Court Opinion

ID: 6231535
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:23:07.57828+00
Date Added: 2024-06-11T08:57:53.206927
License: Public Domain

Thompson, J.
This was an action of assumpsit, and the instrument declared on was in these words :
“ I hereby guaranty the payment to Pritchett, Baugh & Co., for hides delivered from time to time to J. B. & J. Slaymaker, to the amount of six thousand dollars. This to be a continuing guarantee.” Dated February 20th 1860, and signed by the defendant. This instrument was signed at the residence of the ,defendant, in Franklin county, and was sent to the plaintiffs with the accompanying note:
“ Shade Gap, 20th February 1860.
“ Gents : Enclosed find a letter of credit to J. B. & J. Slay-maker. The form was sent here, and I presume will be acceptable.”
The question on this instrument is whether it is to be construed to be a guarantee of present, or future, indebtedness, or both. The plaintiffs had been delivering hides to the Slaymakers on a prior guarantee, which was limited to $2000, and satisfied by actual payments, and a large additional indebtedness beyond that sum incurred by them. In the winter of 1860, the Slay-makers, desiring to procure more hides from the plaintiffs, were refused, unless a guarantee was furnished. The defendant being applied to for that purpose, wrote to the plaintiffs to know what contract they wished guarantied, the extent of it, and whether his last guarantee was satisfied. The answer to this letter was not given in evidence, as the plaintiffs were unable to prove its receipt by the defendant, and he denied under oath that it had *423ever been received by him. On the 5th of February, however, he executed the following guarantee to the plaintiffs: — “ Let the Messrs. Slaymakers have hides to the amount of six thousand dollars, and I will guaranty the fulfilment of the bargain.” This was rejected by the plaintiffs, because, as they allege, it was not according to the agreement with the Slaymakers; but, as we would learn from the testimony of J. Slaymaker, because it was addressed to them in the handwriting of a different person than that of the guarantor. Mr. Baugh, one of the firm, wrote, and forwarded by the witness, the instrument now in suit, and claimed by them to be a guarantee of past indebtedness.
The plaintiffs offered a witness to prove that the contract with the Slaymakers was that the guarantee they were to furnish was for the security of past indebtedness, and that that was the reason of the rejection of the paper of the 5th of February, and the draft of the one sued upon. But the testimony was rejected on the ground that the defendant could not be affected by agreements to which he was no party, and of the contents of which he was ignorant.
The plaintiffs assign this as error. It cannot be possible to sustain the assignment. The bargain with the Slaymakers was at Philadelphia, and preceded the guarantee of the 5th of February, and was alleged to be the reason of its rejection for want of conformity with it. A new one was written, but they did not offer to prove the reason for that, or that the bargain was that it should be security for past indebtedness. Without this knowledge brought home to him, it could not, on any principle, be that he was bound by what he did not understand, and never heard of or assented to. To the suggestion that if not sufficient for the main purpose for which it ivas offered, still it contradicted the testimony of the defendant’s witness as to the terms of the bargain between the plaintiffs and the Slaymakers, it is enough to say, that it was not offered for that purpose, and had it been, it would not have proved notice of the contract and assent to it by the defendant. The Slaymakers were not the agents for Wilson, and their acts and declarations did not bind him. The contract of guarantee was independent of, and only operated on contracts they might make for credit with the plaintiffs. The exception is without merit.
We need not discuss the subject of the exception to the admission of Jasper Slaymaker’s testimony, as the court must have determined that the defendant was not liable for past indebtedness, on an interpretation of the instrument itself; otherwise the learned judge would hardly have been justifiable in giving a binding instruction to the jury to find for the defendant.
Interpreting the instrument in the light of its object and nature, together with the circumstances that accompany it, and *424necessarily a part of it, we think that the construction given to it, that it was a guarantee of prospective indebtedness, was sound. The object ordinarily of a guarantee is security for the performance of something in the future, the consideration for which is the credit given or contract of the party guarantied. Where it occurs under circumstances like the present, it is usually called a letter of credit, addressed by one person to another on behalf of a third, as here by the defendant to the plaintiffs, in favour of the Slaymakers. As a letter of credit, it would necessarily be for future credit — past credit needs no guarantee, for it has already been given. Received in this light, we can only understand the stipulation to guaranty the “ payment of hides delivered from time to time to the amount of six thousand dollars,” to mean hides to be delivered from time to time, and not those which had been delivered. How could it help the credit of the parties guarantied to apply the guarantee to debts already contracted, when no more hides were to be sold to them ? The plaintiffs claim that they were not bound to sell them any more on credit, and refused to do so on obtaining the guarantee. This diverted the security from its purpose, as well as changed it into an absolute undertaking, without the remotest chance of escape from liability by the defendant, through the industry of the guarantied parties. It is an effort to change the guarantee into a promise to pay the debt of the parties at once, if they did not. There was no consideration for this that we can perceive. No time was given for payments to them to raise a consideration for such a promise, and there is no other consideration apparent for such an undertaking. It cannot, therefore, be held to be a binding contract of this nature for the want of this essential element in it. The only consideration that could sustain it as a contract would be the delivery of hides from time to time as they might be wanted by the guarantied parties. It was evidently intended to be binding only by reason of the credit to be given in current transactions. It cannot be sustained on any other principle ; it would be nudum factum on any other ground. I cannot agree that the artificial rule, proper in many cases, which claims a construction most strongly against the party whose language the instrument purports to speak, is to be applied to this case. That rests upon the idea that the party bound has chosen the language best suited to express his intentions, and therefore he shall be bound by it. But here the evidence on part of the plaintiffs showed that the language of this instrument was the plaintiffs’ language, written by them and sent to the defendant. If it be ambiguous, it is their fault. And if, in interpreting it, we have to look at it in the light of its object and surrounding circumstances, and can only see an adverse meaning to what they contend for, it is their fault if, in truth, it was intended to mean *425what they contend for. The parties wanting credit are promised it if they can get a guarantee. They procure such, and then they are informed that they have no credit at all — that credit to them shall cease! What could induce them to involve friends under such circumstances ? Or could the plaintiffs have supposed it possible that any sane man would lend his name with no object whatever of benefit to his friends or himself? Such absurdities must be supposed to have been in the minds of the guarantor, the guarantied, and the plaintiffs themselves, if we hold the contract to be what the plaintiffs contend it is. We cannot do so. We hold that the contract was a guarantee of future indebtedness in the way proposed, and this renders the transaction reasonable, consistent, and binding; and as no liability was incurred, by reason of the refusal of the plaintiffs to deal further with the Slaymakers after they received the defendant’s guarantee, he is of course not liable to them for anything.
Judgment affirmed.