Court Opinion

ID: 3991907
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:51:33.564544+00
Date Added: 2024-06-11T14:23:15.963383
License: Public Domain

While I agree with the majority that the guaranty in writing in suit is an express and unconditional guaranty, I am nevertheless convinced that this is a case peculiarly requiring the application of the principle of legal laches, which is somewhat different but analogous to equitable laches. Legal laches has been applied in cases of absolute guaranty in many cases less provocative than this, by the supreme courts of the United States and of New York, Massachusetts, Michigan, Iowa, Nebraska, and others of highest repute.
Each case depends somewhat, of course, upon the peculiar facts and circumstances involved therein.
The record shows that respondent, at the instigation of Starkey, failed to notify appellants of any of the defaults in payments under the conditional sales contract, the two first installments only having been paid, and appellants were in ignorance thereof until the demand made by respondent upon them for payment in May, 1929. A period of two years and five months had elapsed since the last payment by Starkey, the co-guarantor and the known operator of the business, of any installment upon the conditional sales contract for the organ. It then delayed another fifteen months before commencing suit against appellants. During that long time, pipe organs became obsolescent as adjuncts of moving picture theatres. During that time, also, the organ intrinsically depreciated, so that *Page 268 
it was not worth more than $3,500, if salable, and would cost $1,000 to remove and install elsewhere.
Appellants, under the law of this state, had the right to suppose that respondent would diligently attempt to collect the installments due for the organ. On the contrary, respondent did not do so, and, by arrangement with Starkey, withheld knowledge of the defaults from appellants. There can be no doubt that all this constituted great injury to appellants, and that, by reason thereof, they should be discharged from the guaranty to the extent of the damage sustained by reason of such laches on the part of respondent. Barhydt v. Ellis, 45 N.Y. 107; Sabin Moon v. Harris, 12 Iowa 87; The Second National Bank ofRockford v. Gaylord, 34 Iowa 246; Davis v. Wells,104 U.S. 159; Bedford v. Kelley, 173 Mich. 492, 139 N.W. 250, Ann. Cas. 1914D 848; Lemmert v. Guthrie Bros., 69 Neb. 499, 95 N.W. 1046,62 L.R.A. 954, 111 Am. St. 561.
In the Barhydt case, supra, the guaranty was as follows:
". . . would pay the plaintiff's testator the rent in arrear,without requiring any notice of non-payment, or proof of demandbeing made." (Italics supplied.)
If, as the court there held, the guarantor was released by the laches of the creditor, much more so should he be in the case at bar. The above cited cases were generally absolute guaranties of promissory notes and other express contracts; and in each of them the guarantor was held released by the negligence and laches of the creditor, at least to the extent of the loss sustained by the guarantor, which should be the judgment here.
For these reasons, I am unable to agree with the majority opinion, and I am compelled to dissent. *Page 269