Court Opinion

ID: 6505068
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:17:23.022551+00
Date Added: 2024-06-11T15:54:42.767032
License: Public Domain

G OLDTHW AITE, J.
The cases all show that the contract which is described in the declaration, was not within the statute (Clay’s Digest 383,) defining the liability of endorsers. Granniss & Co. v. Miller, 1 Ala 741; Jordan v. Garnett, 3 Ala. 610; Douthitt v. Hudson, 4 Ala. 110; Nesbit v. Bradford, 6 Ala. 746. If it was a case simply of imperfect or irregular endorsement, under our decisions there would be no difficulty, as then the principles of Miller v. De Yampert, 3 Ala. 648, would apply; and the diligence necessary to charge the party upon an endorsement of that character, would be ascertained from the analogies of the rules applicable to perfect endorsements. But the contract in this case is some*663thing more than an endorsement; and in order to ascertain with accuracy what rules are applicable to it, we must first determine what the legal effect of the contract is. Its terms areas follows: “I assign, and guaranty the within note to Joseph Camp for value received and it was executed by the plaintiff in error before the maturity of the note on which it was written. This note was a specific existing demand; and it was, we think, the obvious intention of the party to transfer it, and to guaranty the performance of the contract which he thus transferred. The performance of the contract! was the payment of the note, according to its terms; and if\ this payment was not made on the day on which the note be- Í came due, the maker did not do what the guarantor had stip- f ulated he should do; and the guarantor then become liable upon his contract, unless something else was necessary to be done to perfect his liability.
We are aware that the construction we have given to guaranty in the case under consideration, is irrecs with the decision of this court in the case of Doutl son, supra, in which case the guaranty was made before it was due, and was, in its legal effect, identical| one declared on in the present case. It was there held _ _„ contract was, in law, a promise to pay if the maker atóS' able to do so; and 0. J. Collier, who delivered the opimfra-ofi-the court, rests the decision upon the case of Granniss v. Miller, supra. But in that case the guaranty was made after the maturity of the note; and an examination of the opinion will show that some stress was laid upon that fact, in determining that the contract was not a mere promise to pay the debt presently, without condition or qualification. Indeed, we have found no case, except the one referred to, which goes to the length of holding that an absolute, unconditional guaranty of the payment of a debt or note before it became due, was a guaranty simply of the ability of the original debt- or to pay.
Regarding the contract as a guaranty for the payment of the debt at maturity, does the failure of the debtor to pay according to his promise, perfect the liability of the guarantor? In England the rule is well settled, that the guarantor, even of commercial paper, is entitled to notice, only when the failure *664to give such notice bas resulted to bis loss or injury: Phillips v. Astling, 2 Taunt, 206; Warrington v. Furbor, 8 East 242; but tbe rule there bas never, that we are aware, been extended beyond collateral engagements, upon or in relation to commercial paper; and no English authority, it is believed, has ever held, that where the guaranty was of a specific, existing demand, other than mercantile paper, notice was required to the guarantor; on the contrary, this idea is repudiated in the case of King v. Murray, 5 B. & A. 165, which was a guaranty in the shape of a bond, and the court say: “ It is insisted, however, that we are to engraft upon this bond those limitations which the law imposes upon holders of bills of exchange, namely, a due presentment and notice of dishonor.” In the United States, the cases are somewhat contradictory ; some of them holding that the guarantor of a promissory note is entitled to notice of non-payment by the maker, unless the maker was insolvent at the time the note became due, and that the declaration must aver it: Lewis v. Brewster, 2 McLean 21; Foote v. Brown, ib. 369; Green v. Dodge, 2 Hump. 498; and Judge Story, after an elaborate review of some of the leading American cases, holds the doctrine, that where the language of the contract is that of guaranty, as “ I guaranty the payment,” &c., that the contract is deemed strictly one of guaranty; and that, therefore, the party is not to be held liable, unless upon due demand and due notice of dishonor to him, within the reasonable time required in other common cases of guaranty. Story on Prom. Notes, § 472. The same doctrine was previously held, by the Supreme Court of Massachusetts, in the case of the Oxford Bank v. Haynes, 8 Pick. 423. This doctrine, however, is ¡not sustained by the English books, except in the cases to ¡which we have referred of mercantile paper, and has been ^directly repudiated by the courts of New York: Allen v. Rightmere, 20 John. 366; Brown v. Curtis, 2 Conn. 225; Union Bank v. Carter, 3 Cow. 208; Luqueer v. Prosser, 1 Hill 256; and the the current of American authorities is in support of the New York rule. Thrasher v. Ely, 2 S. & M. 139; Taylor v. Ross, 3 Yerger 330; Norton v. Eastman, 4 Greenl. 