followed up with proof from which the jury can reasonably infer the insolvency of the obligor, and that the requisite attention has been paid to the collection of the debt. Besides, here a mortgage was given as a collateral security ; and to this fund the plaintiff might have resorted, on the refusal to deliver the salt according to contract. An ejectment on the mortgage would be' a most efficacious mode of compelling payment, as it is in proof, that the mortgaged premises are of a value amply sufficient to cover the whole demand. Had suit been brought against Yar.nell, or some proceedings instituted on the mortgage, non constat,,but that the assignee would have had ample redress for the breach of the covenant. We think this rule a necessary one; as otherwise assignees would be careless when no doubts were entertained of the solvency of the assignor.
- The court of Common Pleas ruled this case on the ground that there is an absolute agreement to pay on the refusal to deliver the salt. In this we conceive there was error. It was a conditional and not an absolute engagement.
I at onetime doubted whether the fact that the assignment was executed before the day of payment, 'made a distinction : on reflection I am convinced it does not. After a careful search into the authorities, I have found no ease, except in that of negotiable paper, where any distinction has been taken, whether the assignment was made before or after the time fixed for payment. In cither case the assignor, is liable on the assignment, only when the obligqa is insolvent, and due diligence has been used by the assignee to enforce payment. What is evidence of the insolvency of the obligor, it is unnecessary to decide. We are, however, of the opinion that a demand of paj-mentand a refusal to pay, is not such evidence, although coupled with the fact of the non-residence of the obligor; particularly when a mortgage has been given as collateral security.
Judgment reversed and a venire dc novo awarded.