Court Opinion

ID: 9812985
Source: CourtListenerOpinion
Date Created: 2023-08-31 22:52:53.897754+00
Date Added: 2024-06-11T15:27:26.005537
License: Public Domain

Clark, ' C. J.,
dissenting: The guarantee given by the defendant, upon which this action is brought, is as follows: “In each and every consecutive year from and after this date, should the dividends or any part thereof called for upon the face of the within certificate not be paid on its due date, for value received, the Spray Water Power and Land Company guarantees and binds itself to pay in cash, ten days after notice of such default, to the holder of the within certificate, any such deficiency in the dividend as may arise from the failure of the American Warehouse Company to pay its annual dividend as stated in said certificate. This agreement is binding during the life of the Spray Water Power and Land Company.”
The sole question presented is ‘the meaning of the above guarantee. Probably there is no other case in the books which presents a guarantee in exactly the same words, and it would be small, if any, aid to consider the construction placed by other courts upon guarantees more or less dissimilar.
Even if there had been presented to other courts a guarantee in these identical words, there has been none in our court. The construction of this guarantee should not be complicated by the view taken of more or less dissimilar guarantees by other courts. The sole question is the construction of the words, and their intent as derived from the four corners of the guarantee itself. It is a question of the. meaning of these plain English words.
A guarantor on a note, bond, or other obligation is not released because the promisor or obligor becomes insolvent, bankrupt, or dies. His guarantee is to provide against the risk of those very contingencies.
It can make no difference that the promisor, or obligor, and the guarantor are corporations.
The original obligation of the American Warehouse Company is to pay 6 per cent preferred, accumulative, dividends on its certificates during the life of the obligor company, which was chartered for thirty years. When that company fails to pay, whether because it does not earn dividends or dies by legal dissolution or bankruptcy, the, guarantor faces the very contingency provided for by the guarantee, and for which it was exacted.
The guarantor company is specially authorized by its charter to make this guarantee. The guarantee specifies that it “is binding during the life of the Spray Water Power and Land Company.” This leaves no doubt as to the duration of the guarantee.
*606Whether this duration would be restricted to the thirty years chartered life of the American Warehouse Company should its life not be extended by a renewal of the charter of that company is a question not presented. The guarantee cannot be for less than thirty years in any event, and it was given to secure the payment of the accumulative 6 per cent dividends should the American Warehouse Company fail to pay such dividends, regardless of the cause of the default — whether such default is caused by the' failure to earn dividends or by legal dissolution or bankruptcy or any other cause.
This is the plain language of the guarantee. If it was not given for that purpose, and the guarantor is absolved either by failure to earn dividends or by the legal dissolution or bankruptcy of the Warehouse Company, it is difficult to conceive for what purpose thé guarantee was required. It was intended to add something to the security afforded by the obligation of the original obligor, insuring against the contingencies by reason of which said company might fail or be unable to pay its dividends as stipulated.
BbowN, J., concurs in this opinion.