Court Opinion

ID: 6582548
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:39:27.488929+00
Date Added: 2024-06-11T15:56:56.581952
License: Public Domain

Loomis, J.
The second count of the complaint in this case, under which the questions for review arise, alleges that “a promissory note purporting to have been made by Hurd, Hotchkiss & McFarlane, on January 14th, 1884, to the order of Hurd, Hotchkiss & McFarlane, for five thousand dollars, payable four months after date, at the Farmers’ & Mechanics’ National Bank, Hartford, Conn., for value received, and indorsed by said Hurd, Hotchkiss & McFarlane to the defendant, was, by the indorsement of the defendant and others, transferred to the plaintiff; that on May 12th, 1884, the de*439fendant and one Chas. B. Hotchkiss (an indorser subsequent to the defendant), in writing, jointly and severally waived demand and notice of protest of said note, and guaranteed payment of said note, and warranted the same good and collectible until paid, at seven per cent, interest; and that the plaintiff still owns said note, and it has not been paid.”
To this count the defendant filed an answer, setting up in defense that “ the plaintiff never took any steps or attempted to collect said note of the makers thereof.”
To this answer the plaintiff demurred, claiming that the matter so set up constituted no defense to the cause of action; and the question raised by this demurrer is the sole question presented by this appeal.
The answer is based entirely upon the assumption that the guaranty was a conditional one and that the condition was not complied with. If conditional the answer was sufficient, for the pleadings admit that no steps were taken to collect the note of the makers. If on the other hand the guaranty is an absolute one, the defendant concedes that he is liable. The following is a copy of the note and of the indorsement and guaranty written thereon.
“ $5,000. Bridgeport, Ct., January 14th, 1884.
“ Four months after date we promise to pay to the order of Hurd, Hotchkiss & McFarlane five thousand dollars at Farmers’ and Mechanics’ Hat. Bauk, Hartford, Conn. Value received.
“ Hurd, Hotchkiss & McFarlane.”
Indorsed.—
“ Hurd, Hotchkiss & McFarlane.
“John Hurd.
“Chas. B. Hotchkiss.”
The guaranty is as follows:—
“ For value received we hereby jointly and severally waive demand and notice of protest, and guarantee payment of the within note, and we hereby warrant the same good and collectible until paid, at seven per cent, interest. Bridgeport, Conn., May 12, 1884.
“John Hurd.
“Chas. B. Hotchkiss.”
*440The defendant claims that the contract of indorsement was abrogated by the substitution of the new contract of guaranty, and that the controlling words of the latter are those that, “ warrant the note good and collectible until paid,” and that the plaintiff must first institute a suit against the makers and prosecute it to final judgment and execution (or else show that such proceeding would be futile,) before the defendant can be subjected to pay the note. Although the argument in support of the defendant’s construction was very plausible, yet it seems to us from all the provisions of the contract that the defendant intended to assume more than a mere conditional liability, that is, that he would pay the note, if the plaintiff, having first taken the proper steps, failed to recover it of the makers.
The contract contains three distinct provisions:—(1) The waiver of demand and notice of the protest of the note. This clearly refers to the defendant’s liability as indorser and recognizes it as a continued existing liability, not abrogated at all, as the defendant claims, but on the contrary made more easy of enforcement. (2) A distinct guaranty of payment, which of course is an absolute undertaking, following very naturally the dispensing with the requirement of demand and notice in order to impose a liability on the defendant. (8) There is the warranty that the note is good and collectible until paid at seven per cent, interest.
It was_ urged in argument by the defendant as strange that the parties, having provided for absolute payment, should add a guaranty that the note was good and collectible; but the first two provisions are entirely consistent with each other and the meaning is plain. There is no more reason to give a controlling force to the third provision than to the other two ; assuming some of the provisions to be unnecessary. But all the provisions may have effect and stand together. The first two waived demand and protest, and guaranteed payment, but with ordinary interest only. The last provision warranted the note good and collectible, not only for the principal'but at a greater rate of interest than could otherwise have been recovered on the instrument. *441This last may have been the purpose of the parties in adding the third provision, but whether the contract for the increased rate of interest was good or not there is no occasion to determine.
In this way the rule of construction urged by the defendant, that effect should be given, as far as may be rationally done, to all the words and parts of a contract, is more faithfully followed than by the mode proposed by him, the construction given by which renders the first two provisions useless or insensible.
We have considered the case thus far only with reference to the language of the guaranty. There is a further consideration which is entitled to much and perhaps decisive weight. The note is dated January 14th, 1884, and is at four months, and would therefore have fallen due on the 17th of May following. The guaranty is dated May 12th, and was given therefore only five days before the note was to fall due. It seems absurd, that the guarantors, already indorsers, should give a guaranty of the mere collectibility of the note only for these five days. Their object manifestly was to save the necessity of taking measures for the collection of the note, not to impose upon the plaintiff that necessity. This explains their waiver of demand and notice as indorsers, and their guaranteeing the seven per cent, interest. The makers apparently desired delay and the plaintiff gave it in consideration of the guaranty and of the increased interest from the time the note fell due. It was in its purpose and effect an agreement that the note should run on at seven per cent, interest, and that the indorsers would become guarantors of the note for the future.
The view we have taken makes the defendant liable either as indorser or as guarantor of the note in question.
There was no error in the judgment complained of.
In this opinion the other judges concurred.