521; Read v. Cutts, 7 Grreenl. 191; Force v. Harding, 3 Fair. 195; Foster v. Barney, 3 Verm. 60. Chancellor Kent *665also, in bis Commentaries, in speaking of commercial guaranties, says: “And in the case of an absolute guaranty of the act of another, as of his promise to pay a debt, or perform a special agreement, the doctrine of notice applicable to negotiable paper does not apply. The guarantor must inquire of his principal, or take notice of his default at his peril, unless notice be required by the contract of guaranty.” 3 Kent Com., 7th ed.
The same principle is distinctly intimated by Mr. Justice Thompson, in Lee v. Dick, 10 Pet. 496, where he says: u There are many cases where the guaranty is of a specific,^ existing demand by a promissory note, or other evidence ofj debt, and such a guaranty is given upon the note itself, or ¡ with reference to it, and in recognition of it, when no notice would be necessary.” There are many cases of guaranty, where we can perceive strong reasons for the necessity of giving notice to the guarantor in order that he may protect himself; but where the guaranty is absolute in its terms, and for the payment of a definite, specific demand, we are able to perceive no sound reason why notice should be required to be given to the guarantor to perfect his liability; and, as we have shown, the English cases, and the current of the American authorities, are in opposition to it. The contract of an endorser is, to pay upon due diligence; but the engagement of a guarantor, in a case like the present, is absolute: it is to pay the note himself, if the maker fails to pay it at maturity; and it is as easy for him to ascertain the fact upon which his liability depends, as it is for the holder to give him notice. Our conclusion is, therefore, that the contract was an absolute guaranty on the part of the plaintiff in error, that the note should be paid at maturity, and that if it was not paid, the right of action became complete against him, without any additional act of the other party; and it follows from these views, that there was no necessity for the averments in the declaration as to the insolvency of the maker of the note. They were mere surplusage, not required to be alleged, or if alleged to be proved. The demurrer, therefore, was correctly overruled.
The same principles apply to the evidence of the insolvency *666make out tbe plaintiff’s case, and, if introduced, it was simply redundant or superfluous testimony, in no way affecting tbe right to recover.
In relation to tbe admisssions of the note and endorsements without proof, it is only necessary to say, that as the contract was. declared on as a writing, its execution could only be put in issue by the appropriate plea, (Clay’s Dig. 304 § 152,) which was not done in the present case. The guaranty which was endorsed upon the note, was an affirmance that the note itself was genuine; and the first endorsement stands upon the same ground. As to the evidence of insolvency, it was entirely unnecessary to support the plaintiff’s case, which was made out without it; and its admission, if erroneous, could have been productive of no possible injury to the defendant.
Neither do the charges which were given present any error which is available in this court. The record shows that the note and guaranty, as described in the declaration, were offered in evidence; and this was all that was necessary to make out the plaintiff’s case. The charges were, that in the event that the plaintiff had given the defendant reasonable notice of the failure of the maker of the note to pay, or that if such maker was insolvent at the time the note fell due, and remained so until the commencement of the action, he was entitled to recover. Conceding that the legal proposition was erroneous, yet there was nothing on which the error could operate. Upon the evidence as disclosed by the record, the court would have been justified in instructing the jury to find for the plaintiff; and this being the case, the charges given could have produced no injury to the defendant.
The judgment is affirmed.